HARSCO CORPORATION
 
                   1995 EXECUTIVE INCENTIVE COMPENSATION PLAN
                            AS AMENDED AND RESTATED
 
     1.Purposes.  The purposes of this 1995 Executive Incentive Compensation
       Plan (the "Plan") of Harsco Corporation, a Delaware corporation (the
       "Company"), are to advance the interests of the Company and its
       stockholders by providing a means to attract, retain, and reward
       executive officers and other key employees of the Company and its
       subsidiaries, to link compensation to measures of the Company's
       performance by providing for incentive awards to be settled in cash
       and/or stock in order to promote the creation of stockholder value, and
       to enable such employees to acquire or increase a proprietary interest in
       the Company in order to promote a closer identity of interests between
       such employees and the Company's stockholders.
 
     2.Definitions.  The definitions of awards under the Plan, including
       Options, SARs (including Limited SARs), Restricted Stock, Deferred Stock,
       Stock granted as a bonus or in lieu of other awards, Dividend
       Equivalents, and Annual Incentive Awards are set forth in Section 6 of
       the Plan. Such awards, together with any other right or interest granted
       to a Participant under the Plan, are termed "Awards." The definitions of
       terms relating to a Change in Control of the Company are set forth in
       Section 8 of the Plan. In addition to such terms and the terms defined in
       Section 1, the following terms shall be defined as set forth below:
 
        (a) "Award Agreement" means any written agreement, contract, notice to a
            Participant, or other instrument or document evidencing an Award.
 
        (b) "Beneficiary" means the person, persons, trust, or trusts which have
            been designated by a Participant in his or her most recent written
            beneficiary designation filed with the Committee to receive the
            benefits specified under this Plan upon such Participant's death or
            to which Awards or other rights are transferred if and to the extent
            permitted under Section 9(b). If, upon a Participant's death, there
            is no designated Beneficiary or surviving designated Beneficiary,
            then the term Beneficiary means person, persons, trust, or trusts
            entitled by will or the laws of descent and distribution to receive
            such benefits.
 
        (c) "Board" means the Board of Directors of the Company.
 
        (d) "Code" means the Internal Revenue Code of 1986, as amended from time
            to time. References to any provision of the Code include regulations
            thereunder and successor provisions and regulations thereto.
 
        (e) "Committee" means the Management Development and Compensation
            Committee of the Board, or such other Board committee as may be
            designated by the Board to administer the Plan. The composition and
            governance of the Committee shall be governed by the charter of the
            Committee, as approved by the Board from time to time.
 
        (f) "Exchange Act" means the Securities Exchange Act of 1934, as amended
            from time to time. References to any provision of the Exchange Act
            include rules thereunder and successor provisions and rules thereto.
 
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        (g) "Fair Market Value" means, with respect to Stock, Awards, or other
            property, the fair market value of such Stock, Awards, or other
            property determined by such methods or procedures as shall be
            established from time to time by the Committee. Unless otherwise
            determined by the Committee, the Fair Market Value of Stock as of
            any given date means the average of the high and the low sale prices
            of a share of common stock, as reported by a reputable information
            service for such date or, if no such prices are reported for such
            date, on the most recent trading day prior to such date for which
            such prices were reported.
 
         (h) "ISO" means any Option intended to be and designated as an
             incentive stock option within the meaning of Section 422 of the
             Code.
 
         (i) "Participant" means a person who, as an executive officer or key
             employee of the Company or a subsidiary, has been granted an Award
             under the Plan.
 
         (j) "Rule 16b-3" means Rule 16b-3, as from time to time in effect and
             applicable to the Plan and Participants, promulgated by the
             Securities and Exchange Commission under Section 16 of the Exchange
             Act.
 
         (k) "Stock" means the Common Stock, $1.25 par value, of the Company and
             such other securities as may be substituted for Stock or such other
             securities pursuant to Section 4.
 
     3. Administration.
 
        (a)Authority of the Committee.  The Plan shall be administered by the
           Committee. The Committee shall have full and final authority to take
           the following actions, in each case subject to and consistent with
           the provisions of the Plan:
 
             (i) to select Participants to whom Awards may be granted;
 
            (ii) to determine the type or types of Awards to be granted to each
                 Participant;
 
            (iii) to determine the number of Awards to be granted, the number of
                  shares of Stock to which an Award will relate, the terms and
                  conditions of any Award granted under the Plan (including, but
                  not limited to, any exercise price, grant price, or purchase
                  price, any restriction or condition, any schedule or
                  performance conditions for the lapse of restrictions or
                  conditions relating to transferability, forfeiture,
                  exercisability, or settlement of an Award, and waivers,
                  accelerations, or modifications thereof, based in each case on
                  such considerations as the Committee shall determine), and all
                  other matters to be determined in connection with an Award;
 
            (iv) to determine whether, to what extent, and under what
                 circumstances an Award may be settled, or the exercise price of
                 an Award may be paid, in cash, Stock, other Awards, or other
                 property, or an Award may be canceled, forfeited, or
                 surrendered;
 
            (v) to determine whether, to what extent and under what
                circumstances cash, Stock, other Awards, or other property
                payable with respect to an Award will be deferred either
                automatically, at the election of the Committee, or at the
                election of the Participant;
 
            (vi) to prescribe the form of each Award Agreement, which need not
                 be identical for each Participant;
 
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           (vii) to adopt, amend, suspend, waive, and rescind such rules and
                 regulations and appoint such agents as the Committee may deem
                 necessary or advisable to administer the Plan;
 
          (viii) to correct any defect or supply any omission or reconcile any
                 inconsistency in the Plan and to construe and interpret the
                 Plan and any Award, rules and regulations, Award Agreement, or
                 other instrument hereunder; and
 
           (ix) to make all other decisions and determinations as may be
                required under the terms of the Plan or as the Committee may
                deem necessary or advisable for the administration of the Plan.
 
        (b)Manner of Exercise of Committee Authority.  Unless authority is
           specifically reserved to the Board under the terms of the Plan, the
           Company's Certificate of Incorporation or Bylaws, or applicable law,
           the Committee shall have full discretion in exercising authority
           under the Plan; provided, however, that the Board may perform any
           function of the Committee under the Plan, in which case references to
           the "Committee" shall be deemed to include the Board. Any action of
           the Committee with respect to the Plan shall be final, conclusive,
           and binding on all persons, including the Company, subsidiaries of
           the Company, Participants, any person claiming any rights under the
           Plan from or through any Participant, and stockholders. The express
           grant of any specific power to the Committee, and the taking of any
           action by the Committee, shall not be construed as limiting any power
           or authority of the Committee. The Committee may delegate to officers
           or managers of the Company or any subsidiary of the Company the
           authority, subject to such terms as the Committee shall determine, to
           perform administrative functions and such other functions of the
           Committee as the Committee may determine, to the fullest extent
           permitted under Section 157(c) and other applicable provisions of the
           Delaware General Corporation Law.
 
        (c)Limitation of Liability.  Each member of the Committee shall be
           entitled to, in good faith, rely or act upon any report or other
           information furnished to him by any officer or other employee of the
           Company or any subsidiary, the Company's independent certified public
           accountants, or any executive compensation consultant, legal counsel,
           or other professional retained by the Company to assist in the
           administration of the Plan. No member of the Committee, nor any
           officer or employee of the Company acting on behalf of the Committee,
           shall be personally liable for any action, determination, or
           interpretation taken or made in good faith with respect to the Plan,
           and all members of the Committee and any officer or employee of the
           Company acting on behalf of the Committee or members thereof shall,
           to the extent permitted by law, be fully indemnified and protected by
           the Company with respect to any such action, determination, or
           interpretation.
 
     4.Stock Available Under Plan; Per-Person Award Limitations; Adjustments.
 
        (a)Stock Reserved for Awards.  Subject to adjustment as hereinafter
           provided, the total number of shares of Stock reserved and available
           for delivery to Participants in connection with Awards under the Plan
           shall be 4,000,000(1). No Award may be granted if the number of
           shares to which such Award relates, when added to the
 
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(1) Pursuant to two-for-one stock split on February 14, 1997.
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    number of shares to which other then-outstanding Awards relate, exceeds the
    number of shares then remaining available for delivery under this Section 4.
    If all or any portion of an Award is forfeited, settled in cash, or
    otherwise terminated without delivery of shares to the Participant, the
    shares to which such Award or portion thereof related shall again be
    available for Awards under the Plan. The Committee may adopt procedures for
    the counting of shares relating to any Award to ensure appropriate counting
    and avoid double counting (in the case of tandem or substitute awards). Any
    shares of Stock delivered pursuant to an Award may consist, in whole or in
    part, of authorized and unissued shares or treasury shares.
 
        (b)Annual Individual Limitations.  During any calendar year, no
           Participant may be granted Options, SARs, Restricted Stock, Deferred
           Stock, and Stock as a bonus or in lieu of other awards under the Plan
           with respect to more than 150,000(2) shares of Stock. If a potential
           grant is authorized subject to performance conditions, this limit
           will apply at the time of such authorization rather than at the time
           of any resulting grant. In addition, the maximum value of any
           cash-denominated Annual Incentive Award that may be earned by
           satisfaction of performance conditions in any calendar year shall not
           exceed $2,000,000(2).
 
        (c)Adjustments.  In the event that the Committee shall determine that
           any dividend or other distribution (whether in the form of cash,
           Stock, or other property), recapitalization, forward or reverse
           split, reorganization, merger, consolidation, spin-off, combination,
           repurchase, or share exchange, or other similar corporate transaction
           or event, affects the Stock such that an adjustment is appropriate in
           order to prevent dilution or enlargement of the rights of
           Participants under the Plan, then the Committee shall, in such manner
           as it may deem equitable, adjust any or all of (i) the number and
           kind of shares of Stock reserved and available for Awards under
           Section 4(a), (ii) the number and kind of shares of outstanding
           Restricted Stock or other outstanding Award in connection with which
           shares have been issued or transferred to Participants, (iii) the
           number and kind of shares that may be issued or delivered in respect
           of other outstanding Awards, (iv) the exercise price, grant price, or
           purchase price relating to any Award (or, if deemed appropriate, the
           Committee may make provision for a cash payment with respect to any
           outstanding Award), and (v) the number of shares with respect to
           which Awards may be granted to a Participant in any calendar year, as
           set forth in Section 4(b). In addition, the Committee is authorized
           to make adjustments in the terms and conditions of, and any
           performance goals and other criteria included in, Awards in
           recognition of unusual or nonrecurring events (including, without
           limitation, events described in the preceding sentence) affecting the
           Company or any subsidiary or the financial statements of the Company
           or any subsidiary, or in response to changes in applicable laws,
           regulations, or accounting principles. The foregoing notwithstanding,
           no adjustments shall be authorized under this Section 4(c) with
           respect to ISOs or SARs in tandem therewith to the extent that such
           authority would cause the Plan to violate Section 422(b)(1) of the
           Code, and no such adjustment shall be authorized with respect to
           Awards relating to Stock or Annual Incentive Awards to the extent
           that such authority would cause such Awards intended to qualify as
           "qualified performance-based compensation" under
 
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(2) Approved by the stockholders at the Annual Meeting held on April 29, 1998.
                                       B-4
<PAGE>
 
    Section 162(m)(4)(C) of the Code and regulations thereunder to fail to so
    qualify.
 
     5.Eligibility.  Executive officers and other key employees of the Company
       and its subsidiaries, including any director or officer who is also such
       an employee, are eligible to be granted Awards under the Plan. The
       foregoing notwithstanding, no member of the Committee shall be eligible
       to be granted Awards under the Plan.
 
     6.Specific Terms of Awards.
 
        (a)General.  Awards may be granted on the terms and conditions set forth
           in this Section 6. In addition, the Committee may impose on any Award
           or the exercise thereof, at the date of grant or thereafter (subject
           to Section 9(e)), such additional terms and conditions not
           inconsistent with the provisions of the Plan, as the Committee shall
           determine, including terms requiring forfeiture of Awards in the
           event of termination of employment by the Participant or upon the
           occurrence of other events. Awards will be granted under the Plan in
           order to obtain for the Company and its subsidiaries the benefit of
           the services of Participants. The Committee may require the payment
           of other consideration for Awards, including in order to ensure that
           lawful consideration is paid for Stock in accordance with the
           Delaware General Corporation Law.
 
        (b)Options.  The Committee is authorized to grant Options to
           Participants on the following terms and conditions:
 
            (i)Exercise Price.  The exercise price per share of Stock
               purchasable under an Option shall be determined by the Committee;
               provided, however, that such exercise price shall be not less
               than the Fair Market Value of a share on the date of grant of
               such Option.
 
            (ii)Time and Method of Exercise.  The Committee shall determine the
                time or times at which an Option may be exercised in whole or in
                part, the methods by which such exercise price may be paid or
                deemed to be paid, the form of such payment, including, without
                limitation, cash, Stock (including Stock deliverable upon
                exercise, if such withholding will not result in additional
                accounting expense to the Company), other Awards or awards
                granted under other Company plans, or other property (including
                through "cashless exercise" arrangements, to the extent
                permitted by applicable law), and the methods by which Stock
                will be delivered or deemed to be delivered to Participants;
                provided, however, that Participants shall be permitted to
                specify that Stock issued upon exercise of Options shall be
                registered in the name of a person other than the Participant.
 
           (iii)Expiration Date of Options.  No Option shall expire later than
                ten years after the date of its grant.
 
           (iv)ISOs.  The terms of any ISO granted under the Plan shall comply
               in all respects with the provisions of Section 422 of the Code,
               including but not limited to the requirement that no ISO shall be
               granted more than ten years after the effective date of the Plan.
 
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<PAGE>
 
        (c)Stock Appreciation Rights ("SARs").  The Committee is authorized to
           grant SARs to Participants on the following terms and conditions:
 
            (i)Right to Payment.  An SAR shall confer on the Participant to whom
               it is granted a right to receive, upon exercise thereof, the
               excess of (A) the Fair Market Value of one share of Stock on the
               date of exercise, over (B) the grant price of the SAR as
               determined by the Committee as of the date of grant of the SAR,
               which shall be not less than the Fair Market Value of one share
               of Stock on the date of grant.
 
            (ii)Other Terms.  The Committee shall determine the time or times at
                which an SAR may be exercised in whole or in part, the method of
                exercise, method of settlement, form of consideration payable in
                settlement, method by which Stock will be delivered or deemed to
                be delivered to Participants, whether or not an SAR shall be in
                tandem with any other Award, and any other terms and conditions
                of any SAR. Limited SARs that may only be exercised upon the
                occurrence of a Change in Control (as such term is defined in
                Section 8(b) or as otherwise defined by the Committee) may be
                granted on such terms, not inconsistent with this Section 6(c),
                as the Committee may determine. Such Limited SARs may be either
                freestanding or in tandem with other Awards.
 
           (iii)Expiration Date of SARs.  No SAR shall expire later than ten
                years after the date of its grant.
 
        (d)Restricted Stock.  The Committee is authorized to grant Restricted
           Stock to Participants on the following terms and conditions:
 
            (i)Grant and Restrictions.  Restricted Stock shall be subject to
               such restrictions on transferability and other restrictions, if
               any, as the Committee may impose, which restrictions may lapse
               separately or in combination at such times, under such
               circumstances, in such installments, or otherwise as the
               Committee may determine; provided, however, that Restricted Stock
               the grant of which is not conditioned upon achievement of any
               performance objective shall be subject to a restriction on
               transferability and a risk of forfeiture for a period of not less
               than three years after the date of grant (except that the
               Committee may accelerate the lapse of such restrictions in the
               event of the Participant's termination of employment due to
               death, disability, normal or approved early retirement, or
               involuntary termination by the Company or a subsidiary without
               "cause," as defined by the Committee). Except to the extent
               restricted under the terms of the Plan and any Award Agreement
               relating to the Restricted Stock, a Participant granted
               Restricted Stock shall have all of the rights of a stockholder
               including, without limitation, the right to vote Restricted Stock
               or the right to receive dividends thereon.
 
            (ii)Forfeiture.  Except as otherwise determined by the Committee,
                upon termination of employment during the applicable restriction
                period, Restricted Stock that is at that time subject to
                restrictions shall be forfeited and reacquired by the Company;
                provided, however, that the Committee may provide by rule or
                regulation or in any Award Agreement, or may determine in any
                individual case, that restrictions or forfeiture conditions
                relating to Restricted Stock will be waived in whole or in part
                in the event of terminations resulting from specified causes,
                except as otherwise provided in Section 6(d)(i).
                                       B-6
<PAGE>
 
           (iii)Certificates for Stock.  Restricted Stock granted under the Plan
                may be evidenced in such manner as the Committee shall
                determine. If certificates representing Restricted Stock are
                registered in the name of the Participant, such certificates
                shall bear an appropriate legend referring to the terms,
                conditions, and restrictions applicable to such Restricted
                Stock, the Company shall retain physical possession of the
                certificate, and the Participant shall have delivered a stock
                power to the Company, endorsed in blank, relating to the
                Restricted Stock.
 
           (iv)Dividends and Distributions.  Dividends paid on Restricted Stock
               shall be either paid at the dividend payment date in cash or in
               shares of unrestricted Stock having a Fair Market Value equal to
               the amount of such dividends, or the payment of such dividends
               shall be deferred and/or the amount or value thereof
               automatically reinvested in additional Restricted Stock, other
               Awards, or other investment vehicles, as the Committee shall
               determine or permit the Participant to elect. To this end, the
               Committee may require or permit such dividends to be
               automatically reinvested through any dividend reinvestment plan
               or program of the Company, subject to such terms and conditions
               as the committee may specify. Stock distributed in connection
               with a Stock split or Stock dividend, and other property
               distributed as a dividend, shall be subject to restrictions and a
               risk of forfeiture to the same extent as the Restricted Stock
               with respect to which such Stock or other property is
               distributed.
 
        (e)Deferred Stock.  The Committee is authorized to grant Deferred Stock
           to Participants, subject to the following terms and conditions:
 
            (i)Award and Restrictions.  Delivery of Stock will occur upon
               expiration of the deferral period specified for an Award of
               Deferred Stock by the Committee (or, if permitted by the
               Committee, as elected by the Participant.) In addition, Deferred
               Stock shall be subject to such restrictions as the Committee may
               impose, if any, which restrictions may lapse at the expiration of
               the deferral period or at earlier specified times, separately or
               in combination, under such circumstances, in such installments,
               or otherwise as the Committee may determine.
 
            (ii)Forfeiture.  Except as otherwise determined by the Committee,
                upon termination of employment during the applicable deferral
                period or portion thereof to which forfeiture conditions apply
                (as provided in the Award Agreement evidencing the Deferred
                Stock), all Deferred Stock that is at that time subject to such
                risk of forfeiture shall be forfeited; provided, however, that
                the Committee may provide, by rule or regulation or in any Award
                Agreement, or may determine in any individual case, that
                restrictions or forfeiture conditions relating to Deferred Stock
                will be waived in whole or in part in the event of terminations
                resulting from specified causes. Deferred Stock subject to a
                risk of forfeiture may be called "restricted stock units" or
                otherwise designated by the Committee.
 
        (f) Bonus Stock and Awards in Lieu of Cash Obligations.  The Committee
            is authorized to grant Stock as a bonus, or to grant Stock or other
            Awards in lieu of Company obligations to pay cash under other plans
            or compensatory arrange-
 
                                       B-7
<PAGE>
 
            ments. Stock or Awards granted hereunder shall be subject to such
            other terms as shall be determined by the Committee.
 
        (g)Dividend Equivalents.  The Committee is authorized to grant Dividend
           Equivalents to a Participant, entitling the Participant to receive
           cash, Stock, other Awards, or other property equal in value to
           dividends paid with respect to a specified number of shares of Stock.
           Dividend Equivalents may be awarded on a freestanding basis or in
           connection with another Award. The Committee may provide that
           Dividend Equivalents shall be paid or distributed when accrued or
           shall be deemed to have been reinvested in additional Stock, Awards,
           or other investment vehicles, and subject to such restrictions on
           transferability and risks of forfeiture, as the Committee may
           specify.
 
        (h)Annual Incentive Awards.  The Committee is authorized to grant Annual
           Incentive Awards, which Awards shall represent a conditional right to
           receive cash and/or Restricted Stock upon achievement of
           preestablished performance objectives, subject to the following terms
           and conditions:
 
            (i)Status of Awards under Section 162(m) of the Code.  It is the
               intent of the Company that Annual Incentive Awards under this
               Section 6(i) granted to persons who are "covered employees"
               within the meaning of Code Section 162(m) and regulations
               thereunder (including Proposed Regulation 1.162-27 until such
               time as successor proposed regulations or final regulations may
               be adopted) shall constitute "qualified performance-based
               compensation" within the meaning of Code Section 162(m) and
               regulations thereunder. Accordingly, this Section 6(i), and the
               definition of "covered employee" and other terms used herein,
               shall be interpreted in a manner consistent with Code Section
               162(m) of the Code and regulations thereunder. The foregoing
               notwithstanding, because the Committee cannot determine with
               certainty whether a given Participant will be a "covered
               employee" with respect a fiscal year that has not yet been
               completed, the term "covered employee" as used in this Section
               6(i) shall mean only a person determined by the Committee, at the
               time of grant of an Annual Incentive Award, likely to be a
               "covered employee" with respect to that fiscal year.
 
            (ii)Grants of Annual Incentive Awards.  If the Committee determines
                to grant Annual Incentive Awards with respect to any fiscal
                year, the Committee shall select the Participants to be granted
                such Awards and establish the performance objectives, amounts
                payable and other terms of settlement, and all other terms of
                such Awards. Such determinations by the Committee shall be made,
                in the case of any covered employee, not later than the end of
                the first quarter of that fiscal year or such earlier date as
                may be necessary to comply with Code Section 162(m) and
                regulations thereunder.
 
           (iii)Performance Objectives and Amounts Payable.  The performance
                objectives relating to an Annual Incentive Award shall consist
                of (A) one(3) or more business criteria, (B) minimum, targeted,
                and maximum levels of performance with respect to each such
                business criteria, and (C) amounts payable upon achievement of
                such levels of performance and at other levels of performance
 
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(3) Approved by the stockholders at the Annual Meeting held on April 24, 2001.
                                       B-8
<PAGE>
 
    between the specified minimum and maximum levels, as specified by the
    Committee subject to this Section 6(i). In the case of persons determined by
    the Committee to be covered employees, performance objectives shall be
    objective and shall otherwise meet the requirements of Section 162(m)(4) (C)
    of the Code and regulations thereunder, and the business criteria used by
    the Committee in establishing performance objectives necessary to qualify
    the Award as "performance-based" under Section 162(m) shall be selected from
    among the following:
 
               (1) Annual return on capital;
 
               (2) Annual earnings per share;
 
               (3) Annual cash flow provided by operations;
 
               (4) Annual sales;
 
               (5) Strategic business criteria, consisting of one or more
                   objectives based on meeting specified sales, market
                   penetration, geographic business expansion goals, cost
                   targets, safety goals, goals relating to acquisitions or
                   divestitures, research and development and product
                   development goals; and/or
 
               (6) Economic value-added measures.(4)
 
               The Committee may, in its discretion, specify business criteria
               other than those stated above in establishing business objectives
               for such Awards to Participants other than covered employees, but
               may not specify business criteria other than those stated above
               in establishing the business objectives necessary to qualify the
               Award as "performance-based" under Section 162(m) for such Awards
               to covered employees. The levels of performance required with
               respect to such business criteria may be expressed in absolute or
               relative levels. Achievement of performance objectives necessary
               to qualify the Award as "performance-based" under Section 162(m)
               with respect to such Awards shall be measured over a period of
               one year. Performance objectives may differ for such Awards to
               different Participants, including such Awards to different
               covered employees. The Committee shall specify the weighting to
               be given to each performance objective for purposes of
               determining the final amount payable with respect to any such
               Award.
 
           (iv)Payment of Cash and/or Restricted Stock in Settlement.  The
               Committee shall specify whether and to what extent an Annual
               Incentive Award shall be settled in cash, in shares of Restricted
               Stock, or in a combination thereof. With respect to covered
               employees, the Committee shall specify the form or forms of
               settlement at the time of grant of such Award. If any Restricted
               Stock is awarded in settlement of such an Award, at least 50% of
               such Restricted Stock shall be subject to a restriction on
               transferability and a risk of forfeiture for a period extending
               until the end of the third fiscal year following the year to
               which such Award related (except that the Committee may
               accelerate the lapse of such restrictions in the event of the
               Participant's termination of
 
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(4) Approved by the stockholders at the Annual Meeting held on April 24, 2001.
                                       B-9
<PAGE>
 
    employment due to death, disability, normal or approved early retirement, or
    involuntary termination by the Company or a subsidiary without "cause," as
    defined by the Committee). The Committee may specify additional or longer
    restrictions on transferability and risks of forfeiture with respect to such
    Restricted Stock.
 
           (v) Committee Determinations and Adjustments to Amounts Payable.  As
               promptly as practicable following completion of the year or other
               period with respect to which performance objectives relating to
               Annual Incentive Awards are to be achieved, the Committee shall
               determine whether and to what extent such performance objectives
               have in fact been achieved. All such determinations by the
               Committee shall be made in writing. The Committee may, in its
               discretion, increase or reduce the amounts payable in settlement
               of such an Award after the date of grant and prior to settlement
               (including upon consideration by the Committee of other
               performance criteria), except that the Committee may not exercise
               discretion to increase the amounts payable in settlement of such
               an Award to a covered employee. The Committee may not delegate
               any responsibility under this Section 6(i).
 
        (i)Other Performance Awards.  The Committee is authorized to grant
           Restricted Stock, Deferred Shares, and bonus Stock in the form of
           performance Awards. Such Awards may be authorized by the Committee,
           with the grant subject to achievement of performance objectives, or
           the Awards in the form of Restricted Stock or Deferred Shares may be
           granted with terms that require achievement of performance objectives
           as a condition of vesting, in whole or in part. The Committee may use
           such business criteria and other measures of performance as it may
           deem appropriate in establishing any performance objectives; provided
           that, in the case of persons determined by the Committee to be
           covered employees, performance objectives shall be objective and
           shall otherwise meet the requirements of Section 162(m)(4)(C) of the
           Code and regulations thereunder, and the business criteria used by
           the Committee in establishing performance objectives necessary to
           qualify the Award as "performance-based" under Section 162(m) shall
           be selected from among those set forth in Section 6(h)(iii).
           Performance Awards may measure performance over such period or
           periods as the Committee may select. Performance objectives may be
           established at such times as the Committee may select, except that in
           the case of Awards intended to qualify as "performance-based" under
           Section 162(m) the Committee shall establish the qualifying
           performance objectives by the deadline applicable under the Section
           162(m) regulations. Determinations as to whether performance
           objectives have been met and performance Awards earned shall be made
           in writing and otherwise consistent with the requirements of Section
           6(h)(v).
 
     7.Certain Provisions Applicable to Awards.
 
        (a)Stand-Alone, Additional, Tandem, and Substitute Awards.  Awards
           granted under the Plan may, in the discretion of the Committee, be
           granted either alone or in addition to, in tandem with, or in
           substitution for, any other Award granted under the Plan or any award
           granted under any other plan of the Company, any subsidiary, or any
           business entity to be acquired by the Company or a subsidiary, or any
           other right of a Participant to receive payment from the Company or
           any
 
                                       B-10
<PAGE>
 
           subsidiary. Awards granted in addition to or in tandem with other
           Awards or awards may be granted either as of the same time as or a
           different time from the grant of such other Awards or awards.
 
        (b)Term of Awards.  The term of each Award shall be for such period as
           may be determined by the Committee, subject to Sections 6(b)(iii) and
           6(c)(iii).
 
        (c)Form of Payment Under Awards.  Subject to the terms of the Plan and
           any applicable Award Agreement, payments to be made by the Company or
           a subsidiary upon the grant or exercise of an Award may be made in
           such forms as the Committee shall determine, including without
           limitation, cash, Stock, other Awards, or other property, and may be
           made in a single payment or transfer, in installments, or on a
           deferred basis. Such payments may include, without limitation,
           provisions for the payment or crediting or reasonable interest on
           installment or deferred payments or the grant or crediting of
           Dividend Equivalents in respect of installment or deferred payments
           denominated in Stock.
 
        (d)Rule 16b-3 Compliance.
 
It is the intent of the Company that grants and other acquisition transactions
under this Plan shall be covered by exemptions under Rule 16b-3 under the
Exchange Act in the case of a Participant who is subject to Section 16 of the
Exchange Act, and therefore the Plan shall be construed and interpreted in a
manner consistent with Rule 16b-3. Unless otherwise specified by the Participant
or the Committee, equity securities or derivative securities acquired under the
Plan which are disposed of by a Participant shall be deemed to be disposed of in
the order acquired by the Participant.
 
        (e)Awards to Participants Outside the United States.  The Committee may
           modify the terms of any Award under the Plan made to or held by a
           Participant who is then resident or primarily employed outside of the
           United States in any manner deemed by the Committee to be necessary
           or appropriate in order that such Award shall conform to laws,
           regulations, and customs of the country in which the Participant is
           then resident or primarily employed, or so that the value and other
           benefits of the Award to the Participant, as affected by foreign tax
           laws and other restrictions applicable as a result of the
           Participant's residence or employment abroad, shall be comparable to
           the value of such an Award to a Participant who is resident or
           primarily employed in the United States. An Award may be modified
           under this Section 7(e) in a manner that is inconsistent with the
           express terms of the Plan, so long as such modifications will not
           contravene any applicable law or regulation or result in actual
           liability under Section 16(b) for the Participant whose Award is
           modified.
 
     8.Change in Control Provisions.
 
        (a) In the event of a "Change in Control," as defined in this Section,
            the following acceleration provisions shall apply, unless otherwise
            provided in the applicable Award Agreement (subject to Section
            9(e)):
 
            (i) any Award carrying a right to exercise that was not previously
                exercisable and vested shall become fully exercisable and
                vested, subject only to the restrictions set forth in Sections
                7(d)(i) and 9(a); and
 
                                       B-11
<PAGE>
 
            (ii) In the case of any other type of Award, if it is not then
                 subject to performance conditions, the restrictions, deferral
                 of settlement, and forfeiture conditions applicable to such
                 Award shall lapse and such Award shall be deemed fully vested,
                 subject to the restrictions set forth in Sections 7(d)(i) and
                 9(a).
 
           (iii) In the case of any other type of Award then subject to
                 performance conditions, the Award Agreement and other
                 document(s) governing the Award shall specify whether and the
                 extent to which the performance conditions will be deemed met
                 and restrictions, deferral of settlement, and forfeiture
                 conditions applicable to any other Award granted under the Plan
                 shall lapse and the Award be deemed fully vested, subject to
                 the restrictions set forth in Sections 7(d)(i) and 9(a).
 
        (b) For purposes of the Plan, a "Change in Control" shall have occurred
            if:
 
            (i)Stock Acquisition.  Any "person" (as such term is used in Section
               13(d) and 14(d)(2) of the Exchange Act), other than the Company
               or a corporation a majority of whose outstanding stock entitled
               to vote is owned, directly or indirectly, by the Company, is or
               becomes, other than by purchase from the Company or such a
               corporation, the "beneficial owner" (as such term is defined in
               Rule 13d-3 under the Exchange Act), directly or indirectly, of
               securities of the Company representing 20% or more of the
               combined voting power of the Company's then outstanding voting
               securities. Such a Change in Control shall be deemed to have
               occurred on the first to occur of the business day immediately
               preceding the date securities are first purchased by a tender or
               exchange offer, or the date on which the Company first learns of
               the acquisition of 20% of such securities, or the earlier of the
               business day immediately preceding the effective date of an
               agreement for the merger, consolidation or other reorganization
               of the Company or the date of approval thereof by the
               stockholders of the Company, as the case may be.
 
            (ii)Change in Board.  During any period of two consecutive years,
                individuals who at the beginning of such period were members of
                the Board of Directors, (and any new director whose election by
                the Board or nomination for election by the Company's
                stockholders was approved by a vote of at least two-thirds
                ( 2/3) of the directors then still in office who either were
                directors at the beginning of the period or whose election or
                nomination for election was previously so approved,) cease for
                any reason to constitute at least a majority of the Board of
                Directors. Such a Change in Control shall be deemed to have
                occurred on the date upon which the requisite majority of
                directors fail to be elected by the stockholders of the Company.
 
           (iii)Other Events.  There occurs a change in control of the Company
                of a nature that would be required to be reported as such in
                response to Item 1(a) of the Current Report of Form 8-K pursuant
                to Section 13 or 15(d) of the Exchange Act, or any successor
                provision to such Item relating to a "change in control," or in
                any other filing under the Exchange Act.
 
     9. General Provisions.
 
        (a)Compliance with Laws and Obligations.  The Company shall not be
           obligated to issue or deliver Stock in connection with any Award or
           take any other action under
 
                                       B-12
<PAGE>
 
           the Plan in a transaction subject to the registration requirements of
           the Securities Act of 1933, as amended, or any other federal or state
           securities law, any requirement under any listing agreement between
           the Company and any national securities exchange or automated
           quotation system, or any other law, regulation, or contractual
           obligation of the Company, until the Company is satisfied that such
           laws, regulations, and other obligations of the Company have been
           complied with in full. Certificates representing shares of Stock
           delivered under the Plan will be subject to such stop-transfer orders
           and other restrictions as may be applicable under such laws,
           regulations, and other obligations of the Company, including any
           requirement that a legend or legends be placed thereon.
 
        (b)Limitations on Transferability.  Awards and other rights under the
           Plan, including any Award or right which constitutes a derivative
           security as generally defined in Rule 16a-1(c) under the Exchange
           Act, will not be transferable by a Participant except by will or the
           laws of descent and distribution (or to a designated Beneficiary in
           the event of the Participant's death), and, if exercisable, shall be
           exercisable during the lifetime of a Participant only by such
           Participant or his guardian or legal representative; provided,
           however, that such Awards and other rights (other than ISOs and SARs
           in tandem therewith) may be transferred to one or more Beneficiaries
           during the lifetime of the Participant in connection with the
           Participant's estate planning, and may be exercised by such
           transferees in accordance with the terms of such Award, but only if
           and to the extent then consistent with the registration of the offer
           and sale of Stock on Form S-8 or a successor registration form of the
           Securities and Exchange Commission, and permitted by the Committee.
           Awards and other rights under the Plan may not be pledged, mortgaged,
           hypothecated, or otherwise encumbered, and shall not be subject to
           the claims of creditors.
 
        (c)No Right to Continued Employment.  Neither the Plan nor any action
           taken hereunder shall be construed as giving any employee the right
           to be retained in the employ of the Company or any of its
           subsidiaries, nor shall it interfere in any way with the right of the
           Company or any of its subsidiaries to terminate any employee's
           employment at any time.
 
        (d)Taxes.  The Company and any subsidiary is authorized to withhold from
           any Award granted or to be settled, any delivery of Stock in
           connection with an Award, any other payment relating to an Award, or
           any payroll or other payment to a Participant amounts of withholding
           and other taxes due or potentially payable in connection with any
           transaction involving an Award, and to take such other action as the
           Committee may deem advisable to enable the Company and Participants
           to satisfy obligations for the payment of withholding taxes and other
           tax obligations relating to any Award. This authority shall include
           authority to withhold or receive Stock or other property and to make
           cash payments in respect thereof in satisfaction of a Participant's
           tax obligations; in such case, the shares withheld shall be deemed to
           have been delivered for purposes of Section 4(a).
 
        (e)Changes to the Plan and Awards.  The Board may amend, alter, suspend,
           discontinue, or terminate the Plan or the Committee's authority to
           grant Awards under the Plan without the consent of stockholders or
           Participants, except that any such action shall be subject to the
           approval of the Company's stockholders at or before
 
                                       B-13
<PAGE>
 
           the next annual meeting of stockholders for which the record date is
           after such Board action if such stockholder approval is required by
           any federal or state law or regulation or the rules of any stock
           exchange or automated quotation system on which the Stock may then be
           listed or quoted, and the Board may otherwise, in its discretion,
           determine to submit other such changes to the Plan to stockholders
           for approval; provided, however, that, without the consent of an
           affected Participant, no such action may materially impair the rights
           of such Participant under any Award theretofore granted to him. The
           Committee may waive any conditions or rights under, or amend, alter,
           suspend, discontinue, or terminate, any Award theretofore granted and
           any Award Agreement relating thereto; provided, however, that this
           authority does not override any express limitation in the Plan, so
           that the Committee may not waive any condition or right that would be
           mandatory under the Plan if the same Award were then being newly
           granted, and provided further, that, without the consent of an
           affected Participant, no such action may materially impair the rights
           of such Participant under such Award.
 
        (f) No Rights to Awards; No Stockholder Rights.  No Participant or
            employee shall have any claim to be granted any Award under the
            Plan, and there is no obligation for uniformity of treatment of
            Participants and employees. No Award shall confer on any Participant
            any of the rights of a stockholder of the Company unless and until
            Stock is duly issued or transferred to the Participant in accordance
            with the terms of the Award or, in the case of an Option, the Option
            is duly exercised.
 
        (g)Unfunded Status of Awards; Creation of Trusts.  The Plan is intended
           to constitute an "unfunded" plan for incentive and deferred
           compensation. With respect to any payments not yet made to a
           Participant pursuant to an Award, nothing contained in the Plan or
           any Award shall give any such Participant any rights that are greater
           than those of a general creditor of the Company; provided, however,
           that the Committee may authorize the creation of trusts or make other
           arrangements to meet the Company's obligations under the Plan to
           deliver cash, Stock, other Awards, or other property pursuant to any
           Award, which trusts or other arrangements shall be consistent with
           the "unfunded" status of the Plan unless the Committee otherwise
           determines with the consent of each affected Participant.
 
        (h)Nonexclusivity of the Plan.  Neither the adoption of the Plan by the
           Board nor its submission to the stockholders of the Company for
           approval shall be construed as creating any limitations on the power
           of the Board to adopt such other compensatory arrangements as it may
           deem desirable, including, without limitation, the granting of stock
           options otherwise than under the Plan, and such arrangements may be
           either applicable generally or only in specific cases.
 
        (i) No Fractional Shares.  No fractional shares of Stock shall be issued
            or delivered pursuant to the Plan or any Award. The Committee shall
            determine whether cash, other Awards, or other property shall be
            issued or paid in lieu of such fractional shares or whether such
            fractional shares or any rights thereto shall be forfeited or
            otherwise eliminated.
 
        (j) Compliance with Code Section 162(m).  It is the intent of the
            Company that Options, SARs, Annual Incentive Awards, and other
            performance-based Awards granted under Section 6(i) to covered
            employees shall constitute "qualified performance-based
            compensation" within the meaning of Code Section 162(m)
 
                                       B-14
<PAGE>
 
            and regulations thereunder (including Proposed Regulation 1.162-27).
            Accordingly, if any provision of the Plan or any Award Agreement
            relating to such an Award does not comply or is inconsistent with
            the requirements of Code Section 162(m) or regulations thereunder,
            such provision shall be construed or deemed amended to the extent
            necessary to conform to such requirements, and no provision shall be
            deemed to confer upon the Committee or any other person discretion
            to increase the amount of compensation otherwise payable in
            connection with any such Award upon attainment of the performance
            objectives.
 
        (k)Governing Law.  The validity, construction, and effect of the Plan,
           any rules and regulations under the Plan, and any Award Agreement
           will be determined in accordance with the Delaware General
           Corporation Law, to the extent applicable, other laws (including
           those governing contracts) of the Commonwealth of Pennsylvania,
           without giving effect to principles of conflicts of laws, and
           applicable federal law.
 
         (l)Effective Date, Stockholder Approval, and Plan Termination.  The
            Plan became effective on January 1, 1995, and was approved by
            stockholders on April 25, 1995. Unless earlier terminated by action
            of the Board of Directors, the Plan will remain in effect until such
            time as no Stock remains available for delivery under the Plan and
            the Company has no further rights or obligations under the Plan with
            respect to outstanding Awards under the Plan.