DESCRIPTION OF
                     MELAMINE CHEMICALS, INC.
                   ANNUAL INCENTIVE AWARD PLAN


Each   year  the  board  of  directors  of  Melamine  Chemicals,  Inc.
("Melamine")  adopts an Annual Incentive Award Plan (the "Plan").  The
Plan is not set forth in a formal plan document.

All salaried employees  of  Melamine  who  are not required to be paid
overtime  (currently  32  persons)  are  eligible  to  receive  annual
incentive cash awards under the Plan in a  maximum  amount  equal to a
percentage of the employee's annual salary.  The applicable percentage
is set for each eligible employee each year and for 1997 ranged from a
high  of 50% to a low of 6%.  All individuals other than officers  are
awarded  incentives  based  on  a return on equity, yearly performance
evaluation and reaching certain agreed  upon  goals.  All officers are
awarded incentives based on a return on equity  and yearly performance
evaluation.

The board of directors have the authority to choose  the  persons  who
are  eligible  to  participate  in  the  Plan  each  year  and set the
percentage  of  salary  for which an employee is eligible.  The  Board
also has the power to award discretionary bonuses at any time based on
special, highly significant  contributions by a particular employee or
group of employees.