FIRST NIAGARA FINANCIAL GROUP, INC.
                              AMENDED AND RESTATED
                   2002 LONG-TERM INCENTIVE STOCK BENEFIT PLAN
 
      1. PURPOSE. The purpose of the First Niagara Financial Group, Inc. 2002
Long-term Incentive Stock Benefit Plan (the "Plan") is to advance the interest
of First Niagara Financial Group, Inc. (the "Company") and to increase
shareholder value by providing outside directors and key employees of the
Company and its affiliates, upon whose judgment, initiative and efforts the
successful conduct of the business of the Company and its affiliates largely
depends, with additional incentive in the form of a proprietary interest in the
growth and performance of the Company and to encourage their continued service
with the Company and its affiliates. A purpose of the Plan is also to attract
and retain people of experience and ability to the Company and its affiliates.
 
      2. TERM. The Plan initially became effective as of March 7, 2002 (the
"Initial Effective Date") and was to remain in effect for ten years thereafter,
unless sooner terminated by the Company's Board of Directors (the "Board"). The
Plan, as amended and restated, is being submitted to shareholders, and is
expected to be approved on May 3, 2005 (the "Restatement Effective Date"), in
order to (i) reserve additional shares of common stock under the Plan, (ii)
extend the term of the Plan for ten (10) years from the date of the Restatement
Effective Date, and (iii) bring the Plan into compliance with the requirements
of (A) Section 409A of the Internal Revenue Code and (B) final regulations
issued Sections 421, 422 and 424 of the Internal Revenue Code. After termination
of the Plan, no future awards may be granted but previously made awards shall
remain outstanding in accordance with their applicable terms and conditions and
the terms and conditions of the Plan.
 
      3. PLAN ADMINISTRATION. A committee (the "Committee") appointed by the
Board shall be responsible for administering the Plan. The Committee shall be
comprised of either (i) at least two "Non-Employee Directors" of the Company, or
(ii) the entire Board of the Company. A "Non-Employee Director" means, for
purposes of the Plan, a director who (a) is not employed by the Company or an
affiliate; (b) does not receive compensation directly or indirectly as a
consultant (or in any other capacity than as a director) greater than $60,000;
(c) does not have an interest in a transaction requiring disclosure under Item
404(a) of Regulation S-K; or (d) is not engaged in a business relationship for
which disclosure would be required pursuant to Item 404(b) of Regulation S-K.
Actions and decisions of the Committee shall be approved by a majority of the
members of the Committee. The Committee shall have full and exclusive power to
interpret, construe and implement the Plan and any rules, regulations,
guidelines or agreements adopted hereunder and to adopt such rules, regulations
and guidelines for carrying out the Plan as it may deem necessary or proper.
These powers shall include, but not be limited to, (i) determination of the type
or types of awards to be granted under the Plan; (ii) determination of the terms
and conditions of any awards under the Plan; (iii) determination of whether, to
what extent and under what circumstances awards may be settled, paid or
exercised in cash, shares, other securities, or other awards, or other property,
or accelerated, canceled, extended, forfeited or suspended; (iv) adoption of
modifications, amendments, procedures, subplans and the like as are necessary;
(v) subject to the rights of participants, modification, change, amendment or
cancellation of any award to correct an administrative error; and (vi) taking
any other action the Committee deems necessary or desirable for the
administration of the Plan. All determinations, interpretations, and other
decisions under or with respect to the Plan or any award by the Committee shall
be final, conclusive and binding upon the Company, any participant, any holder
or beneficiary of any award under the Plan and any employee of the Company.
 
      4. ELIGIBILITY. Any employee of the Company or an Affiliate shall be
eligible to receive Incentive Stock Options, Non-Statutory Stock Options, Stock
Awards, Stock Appreciation Rights, and Accelerated Ownership Option Rights under
the Plan, provided, however, that no Stock Appreciation Rights shall be granted
under the Plan after October 3, 2004 unless such Stock Appreciation Rights are
settled solely in shares of common stock of the Company ("Common Stock").
Outside directors shall be eligible to receive Non-Statutory Stock Options,
Accelerated Ownership Option Rights and Stock Awards under the Plan. An "outside
director" means a director of the Company or an Affiliate who is not an employee
of the Company or an Affiliate. For these purposes, "Affiliate" includes any
entity that is directly or indirectly controlled by the Company or under common
control with the Company or any entity in which the Company has a significant
equity interest, as determined by the Committee.
 
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      5. SHARES OF STOCK SUBJECT TO THE PLAN. As initially adopted, the Plan
authorized 2,158,423 shares of Common Stock (adjusted in accordance with the
exchange ratio in the Company's second-step conversion) for issuance (subject to
adjustment as provided in Section 6) pursuant to the exercise of stock options,
granted under Sections 7(a) and (c) of the Plan, or Stock Awards, under Section
7(d) of the Plan. With respect to the shares originally reserved for issuance
under the Plan (as adjusted), the maximum number of shares that may be subject
to all awards granted to any one employee of the Company is 776,043 (as
adjusted). Of the shares initially reserved under the Plan, 1,848,805 shares are
subject to awards that have been granted under the Plan as of March 9, 2005. Of
this amount 114,664 shares have been cancelled and returned to the Plan.
Accordingly, 424,282 shares remain available for the grant of awards under the
Plan.
 
      In connection with the amendment and restatement of the Plan, an
additional 5,862,031 shares of Common Stock are reserved for issuance under the
Plan. Of the additional shares of Common Stock reserved for issuance under the
Plan, no more than 1,600,000 shares may be awarded to any one employee of the
Company or an Affiliate, and no more than 5,862,031 shares may be awarded as
Incentive Stock Options, provided, however, that no Incentive Stock Options
shall be awarded hereunder after the tenth (10th) anniversary of the Initial
Effective Date of the Plan. If any shares underlying awards granted prior to the
Restatement Effective Date again become available for issuance under this Plan,
they may be awarded as Incentive Stock Options.
 
      Any shares that are issued by the Company, and any awards that are granted
by, or become obligations of, the Company, and any awards that are granted by,
or become obligations of, the Company, through the assumption by the Company or
an Affiliate of, or in substitution for, outstanding awards previously granted
by an acquired company shall not be counted against the shares available for
issuance under the Plan. In addition, any shares that are used for the full or
partial payment of the exercise price of any Stock Option in connection with an
Accelerated Ownership Option Right will not be counted as issued under the Plan
and will be available for future grants under the Plan.
 
      Any shares issued under the Plan may consist in whole or in part, of
authorized and unissued shares or of treasury shares, and no fractional shares
shall be issued under the Plan. Cash may be paid in lieu of any fractional
shares in settlements of awards under the Plan.
 
      6. ADJUSTMENTS AND REORGANIZATIONS.
 
      (a)   Changes in Stock. If the number of outstanding shares of Common
            Stock is increased or decreased or the shares of Common Stock are
            changed into or exchanged for a different number of kind of shares
            or other securities of the Company on account of any
            recapitalization, reclassification, stock split, reverse split,
            combination of shares, exchange of shares, stock dividend or other
            distribution payable in capital stock, or other increase or decrease
            in such shares effected without receipt of consideration by the
            Company occurring after the Effective Date, the number and kinds of
            shares for which grants of Stock Options or Stock Awards may be made
            under the Plan shall be adjusted proportionately and accordingly by
            the Company. In addition, the number and kind of shares for which
            grants are outstanding shall be adjusted proportionately and
            accordingly so that the proportionate interest of the grantee
            immediately following such event shall, to the extent practicable,
            be the same as immediately before such event. Any such adjustment in
            outstanding Stock Options shall not change the aggregate Stock
            Option purchase price payable with respect to shares that are
            subject to the unexercised portion of the Stock Option outstanding
            but shall include a corresponding proportionate adjustment in the
            Stock Option purchase price per share.
 
      (b)   Reorganization in Which the Company Is the Surviving Entity and in
            Which No Change of Control Occurs. Subject to Section 23 hereof, if
            the Company shall be the surviving entity in any reorganization,
            merger, or consolidation of the Company with one or more other
            entities, any Stock Option or Stock Awards theretofore granted
            pursuant to the Plan shall pertain to and apply to the securities to
            which a holder of the number of shares of stock subject to such
            Stock Option or Stock Awards would have been entitled immediately
            following such reorganization, merger or consolidation, with a
            corresponding proportionate adjustment of the Stock Option purchase
            price per share so that the aggregate Stock Option purchase price
            thereafter shall be the same as the aggregate Stock Option purchase
            price of the shares remaining subject to the Stock Option
            immediately prior to such reorganization, merger, or consolidation.
 
 
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Adjustments under this Section 6 related to shares of Common Stock or securities
of the Company shall be made by the Committee, whose determination in that
respect shall be final, binding and conclusive. No fractional shares or other
securities shall be issued pursuant to any such adjustment, and any fractions
resulting from any such adjustment shall be eliminated in each case by rounding
downward to the nearest whole share. The granting of awards pursuant to the Plan
shall not affect or limit in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations, or changes of its capital or
business structure or to merge, consolidate, dissolve, or liquidate, or to sell
or transfer all or any part of its business or assets.
 
      7. AWARDS. The Committee shall determine the type or types of award(s) to
be made to each participant under the Plan and shall approve the terms and
conditions governing these awards in accordance with Section 12. Awards may be
granted singly, in combination or in tandem so that the settlement or payment of
one automatically reduces or cancels the other. Awards may also be made in
combination or in tandem with, in replacement of, as alternatives to, or as the
payment form for, grants or rights under any other employee or compensation plan
of the Company, including the plan of any acquired entity.
 
      (a)   Stock Option - is a grant of a right to purchase a specified number
            of shares of Common Stock during a specified period. The purchase
            price of each Stock Option shall be the Fair Market Value of a share
            on the date such award was granted. However, if a key employee owns
            stock possessing more than 10% of the total combined voting power of
            all classes of stock of the Company or its affiliates (or under
            Section 424(d) of the Internal Revenue Code of 1986, as amended (the
            "Code") is deemed to own stock representing more than 10% of the
            total combined voting power of all classes of stock of the Company
            or its affiliates by reason of the ownership of such classes of
            stock, directly or indirectly, by or for any brother, sister,
            spouse, ancestor or lineal descendent of such key employee, or by or
            for any corporation, partnership, estate or trust of which such key
            employee is a shareholder, partner or beneficiary), the purchase
            price per share of Common Stock deliverable upon the exercise of
            each Incentive Stock Option shall not be less than 110% of the Fair
            Market Value of the Company's Common Stock on the date the Incentive
            Stock Option is granted. A Stock Option may be exercised in whole or
            in installments, which may be cumulative. A Stock Option may be in
            the form of an Incentive Stock Option, which complies with Section
            422 of the Code, as amended, and the regulations thereunder at the
            time of grant, or a Non-Statutory Stock Option. A Non-Statutory
            Stock Option means a Stock Option granted by the Committee to (i) an
            outside director or (ii) to any other participant, and such Stock
            Option is either (A) not designated by the Committee as an Incentive
            Stock Option, or (B) fails to satisfy the requirements of an
            Incentive Stock Option as set forth in Section 422 of the Code and
            the regulations thereunder. The price at which shares of Common
            Stock may be purchased under a Stock Option shall be paid in full at
            the time of the exercise, in either cash or such other methods as
            provided by the Committee at the time of grant or as provided in the
            form of agreement approved in accordance herewith, including
            tendering (either actually or by attestation) Common Stock at Fair
            Market Value on the date of surrender (provided that the shares
            surrendered have been held for at least six months at the time of
            surrender), or any combination thereof. As set forth in Section 5
            above, no Incentive Stock Options shall be awarded hereunder after
            the tenth (10th) anniversary of the Initial Effective Date of the
            Plan.
 
      (b)   Stock Appreciation Right - is a right to receive a payment, in cash
            and/or Common Stock, as determined by the Committee, equal to the
            excess of the Fair Market Value of a specified number of shares of
            Common Stock on the date the SAR is exercised over the Fair Market
            Value on the date of grant of the SAR as set forth in the applicable
            award agreement, except that, in the case of an SAR granted
            retroactively, in tandem with or as a substitution for another
            award, the exercise or designated price may be no lower than the
            Fair Market Value of a share on the date such other award was
            granted. Notwithstanding anything herein to the contrary, no SAR
 
 
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            shall be granted after October 3, 2004, unless (i) such SAR is
            granted with an exercise price at least equal to the Fair Market
            Value of a share of Common Stock on the date of grant, (ii) the
            Common Stock of the Company is publicly traded, (iii) the SAR is
            settled solely in the publicly traded stock of the Company and (iv)
            there is no opportunity to further defer the income received on the
            exercise of the SAR.
 
      (c)   Accelerated Ownership Option Rights, as defined in Section 12.
 
      (d)   Stock Award - is an award made in Common Stock or denominated in
            units of Common Stock. All or part of any stock award may be subject
            to conditions established by the Committee, and set forth in the
            award agreement, which may include, but are not limited to,
            continuous service with the Company, achievement of specific
            business objectives, and other measurements of individual, business
            unit or Company performance.
 
      8. DEFERRALS AND SETTLEMENTS. Payment of awards may be in the form of
cash, stock, other awards, or in combinations thereof as the Committee shall
determine at the time of grant, and with such restrictions as it may impose. The
Committee may also require or permit participants to elect to defer the issuance
of shares or the settlement of awards in cash under such rules and procedures as
it may establish under the Plan. It may also provide that deferred settlements
include the payment or crediting of interest on the deferral amounts or the
payment or crediting of dividend equivalents on deferred settlements denominated
in shares. Notwithstanding anything herein to the contrary, effective October 3,
2004, the second and third sentence of this Section 8 shall no longer apply.
 
      9. FAIR MARKET VALUE. Fair Market Value for all purposes under the Plan
shall mean the reported closing price of Common Stock as reported by the Nasdaq
stock market on such date, or if the Common Stock was not traded on such date,
on the next preceding day on which Common Stock was traded thereon. Under no
circumstances shall Fair Market Value be less than the par value of the Common
Stock.
 
      10. TRANSFERABILITY AND EXERCISABILITY. All awards other than
Non-Statutory Stock Options under the Plan will be nontransferable and shall not
be assignable, alienable, saleable or otherwise transferable by the participant
other than by will or the laws of descent and distribution, except pursuant to a
domestic relations order entered by a court of competent jurisdiction or as
otherwise determined by the Committee. In the event that a participant
terminates employment with the Company to assume a position with a governmental,
charitable, educational or similar non-profit institution, the Committee may
authorize a third party, including but not limited to a "blind" trust, to act on
behalf of and for the benefit of the representative participant with respect to
any outstanding awards.
 
      If so permitted by the Committee, a participant may designate a
beneficiary or beneficiaries to exercise the rights of the participant and
receive any distributions under the Plan upon the death of the Participant.
However, in the case of participants covered by Section 16 of the 1934 Act, any
contrary requirements of Rule 16b-3 under the 1934 Act, or any successor rule,
shall prevail over the provisions of this Section.
 
      Awards granted pursuant to the Plan may be exercisable pursuant to a
vesting schedule as determined by the Committee. The Committee may, in its sole
discretion, accelerate or extend the time at which any Stock Option may be
exercised, or any Stock Award may vest, in whole or in part, provided, however,
that with respect to an Incentive Stock Option, it must be consistent with the
terms of Section 422 of the Code in order to continue to qualify as an Incentive
Stock Option. Notwithstanding the above, in the event of Retirement (as herein
defined), death or Disability, all awards shall immediately vest. "Retirement"
means for a key employee, retirement at the normal or early retirement date set
forth in the First Niagara Financial Group Employee Stock Ownership Plan, or any
successor plan, or in accordance with any written agreement entered into with
the Participant. Retirement for an outside director means a cessation of service
on the Board of Directors for any reason other than removal for Cause, after
reaching 60 years of age and maintaining at least 10 years of continuous service
or after attaining age 70. "Disability" means the permanent and total inability
by reason of mental or physical infirmity, or both, of an employee to perform
the work customarily assigned to him, or of a director to serve as such.
Additionally, in the case of an employee, a medical doctor selected or approved
by the Board must advise the Committee that it is either not possible to
determine when such Disability will terminate or that it appears probable that
such Disability will be permanent during the remainder of paid employee's
lifetime. Notwithstanding anything herein to the contrary, with respect to
Incentive Stock Options granted on or after the Restatement Effective Date,
Disability shall mean the inability of the Key Employee to engage in any
substantial gainful activity by reason of any medically determinable mental or
physical impairment which can be expected to result in death or which can be
expected to last for a continuous period of not less than 12 months. A Key
Employee shall not be considered to be permanently disabled unless he furnishes
proof of the existence thereof in such form and manner, and at such times, in
accordance with Section 22(e)(3) of the Internal Revenue Code and regulations
issued thereunder.
 
 
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      11. AWARD AGREEMENTS. Awards under the Plan shall be evidenced by an
agreement as shall be approved by the Committee that sets forth the terms,
conditions and limitations to an award and the provisions applicable in the
event the participant's employment terminates, provided however, in no event
shall the term of any Incentive Stock Option exceed a period of ten years from
the date of its grant. However, if any key employee, at the time an Incentive
Stock Option is granted to him, owns stock representing more than 10% of the
total combined voting power of all classes of stock of the Company or its
affiliate (or, under Section 424(d) of the Code, is deemed to own stock
representing more than 10% of the total combined voting power of all classes of
stock, by reason of the ownership of such classes of stock, directly or
indirectly, by or for any brother, sister, spouse, ancestor or lineal descendent
of such key employee, or by or for any corporation, partnership, estate or trust
of which such key employee is a shareholder, partner or beneficiary), the
Incentive Stock Option granted to him shall not be exercisable after the
expiration of five years from the date of grant.
 
      In addition, to the extent required by Section 422 of the Code, the
aggregate Fair Market Value (determined at the time the option is granted) of
the Common Stock for which Incentive Stock Options are exercisable for the first
time by a Participant during any calendar year (under all plans of the Company
and its affiliates) shall not exceed $100,000. In the event the amount
exercisable shall exceed $100,000, the first $100,000 of Incentive Stock Options
(determined as of the date of grant) shall be exercisable as Incentive Stock
Options and any excess shall be exercisable as Non-Statutory Stock Options.
 
      Notwithstanding any other provision of the Plan or award agreement to the
contrary, if any provision of the Plan permits a Participant, at his or her
election, to receive a cash settlement of Options or other awards under the
Plan, or requires the Company to pay a cash settlement of Options or awards
under the Plan, the Participant shall be entitled to receive the cash
settlement, and the Company shall be obligated to pay the cash settlement, only
if the Committee determines, in its sole discretion, to make such payment.
 
      12. ACCELERATED OWNERSHIP STOCK OPTION RIGHTS. The Committee may grant the
right to receive an Accelerated Ownership Option simultaneously with, or
subsequent to, the grant of any stock option, with respect to all or some of the
shares covered by such stock option, provided, however, that with respect to an
Incentive Stock Option, such grant must be consistent with the terms of Section
422 of the Code in order to continue to qualify as an Incentive Stock Option. In
the event an Accelerated Ownership Option Right has been granted, upon the
exercise of the related Stock Option, the participant will be granted an
Accelerated Ownership Stock Option (which may be an Incentive or Non-Incentive
Stock Option) to purchase a number of shares of Common Stock equal to the sum of
the number of whole shares of Common Stock used by the participant in payment of
the purchase price of the Stock Option. The exercise price of the Accelerated
Ownership Option shall be the Fair Market Value of the Common Stock on the date
of grant of the Accelerated Ownership Option. The term during which the
Accelerated Ownership Option may be exercised (and the other terms and
conditions) shall be determined by the Committee, but in no event shall an
Accelerated Ownership Option be exercisable in whole or in part before the
expiration of six months from the date of the grant of the Accelerated Ownership
Option. Notwithstanding anything herein to the contrary, Accelerated Ownership
Stock Option Rights shall not be granted on or after May 3, 2005.
 
      13. PLAN AMENDMENT. The Board or the Committee may modify or amend the
Plan as it deems necessary or appropriate or modify or amend an award received
by key employees and/or outside directors. No such amendment shall adversely
affect any outstanding awards under the Plan without the consent of the holders
thereof.
 
      14. TAX WITHHOLDING. The Company may deduct from any settlement of an
award made under the Plan, including the delivery or vesting of shares, an
amount sufficient to cover the minimum withholding required by law for any
federal, state or local taxes or to take such other action as may be necessary
to satisfy any such withholding obligations. The Committee may permit shares to
be used to satisfy required tax withholding and such shares shall be valued at
the Fair Market Value as of the settlement date of the applicable award.
 
 
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      15. OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Unless otherwise
determined by the Committee, settlements of awards received by participants
under the Plan shall not be deemed a part of a participant's regular, recurring
compensation for purposes of calculating payments or benefits from any Company
benefit plan, severance program or severance pay law of any country.
 
      16. UNFUNDED PLAN. Unless otherwise determined by the Committee, the Plan
shall be unfunded and shall not create (or be construed to create) a trust or a
separate fund or funds. The Plan shall not establish any fiduciary relationship
between the Company and any participant or other person. To the extent any
person holds any rights by virtue of a grant awarded under the Plan, such right
(unless otherwise determined by the Committee) shall be no greater than the
right of an unsecured general creditor of the Company.
 
      17. FUTURE RIGHTS. No person shall have any claim or rights to be granted
an award under the Plan, and no participant shall have any rights by reason of
the grant of any award under the Plan to continued employment by the Company or
any subsidiary of the Company.
 
      18. GENERAL RESTRICTION. Each award shall be subject to the requirement
that, if at any time the Committee shall determine, in its sole discretion, that
the listing, registration or qualification of any award under the Plan upon any
securities exchange or under any state or federal law, or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such award or the grant or
settlement thereof, such award may not be exercised or settled in whole or in
part unless such listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not acceptable to the
Committee.
 
      19. GOVERNING LAW. The validity, construction and effect of the Plan and
any actions taken or relating to the Plan shall be determined in accordance with
the laws of the State of Delaware.
 
      20. SUCCESSORS AND ASSIGNS. The Plan shall be binding on all successors
and permitted assigns of a participant, including, without limitation, the
guardian or estate of such participant and the executor, administrator or
trustee of such estate, or any receiver or trustee in bankruptcy or
representative of the participant's creditors. The term "Company" includes any
company that succeeds to the rights and obligations of the Company.
 
      21. RIGHTS AS A SHAREHOLDER. A participant shall have no rights as a
shareholder with respect to awards under the Plan until he or she becomes the
holder of record of shares granted under the Plan.
 
      22. CHANGE IN CONTROL. Notwithstanding anything to the contrary in the
Plan, the following shall apply to all outstanding awards granted under the
Plan:
 
            1. (a) "Change in Control" means:
 
            (i) Any acquisition or series of acquisitions by any Person (as the
      term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
      1934, as amended ("Exchange Act")) other than the Company, any of its
      Affiliates, any employee benefit plan of the Company or any of its
      Affiliates, or any Person holding common shares of the Company for or
      pursuant to the terms of such an employee benefit plan, that
 
                  (A) results in that Person becoming the beneficial owner (as
            defined in Rule 13d-3 under the Exchange Act, directly or
            indirectly, of securities of the Company representing 25% or more of
            either the then outstanding shares of the Common Stock of the
            Company ("Outstanding Company Common Stock") or the combined voting
            power of the Company's then outstanding securities entitled to then
            vote generally in the election of Directors of the Company
            ("Outstanding Company Voting Securities"), except that any such
            acquisition of Outstanding Company Common Stock or Outstanding
            Company Voting Securities will not constitute a Change in Control
 
 
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            while that Person does not exercise the voting power of its
            Outstanding Company Common Stock or otherwise exercise control with
            respect to any matter concerning or affecting the Company, or
            Outstanding Company Voting Securities, and promptly sells,
            transfers, assigns or otherwise disposes of that number of shares of
            Outstanding Company Common Stock necessary to reduce its beneficial
            ownership (as defined in Rule 13d-3 under the Exchange Act) of the
            Outstanding Company Common Stock to below 25%,
 
                  (B) results in a change in control of the Company within the
            meaning of the Home Owners' Loan Act and the Rules and Regulations
            of the Office of Thrift Supervision (or its predecessor agency)
            under that Act, or
 
                  (C) would be required to be reported in response to Item 5.01
            of the current report on Form 8-K, pursuant to Section 13 or 15(d)
            of the Exchange Act;
 
            (ii) At the time when, during any period not longer than 24
      consecutive months, individuals who at the beginning of that period
      constitute the Board cease to constitute at least a majority of the Board,
      unless the election, or the nomination for election by the Company's
      stockholders, of each new Board member was approved by a vote of at least
      two-thirds of the Board members then still in office who were Board
      members at the beginning of that period (including, for these purposes,
      new members whose election or nomination was so approved);
 
            (iii) Approval by the stockholders of the Company of:
 
                  (A) a dissolution or liquidation of the Company,
 
                  (B) a sale of all or substantially all of the assets or
            earning power of the Company, taken as a whole (with the stock or
            other ownership interests of the Company in any of its Affiliates
            constituting assets of the Company for this purpose) to a Person
            that is not an Affiliate of the Company (for purposes of this
            paragraph, "sale" means any change of ownership), or
 
                  (C) an agreement to merge or consolidate or otherwise
            reorganize, with or into one or more Persons that are not Affiliates
            of the Company, as a result of which less than 75% of the
            outstanding voting securities of the surviving or resulting entity
            immediately after any such merger, consolidation or reorganization
            are, or will be, owned, directly or indirectly, by stockholders of
            the Company immediately before such merger, consolidation or
            reorganization (assuming for purposes of that determination that
            there is no change in the record ownership of the Company's
            securities from the record date for that approval until that merger,
            consolidation or reorganization and that those record owners hold no
            securities of the other parties to that merger, consolidation or
            reorganization), but including in that determination any securities
            of the other parties to that merger, consolidation or reorganization
            held by Affiliates; or
 
            (iv) A tender offer is made for 25% or more of the Outstanding
      Company Voting Securities and the shareholders owning beneficially or of
      record 25% or more of the Outstanding Company Voting Securities have
      tendered or offered to sell their shares pursuant to that tender offer, at
      the time those shares have been accepted by the tender offer.
 
            (v) However, a Change in Control will not be deemed to have occurred
      under any of the preceding subparagraphs if the action (agreement,
      acquisition or other) also is approved by a majority of the Board, the
      Company or an Affiliate is the resulting entity, and at least 51% of the
      ownership of voting control of the Company, under any of the preceding
      subparagraphs, remains unchanged from that ownership immediately prior to
      such action.
 
      23. COMPLIANCE WITH SECTION 16. With respect to persons subject to Section
16 of the 1934 Act, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the 1934 Act. To the
extent any provisions of the Plan or actions of the Committee fail to so comply,
it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee administrators.
 
 
                                       7
<PAGE>
 
      24. TERMINATION OF EMPLOYMENT OR SERVICE. Upon the termination of an
employee's service for any reason other than Disability, Retirement, Change in
Control, death or Termination for Cause, the employee's Stock Options shall be
exercisable, and all Stock Awards shall vest, but only as to those shares that
were immediately purchasable by, or vested in, such employee at the date of
termination, and options may be exercised only for a period of three months
following termination. In the event of termination of employment for Cause (as
defined herein) all rights and awards granted to an employee under the Plan not
exercised or vested shall expire upon termination of employee.
 
      "Termination for Cause" means the termination upon personal dishonesty,
willful misconduct, any breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, or the willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or a
final cease-and-desist order, any of which results in a material loss to the
Company or an Affiliate.
 
      No option shall be eligible for treatment as an Incentive Stock Option in
the event such option is exercised more than three months following the date of
his Retirement or termination of employment following a Change in Control; and
provided further, that no option shall be eligible for treatment as an Incentive
Stock Option in the event such option is exercised more than one year following
termination of employment due to death or Disability and provided further, in
order to obtain Incentive Stock Option treatment for options exercised by heirs
or devisees of an optionee, the optionee's death must have occurred while
employed or within three (3) months of termination of employment. Upon the
termination of an employee's service for reason of Disability, Change in Control
or death, the employee's Stock Options shall be exercisable as to all shares
whether or not then exercisable, and the employee's Stock Awards shall vest as
to all shares subject to an outstanding award, whether or not otherwise
immediately vested in, such employee at the date of termination, and options may
be exercised for a period of one year following termination. Upon the
termination of an employee's service for reason of Retirement, the employee's
Stock Options shall be exercisable as to all shares whether or not then
exercisable, and the employee's Stock Awards shall vest as to all shares subject
to an outstanding award, whether or not otherwise immediately vested in, such
employee at the date of termination, and options may be exercised for a period
of five years following such termination. In no event shall the exercise period
extend beyond the expiration of the Stock Option term.
 
      Upon the termination of a director's service for any reason other than
Disability, Retirement, Change in Control, death or Termination for Cause, the
director's Stock Options shall be exercisable, but only as to those shares that
were immediately purchasable by, or vested in, such director at the date of
termination, and options may be exercised for a period of one year following
termination of service, and all of the director's unvested Stock Awards shall be
forfeited. In the event of termination of service for cause (as defined above)
all rights granted to the director under the Plan not exercised by or vested in
such director shall expire upon termination of service. Upon the termination of
a director's service for reason of Disability, Change in Control or death, the
director's Stock Options shall be exercisable as to all shares whether or not
then exercisable, and the director's Stock Awards shall vest as to all shares
subject to an outstanding award, whether or not otherwise immediately vested in,
such director at the date of termination, and options may be exercised for a
period of one year following such termination. Upon the termination of a
director's service for reason of Retirement, the director's Stock Options shall
be exercisable as to all shares whether or not then exercisable, and the
director's Stock Awards shall vest as to all shares subject to an outstanding
award, whether or not otherwise immediately vested in, such director at the date
of termination, and options may be exercised for a period of five years
following such termination. In no event shall the exercise period extend beyond
the expiration of the Stock Option term.