RIVIANA FOODS INC /DE/, DEF 14A, 1997-09-24

RIVIANA FOODS INC /DE/
DEF 14A, 1997-09-24
GRAIN MILL PRODUCTS

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12

RIVIANA FOODS INC.
(Name of Registrant as Specified in its Charter)

_____________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1. Title of each class of securities to which transaction applies:

2. Aggregate number of securities to which transaction applies:

3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:

4. Proposed maximum aggregate value of transaction:

5. Total fee paid:

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
<PAGE>
[RIVIANA LOGO]

RIVIANA FOODS INC. 2777 ALLEN PARKWAY, HOUSTON, TEXAS 77019-2141
TEL. (713) 529-3251

September 30, 1997

To the Stockholders of Riviana Foods Inc.:

The Annual Meeting of Stockholders of Riviana Foods Inc. will be held at
the Riviana Building, Plaza I, 2777 Allen Parkway, Houston, Texas 77019-2141, at
9:00 a.m., Central Time, on Wednesday, October 22, 1997.

A Notice of Annual Meeting of Stockholders, proxy and Proxy Statement,
which contains information about the matters to be acted upon at the Annual
Meeting, are enclosed. The Company's 1997 Annual Report, which is not a part of
the enclosed Proxy Statement, is also enclosed and provides additional
information regarding the financial results of the Company in fiscal year 1997.
Holders of the Company's Common Stock are entitled to vote at the Annual Meeting
on the basis of one vote for each share held.

All stockholders of the Company are cordially invited to attend the Annual
Meeting. If you cannot attend, please assist us in preparing for the Annual
Meeting by promptly completing, signing, dating and returning your proxy. Even
though you return your completed and signed proxy, you still will retain the
right to revoke your proxy designation at any time prior to the Annual Meeting
and vote in person if you wish. The prompt return of proxies will ensure a
quorum and save the Company the expense of further solicitation.

Very truly yours,
/s/ FRANK A. GODCHAUX III
Frank A. Godchaux III
CHAIRMAN OF THE BOARD

WHETHER YOU PLAN TO BE PRESENT AT THE ANNUAL MEETING OR NOT, YOU ARE URGED
TO COMPLETE, SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED PROXY. IF YOU ATTEND
THE ANNUAL MEETING, YOU CAN VOTE EITHER IN PERSON OR BY YOUR PROXY.
<PAGE>
RIVIANA FOODS INC.
2777 ALLEN PARKWAY
HOUSTON, TEXAS 77019-2141

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 22, 1997

To the Stockholders of Riviana Foods Inc.:

Notice is hereby given that the Annual Meeting of Stockholders (the
"Annual Meeting") of Riviana Foods Inc. (the "Company") will be held at the
Riviana Building, Plaza I, 2777 Allen Parkway, Houston, Texas 77019-2141, at
9:00 a.m., Central Time, on Wednesday, October 22, 1997, for the following
purposes:

1. To elect eleven persons to serve as directors until the 1998
annual meeting of stockholders and until their successors have been elected
and have qualified;

2. To adopt the 1997 Stock Option Plan as more fully described under
"Proposal No. 2;"

3. To ratify the appointment of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending June 28, 1998;
and

4. To transact such other business as may properly come before the
Annual Meeting, or any adjournment or adjournments thereof.

Stockholders of record at the close of business on September 25, 1997 will
be entitled to notice of and to vote at the Annual Meeting, or any adjournment
or adjournments thereof. All stockholders of the Company are cordially invited
to attend the Annual Meeting. Those who will not attend and who wish their
shares voted are requested to complete, sign, date and return promptly the
enclosed proxy for which a stamped return envelope is provided.

By Order of the Board of Directors
/s/ ELIZABETH B. WOODARD
Elizabeth B. Woodard
SECRETARY

Houston, Texas
September 30, 1997

SOLICITATION AND REVOCABILITY OF PROXIES

This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Riviana Foods Inc., a Delaware
corporation (the "Company"), for use at the annual meeting of stockholders to
be held at the Riviana Building, Plaza I, 2777 Allen Parkway, Houston, Texas
77019-2141, at 9:00 a.m., Central Time, on Wednesday, October 22, 1997, or at
any adjournment or adjournments thereof (such meeting and any adjournments
thereof collectively referred to as the "Annual Meeting"). Copies of the
Notice of Annual Meeting of Stockholders, proxy and Proxy Statement are being
mailed to stockholders on or about September 30, 1997.

In addition to solicitation by mail, solicitation of proxies may be made by
personal interview, special letter, telephone or telecopy by the officers,
directors and employees of the Company. Brokerage firms will be requested to
forward proxy materials to beneficial owners of shares registered in their names
and will be reimbursed for their expenses. The cost of solicitation of proxies
will be borne by the Company.

A proxy received by the Board of Directors of the Company may be revoked by
the stockholder giving the proxy at any time before it is exercised. A
stockholder may revoke a proxy by notification in writing to the Company at 2777
Allen Parkway, Houston, Texas 77019-2141, Attention: Secretary. A proxy may also
be revoked by execution of a proxy bearing a later date or by attendance at the
Annual Meeting and voting by ballot. A proxy in the form accompanying this Proxy
Statement, when properly executed and returned, will be voted in accordance with
the instructions contained therein. A proxy received by management which does
not withhold authority to vote or on which no specification has been indicated
will be voted in favor of the proposals set forth in this Proxy Statement and
for the nominees for the Board of Directors of the Company named in Proposal No.
1 of this Proxy Statement. A majority of the outstanding shares of common stock,
par value $1.00 per share (the "Common Stock"), will constitute a quorum at
the Annual Meeting. Abstentions and broker non-votes will be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. Abstentions will be counted in tabulations of the votes cast on
proposals presented to stockholders, whereas broker non-votes will not be
counted for purposes of determining whether a proposal has been approved.

At the date of this Proxy Statement, management of the Company does not
know of any business to be presented at the Annual Meeting other than those
matters which are set forth in the Notice of Annual Meeting of Stockholders
accompanying this Proxy Statement. If any other business should properly come
before the Annual Meeting, it is intended that the shares represented by proxies
will be voted with respect to such business in accordance with the judgment of
the persons named in the proxy.

COMMON STOCK OUTSTANDING AND PRINCIPAL HOLDERS THEREOF

The Board of Directors has fixed the close of business on September 25,
1997, as the record date for the determination of stockholders entitled to
notice of and to vote at the Annual Meeting. At the record date there were
outstanding 15,755,660 shares of Common Stock and the holders thereof will be
entitled to one vote for each share of Common Stock held of record by them on
the record date for each proposal to be presented at the Annual Meeting.
<PAGE>
The following table sets forth information with respect to the shares of
Common Stock (the only outstanding class of voting securities of the Company)
owned of record and beneficially as of September 25, 1997, unless otherwise
specified, by (a) each named executive officer and director, (b) all persons who
own of record or are known by the Company to own beneficially more than 5% of
the outstanding shares of Common Stock and (c) all directors, nominees for
director and executive officers of the Company as a group:

AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- ------------------------------------- ---------- ---------
Joseph A. Hafner, Jr. ............... 991,418 (1) 6.3%
P.O. Box 2636
Houston, Texas 77252-2636
W. David Hanks ...................... 266,000 (2) 1.7
E. Wayne Ray, Jr. ................... 84,000 *
Ranvir B. Mohindra .................. 64,000 *
Christopher L. Haines ............... 35,000 *
Frank A. Godchaux III ............... 839,000 (3) 5.3
P.O. Box 278
Abbeville, Louisiana 70511-0278
Charles R. Godchaux ................. 6,097,100 (4) 38.7
P.O. Box 278
Abbeville, Louisiana 70511-0278
Leslie K. Godchaux .................. 5,586,200 (5) 35.5
P.O. Box 278
Abbeville, Louisiana 70511-0278
W. Elton Kennedy .................... 123,000 (6) *
E. James Lowrey ..................... 12,000 *
Theresa G. Payne .................... 5,561,000 (7) 35.3
P.O. Box 278
Abbeville, Louisiana 70511-0278
Patrick W. Rose ..................... 3,000 (8) *
Thomas B. Walker, Jr. ............... 120,000 *
Mary G. Wieck ....................... 13,200 (9) *
Abbeville Family Partnership, L.P. .. 5,537,000 (10) 35.2
P.O. Box 269
Abbeville, Louisiana 70511-0269
All directors and executive officers
as a group (23 persons) ........... 8,954,482 (11) 56.9
- ------------
* Less than 1.0%

(1) Includes (a) 321,866 shares owned beneficially and of record by Mr. Hafner,
(b) 5,136 shares owned of record by a custodian for the benefit of Mr.
Hafner's minor child, which custodian exercises sole voting and investment
authority with respect to said shares and as to which Mr. Hafner disclaims
beneficial ownership, (c) 308,208 shares held in trust for the benefit of
Mr. Hafner as to which he exercises sole voting and investment authority,
(d) 308,208 shares held in trust for the benefit of Mr. Hafner's wife as to
which she exercises sole voting and investment authority and as to which
Mr. Hafner disclaims beneficial ownership and (e) 48,000 shares held in
various trusts, as to 24,000 shares of which Mr. Hafner exercises sole
voting and investment authority, and as to 24,000 shares of which he shares
voting and investment authority with a co-trustee.

(2) Includes (a) 255,000 shares owned beneficially and of record by Mr. Hanks
and (b) 11,000 shares owned of record by his wife in her capacity as
custodian for the benefit of Mr. Hanks' children, as to

(FOOTNOTES CONTINUED ON FOLLOWING PAGE)

2
<PAGE>
which she as custodian exercises sole voting and investment authority, and
as to which Mr. Hanks disclaims beneficial ownership.

(3) Includes (a) 539,000 shares owned beneficially and of record by Mr. F.A.
Godchaux and (b) 300,000 shares owned of record by Mr. F.A. Godchaux's wife
who exercises sole voting and investment authority with respect thereto,
and as to which Mr. F.A. Godchaux disclaims beneficial ownership. The
amount in the table excludes 421,435 shares owned of record by a limited
partnership, as to which the three general partners share voting and
investment authority, and with respect to which Mr. F.A. Godchaux has a
limited partnership interest and an indirect ownership interest in his
capacity as a shareholder of a corporate general partner of the limited
partnership.

(4) Includes (a) 559,100 shares owned beneficially and of record by Mr. C.R.
Godchaux, (b) 1,000 shares owned beneficially and of record by Mr. C.R.
Godchaux's wife who exercises sole voting and investment authority with
respect thereto, and as to which Mr. C.R. Godchaux disclaims beneficial
ownership and (c) 5,537,000 shares owned of record by a limited
partnership, with respect to which Mr. C.R. Godchaux, in his capacity as
president of a corporate general partner of the limited partnership, shares
voting and investment authority with two other general partners. The amount
in the table excludes 12,000 shares held in various trusts for the benefit
of Mr. C.R. Godchaux, as to which the respective trustees of said trusts
exercise sole voting and investment authority.

(5) Includes (a) 12,000 shares owned beneficially and of record by Ms. L.K.
Godchaux, (b) 1,200 shares owned of record by Ms. L.K. Godchaux's husband
who exercises sole voting and investment authority with respect thereto,
and as to which Ms. L.K. Godchaux disclaims beneficial ownership, (c)
5,537,000 shares owned of record by a limited partnership, in which Ms.
L.K. Godchaux is a general partner and (d) 36,000 shares held in various
trusts, as to 12,000 shares of which Ms. L.K. Godchaux exercises sole
voting and investment authority, and as to 24,000 shares of which she
shares voting and investment authority with a co-trustee.

(6) Includes (a) 94,000 shares owned beneficially and of record by Mr. Kennedy,
(b) 9,800 shares owned of record by Mr. Kennedy's wife who exercises sole
voting and investment authority with respect thereto, and as to which Mr.
Kennedy disclaims beneficial ownership and (c) 19,200 shares held in trust
for the benefit of Mr. Kennedy's children, as to which he exercises sole
voting and investment authority as trustee.

(7) Includes (a) 12,000 shares owned beneficially and of record by Mrs. Payne,
(b) 12,000 shares held in a trust as to which Mrs. Payne exercises sole
voting and investment authority in her capacity as trustee and (c)
5,537,000 shares owned of record by a limited partnership with respect to
which Mrs. Payne, in her capacity as Chairman of the Board of a corporate
general partner of the limited partnership, shares voting and investment
authority with two other general partners.

(8) Includes 3,000 shares held in a family trust, as to which Mr. Rose shares
voting and investment authority with a co-trustee.

(9) Includes (a) 12,000 shares owned beneficially and of record by Mrs. Wieck
and (b) 1,200 shares owned of record by Mrs. Wieck's husband who exercises
sole voting and investment authority with respect thereto, and as to which
Mrs. Wieck disclaims beneficial ownership. The amount in the table excludes
320,377 shares owned of record by a limited partnership, as to which the
three general partners share voting and investment authority, and with
respect to which Mrs. Wieck has a limited partnership interest and an
indirect ownership interest in her capacity as a shareholder of a corporate
general partner of the limited partnership.

(10) Voting and investment authority of shares owned by Abbeville Family
Partnership, L.P. is exercised by Mr. C.R. Godchaux, Ms. L.K. Godchaux and
Mrs. Payne, who are direct or indirect general partners of the partnership.
See notes (4), (5) and (7).

(11) Notes (1), (2), (3), (4), (6), (7), (8) and (9) apply.

3
<PAGE>
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS

GENERAL

Eleven directors are to be elected at the Annual Meeting. The persons named
as proxy holders in the accompanying proxy intend to vote each properly signed
and submitted proxy for the election as a director of each of the persons named
as a nominee below unless authority to vote in the election of directors is
withheld on such proxy. If, for any reason, at the time of the election any of
such nominees should be unable to serve, the proxy will be voted for a
substitute nominee or nominees selected by the Board of Directors. Directors are
elected by a plurality of votes cast at the Annual Meeting. Pursuant to the
Company's Bylaws, any nomination of other persons to be elected as directors at
the Annual Meeting may only be made by a stockholder who (a) is the record or
beneficial owner of at least $1,000 in market value of the Common Stock, (b) has
held such Common Stock for at least one year and (c) continues to hold such
Common Stock through the date on which the Annual Meeting is held, and the
nomination must be received at the Company's principal business office not less
than 120 calendar days in advance of the date of the Company's notice sent to
stockholders for the previous year's annual meeting of stockholders.

Unless otherwise specified, all properly executed proxies received by the
Company will be voted for the election of Frank A. Godchaux III, Charles R.
Godchaux, Joseph A. Hafner, Jr., W. David Hanks, E. Wayne Ray, Jr., W. Elton
Kennedy, E. James Lowrey, Theresa G. Payne, Patrick W. Rose, Thomas B. Walker,
Jr. and Mary G. Wieck to hold office until the 1998 annual meeting of
stockholders and until each of their respective successors is elected and
qualified.

THE COMPANY RECOMMENDS VOTING "FOR" THE NOMINEES.

The following table sets forth the name and age of each nominee listed in
the enclosed form of proxy, the year the nominee became a director of the
Company or the Company's predecessors and the nominee's principal position with
the Company.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE POSITION
- ------------------------------------- --- -------- ------------------------------------------------
<S> <C> <C> <C>
Frank A. Godchaux III ............... 70 1965 Chairman of the Board of Directors
Charles R. Godchaux ................. 66 1965 Vice Chairman of the Board of Directors
Joseph A. Hafner, Jr. ............... 52 1986 President, Chief Executive Officer and Director
W. David Hanks ...................... 52 1986 Executive Vice President, Assistant Secretary
and Director
E. Wayne Ray, Jr. ................... 56 1986 Vice President, Chief Financial Officer,
Treasurer and Director
W. Elton Kennedy .................... 51 1986 Director
E. James Lowrey ..................... 69 1994 Director
Theresa G. Payne .................... 43 1994 Director
Patrick W. Rose ..................... 55 1995 Director
Thomas B. Walker, Jr. ............... 73 1986 Director
Mary G. Wieck ....................... 41 1996 Director
</TABLE>
Frank A. Godchaux III has served as Chairman of the Board since 1965 and
has served as a consultant to the Company since 1985. Mr. F.A. Godchaux also
manages personal and family investments and is a director of Sysco Corporation
and The Walker Companies.

Charles R. Godchaux has served as Vice Chairman of the Board and Chairman
of the Executive Committee since 1986. Mr C.R. Godchaux served as an executive
officer of the Company from 1956 to June 1994, when he retired as an employee
and was retained as a consultant to the Company.

Joseph A. Hafner, Jr. has been with the Company since 1972 and has served
as President since 1980 and Chief Executive Officer since 1984. Mr. Hafner has
been a Director since 1986.

4
<PAGE>
W. David Hanks was with the Company from 1974 until 1982 and has served as
Executive Vice President and a Director since 1986 when he rejoined the Company.
Mr. Hanks has served as Assistant Secretary since 1991.

E. Wayne Ray, Jr. has been with the Company since 1966 and has served as
Vice President, Chief Financial Officer, Treasurer and a Director since 1986.

W. Elton Kennedy serves as President of Kennedy Rice Dryers, Inc. and
Kennedy Rice Farms, Inc., both based in Mer Rouge, Louisiana. Mr. Kennedy also
serves as a director of a division of Regions Bank of Louisiana and President of
Delta Land and Farm Management Company, Inc. Mr. Kennedy has been a Director
since 1986.

E. James Lowrey served as Executive Vice President -- Finance and
Administration of Sysco Corporation for over five years until his retirement in
1993. Since that time, Mr. Lowrey has managed personal investments. Mr. Lowrey
was a Director of Sysco Corporation for twelve years and currently is a director
of Hi-Lo Automotive Inc. and Profit Recovery Group International, Inc.

Theresa G. Payne has managed personal investments for the past five years.
Mrs. Payne has been a Director since 1994.

Patrick W. Rose is a director of Van Camp Seafood Company, Inc. and was
Chairman of the Board, President and Chief Executive Officer until his
retirement in 1997. Van Camp Seafood Company, Inc. filed a voluntary Chapter 11
bankruptcy petition on April 11, 1997 to facilitate the sale of its assets to
Tri-Union Seafoods LLC. Mr. Rose is also a Director of International House of
Pancakes, Inc. Mr. Rose has been a Director since 1995.

Thomas B. Walker, Jr. is a limited partner of The Goldman Sachs Group,
L.P., the parent of Goldman, Sachs & Co., an investment banking firm, and
manages personal and family investments. Mr. Walker is also a director of A.H.
Belo Corporation, NCH Corporation and Sysco Corporation. He has been a Director
since 1986.

Mary G. Wieck has managed personal investments for the past five years.
Mrs. Wieck has been a Director since 1996.

Frank A. Godchaux III and Charles R. Godchaux are brothers. Mary G. Wieck
is the daughter of Frank A. Godchaux III, and Theresa G. Payne is the daughter
of Charles R. Godchaux.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

During the Company's last fiscal year, the Board of Directors held four
meetings. The Board of Directors has an Executive Committee, Audit Committee,
and Compensation and Stock Option Committee. Each director attended at least 75%
of the meetings of the Board of Directors and the meetings of the committees on
which the director serves.

The Executive Committee, which is composed of Frank A. Godchaux III,
Charles R. Godchaux, Joseph A. Hafner, Jr., W. David Hanks, E. James Lowrey and
Thomas B. Walker, Jr., did not hold any meetings during the last fiscal year.
The Executive Committee has the authority to exercise all powers of the Board of
Directors in the management of the business and affairs of the Company during
intervals between meetings of the Board of Directors, except that it has no
authority to propose amendments to the Restated Certificate of Incorporation,
adopt an agreement of merger or consolidation, recommend to the stockholders the
sale, lease or exchange of all or substantially all of the Company's assets or
its dissolution, or amend the Bylaws.

The Audit Committee, which is composed of W. Elton Kennedy, E. James Lowrey
and Patrick W. Rose, met on two occasions during the last fiscal year. The Audit
Committee meets with appropriate financial and legal personnel of the Company
and the independent public accountants to review the internal controls of the
Company and to review its financial reporting. The Audit Committee also
recommends to the Board of Directors the appointment of the independent public
accountants to serve as auditors in examining the financial statements of the
Company. The Audit Committee is charged with the responsibility

5
<PAGE>
of reviewing and overseeing all material transactions and material proposed
transactions between the Company and one or more of its directors or executive
officers, or their affiliates, with a view to assuring that all such
transactions will be (a) on terms no less favorable to the Company than would be
available with unaffiliated third parties and (b) ratified by a majority of
independent directors who have no interest in such transactions.

The Compensation and Stock Option Committee, which is composed of E. James
Lowrey, Patrick W. Rose and Thomas B. Walker, Jr., met on two occasions during
the last fiscal year. The Compensation and Stock Option Committee (a) makes
recommendations to the Board of Directors concerning the election of the
Company's officers, (b) reviews the employee compensation and benefit plans and
sets the compensation for officers of the Company, (c) awards bonuses to
officers of the Company, (d) assumes responsibility for all broad-based
compensation and benefit programs of the Company and (e) administers the
Company's Employee Stock Option Plan.

DIRECTOR COMPENSATION

Directors who are not employed by or consultants to the Company receive an
annual retainer of $4,000 and fees of $1,500 for each Board of Directors meeting
attended and $500 for each committee meeting attended in person or by telephone
conference that is not held in conjunction with a Board of Directors meeting.
Non-employee directors are also reimbursed for expenses incurred in attending
meetings in person or by telephone conference.

EXECUTIVE OFFICERS

The following table sets forth the names, ages and positions of the persons
who are not directors and who are executive officers of the Company:

NAME AGE POSITION
- ------------------------- --- ---------------------------------------------
Alfonso Bocaletti........ 54 Vice President
Andre G. Boost........... 64 Vice President
Ian W. Boyle............. 61 Vice President
Thomas M. Forshee........ 51 Vice President Sales
Christopher L. Haines.... 52 Vice President Marketing
Ranvir B. Mohindra....... 48 Vice President Technical Services
Jack M. Nolingberg....... 64 Vice President Industrial Relations
Paul R. Stevens.......... 44 Vice President
David E. Van Oss......... 48 Vice President Commodity & International
Richard F. Vincent....... 60 Vice President Manufacturing Operations
Elizabeth B. Woodard..... 44 Vice President, General Counsel and Secretary

Alfonso Bocaletti, Andre G. Boost, Ian W. Boyle, Thomas M. Forshee,
Christopher L. Haines, Ranvir B. Mohindra, Jack M. Nolingberg, Paul R. Stevens,
Richard F. Vincent and Elizabeth B. Woodard have each served in their respective
positions with the Company set forth in the foregoing table for over five years.
David E. Van Oss became Vice President Commodity & International in February
1995, and prior to that time, served in various capacities with the Company for
over five years.

The executive officers serve at the pleasure of the Board of Directors.

6
<PAGE>
COMPENSATION AND STOCK OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION+

The following report has been provided by the Compensation and Stock Option
Committee (the "Committee") of the Board of Directors. This report summarizes
the Company's current overall compensation philosophy and program objectives.
Detailed descriptions of the Company's compensation programs are provided as
well as the bases for the Company's fiscal 1997 compensation for the Company's
named executive officers, including the Chief Executive Officer ("CEO").

OVERALL OBJECTIVES OF THE EXECUTIVE COMPENSATION PROGRAM

The Company's executive compensation philosophy and program objectives
primarily are directed by two guiding principles. First, the program is intended
to provide competitive levels of compensation, at expected levels of
performance, in order to attract, motivate and retain talented executives.
Second, the program is intended to create an alignment of interests between the
Company's executives and stockholders so that a significant portion of each
executive's compensation is directly linked to maximizing stockholder value.

In support of this philosophy, the executive compensation program is
designed to reward performance that is directly relevant to the Company's
short-term and long-term success. The Company attempts to provide both
short-term and long-term incentive compensation that varies based on corporate
and individual performance.

The executive compensation program has been structured with three primary
components: base salary, annual incentives (I.E. bonus plan), and long-term
incentives (I.E. stock options). The following sections of this report describe
the Company's plans by component of compensation and discuss how each component
relates to the Company's overall executive compensation philosophy.

In this report, reference is made to the use of competitive market data as
a criterion for establishing targeted compensation levels. The Company targets
the market 50th percentile for its total compensation program. The Company
utilizes published survey data and data obtained from independent consultants
for general industry and food industry companies similar in size to the Company.
The published surveys include data on over 100 companies of comparable size to
the Company, as measured by revenues.

BASE SALARY PROGRAM

The Company's base salary program is based on a philosophy of providing
base compensation levels at or near the market 50th percentile. The Company
periodically reviews its executive compensation levels to assure consistency
with the external market. The Company believes it is important to provide
competitive salaries over time in order to attract and retain talented
executives.

Annual base salary adjustments for the Company are based on several
factors: general levels of market salary increases, individual performance,
competitive base salary levels and the Company's overall financial results. For
purposes of determining base salary adjustments, the Company reviews performance
qualitatively, considering total stockholder returns, the level of earnings, and
each individual's contributions. These criteria are assessed qualitatively and
are not weighted. All base salary adjustments are based on a philosophy of
pay-for-performance and an individual's value to the Company. As a result,
employees with higher levels of performance sustained over time will be paid
correspondingly higher salaries.

All the Company's named executive officers, including the CEO, received a
base salary increase of approximately 3.5% in fiscal 1997. This base salary
increase was based on general market movement of executive base salaries and a
qualitative assessment (based on the factors discussed above) that the named
executive officers' performances met the Committee's expectations.

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

+ Notwithstanding filings by the Company with the Securities and Exchange
Commission ("SEC") that have incorporated or may incorporate by reference
other SEC filings (including this Proxy Statement) in their entirety, this
Committee Report shall not be incorporated by reference into such filings and
shall not be deemed to be "filed" with the SEC except as specifically
provided otherwise or to the extent required by Item 402 of Regulation S-K.

7
<PAGE>
ANNUAL BONUS PLAN

The Company's annual bonus plan is intended to (a) reward key employees
based on Company and individual performance, (b) motivate key employees and (c)
provide competitive cash compensation opportunities to plan participants. Under
the annual bonus plan, target award opportunities vary by individual position
and are expressed as a percent of base salary consistent with the market 50th
percentile award levels. The amount a particular executive may earn is directly
dependent on the individual's position, responsibility and ability to impact the
Company's financial success.

The annual bonus plan consists of two key components. First, 60% of the
award opportunity is tied to corporate profitability relative to an annual
profit plan. Second, the remainder of the award opportunity is tied to a
qualitative assessment of individual performance. Actual awards payable under
the plan vary based on both profitability and individual performance. For fiscal
1997, the Company's profit closely approximated the annual profit plan.
Accordingly, all named executive officers received substantially all of the
total potential award opportunity based upon corporate profitability. All named
executive officers received an additional award based on a qualitative
assessment of individual performance and each of them received the maximum of
his qualitative award opportunity based on meeting the qualitative targets.

LONG-TERM INCENTIVE PLAN

The Company's Long-Term Incentive Plan ("LTIP") is designed to focus
executive efforts on the long-term goals of the Company and to maximize total
return to stockholders. The long-term incentive device used by the Committee is
stock options.

Stock options align the interests of employees and stockholders by
providing value to the executive through stock price appreciation only. All
stock options granted in fiscal 1997 have a ten year term before expiration and
are fully exercisable within nine years of the grant date.

Stock option grants were made to key executives in fiscal 1997, and it is
anticipated that stock option awards will be made periodically at the discretion
of the Committee in the future. The Company's aggregate stock option grant
levels approximate the market 50th percentile. The number of shares actually
granted to individual participants was based on the individual's position and
level of responsibility within the Company. These factors were assessed
subjectively and are not weighted.

The Committee granted 10,000 stock options at 100% of fair market value to
the CEO in fiscal 1997. 50% of these options vests equally over a five-year
period beginning one year from the date of the grant; the other 50% vests
equally over a five-year period upon achievement of certain corporate
profitability standards determined by the Committee on the date of the grant of
the options.

SECTION 162(M)

Under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), public companies are precluded from receiving a tax deduction on
compensation paid to executive officers in excess of $1,000,000. The Company
anticipates that all of its stock option grants satisfy the requirements of
Section 162(m). None of the named executive officers have had cash compensation
in excess of $1,000,000 in fiscal 1997.

Compensation and Stock Option Committee

Thomas B. Walker, Jr., Chairman
E. James Lowrey
Patrick W. Rose

COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During fiscal 1997, no executive officer of the Company served as (i) a
member of the compensation committee (or other board committee performing
equivalent functions or, in the absence of any such committee, the entire board
of directors) of another entity, one of whose executive officers served on the
Compensation and Stock Option Committee, (ii) a director of another entity, one
of whose executive

8
<PAGE>
officers served on the Compensation and Stock Option Committee, or (iii) a
member of the compensation committee (or other board committee performing
equivalent functions or, in the absence of any such committee, the entire board
of directors) of another entity, one of whose executive officers served as a
director of the Company.

CERTAIN TRANSACTIONS

Frank A. Godchaux III was formerly employed as an executive officer of the
Company until his retirement as such in 1984. Mr. F.A. Godchaux received
compensation of $90,000 for fiscal 1997 under an agreement pursuant to which he
provided consulting services to the Company. The consulting agreement with the
Company currently calls for an annual fee of $90,000 and is terminable annually
by the Company.

From time to time, the Company charters an airplane owned by Frank A.
Godchaux III for business use. In fiscal 1997, Mr. F.A. Godchaux was paid
$151,286 for the use of the airplane.

Charles R. Godchaux was formerly employed as an executive officer of the
Company until his retirement as such in June 1994. After Mr. C.R. Godchaux's
retirement, he entered into an agreement to provide consulting services to the
Company for an annual fee of $140,000. Mr. C.R. Godchaux received compensation
of $140,000 for fiscal year 1997 under the consulting agreement.

From time to time, the Company makes rice purchases from Godchaux Bros., an
entity in which Frank A. Godchaux III and Charles R. Godchaux each owns a 50%
interest. Such purchases, all of which were made at market prices, amounted to
$248,721 in fiscal 1997. The Company also pays certain operating costs of an
apartment owned by Godchaux Bros. in London, England, which totaled
approximately $36,610 in fiscal 1997. The apartment is used by officers,
employees and business associates of the Company and its affiliates for business
meetings and overnight accommodations during business trips.

The Company paid $1,317,761 in fiscal 1997 to W. Elton Kennedy, a director
of the Company, or entities controlled by Mr. Kennedy, and $388,995 to an entity
in which Mr. Kennedy is a participant, for rice purchases at market prices.

The Company and Kennedy Rice Dryers, Inc., a corporation in which Mr.
Kennedy is the principal stockholder, director and officer, each owns a 50%
interest in South Lafourche Farm Partnership (the "Partnership"). During
fiscal 1997, the Partnership paid $32,221 in management fees to Delta Land and
Farm Management Company, Inc., a corporation in which Mr. Kennedy is a
stockholder, director and officer. The Company and Mr. Kennedy are each
contingently liable on a promissory note in the principal amount of $2,142,892
payable by the Partnership to the Farm Credit Bank of Texas.

Management of the Company believes that the foregoing transactions and
those described under "Compensation and Stock Option Committee Interlocks and
Insider Participation" were on terms no less favorable to the Company than
could normally be obtained from unaffiliated third parties. Except as set forth
above, neither the Company nor its affiliates have made loans to, or loan
guarantees for, officers or directors, or have engaged in material transactions
with officers or directors.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year, and Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year, and written representations from reporting persons that no Form 5
was required, the Company believes that W. Elton Kennedy, E. James Lowrey,
Patrick W. Rose and Thomas B. Walker, Jr. each filed a late Form 4 with respect
to an automatic stock option grant in fiscal year 1995 pursuant to the Company's
Amended and Restated 1995 Non-Employee Director Stock Option Plan.

9
<PAGE>
COMPENSATION TABLES

The following table sets forth compensation information for the CEO and the
four most highly compensated executive officers of the Company during the
Company's fiscal years 1997, 1996 and 1995, for services rendered during such
years to the Company or any of its subsidiaries.

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
AWARDS
ANNUAL ------------
COMPENSATION SECURITIES
FISCAL ---------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITIONS YEAR SALARY BONUS OPTIONS COMPENSATION(1)
- ------------------------------------- ------ ---------- ---------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Joseph A. Hafner, Jr................. 1997 $ 347,000 $ 166,600 10,000 $ 6,772
President, Chief Executive Officer 1996 335,500 101,200 -- 9,320
and Director 1995 322,500 145,200 20,000 4,656
W. David Hanks....................... 1997 $ 236,000 $ 90,700 7,500 $ 6,835
Executive Vice President, Assistant 1996 228,000 50,500 -- 8,433
Secretary and Director 1995 219,000 72,300 15,000 6,416
E. Wayne Ray, Jr..................... 1997 $ 158,500 $ 53,300 7,500 $ 7,535
Vice President, Chief Financial 1996 153,000 27,000 -- 8,494
Officer, Treasurer and Director 1995 147,000 36,800 15,000 6,543
Ranvir B. Mohindra................... 1997 $ 133,500 $ 32,100 4,000 $ 5,652
Vice President Technical Services 1996 129,000 26,800 -- 6,425
1995 124,000 29,500 7,500 5,038
Christopher L. Haines................ 1997 $ 129,500 $ 31,100 4,000 $ 5,890
Vice President Marketing 1996 125,000 26,800 -- 6,541
1995 120,000 28,500 7,500 5,224
</TABLE>
- ------------

(1) All other compensation amounts for fiscal 1997 include matching
contributions to the Company's Savings Plan of $4,950, $5,082, $5,041,
$4,405 and $4,273 and premiums for executive life insurance of $1,822,
$1,753, $2,494, $1,247 and $1,617 for Messrs. Hafner, Hanks, Ray, Mohindra
and Haines, respectively.

The following tables present certain information for the fiscal year ended
June 29, 1997 with respect to stock option grants made to the individuals named
in the Summary Compensation Table above.

OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS (1) VALUE AT ASSUMED
------------------------------------------------------- ANNUAL RATES
PERCENT OF OF STOCK PRICE
NUMBER OF TOTAL OPTIONS APPRECIATION
SECURITIES GRANTED TO EXERCISE FOR OPTION TERMS(2)
UNDERLYING EMPLOYEES PRICE PER EXPIRATION ----------------------
NAME OPTIONS IN FISCAL 1997 SHARE DATE 5% 10%
- ------------------------------------- ---------- -------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Joseph A. Hafner, Jr. ............... 10,000 4.97% $ 16.375 8/16/06 $ 102,982 $ 260,968
W. David Hanks....................... 7,500 3.72% $ 16.375 8/16/06 $ 77,237 $ 195,726
E. Wayne Ray, Jr..................... 7,500 3.72% $ 16.375 8/16/06 $ 77,237 $ 195,726
Ranvir B. Mohindra................... 4,000 1.99% $ 16.375 8/16/06 $ 41,193 $ 104,387
Christopher L. Haines................ 4,000 1.99% $ 16.375 8/16/06 $ 41,193 $ 104,387
</TABLE>
- ------------

(1) 201,350 stock options were granted in fiscal 1997.

(2) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the Securities and Exchange Commission and therefore
are not intended to forecast possible future appreciation, if any, of the
price of the Common Stock.

10
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS
SHARES FY-END (#) AT FY-END($)(1)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ------------------------------------- ----------- ------------ --------------- ----------------
<S> <C> <C> <C> <C>
Joseph A. Hafner, Jr. ............... -- -- 8,000/22,000 $60,000/$121,250
W. David Hanks....................... -- -- 6,000/16,500 $45,000/$ 90,938
E. Wayne Ray, Jr. ................... -- -- 6,000/16,500 $45,000/$ 90,938
Ranvir B. Mohindra................... -- -- 3,000/8,500 $22,500/$ 46,250
Christopher L. Haines................ -- -- 3,000/8,500 $22,500/$ 46,250
</TABLE>
- ------------

(1) Value of the exercisable and unexercisable options is calculated on the
basis of the difference between the option exercise price and $19.50, the
closing market price of the Common Stock as reported by the Nasdaq National
Market on June 27, 1997 (the last business day before the fiscal year end).

RETIREMENT PLAN

The Company maintains a qualified Retirement Plan (the "Retirement Plan")
that covers all United States employees of the Company, including the executive
officers, who have completed one year of service and attained the age of 21.
Normal retirement benefits, payable upon retirement at age 65, equal the sum of
the employee's annual retirement benefits accumulated on June 30, 1989 (the
"June 30, 1989 Accrued Benefit"), if any, plus an annual benefit equal to 2%
of the employee's cumulative compensation after June 30, 1989. The June 30, 1989
Accrued Benefit is determined by multiplying 2% of the employee's average
compensation for the highest five consecutive years prior to June 30, 1989 by
the employee's years of credited service at age 65 (not to exceed 35 years) and
subtracting from this amount 1% of the employee's estimated Social Security
benefits multiplied by the employee's years of credited service at age 65 (not
to exceed 30 years), prorated to reflect service through June 30, 1989 only. For
years beginning on or after July 1, 1989 and prior to July 1, 1994, compensation
on which the Retirement Plan benefits are calculated is limited to $200,000 per
year as adjusted in accordance with the Code, and for years beginning on or
after July 1, 1994, $150,000 per year as adjusted in accordance with the Code.

In order to provide additional retirement benefits to employees whose
benefits under the Retirement Plan are limited by restrictions imposed by the
Code, including annual benefit limitations and the compensation limitations
described above ("Code Limitations"), the Company adopted a Benefit
Restoration Plan (the "Benefit Restoration Plan") effective December 1, 1988
for the benefit of designated officers ("Initial Participants") and for other
executive employees who may be designated as participants after December 1, 1988
("New Participants"). There are five Initial Participants, Messrs. Hafner,
Hanks, Ray, Mohindra and Haines. Under the Benefit Restoration Plan, the
retirement benefit payable at age 65 is equal to the excess of:

(a) in the case of New Participants,

(i) the benefit that would have been payable under the Retirement
Plan in accordance with the formula described above in the first paragraph,
but without Code Limitations, over

(ii) the benefit actually payable under (A) the Retirement Plan
(which takes into account the Code Limitations), and (B) the Company's
Management Security Program, described below, taken together; and

(b) in the case of Initial Participants,

(i) 2% of the employee's average compensation for the five
consecutive years prior to the employee's retirement multiplied by the
employee's years of credited service (not to exceed 35 years)

11
<PAGE>
minus 1% of the employee's estimated Social Security benefits multiplied by
the employee's years of credited service (not to exceed 30 years), over

(ii) the sum of (A) the benefit determined under the formula set
forth in paragraph (b)(i) above, but limited by the Code Limitations as in
effect on June 30, 1989 (to be indexed in subsequent years), and (B) the
benefit actually payable under the Company's Management Security Program,
taken together.

The Management Security Program was established by the Company in 1975 to
provide supplemental retirement income benefits to designated employees based on
an individualized formula. The Management Security Program was frozen in 1977
and no participants have been added or benefits increased since that time. There
is currently one retired employee receiving benefits under the Management
Security Program, and five active employees covered by it, including Messrs.
Hafner, Hanks and Ray.

The total estimated annual benefits under the Retirement Plan, the Benefit
Restoration Plan, and the Management Security Program, taken together, payable
upon retirement at age 65 in a life annuity form are: $361,000 for Mr. Hafner;
$186,400 for Mr. Hanks; $115,000 for Mr. Ray; $92,600 for Mr. Mohindra, and
$89,900 for Mr. Haines. Other forms of benefit payment may be available or
operative under such plans.

12
<PAGE>
PERFORMANCE GRAPH

The following performance graph provided by Research Data Group compares
the performance of the Company's Common Stock to the S & P Mid-Cap 400 Index and
a Peer Group Index on the last day of each fiscal year through the end of fiscal
1997 and beginning March 7, 1995, the date on which the Common Stock was
registered under Section 12 of the Exchange Act. The Peer Group Index consists
of companies of similar market capitalization to the Company in the food
industry and is composed of Dean Foods Company, Eskimo Pie Corporation, GoodMark
Foods, Inc., International Multifoods Corporation, Interstate Bakeries
Corporation, Lance, Inc., Ralcorp Holdings Incorporated and Universal Foods
Corporation. The performance graph assumes that $100 was invested on March 7,
1995 in the Company's Common Stock and on February 28, 1995 in the Indices and
that dividends are reinvested.

[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]

3/07/95 6/95 6/96 6/97
------- ---- ---- ----
RIVIANA FOODS INC. 100 108 126 166
PEER GROUP 100 102 104 150
S&P MIDCAP 400 100 111 134 166

13
<PAGE>
PROPOSAL NO. 2 -- ADOPTION OF 1997 STOCK OPTION PLAN

The Board of Directors of the Company has adopted, subject to approval by
stockholders, the Riviana Foods Inc. 1997 Stock Option Plan (the "1997 Plan"),
and has directed that the 1997 Plan be submitted to the stockholders for
approval. Approval of the 1997 Plan will require the majority vote of
stockholders voting in person or by proxy with respect to the 1997 Plan at the
Annual Meeting. This summary of the material terms of the 1997 Plan is qualified
in its entirety by reference to the complete text of the 1997 Plan which is
attached to this Proxy Statement as Appendix A.

PURPOSE. The purpose of the 1997 Plan is to encourage stock ownership
through the grant of Stock Options ("Options") to certain officers and other
eligible employees of the Company or of its subsidiary corporations or of its
affiliates and joint ventures of which the Company is a partner or owner, so
that they may acquire or increase their proprietary interest in the Company and
to reward them for services to the Company, its subsidiaries or affiliates. The
Company believes that participation in the 1997 Plan through receipt of
incentive stock options ("Incentive Options") or nonqualified stock options
("Nonqualified Options") creates an incentive to increase the value of the
stock of the Company and also strengthens the Company's ability to attract and
retain officers and key employees in the employ of the Company.

TERM. The 1997 Plan was adopted effective September 1, 1997, subject to
approval by stockholders at this Annual Meeting. No Option may be granted under
the 1997 Plan after September 1, 2007.

ADMINISTRATION. The 1997 Plan is administered by the Committee, which
consists of not less than two members who are disinterested persons (as defined
in the 1997 Plan). All questions of interpretation and construction of the
provisions of the 1997 Plan shall be determined by the Committee.

PARTICIPATION. Participation in the 1997 Plan is limited to full-time
employees ("Employees") selected by the Committee. The Company estimates
approximately 150 Employees will be eligible to participate in the 1997 Plan.
During the lifetime of the Employee, Options shall be exercisable only by the
Employee, and no Option will be transferable otherwise than by will or the laws
of descent and distribution or pursuant to a qualified domestic relations order.
In addition, the Committee, in its discretion, may grant Options that are
transferable, without payment of consideration, to immediate family members of
the Employee or to trusts or partnerships for such family members.

SHARES OF STOCK AVAILABLE FOR OPTIONS. A total of 1,000,000 shares of
Common Stock is available for issuance under the Options. The shares may be
treasury shares or authorized but unissued shares. In the event an Option
expires, or terminates for any reason, or is surrendered, the shares of Common
Stock allocable to the unexercised portion of that Option may again be subject
to an Option under the 1997 Plan.

The 1997 Plan provides that the number of shares subject thereto and shares
covered by Options outstanding are subject to proportional adjustment for any
increase or decrease in the number of issued shares of the Company resulting
from a subdivision or consolidation of shares or the payment of a stock dividend
or any other increase or decease in the number of such shares effected without
receipt of consideration.

COMPENSATION DEDUCTION LIMITATION. In the Omnibus Budget Reconciliation
Act of 1993 ("OBRA"), Congress enacted Section 162(m) of the Code which
generally limits to $1,000,000 per year per employee the tax deduction available
to public companies for certain compensation paid to designated executed
("covered employees"). These covered employees include the Chief Executive
Officer and the next four highest compensated officers of the Company.

OBRA provides an exception (Section 162(m)(4)(C)) from this deduction
limitation, for certain "performance-based compensation," if specified
requirements are satisfied. The 1997 Plan is designed to satisfy these statutory
requirements. Therefore, if this 1997 Plan is approved by stockholders, the
Company anticipates being entitled to deduct an amount equal to the ordinary
income reportable by each optionee on exercise of a Nonqualified Option and the
Early Disposition (as defined below) of shares of stock acquired by exercise of
an Incentive Option.

14
<PAGE>
STOCK OPTIONS. The Committee may designate an Option as an Incentive
Option or as a Nonqualified Option. The terms of each Option shall be set out in
a written agreement which incorporates the terms of the 1997 Plan. The Option
price may not be less than 100% of the fair market value of the Common Stock on
the date of grant and may not be exercisable after 10 years from the date of
grant. No Options shall be granted to any person who is the owner of more than
10% of the outstanding shares of Common Stock.

EXERCISE OF OPTIONS. Options may be exercised by payment of the Option
price in cash, by check or in shares of Common Stock previously owned for six
months valued at fair market value on the date of exercise. Special rules apply
which limit the time of exercise of an Option following an Employee's
termination of employment. The Committee may impose restrictions on the exercise
of any Option.

AMENDMENT OF 1997 PLAN. The Board of Directors of the Company may suspend
or discontinue the 1997 Plan or revise or amend it in any respect whatsoever
except that, without approval of the stockholders, no such revision or amendment
shall change the number of shares subject to the 1997 Plan, change the
designation of the class of employees eligible to receive Options, decrease the
price at which Options may be granted or remove the administration of the 1997
Plan from the Committee.

CHANGES IN CAPITALIZATION. Subject to any required action by the
stockholders, the number of shares covered by each outstanding Option and the
price per share of each such Option shall be proportionally adjusted for any
increase or decrease in the number of issued shares of the Company resulting
from a subdivision or consolidation of shares or the payment of a stock dividend
(but only the shares) or any other increase or decrease in the number of such
shares effected without receipt of consideration by the Company.

If the Company merges or consolidates with another corporation, whether or
not the Company is the surviving corporation, or if the Company is liquidated or
sells or otherwise disposes of substantially all of its assets, while
unexercised Options remain outstanding under the 1997 Plan, (i) subject to the
provisions of clause (iii) below, after the effective date of the merger,
consolidation, liquidation, sale or other disposition, as the case may be, each
holder of an outstanding Option shall be entitled, upon exercise of that Option,
to receive, in lieu of shares, the number and class or classes of shares of
stock or other securities or property to which the holder would have been
entitled if, immediately prior to the merger, consolidation, liquidation, sale
or other disposition, the holder had been the holder of record of a number of
shares equal to the number of shares as to which that Option may be exercised;
(ii) the Board of Directors of the Company may waive any limitation set forth in
or imposed pursuant to the 1997 Plan so that all Options, from and after a date
prior to the effective date of such merger, consolidation, liquidation, sale or
other disposition, as the case may be, specified by the Board of Directors of
the Company, shall be exercisable in full; and (iii) all outstanding Options may
be canceled by the Board of Directors as of the effective date of any merger,
consolidation, liquidation, sale or other disposition, provided that any holder
of an Option shall have the right immediately prior to such event to exercise
his Option to the extent such holder is otherwise able to do so in accordance
with the 1997 Plan and his individual stock option agreement.

FEDERAL TAX CONSEQUENCES. The grant of Incentive Options to an Employee
does not result in any income tax consequences. The exercise of an Incentive
Option generally does not result in any income tax consequences to the Employee
if the Incentive Option is exercised by the Employee during his employment with
the Company or a subsidiary, or within a specified period after termination of
employment. However, the excess of the fair market value of the shares of Common
Stock as of the date of exercise over the Incentive Option price is a tax
preference item for purposes of determining an Employee's alternative minimum
tax, if applicable. An Employee who sells shares acquired pursuant to the
exercise of an Incentive Option after the expiration of (i) two years from the
date of grant of the Incentive Option, and (ii) one year after the transfer of
the shares to him (the "Waiting Period") will generally recognize a long-term
capital gain or loss on the sale.

An Employee who disposes of his Incentive Option shares prior to the
expiration of the Waiting Period (an "Early Disposition") generally will
recognize ordinary income in the year of sale in an amount equal to the excess,
if any, of (a) the lesser of (i) the fair market value of the shares as of the
date of exercise or (ii) the amount realized on the sale, over (b) the Incentive
Option price. Any additional amount realized on an Early Disposition should be
treated as capital gain to the Employee, short or long term, depending on the

15
<PAGE>
Employee's holding period for the shares. If the shares are sold for less than
the option price, the Employee will not recognize any ordinary income but will
recognize a capital loss, short or long term, depending on the holding period.

The Company will not be entitled to a deduction as a result of the grant of
an Incentive Option, the exercise of an Incentive Option, or the sale of
Incentive Option shares after the Waiting Period. If an Employee disposes of
Incentive Option shares in an Early Disposition, the Company would be entitled
to deduct the amount of ordinary income recognized by the Employee.

The grant of Nonqualified Options under the Incentive Plan will not result
in the recognition of any taxable income by the Employee. An Employee will
recognize ordinary income on the date of exercise of the Nonqualified Option
equal to the excess, if any, of (i) the fair market value of the shares acquired
as of the exercise date, over (ii) the exercise price. The tax basis of these
shares for purposes of a subsequent sale includes the Nonqualified Option price
paid and the ordinary income reported on exercise of the Nonqualified Option.
The income reportable on exercise of a Nonqualified Option is subject to federal
income and employment tax withholding. Generally, the Company will be entitled
to a deduction in the amount reportable as income by the Employee on the
exercise of a Nonqualified Option.

Generally, the Company will be entitled to a deduction in the amount
reportable as income by the Employee on the exercise of a Nonqualified Option.

FISCAL 1997 OPTIONS. No Options have been granted under the 1997 Plan. As
indicated above, the Committee has the power to determine, among other things,
the Employees to be granted Options. As a result, the number of Options to be
granted in the future to executive officers is not determinable at this time.

THE COMPANY RECOMMENDS VOTING "FOR" PROPOSAL NO. 2.

PROPOSAL NO. 3 -- RATIFICATION AND APPOINTMENT OF INDEPENDENT ACCOUNTANTS

The Board of Directors of the Company has selected Arthur Andersen LLP as
its independent public accountants to audit the accounts of the Company for the
fiscal year ending June 28, 1998. Arthur Andersen LLP has advised the Company
that it will have a representative in attendance at the Annual Meeting who will
respond to appropriate questions presented at such meeting.

Management recommends that the appointment of Arthur Andersen LLP as
independent public accountants of the Company for the fiscal year ending June
28, 1998 be ratified by the stockholders. Unless otherwise specified, all
properly executed proxies received by the Company will be voted for such
ratification.

THE COMPANY RECOMMENDS VOTING "FOR" PROPOSAL NO. 3.

OTHER MATTERS

The Board of Directors knows of no other matters than those described above
which are likely to come before the Annual Meeting. If any other matters
properly come before the meeting, persons named in the accompanying form of
proxy intend to vote such proxy in accordance with their best judgment on such
matters.

16
<PAGE>
PROPOSALS AND NOMINATIONS FOR NEXT ANNUAL MEETING

Any proposals of holders of Common Stock of the Company intended to be
presented at the 1998 annual meeting of stockholders of the Company must be
received by the Company at 2777 Allen Parkway, Houston, Texas 77019-2141,
Attention: Secretary, no later than May 22, 1998, to be included in the proxy
statement relating to that annual meeting.

Pursuant to the Company's Bylaws, any nomination of other persons to be
elected as directors at the Annual Meeting may only be made by a stockholder who
(a) is the record or beneficial owner of at least $1,000 in market value of the
Common Stock, (b) has held such Common Stock for at least one year and (c)
continues to hold such Common Stock through the date on which the annual meeting
is held, and such nomination must be received at the Company's principal
business office not less than 120 calendar days in advance of the date of the
Company's notice sent to stockholders for the previous year's annual meeting of
stockholders. Any nomination of a candidate for director must be accompanied by
(i) a written description of the candidate's qualifications to serve as a
director, including all information specified in paragraphs (e) and (f) of Item
401 of Regulation S-K and (ii) a written undertaking by the nominee to serve if
elected.

By Order of the Board of Directors
Elizabeth B. Woodard
SECRETARY

September 30, 1997

THE COMPANY WILL FURNISH WITHOUT CHARGE COPIES OF ITS ANNUAL REPORT ON FORM
10-K FOR THE FISCAL YEAR ENDED JUNE 29, 1997 TO INTERESTED SECURITY HOLDERS ON
REQUEST. THE COMPANY WILL FURNISH TO ANY SUCH PERSON ANY EXHIBITS DESCRIBED IN
THE LIST ACCOMPANYING SUCH REPORT UPON PAYMENT OF REASONABLE FEES RELATING TO
THE COMPANY'S FURNISHING SUCH EXHIBITS. REQUESTS FOR COPIES SHOULD BE DIRECTED
TO THE SECRETARY AT THE COMPANY'S ADDRESS PREVIOUSLY SET FORTH.

17
<PAGE>
PROXY PROXY

RIVIANA FOODS INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned shareholder(s) of Riviana Foods Inc. (the "Company")
hereby appoint JOSEPH A. HAFNER, JR. and W. DAVID HANKS and each of them,
attorneys-in-fact and proxies of the undersigned, with full power of
substitution, to vote in respect of the undersigned's shares of the Company's
Common Stock at the Annual Meeting of Stockholders of the Company to be held at
the Riviana Building, Plaza 1, 2777 Allen Parkway, Houston, Texas 77019-2141, at
9:00 a.m., Central Time on Wednesday, October 22, 1997 and at any adjournment(s)
thereof, the number of shares the undersigned would be entitled to vote if
personally present.
<PAGE>

Please mark your votes as indicated in this example [X]

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES SET FORTH
BELOW AND "FOR" EACH OF PROPOSALS 2 AND 3 BELOW.

PROPOSAL 1: ELECTION OF DIRECTORS

(INSTRUCTION: To withhold authority to vote for any nominee, strike a line
through the nominee's name in the list below.)

FOR the nominees listed to the right (except as marked to the contrary) [ ]

WITHHOLD AUTHORITY to vote for all nominees listed to the right [ ]

Frank A. Godchaux III
Charles R. Godchaux
Joseph A. Hafner, Jr.
W. David Hanks
E. Wayne Ray, Jr.
Theresa G. Payne
W. Elton Kennedy
E. James Lowrey
Patrick W. Rose
Thomas B. Walker, Jr.
Mary G. Wieck

PROPOSAL 2: TO ADOPT THE 1997 RIVIANA FOODS INC. STOCK OPTION PLAN

FOR [ ] AGAINST [ ] ABSTAIN [ ]

PROPOSAL 3: TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING JUNE 29,1998

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. In their discretion, on such other matters as may properly come before the
1997 Annual Meeting of Stockholders or any adjournment(s) thereof; all as more
particularly described in the Proxy Statement, receipt of which is hereby
acknowledged.

This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder(s). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE BOARD OF DIRECTOR NOMINEES AND EACH OF PROPOSALS 2 AND 3. All
prior proxies are hereby revoked.

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

- ---------------------------------------
Signature(s)

Dated_____________________________,1997

(Please sign exactly as your name appears hereon. When signing as attorney,
executor, administrator, trustee, guardian, etc., give full title as such. For
joint accounts, each joint owner should sign.)

PLEASE COMPLETE, SIGN, DATE AND RETURN PROMPTLY THE PROXY CARD USING THE
ENCLOSED ENVELOPE.
<PAGE>
APPENDIX A

RIVIANA FOODS INC.

1997 STOCK OPTION PLAN

1. PURPOSE

This 1997 Stock Option Plan (the "Plan") is intended as an incentive and
to encourage stock ownership by certain officers and other eligible employees of
Riviana Foods Inc. (the "Corporation"), or of its subsidiary corporations (the
"Subsidiary" or "Subsidiaries") as that term is defined in Section 424(f) of
the Internal Revenue Code of 1986 (the "Code"), or of its affiliates and joint
ventures of which the Corporation is a partner or owner (the "Affiliate" or
"Affiliates"), so that they may acquire or increase their proprietary interest
in the Corporation and to reward them for services to the Corporation, the
Subsidiaries or the Affiliates in a manner that creates an incentive to increase
the value of the stock of the Corporation and also to strengthen the
Corporation's ability to attract and retain officers and key employees in the
employ of the Corporation. Options granted pursuant to the Plan shall be either
Incentive Stock Options ("ISO's") meeting the requirements of Section 422 of
the Code, or any succeeding provisions, or Nonqualified Stock Options
("NQSO's") (collectively an "Option" or the "Options").

2. TERM OF PLAN

The Plan is effective September 1, 1997, if within 90 days of such date, it
shall have been approved by the vote of the holders of the majority of the
shares of the Corporation. Options may be granted pursuant to the Plan from time
to time within a period of ten (10) years from such date.

3. ADMINISTRATION

The Plan shall be administered by a committee appointed by the Board of
Directors of the Corporation (the "Committee"). The Committee shall consist of
not less than two members of the Corporation's Board of Directors. The Board of
Directors may from time to time remove members from or add members to the
Committee. Vacancies on the Committee, however caused, shall be filled by the
Board of Directors. The Committee shall select one of its members as Chairman
and shall hold meetings at such times and places as it may determine. The action
of a majority of the Committee at which a quorum is present, or acts reduced to
or approved in writing by a majority of the members of the Committee, shall be
valid acts of the Committee. Each director, while a member of the Committee,
shall meet the definition of "Non-Employee Director" contained in Rule 16b-3
("Rule 16b-3") promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended, (The "1934 Act"), and "Outside
Director" under Section 162(m) of the Code.

(a) AUTHORITY. The Committee shall periodically in its discretion have
the authority to designate the eligible employees who shall be granted Options,
the number of shares to be optioned to each optionee, and to establish any other
Option terms and conditions consistent with provisions of the Plan. The
interpretation and construction by the Committee of any provisions of the Plan
or of any Option granted under it shall be final. No member of the Board of
Directors or the Committee shall be liable for any action or determination made
in good faith with respect to the Plan or any Option granted under it.

(b) DELEGATION OF AUTHORITY. The Committee may delegate some or all of
its authority to the Chief Executive Officer or other senior member of
management as it may determine in its discretion; provided, however, that any
such delegation shall be in writing and that the Committee may not delegate its
authority with regard to any matter or action affecting an officer subject to
Section 16 of the 1934 Act.

(c) SECTION 162(M) OF THE CODE. With regards to all eligible employees,
the Plan shall for all purposes, be interpreted and construed in accordance with
Section 162(m) of the Code.

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4. ELIGIBILITY

Full time employees (an "Optionee" or collectively, "Optionees") of the
Corporation or its Subsidiaries or its Affiliates (including officers, whether
or not they are directors) shall be able to participate in the Plan if
designated by the Committee and who in the opinion of the Committee, can further
the Plan's purpose.

5. STOCK

(a) SOURCES OF SHARES. The stock subject to the Options shall be shares
of the Corporation's authorized and unissued or reacquired $1 par value Common
Stock (the term "shares" as used herein shall refer to shares of said $1 par
value Common Stock of the Corporation, and the term "Shares" shall refer to
shares that are subject to an Option granted under the Plan). The shares
available for granting Options under the Plan shall be increased by any Options
which terminate by expiration, forfeiture, cancellation or otherwise without the
issuance of such shares. In addition, any shares reserved for issuance under the
Corporation's 1994 Stock Option Plan ("the 1994 Plan") in excess of the number
of shares as to which options have been granted thereunder, plus any shares to
which options granted under the 1994 Plan may terminate, expire, forfeit or
cancel, shall also be reserved and available for issuance or re-issuance under
the Plan. Shares under the Plan may be delivered by the Corporation from its
authorized but un-issued shares of Common Stock or from Common Stock held in the
Corporation's Treasury.

(b) MAXIMUM SHARES. The aggregate number of shares that may be issued
under Options pursuant to the Plan shall not exceed 1,000,000 shares. The
aggregate number of shares that may be issued under Options pursuant to the Plan
to any Optionee shall not exceed 50,000 shares. The limitations established in
Section 7 of the Plan shall be subject to adjustment as provided in Section 9 of
the Plan.

6. FORM OF OPTIONS

Options granted pursuant to the Plan need not be uniform and may be made
selectively among eligible employees who received, or who are eligible to
receive Options, whether or not such eligible employees are similarly situated.

7. LIMITATIONS

(a) The aggregate fair market value (determined at the date of grant of an
ISO in accordance with Section 8(c) of the Plan) of shares with respect to which
Options first become exercisable by an Optionee in any calendar year shall not
exceed $100,000, plus any carryover amount permitted under the Code.

(b) No Options shall be granted to any person who, on the date of the
grant, is the owner of more than 10% of the total combined voting power of the
Corporation, the Subsidiaries or the Affiliates.

8. TERMS AND CONDITIONS

(a) INDIVIDUAL STOCK OPTION AGREEMENTS. Each Option granted pursuant to
the Plan shall be evidenced by a written agreement, specifying the number of
shares of Stock covered thereby, in such form as the Committee shall from time
to time approve.

(b) TERM OF OPTIONS. All Stock Options shall not expire later than ten
(10) years from the effective date of the Option's grant.

(c) OPTION PRICE. Each Option shall state the Option price, which shall
not be less than the greater of (i) 100% of the fair market value of the Shares
subject to the Option and (ii) the par value of the Common Stock. Fair market
value shall be determined as the last closing price of the shares on the Nasdaq
National Market on the date that the Option is granted by the Committee. Subject
to the foregoing, the Committee, in fixing the Option price, shall have full
authority and discretion and be fully protected in doing so.

(d) METHOD AND TIME OF PAYMENT. The Option price shall be payable on the
exercise of the Option and may be paid (i) in United States Dollars in cash or
by check, or (ii) by transferring a number of shares,

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<PAGE>
previously owned for a period of at least six months, valued as provided in
Section (c) above, as of the date of transfer having a value equal to the Option
price, or (iii) by any combination thereof.

(e) VESTING. The shares covered by an Option may be purchased in such
installments and on such exercise dates as the Committee may determine.

(f) TRANSFERABILITY AND NON-ASSIGNABILITY. Except as set forth below, no
Option granted under this Plan shall be transferable or assignable by the
Optionee otherwise than by will or under the laws of descent and distribution of
the state or country in which the Optionee resided on the date of Optionee's
death or pursuant to a qualified domestic relations order as defined by the Code
or Title I of the Employee Retirement Income Security Act or the rules
thereunder and allowed by Section 424(c)(4) of the Code, nor shall any Option be
granted to or exercisable, during the Optionee's lifetime, by anyone other than
the Optionee. At its discretion, the Committee may grant Options that are
transferable, without payment of consideration, to immediate family members of
the Optionee or to trusts or partnerships for such family members.

(g) CONDITIONS TO EXERCISE OF OPTIONS. In order to exercise an Option
granted hereunder, in whole or in part, the Optionee must meet any additional
specific conditions imposed by the Committee at the time of the granting of the
Option. Such conditions, which if achieved, and in the discretion of the
Committee, may result in exercisability or early exercisability of the Option
provided that no Option granted under this Plan (or any portion thereof) shall
be exercisable within one (1) year after the date of grant. Such specific
conditions may be in the form of achievement goals for the individual Optionee
based upon predetermined minimum increases over a specified period or periods of
time, in sales, gross profits, pre-tax earnings, productivity, or other goals or
standards. The imposition of such achievement goals and conditions shall be in
the sole discretion of the Committee. Such goals and conditions may differ
between individual employees of the Corporation or of its Subsidiaries,
affiliates and joint ventures, between classes of employees of the Corporation
or any Subsidiary, or Affiliate, and separately as a class between the employees
of the Corporation, and the employees of the Subsidiaries or the Affiliates.

(h) DEATH OF OPTIONEE AND TRANSFER OF OPTION. If the Optionee shall die
while in the employ of the Corporation, the Subsidiary, or the Affiliate and
shall not have fully exercised the Option, the Option may be exercised, subject
to the condition that no Option shall be exercisable after the expiration of ten
years from the date it is granted, to the extent that Optionee's right to
exercise such Option had accrued pursuant to this Section 8 of the Plan at the
time of the Optionee's death and had not previously been exercised, at any time
within one (1) year after the Optionee's death, by the executors or
administrators of the Optionee or by any person or persons who shall have
acquired the Option directly from the Optionee by bequest or inheritance.

(i) TERMINATION OF EMPLOYMENT. (i) Upon termination of the Optionee's
employment by reason of permanent and total disability as defined under Section
22(e)(3) of the Code, an Option may be exercised, but only to the extent
exercisable on the date of such permanent and total disability, within one (1)
year from and after the date of such termination of employment. (ii) Upon
termination of the Optionee's employment by reason of retirement, an Option may
be exercised, but only to the extent exercisable on the date of such retirement,
within (1) year from and after the date of such termination of employment. (iii)
Upon termination of the Optionee's employment by reason of termination, other
than retirement or disability as defined by clause (i) or (ii) of this Section 8
(i), an Option may be exercised, but only to the extent exercisable on the date
of such termination, within three (3) months from and after the date of such
termination of employment. (iv) A transfer of the Optionee's employment from one
Subsidiary or Affiliate to another shall not be deemed to be a termination of
the Optionee's employment.

(j) LEAVE OF ABSENCE. The Committee shall be entitled to make such rules,
regulations and determination as it deems appropriate under the Plan in respect
of any leave of absence taken by an Optionee. Without limiting the generality of
the foregoing, the Committee shall be entitled to determine (i) whether or not
any such leave of absence shall constitute a termination of employment within
the meaning the Plan and (ii) the impact , if any, of any such leave of absence
on Options granted under the Plan theretofore made to any Optionee who takes
such leave of absence.

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<PAGE>
9. CHANGES IN CAPITALIZATION

Subject to any required action by the stockholders, the number of shares
covered by each outstanding Option and the price per share of each such Option
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of the Corporation resulting from a subdivision or consolidation
of shares or the payment of a stock dividend (but only on the shares) or any
other increase or decrease in the number of such shares effected without receipt
of consideration by the Corporation.

If the Corporation merges or consolidates with another corporation, whether
or not the Corporation is a surviving corporation, or if the Corporation is
liquidated or sells or otherwise disposes of substantially all of its assets
while unexercised Options remain outstanding under the Plan, (i) subject to the
provisions of clause (iii) of this Section 9 below, after the effective date of
the merger, consolidation, liquidation, sale or other disposition, as the case
may be, each holder of an outstanding Option shall be entitled, upon exercise of
that Option, to receive, in lieu of shares, the number and class or classes of
shares of stock or other securities or property to which the holder would have
been entitled if, immediately prior to the merger, consolidation, liquidation,
sale or other disposition, the holder had been the holder of record of a number
of shares equal to the number of shares as to which that Option may be
exercised; (ii) the Board of Directors may waive any limitations set forth in or
imposed pursuant to this Plan so that all Options, from and after a date prior
to the effective date of such merger, consolidation, liquidation, sale or other
disposition, as the case may be, specified by the Board of Directors, shall be
exercisable in full; and (iii) all outstanding Options may be canceled by the
Board of Directors as of the effective date of any merger, consolidation,
liquidation, sale or other disposition, provided that any Optionee shall have
the right immediately prior to such event to exercise his Option to the extent
such Optionee is otherwise able to do so in accordance with this Plan and his
individual stock option agreement.

In the event of a change in the shares of the Corporation as presently
constituted that is limited to a change of all of its authorized shares with par
value into the same number of shares with a different par value or without par
value, the shares resulting from any such change shall be deemed to be the
shares within the meaning of the Plan.

To the extent that the foregoing adjustments relate to stock or securities
of the Corporation, such adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive; provided
that the character of an Option shall be not adjusted in a manner that causes
the Option to not qualify under the terms and conditions of that Option or the
meaning of the Plan.

Except as hereinbefore expressly provided in this Section 9, the Optionee
shall have no rights (i) by reason of any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class, or (ii) by reason of
any dissolution, liquidation, merger, or consolidation, spin-off of assets or
stock of another corporation, or any issue by the Corporation of shares of stock
of any class, nor shall any of these actions affect or cause an adjustment to be
made with respect to, the number or price of shares subject to an Option.

The grant of any Option pursuant to the Plan shall not affect in any way
the right or power of the Corporation (i) to make adjustments, reclassification,
reorganization or changes of its capital or business structure, (ii) to merge or
consolidate, (iii) to dissolve, liquidate or sell or transfer all or any part of
its business or assets, or (iv) to issue any bonds, debentures , preferred or
other preference stock ahead of or affecting the shares. If any action described
in the preceding sentence results in a fractional share for any Optionee under
any Option hereunder, such fraction shall be disregarded and Optionee shall only
be entitled to the whole number of shares resulting from such adjustment.

10. RIGHTS AS A STOCKHOLDER

An Optionee or a transferee of an Option shall have no rights as a
stockholder with respect to any Shares covered by his Option until the date of
the issuance of a stock certificate to him for such shares. No adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as provided in
Section 8 and Section 9 hereof.

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<PAGE>
11. INVESTMENT PURPOSE

The Company shall not be obligated to sell or issue any shares pursuant to
any Option unless the shares with respect to which the Option is being exercised
are at the time effectively registered or exempt from registration under the
Securities Act of 1933, as amended.

Notwithstanding anything in the Plan to the contrary, each Option under the
Plan shall be granted on the condition that the purchase of shares thereunder
shall be for investment purposes, and not with a view to resale or distribution.
However, if the shares subject to such Option are registered under the
Securities Act of 1933, as amended, or if a resale of such shares without such
registration otherwise would be permissible, such condition shall be inoperative
if in the opinion of counsel for the Corporation such condition is not required
under the Securities Act of 1933, as amended, or any other applicable law,
regulation, or rule of any governmental agency.

12. OTHER PROVISIONS

Options granted under the Plan shall also contain such other provisions as
the Committee or the Board of Directors of the Corporation shall deem advisable
subject to any limitation in the discretion of the Board of Directors required
by Rule 16b-3 under the 1934 Act, or by Section 162(m) of the Code.

13. INDEMNIFICATION OF COMMITTEE

In addition to such other rights of indemnification as they may have as
directors or as members of the Committee, the members of the Committee shall be
indemnified by the Corporation against the reasonable expenses, including
attorneys' fees actually and reasonably incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any Option granted
thereunder, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by the independent legal counsel selected by the
Corporation) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding (except in relation to matters as to which it shall adjudged
in such action, suit or proceeding that such Committee member is liable for
willful misconduct in the performance of his duties) if within sixty (60) days
after institution of any such action, suit or proceeding a Committee member
shall in writing offer the Corporation the opportunity, at its own expense, to
handle and defend the same.

14. FORFEITURE

Notwithstanding any other provision of this Plan, if the Committee finds
that (i) the Optionee, before or after termination of his employment with the
Corporation, Subsidiary, affiliate or joint venture (as used in this Section 14,
an "Employer"), committed fraud, embezzlement, theft, a felony, or proven
dishonesty in the course of his employment by Employer that damaged Employer, or
disclosed trade secrets of Employer, or (ii) the Optionee, before or after
termination of employment with the Employer for any reason, participated,
engaged in or had a financial or other interest as an employee, officer,
shareholder, owner or otherwise (except as the owner of less than 1% of the
common stock of a corporation whose stock is registered under the 1934 Act), in
any commercial endeavor that is competitive with the business of Employer, then
any outstanding Options that have not been exercised by the Optionee will be
forfeited. The decision of the Committee as to the nature of an Optionee's
conduct, the damage done to Employer and the extent of the Optionee's
competitive activity will be final. No decision of the Committee, however, will
affect the finality of the termination of the Optionee by Employer in any
manner.

15. MISCELLANEOUS

(a) AMENDMENT OF THE PLAN. The Board of Directors of the Corporation may,
insofar as permitted by law, from time to time, with respect to any shares at
the time not subject to Options, suspend or discontinue the Plan or revise or
amend it in any respect whatsoever except that, without approval of the
stockholders, (i) no such revision or amendment shall change the number of
shares subject to the Plan, change the designation of the class of employees
eligible to receive Options, decrease the price at which Options may

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be granted or remove the administration of the Plan from the Committee, and (ii)
no such revision or amendment shall materially increase the number of shares
that may be issued under the Plan, materially modify the requirements as to
eligibility for participation in the Plan, or otherwise materially increase the
benefits accruing to participants under the Plan.

(b) FOREIGN JURISDICTIONS. Options may be granted, without amending the
Plan, to participants who are foreign nationals or employed outside the United
States or both, on such terms and conditions different from those specified in
the Plan as may, in the judgement of the Committee, be necessary or desirable to
further the purpose of the Plan or to accommodate differences in local law, tax
policy or custom. Moreover, the Committee may approve such supplements to or
alternative versions of the Plan as it may consider necessary or appropriate for
such purposes without thereby affecting the terms of the Plan as in effect for
any other purpose; provided, however, no such supplement or alternative version
shall (i) increase the number of available shares under Section 5 (b) of the
Plan; or (ii) cause the Plan to cease to satisfy any considerations of Rule
16b-3 under the 1934 Act or with respect to employees subject to Section 162 (m)
of the Code.

(c) WITHHOLDING TAX REQUIREMENT. Whenever the Corporation proposes or is
required to issue or transfer shares under the Plan, the Corporation shall have
the right to require the Optionee to remit to the Corporation an amount
sufficient to satisfy any federal, state, or local withholding tax requirements
prior to the delivery of any certificate or certificates for such shares.
Alternatively, the Corporation may issue or transfer such shares net of the
number of shares sufficient to satisfy the withholding tax requirements. For
withholding tax purposes, the shares shall be valued on the date the withholding
obligation is incurred.

(d) NO RIGHTS OF EMPLOYMENT. Neither the granting of Options or the
exercise of the same shall be construed as granting the Optionee any right with
respect to continuance of employment with the Corporation, the Subsidiary or the
Affiliate. Except as may otherwise be limited by a written agreement between the
Corporation and the Optionee, the right of the Corporation, the Subsidiary or
the Affiliate to terminate at will the Optionee's employment with it at any time
(whether by dismissal, discharge, retirement or otherwise) is specifically
reserved by the Corporation, the Subsidiary or the Affiliate.

(e) GOVERNING LAWS. The validity, construction, interpretation and effect
of this Plan and instrument shall exclusively be governed by and determined in
accordance with the laws of the State of Delaware, except to the extent
preempted by Federal law, which shall to that extent govern.

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