SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934

[AMENDMENT NO.........]
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

ARMOR HOLDINGS, INC.
- -------------------------------------------------------------------------------

(Name of Registrant as Specified In Its Charter)

N/A
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.

[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

[_] 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:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):

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4) Proposed maximum aggregate value of transaction:

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5) Total fee paid:

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[_] 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:_________________________

ARMOR HOLDINGS, INC.
13386 INTERNATIONAL PARKWAY
JACKSONVILLE, FLORIDA 32218

May 27, 1997

To Our Stockholders:

On behalf of your Company's Board of Directors, I cordially
invite you to attend the Annual Meeting of Stockholders to be held on June 12,
1997, at 10:00 A.M., New York City time, at The Metropolitan Club, 1 East 60th
Street, New York, New York 10022.

The accompanying Notice of Meeting and Proxy Statement cover
the details of the matters to be presented.

A copy of the 1996 Annual Report is included with this
mailing.

REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE MEETING, I URGE
THAT YOU PARTICIPATE BY COMPLETING AND RETURNING YOUR PROXY AS SOON AS POSSIBLE.
YOUR VOTE IS IMPORTANT AND WILL BE GREATLY APPRECIATED. YOU MAY REVOKE YOUR
PROXY AND VOTE IN PERSON IF YOU DECIDE TO ATTEND THE MEETING.

Cordially,

ARMOR HOLDINGS, INC.

Jonathan M. Spiller
President and
Chief Executive Officer

JMS/ksh

ARMOR HOLDINGS, INC.
13386 INTERNATIONAL PARKWAY
JACKSONVILLE, FLORIDA 32218

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON JUNE 12, 1997

To Our Stockholders:

The Annual Meeting of Stockholders of Armor Holdings, Inc., a
Delaware corporation (the "Company"), will be held on Thursday, June 12, 1997,
at The Metropolitan Club, 1 East 60th Street, New York, New York 10022, at 10:00
A.M., New York City time, or any adjournment or postponement thereof (the
"Meeting"), for the following purposes:

1. To elect seven members to serve on the Board of Directors
until the next annual meeting of stockholders and until their successors are
duly elected and qualified (Proposal 1);

2. To vote upon a proposal pursuant to which the Company will
become a holding company and own the capital stock of its subsidiary
corporations, through which all of the operations of the Company will be
conducted. As part of such proposal, all of the business, assets, liabilities
and operations of the Company relating to its armor business will be transferred
to a wholly owned subsidiary corporation in order to implement such holding
company structure (Proposal 2);

3. To vote upon a proposal to amend and restate the Company's
1996 Non-Employee Directors Stock Option Plan to: (i) increase, by 150,000
shares, the total number of shares of the Company's common stock, $.01 par value
per share (the "Common Stock"), that may be awarded under such plan; and (ii)
comport with recent amendments to Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (Proposal 3);

4. To vote upon a proposal to amend and restate the Company's
1996 Stock Option Plan to: (i) increase, by 250,000 shares, the total number of
shares of the Company's Common Stock that may be awarded under such plan; (ii)
change the governing law of such plan from Florida to Delaware; (iii) comport
with recent amendments to Rule 16b-3 promulgated under the Exchange Act; and
(iv) adopt a schedule to such plan to permit the grant of options to employees
of the Company's United Kingdom subsidiaries (Proposal 4);

5. To ratify the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the 1997 fiscal year (Proposal 5); and

6. To transact such other business as may properly be brought
before the Meeting.

Only stockholders of record at the close of business on April
28, 1997 shall be entitled to notice of and to vote at the Meeting. A copy of
the Annual Report for the fiscal year ended December 28, 1996 is being mailed to
stockholders simultaneously herewith.

YOUR VOTE IS IMPORTANT. PLEASE SIGN AND DATE THE ENCLOSED
PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE, WHETHER OR
NOT YOU EXPECT TO ATTEND THE MEETING. YOU MAY REVOKE YOUR PROXY AND VOTE IN
PERSON IF YOU DECIDE TO ATTEND THE MEETING.

Carol T. Burke
Secretary

ARMOR HOLDINGS, INC.
13386 INTERNATIONAL PARKWAY
JACKSONVILLE, FLORIDA 32218

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON JUNE 12, 1997

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

INTRODUCTION

PROXY SOLICITATION AND GENERAL INFORMATION

This Proxy Statement and the enclosed form of proxy (the
"Proxy Card") are being furnished to the holders of common stock, par value $.01
per share (the "Common Stock"), of Armor Holdings, Inc., a Delaware corporation
(the "Company"), in connection with the solicitation of proxies by the Board of
Directors of the Company for use at the Annual Meeting of Stockholders to be
held on Thursday, June 12, 1997, at The Metropolitan Club, 1 East 60th Street,
New York, New York 10022, at 10:00 A.M., New York City time, and at any
adjournment or postponement thereof (the "Meeting"). This Proxy Statement and
the Proxy Card are first being sent to stockholders on or about May 27, 1997.

At the Meeting, holders of Common Stock (the "Stockholders")
will be asked:

1. To elect seven members to serve on the Board of Directors
until the next annual meeting of stockholders and until their successors are
duly elected and qualified (Proposal 1);

3. To vote upon a proposal to amend and restate the Company's
1996 Non-Employee Directors Stock Option Plan to: (i) increase, by 150,000
shares, the total number of shares of the Company's Common Stock that may be
awarded under such plan; and (ii) comport with recent amendments to Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (Proposal 3);

from Florida to Delaware; (iii) comport with recent amendments to Rule 16b-3
promulgated under the Exchange Act; and (iv) adopt a schedule to such plan to
permit the grant of options to employees of the Company's United Kingdom
subsidiaries (Proposal 4);

5. To ratify the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the 1997 fiscal year (Proposal 5); and

6. To transact such other business as may properly be brought
before the Meeting.

The Board of Directors has fixed the close of business on
April 28, 1997 as the record date for the determination of Stockholders entitled
to notice of and to vote at the Meeting. Each such Stockholder will be entitled
to one vote for each share of Common Stock held on all matters to come before
the Meeting and may vote in person or by proxy authorized in writing.

Stockholders are requested to complete, sign, date and
promptly return the Proxy Card in the enclosed envelope. Common Stock
represented by properly executed proxies received by the Company and not revoked
will be voted at the Meeting in accordance with instructions contained therein.
If the Proxy Card is signed and returned without instructions, the shares will
be voted FOR the election of each nominee for director named herein (Proposal 1)
and FOR Proposals 2, 3, 4 and 5. A Stockholder who so desires may revoke his
proxy at any time before it is voted at the Meeting by delivering written notice
to the Company (attention: Corporate Secretary), by duly executing a proxy
bearing a later date or by casting a ballot at the Meeting. Attendance at the
Meeting will not in and of itself constitute a revocation of a proxy.

The Board of Directors knows of no other matters that are to
be brought before the Meeting other than as set forth in the Notice of Meeting.
If any other matters properly come before the Meeting, the persons named in the
enclosed form of proxy or their substitutes will vote in accordance with their
best judgment on such matters.

THE MEETING

The Meeting will be held on Thursday, June 12, 1997, at 10:00
A.M., New York City time, at The Metropolitan Club, 1 East 60th Street, New
York, New York 10022.

RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE

Only Stockholders as of the close of business on April 28,
1997 (the "Record Date") are entitled to notice of and to vote at the Meeting.
As of the Record Date, there were 11,641,362 shares of Common Stock outstanding
and entitled to vote, with each share entitled to one vote. See "Principal
Stockholders-Changes in Control."

REQUIRED VOTES

A plurality of the votes cast by the holders of shares of
Common Stock present in person or by proxy at the Meeting at which a quorum is
present is required for the election of a nominee for director. The approval and
adoption of Proposals 2, 3, 4 and 5 requires the affirmative vote of the holders
of a majority of the outstanding shares of Common Stock present or represented
by proxy and voting at a stockholders meeting at which a quorum is present.
Abstentions and broker non-votes will have the legal effect of a vote against
Proposal 2. Abstentions will have the legal effect of a vote against Proposals
3, 4 and 5. With respect to a broker non-vote on Proposals 3, 4 and 5, such
shares will not be considered present at the Meeting and (since they will not be
counted in respect of the matter) the broker non-votes will have the practical
effect of reducing the number of affirmative votes required to achieve a
majority vote for the matter by reducing the total number of shares from which
the majority is calculated.

The directors and officers of the Company (collectively
"Management") own, in the aggregate, approximately 43% of the outstanding shares
of the Company's Common Stock and have indicated their intention to vote for
each director nominee and for all other proposals described in this Proxy
Statement.

PROXY SOLICITATION

The Company will bear the costs of the solicitation of proxies
for the Meeting. In addition, directors, officers and employees of the Company
may solicit proxies from Stockholders by mail, telephone, telegram, personal
interview or otherwise. Such directors, officers and employees will not receive
additional compensation but may be reimbursed for out-of-pocket expenses in
connection with such solicitation. Brokers, nominees, fiduciaries and other
custodians have been requested to forward soliciting material to the beneficial
owners of Common Stock held of record by them and such custodians will be
reimbursed for their reasonable expenses.

INDEPENDENT ACCOUNTANTS

The Company has been advised that representatives of Deloitte
& Touche LLP, the Company's independent accountants for the fiscal year ended
December 28, 1996, the Company's most recently completed fiscal year ("Fiscal
1996"), will attend the Meeting, will have an opportunity to make a statement if
they desire to do so and will be available to respond to appropriate questions.

IT IS DESIRABLE THAT AS LARGE A PROPORTION AS POSSIBLE OF THE
STOCKHOLDERS' INTERESTS BE REPRESENTED AT THE MEETING. THEREFORE, EVEN IF YOU
INTEND TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE
ENCLOSED PROXY TO INSURE THAT YOUR STOCK WILL BE REPRESENTED. IF YOU ARE PRESENT
AT THE MEETING AND DESIRE TO DO SO, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN
PERSON BY GIVING WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY. PLEASE RETURN
YOUR EXECUTED PROXY PROMPTLY.

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information, as of
April 28, 1997, to the knowledge of the Company, regarding the beneficial
ownership of Common Stock, which is the Company's only class of outstanding
voting securities, by: (i) each Stockholder who owns more than 5% of the
outstanding Common Stock of the Company; (ii) each director; (iii) each of the
named executive officers of the Company; and (iv) all directors and executive
officers of the Company as a group. The information set forth in the table and
accompanying footnotes has been furnished by the named beneficial owners. Since
the table and accompanying footnotes reflect beneficial ownership determined
pursuant to the applicable rules of the Securities and Exchange Commission (the
"Commission"), the information is not necessarily indicative of beneficial
ownership for any other purpose. Unless otherwise indicated, the address of each
person named in the table below is c/o Armor Holdings, Inc., 13386 International
Parkway, Jacksonville, Florida 32218.

NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ------------------- -------------------- ----------

Warren B. Kanders and
Kanders Florida Holdings, Inc. (1) 4,462,178 38.3%

Nevis Capital Management, Inc. (2) 1,035,900 8.9%

Richmont Capital Partners I, L.P.(3) 800,000 6.8%

Jonathan M. Spiller (4) 690,205 5.7%

Burtt R. Ehrlich (5) 229,100 2.0%

Alastair G.A. Morrison (6) 210,257 1.8%

Nicolas Sokolow (7) 150,000 1.3%

Hon. Richard N. Bethell (8) 140,159 1.2%

Martin Brayshaw (9) 87,613 *

Richard T. Bistrong (10) 66,667 *

Thomas W. Strauss (11) 65,000 *

Carol T. Burke (12) 19,999 *

Alair A. Townsend (13) 5,516 *

Richard C. Bartlett (14) 0 *

Robert R. Schiller (15) 0 *

All executive officers and directors 6,126,694 47.4%
as a group (13 persons)(1)(4)(5)
(6)(7)(8)(9)(10)(11)(12)(13)(14)(15)

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

*Less than 1%

(1) Represents 4,133,037 shares owned by Kanders Florida Holdings, Inc.
("KFH"), which are deemed to be beneficially owned by Warren B. Kanders
because he is the sole stockholder and sole director of KFH. Also
includes 300,000 shares owned by the Kanders Florida Holdings, Inc.
1996 Charitable Remainder Unitrust, of which Mr. Kanders is trustee.
Mr. Kanders disclaims beneficial ownership of the shares owned by the
trust. Of the shares listed, Mr. Kanders owns 29,141 shares
individually.

(2) The address of Nevis Capital Management, Inc. ("Nevis") is 1119 St.
Paul Street, Baltimore, Maryland 21202. Nevis is the general partner of
Snowden Limited Partnership ("Snowden"). All of the shares deemed to be
beneficially owned by Nevis are registered in the name of Snowden.

(3) The address of Richmont Capital Partners I, L.P. ("Richmont") is 4300
Westgrove Drive, Dallas, Texas 75248. The shares listed include 200,000
stock options granted to Richmont which are fully vested but
unexercised pursuant to that certain option granted by the Company to
Richmont dated May 15, 1996 (the "Richmont Options"), entitling
Richmont to purchase up to 300,000 shares of Common Stock. Of the
300,000 options granted, 200,000 are fully vested but unexercised, and
100,000 become fully vested on May 15, 1998. The Richmont Options
expire after 5:00 P.M., Eastern Time, on May 15, 2006.

(4) Includes: (i) 432,000 stock options granted to Mr. Spiller under the
terms of his previous employment agreement, which was executed on
January 1, 1994 but which was mutually terminated by Mr. Spiller and
the Company and superseded by a new employment agreement executed on
January 18, 1996; (ii) 18,000 stock options granted to Mr. Spiller
pursuant to the Company's 1994 Incentive Stock Plan; and (iii) 24,000
stock options awarded to Mr. Spiller on January 19, 1996. These options
are fully vested but unexercised. Also includes 43,541 shares owned by
Mr. Spiller's children, of which Mr. Spiller disclaims beneficial
ownership. Of the 690,205 shares listed, 646,664 are subject to a three
year lock-up agreement between Mr. Spiller and KFH. Pursuant to the
terms of a letter agreement, dated January 18, 1996 (the "Letter
Agreement"), Mr. Spiller agreed that he will not, directly or
indirectly, without the prior written consent of KFH, offer to sell,
sell, grant any options for the sale of, assign, transfer, pledge,
hypothecate or otherwise encumber or dispose of such shares of Common
Stock of the Company or securities convertible into, exercisable or
exchangeable for or evidencing any right to purchase or subscribe for,
such shares of Common Stock of the Company or dispose of any beneficial
interest therein for a period of three years from January 18, 1996,
except as provided in such Letter Agreement. KFH and Mr. Spiller
entered into an agreement, dated as of January 18, 1996, pursuant to
which KFH granted a beneficial ownership interest in 316,823 shares of
Common Stock of the Company owned by KFH. Such agreement provides that,
in the event that KFH sells at least 452,604 shares of Common Stock of
the Company in a single transaction, then Mr. Spiller shall have the
option to either (i) pay to KFH an amount equal to the Spiller
Acquisition Cost (as defined in such agreement), in which event Mr.
Spiller will be entitled to receive stock certificates representing
such 316,823 shares of Common Stock, or (ii) receive the net proceeds
relating to 316,823 shares of Common Stock that are the subject of the
sale by KFH, reduced by the Spiller Acquisition Cost relating to such
shares of Common Stock so sold by KFH. In the event that KFH does not
sell at least 452,604 shares of Common Stock as described above, then
Mr. Spiller's rights to the 316,823 shares of Common Stock shall vest
on January 18, 1999; provided, however, that, at such time, Mr. Spiller
is the President and Chief Executive Officer of the Company and his
Employment Agreement with the Company, dated as of January 18, 1996, is
in full force and effect and Mr. Spiller is not in breach thereof; and,
provided, further, that if Mr. Spiller's Employment Agreement with the
Company is terminated due to his death or disability, or without cause,
prior to January 18, 1999, then a pro-rata portion of such 316,823
shares of Common Stock, based upon the number of months elapsed from
January 18, 1996 in relation to 36 months, shall vest to Mr. Spiller.
Unless sooner acquired by Mr. Spiller as hereinabove described, Mr.
Spiller shall have the right to acquire any such vested shares of
Common Stock pursuant to such agreement on January 18, 2001 upon
payment by Spiller to KFH of the Spiller Acquisition Cost relating to
such shares.

(5) Includes 13,400 shares owned by Mr. Ehrlich's children and 20,600 held
in trust for the benefit of his children, of which Mr. Ehrlich's spouse
is trustee, of which he disclaims beneficial ownership. Also includes
400 shares owned by Mr. Ehrlich's spouse's individual retirement
account, of which Mr. Ehrlich disclaims beneficial ownership. Also
includes 25,000 stock options granted to Mr. Ehrlich under the terms of
the 1996 Directors Plan at an exercise price of $3.75 per share. Such
options were granted to Mr. Ehrlich as part of a grant of 75,000 stock
options pursuant to the terms of the 1996 Directors Plan upon his
initial election to the Board of Directors on January 18, 1996, at an
exercise price of $3.75 per share, the closing trading price of the
Company's Common Stock on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ"), on January 18, 1996.
Such options vest in three equal annual installments on January 18,
1997, 1998 and 1999. Of the 229,100 shares listed, 100,000 shares are
subject to a three year lock-up agreement between Mr. Ehrlich and KFH
(the "Ehrlich Lock-Up"). Pursuant to

the Ehrlich Lock-Up, Mr. Ehrlich agreed that he will not, directly or
indirectly, without the prior written consent of KFH, offer to sell,
sell, grant any options for the sale of, assign, transfer, pledge,
hypothecate or otherwise encumber or dispose of any shares of Common
Stock of the Company or securities convertible into, exercisable or
exchangeable for or evidencing any right to purchase or subscribe for
any shares of Common Stock of the Company or dispose of any beneficial
interest therein for a period of three years from January 18, 1996,
except as provided in such agreement.

(6) Mr. Morrison's address is 21 Embankment Gardens, Flat 6, London SW3 4LW
England. All of the shares listed are owned by Mr. Morrison directly.
Mr. Morrison has granted a beneficial ownership interest in 87,613 of
the shares listed to Mr. Brayshaw pursuant to that certain Option Deed
dated April 14, 1997, between Messrs. Morrison and Brayshaw. The option
is fully vested but unexercised, and has an exercise price of
(pound sterling) 1. The option expires on April 13, 2004. As
consideration for the option, Mr. Brayshaw paid to Mr. Morrison the
sum of (pounds sterling) 56,000.

(7) Includes 100,000 shares owned by S.T. Investors Fund, LLC ("STIF"), a
limited liability company of which Mr. Sokolow is a member and 20,000
shares owned by Mr. Sokolow's children, of which he disclaims
beneficial ownership. Also includes 5,000 shares owned by Mr. Sokolow's
profit sharing plan. Also includes 25,000 stock options granted to Mr.
Sokolow under the terms of the 1996 Directors Plan at an exercise price
of $3.75 per share. Such options were granted to Mr. Sokolow as part of
a grant of 75,000 stock options pursuant to the terms of the 1996
Directors Plan upon his initial election to the Board of Directors on
January 18, 1996, at an exercise price of $3.75 per share, the closing
trading price of the Company's Common Stock on NASDAQ, on January 18,
1996. Such options vest in three equal annual installments on January
18, 1997, 1998 and 1999. Of the 150,000 shares listed, 100,000 shares
are subject to a three year lock-up agreement between STIF and KFH (the
"STIF Lock-Up"). Pursuant to the STIF Lock-Up, STIF agreed that it will
not, directly or indirectly, without the prior written consent of KFH,
offer to sell, sell, grant any options for the sale of, assign,
transfer, pledge, hypothecate or otherwise encumber or dispose of any
shares of Common Stock of the Company or securities convertible into,
exercisable or exchangeable for or evidencing any right to purchase or
subscribe for any shares of Common Stock of the Company or dispose of
any beneficial interest therein for a period of three years from
January 18, 1996, except as provided in such agreement.

(8) Mr. Bethell's address is 60 Bromfelde Road, London SW4 6PR England. All
of the shares listed are owned by Mr. Bethell directly.

(9) Mr. Brayshaw's address is Redhall, 87 Main Street, Lyddington, Near
Uppingham, Rutland LE15 9LS England. The shares listed are pursuant to
vested but unexercised stock options granted by Mr. Morrison to Mr.
Brayshaw pursuant to that certain Option Deed dated April 14, 1997,
between Messrs. Morrison and Brayshaw. The option is fully vested but
unexercised, and has an exercise price of (pounds sterling) 1. The
option expires on April 13, 2004. As consideration for the option, Mr.
Brayshaw paid to Mr. Morrison the sum of (pounds sterling) 56,000.

(10) Includes 50,000 stock options granted to Mr. Bistrong under the terms
of his previous employment agreement, which was executed on February 5,
1995 but which was mutually terminated by Mr. Bistrong and the Company
and superseded by a new employment agreement executed on January 18,
1996. Such options are fully vested but unexercised. Also includes
16,667 vested but unexercised stock options granted to Mr. Bistrong
under the terms of the Company's 1994 Incentive Stock Plan at an
exercise price of $.97 per share, the fair market value on the date of
the grant. All of the shares listed are subject to a three year lock-up
agreement between Mr. Bistrong and KFH (the "Bistrong Lock-Up").
Pursuant to the Bistrong Lock-Up, Mr. Bistrong agreed that he will not,
directly or indirectly, without the prior written consent of KFH, offer
to sell, sell, grant any options for the sale of, assign, transfer,
pledge, hypothecate or otherwise encumber or dispose of any shares of
Common Stock of the Company or securities convertible into, exercisable
or exchangeable for or evidencing any right to purchase or subscribe
for any shares of Common Stock of the Company or dispose of any
beneficial interest therein for a period of three years from January
18, 1996, except as provided in such agreement.

(11) Includes 25,000 stock options granted to Mr. Strauss under the terms of
the 1996 Directors Plan at an exercise price of $7.50 per share. Such
options were granted to Mr. Strauss as part of a grant of 75,000 stock
options pursuant to the terms of the 1996 Directors Plan upon his
initial election to the Board of Directors on May 13, 1996, at an
exercise price of $7.50 per share, the closing trading price of the
Company's Common Stock on the American Stock Exchange on May 13, 1996.
Such options vest in three equal annual installments on May 13, 1997,
1998 and 1999.

(12) The number of shares listed are pursuant to vested but unexercised
stock options granted to Ms. Burke under the terms of the Company's
1994 Incentive Stock Plan at an exercise price of $.97 per share, the
fair market value of the Common Stock on the date of the grant. All of
the shares listed are subject to a three year lock-up agreement between

Ms. Burke and KFH (the "Burke Lock-Up"). Pursuant to the Burke Lock-Up,
Ms. Burke agreed that she will not, directly or indirectly, without the
prior written consent of KFH, offer to sell, sell, grant any options
for the sale of, assign, transfer, pledge, hypothecate or otherwise
encumber or dispose of any shares of Common Stock of the Company or
securities convertible into, exercisable or exchangeable for or
evidencing any right to purchase or subscribe for any shares of Common
Stock of the Company or dispose of any beneficial interest therein for
a period of three years from January 18, 1996, except as provided in
such agreement.

(13) Excludes 75,000 stock options granted to Ms. Townsend under the terms
of the 1996 Directors Plan. Such options were granted to Ms. Townsend
upon her initial election to the Board of Directors on December 9, 1996
at an exercise price of $8.00 per share, the closing trading price of
the Company's Common Stock on the American Stock Exchange on December
9, 1996. Such options vest in three equal annual installments on
December 9, 1997, 1998 and 1999.

(14) Mr. Bartlett does not own any shares individually. Mr. Bartlett is
Chairman of the Board of Directors of The Richmont Group, whose
subsidiary, Richmont, is the beneficial owner of 800,000 shares of
Common Stock. Mr. Bartlett disclaims beneficial ownership of the shares
owned by Richmont.

(15) Mr. Schiller does not own any shares individually. Pursuant to the
terms of his employment agreement, Mr. Schiller was granted options to
purchase 150,000 shares of Common Stock on July 24, 1996 under the
Company's 1996 Plan at an exercise price of $6.06 per share, the market
price of the Common Stock on the date of the grant. The options vest
over a period of three years from the date of the grant, and all
options become exercisable on July 24, 1999.

CHANGES IN CONTROL

On January 18, 1996, the Company underwent a change in control
in connection with the purchase by Kanders Florida Holdings, Inc. ("KFH") and
certain other investors of all of the capital stock of the Company (the "KFH
Acquisition") owned by Clark Schwebel, Inc. ("Clark Schwebel"), a supplier of
raw materials to the Company, and Hexcel Corporation ("Hexcel"). See "Certain
Relationships and Related Transactions-Transactions With Management and Others"
for a discussion of the Company's transactions with Clark Schwebel. Prior to the
closing of the KFH Acquisition (the "Closing"), at a meeting held on January 18,
1996, the then existing Board of Directors, which consisted of Jonathan M.
Spiller, Julius Lasnick, Gardner F. Davis, John Innes and Robert Sullivan,
authorized the officers of the Company to take such actions as the officers
deemed necessary, prudent and appropriate to facilitate the KFH Acquisition.
Following such action, Messrs. Lasnick, Davis, Innes and Sullivan conditionally
resigned from the Board of Directors, effective upon the Closing. Such
resignations were conditioned upon the occurrence of the Closing.
Contemporaneously with the tendering by Messrs. Lasnick, Davis, Innes and
Sullivan of their conditional resignations, the Board of Directors appointed
Warren B. Kanders, who was elected Chairman of the Board of Directors, Burtt R.
Ehrlich and Nicolas Sokolow to the vacancies to be created by such resignations.
Mr. Kanders is the sole stockholder and sole director of KFH. Upon assuming
office, Messrs. Kanders, Ehrlich and Sokolow constituted a majority of the Board
of Directors. The Board of Directors was expanded twice during 1996 to add a
total of three additional directors. On May 13, 1996, Thomas W. Strauss and
Richard C. Bartlett were elected to serve as members of the Board of Directors,
and on December 9, 1996, Alair A. Townsend was elected to the Board.

The shares of capital stock of the Company acquired by KFH
were paid for out of KFH's working capital funds. KFH acquired an aggregate of
2,880,217 shares of the Company's common stock, which at the time of the KFH
Acquisition had a par value of $.03 per share, and an aggregate of 1,131,075
shares of the Company's 3% Convertible, $1.00 stated

value Preferred Stock (the "Old Preferred Stock"), for an aggregate purchase
price of $3,190,000, of which an aggregate of $2,340,000 was paid in cash. The
remaining $850,000 of the purchase price was paid by promissory notes. To secure
the payment of the promissory notes, KFH pledged to Springs Industries, Inc.
("Springs"), the parent corporation of Clark Schwebel, 900,000 shares of the
Company's common stock.

Upon assuming their positions, the newly constituted Board of
Directors of the Company elected to require the holders of the Company's Old
Preferred Stock to convert such shares to common stock at 110% of the aggregate
stated value of the Old Preferred Stock, at a conversion price of $.77 per share
(fair market value as determined by an independent valuation firm), as required
by the Company's then-effective Amended and Restated Articles of Incorporation.
All shares of the Company's Old Preferred Stock were deemed to have been
converted upon such election by the Board of Directors.

Following the Closing, and assuming the conversion of the
shares of Old Preferred Stock owned by KFH, KFH and Mr. Kanders collectively
owned 4,524,178 of the total outstanding shares of common stock of the Company,
which at the time constituted approximately 66.4% of the total outstanding
shares of common stock of the Company.

As of the Record Date, KFH and Mr. Kanders collectively owned
4,462,178 of the total outstanding shares of Common Stock of the Company, which
holdings constitute approximately 38.3% of the total outstanding shares of
Common Stock of the Company. Management of the Company owns, in the aggregate,
approximately 43% of the total outstanding shares of the Company's Common Stock
and have indicated their intention to vote for the election of each of the
nominees for director and the approval and adoption of each of the Proposals
presented in this Proxy Statement.

No further changes in control of the Company are currently
contemplated.

The Company is not aware of any material proceedings to which
any director, executive officer or affiliate of the Company or any security
holder, including any owner of record or beneficially of more than 5% of any
class of the Company's voting securities, is a party adverse to the Company or
has a material interest adverse to the Company.

The Company is not aware of any material pending legal
proceedings, other than ordinary routine litigation incidental to the business
of the Company, to which any director or officer of the Company is a party or of
which any of their property is the subject.

PROPOSAL 1

ELECTION OF DIRECTORS

The Certificate of Incorporation of the Company provides
that there shall be three to fifteen directors, with such number to be fixed by
the Board of Directors. Effective at

the time and for the purposes of the Meeting, the number of directors of the
Company, as fixed by the Board of Directors pursuant to the Bylaws of the
Company, is seven.

Directors of the Company are elected annually at the
annual meeting of stockholders. Their respective terms of office continue until
the next annual meeting of stockholders and until their successors have been
elected and qualified in accordance with the Company's Bylaws. There are no
family relationships among any of the directors or executive officers of the
Company.

Unless otherwise specified, each proxy received will be
voted for the election as directors of the seven nominees named below to serve
until the 1998 Annual Meeting of Stockholders and until their successors shall
be duly elected and qualified. Each of the nominees has consented to be named a
nominee in the Proxy Statement and to serve as a director if elected. Should any
nominee become unable or unwilling to accept a nomination or election, the
persons named in the enclosed proxy will vote for the election of a nominee
designated by the Board of Directors or will vote for such lesser number of
directors as may be prescribed by the Board of Directors in accordance with the
Company's Bylaws.

The following persons have been nominated as directors:

WARREN B. KANDERS, 39, has served as Chairman of the Board
of the Company since January 1996. From October 1992 to May 1996, Mr. Kanders
served as Vice Chairman of the Board of Directors of Benson Eyecare Corporation.
From June 1992 to March 1993, Mr. Kanders was the President and a Director of
Pembridge Holdings, Inc.

JONATHAN M. SPILLER, 45, has served as a Director and
President of the Company since July 1991 and as Chief Executive Officer since
September 1993. From June 1991 to September 1993, Mr. Spiller served as the
Company's Chief Operating Officer.

BURTT R. EHRLICH, 57, has served as a Director of the
Company since January 1996. Mr. Ehrlich served as Chairman and Chief Operating
Officer of Benson Eyecare Corporation from 1986 until October 1992 and as a
Director of Benson Eyecare Corporation until 1995.

NICOLAS SOKOLOW, 46, has served as a Director of the
Company since January 1996. Mr. Sokolow is a partner in the law firm of Sokolow,
Dunaud, Mercadier & Carreras. From June 1973 until October 1994, Mr. Sokolow was
an associate and partner in the law firm of Coudert Brothers. Mr. Sokolow is a
Director of Rexel, Inc.

THOMAS W. STRAUSS, 54, has served as a Director of the
Company since May 1996. Since 1995, Mr. Strauss has been a Principal with Ramius
Capital Group, a privately held investment management firm. From June 1993 until
July 1995, Mr. Strauss was Co-Chairman of Granite Capital International Group.
From 1963 to 1991, Mr. Strauss served in various capacities with Salomon
Brothers Inc, including President and Vice-Chairman.

RICHARD C. BARTLETT, 61, has served as a Director of the
Company since May 1996. Mr. Bartlett has served as Vice Chairman of Mary Kay
Holding Corporation since January 1993 and served as President, Chief Operating
Officer and Director of Mary Kay Inc. from 1987 through 1992. Mr. Bartlett has
served as Chairman of the Board of Directors since 1995 and Chief Executive
Officer from 1994 to 1995 of The Richmont Group, a holding company with
portfolio businesses including financial services, apparel, sporting goods and
restaurant chains.

ALAIR A. TOWNSEND, 55, has served as a Director of the
Company since December 1996. Since February 1989, Ms. Townsend has been
Publisher of Crain's New York Business. Ms. Townsend currently serves as a
Governor of the American Stock Exchange, and previously served as New York
City's Deputy Mayor for Finance and Economic Development from February 1985 to
January 1989.

VOTE REQUIRED

The nominees for directors who receive a plurality of the
votes cast by the holders of the outstanding Common Stock entitled to vote at
the Meeting at which a quorum is present will be elected to the Board of
Directors.

RECOMMENDATION OF THE BOARD OF DIRECTORS

The Board of Directors recommends a vote FOR each of the
above-named director nominees.

INFORMATION CONCERNING MEETINGS OF THE BOARD OF
DIRECTORS AND BOARD COMMITTEES AND DIRECTOR COMPENSATION

During Fiscal 1996, the Board of Directors held eight
meetings. The Board of Directors has standing Audit, Compensation, Nominating
and Option Committees. During Fiscal 1996, all of the directors then in office
attended at least 75% of the total number of meetings of the Board of Directors
and the Committees of the Board of Directors on which they served. The Audit,
Compensation, Nominating and Option Committees do not meet on a regular basis,
but only as circumstances require.

AUDIT COMMITTEE

The functions of the Audit Committee are to recommend to
the Board of Directors the appointment of independent auditors for the Company,
to analyze the reports and recommendations of such auditors and to review
internal audit procedures and controls. During Fiscal 1996, the Audit Committee
consisted of Messrs. Ehrlich (Chairman), Kanders and Strauss. The Audit
Committee met twice during Fiscal 1996.

COMPENSATION COMMITTEE

The purpose of the Compensation Committee is to recommend
to the Board of Directors the compensation and benefits of the Company's
executive officers and other key managerial personnel. During Fiscal 1996, the
Compensation Committee consisted of Messrs. Sokolow (Chairman), Kanders and
Ehrlich. The Compensation Committee met twice during Fiscal 1996.

NOMINATING COMMITTEE

The purpose of the Nominating Committee is to identify,
evaluate and nominate candidates for election to the Board of Directors. The
Nominating Committee will consider nominees recommended by Stockholders. The
names of such nominees should be forwarded to Carol T. Burke, Secretary, Armor
Holdings, Inc., 13386 International Parkway, Jacksonville, Florida 32218, who
will submit them to the committee for its consideration. During Fiscal 1996, the
Nominating Committee consisted of Messrs. Kanders (Chairman), Bartlett and
Sokolow. The Nominating Committee met once during Fiscal 1996.

OPTION COMMITTEE

The purpose of the Option Committee is to administer the
Company's 1996 Stock Option Plan and 1996 Non-Employee Directors Stock Option
Plan, and to recommend to the Board of Directors awards of options to purchase
Common Stock of the Company thereunder. During Fiscal 1996, the Option Committee
consisted of Messrs. Kanders (Chairman) and Bartlett. The Option Committee met
twice during Fiscal 1996.

COMPENSATION OF DIRECTORS

The non-employee directors of the Company participate in
the 1996 Non- Employee Directors Stock Option Plan (the "1996 Directors Plan")
under which a grant of options covering 75,000 shares of Common Stock are
granted to each of the Company's non-employee directors on the date of their
initial election to the Board of Directors. Messrs. Kanders, Ehrlich, Sokolow,
Strauss, Bartlett and Ms. Townsend are all non-employee directors of the
Company. During 1996, each non-employee director, except for Messrs. Kanders and
Bartlett, was granted options to purchase 75,000 shares of Common Stock upon
their initial election to the Board of Directors at an exercise price per share
equal to the closing trading price of the Common Stock on the date of the grant.
Messrs. Kanders and Bartlett voluntarily renounced their eligibility to
participate in the 1996 Directors Plan. The options granted under the 1996
Directors Plan have a term of 10 years (but in no event more than three months
following the optionee's ceasing to serve as a member of the Company's Board of
Directors). One-third of the options granted under the 1996 Directors Plan
become exercisable on each anniversary of the grant date until all such options
are exercisable. No other compensation is or was paid to directors in 1996.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

Except as hereinafter provided with respect to Messrs.
Strauss and Spiller, no director, director nominee, executive officer, promoter
or control person has, within the last five years: (i) had a bankruptcy petition
filed by or against any business of which such person was a general partner or
executive officer either at the time of the bankruptcy or within two years prior
to that time; (ii) been convicted in a criminal proceeding or is currently
subject to a pending criminal proceeding (excluding traffic violations or
similar misdemeanors); (iii) been subject to any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business, securities or
banking activities; (iv) been found by a court of competent jurisdiction (in a
civil action), the Commission or the Commodity Futures Trading Commission to
have violated a federal or state securities or commodities law, and the judgment
has not been reversed, suspended or vacated.

On December 3, 1992, without admitting or denying any
liability, Mr. Strauss, a director nominee, consented to an order of the
Commission under which he was suspended from associating with any broker,
dealer, municipal securities dealer, investment company or investment advisor
for a period of six (6) months, and paid a civil penalty of $75,000. The central
claim in these proceedings was that as President of Salomon, Mr. Strauss delayed
in reporting an unauthorized bid by the head of Salomon's Government Trading
Desk who reported to one of Mr. Strauss' subordinates. Mr. Strauss has
maintained that he reported the unauthorized bid both to Salomon's Chief
Executive Officer and General Counsel immediately upon learning of the
unauthorized bid.

Mr. Spiller was employed by and served in a similar
position with the Company at the time the Company filed for Chapter 11
bankruptcy protection in May 1992 through the confirmation on September 20, 1993
of the Company's Third Amended and Restated Plan of Reorganization (the "Plan of
Reorganization") by the United States Bankruptcy Court, Middle District of
Florida, Jacksonville Division (the "Bankruptcy Court").

EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

The Company's executive officers and significant employees
are as follows:

NAME AGE POSITION
---- --- --------

Jonathan M. Spiller 45 Director, President and Chief Executive
Officer
Richard T. Bistrong 34 Vice President-Sales and Marketing
Carol T. Burke 35 Vice President-Finance and Secretary
Robert R. Schiller 34 Vice President-Corporate Development
Alastair G.A. Morrison 54 Director, DSL Group Limited
Hon. Richard N. Bethell 46 Chief Executive Officer, DSL Holdings
Limited
Martin Brayshaw 41 Director and Commercial Director of DSL
Holdings Limited

See "Proposal 1-Election of Directors," for biographical
data concerning Mr. Spiller.

RICHARD T. BISTRONG

Richard T. Bistrong has served as Vice President of Sales
and Marketing of the Company since February 1995. From 1993 to February 1995,
Mr. Bistrong held the position of Director of Retail Operations for Fechheimer
Brothers Company, a wholly-owned subsidiary of Berkshire Hathaway. From 1986 to
1992, Mr. Bistrong was an Executive Vice President of Point Blank Body Armor.

CAROL T. BURKE

Carol T. Burke has served as Vice President of Finance of
the Company since January 1996 and as Secretary since March 1996. Ms. Burke
joined the Company as Controller in January 1995. From 1990 to January 1995, Ms.
Burke was a Senior Finance Manager at Walt Disney Company.

ROBERT R. SCHILLER

Robert R. Schiller has served as Vice President of
Corporate Development of the Company since July 1996. From 1994 to July 1996,
Mr. Schiller was a Principal in the merchant banking firm of Circadian Capital
Corporation and from 1993 to 1995 he was a Director of Corporate Finance for
Jonathan Foster & Co. L.P. From January 1995 to September 1995, Mr. Schiller
served as Chief Financial Officer of Troma, Inc., an independent film studio.
From 1991 to 1992, Mr. Schiller served as Vice President of the Special
Situation Investment Fund, an investment fund controlled by the Brooke Group.

ALASTAIR G.A. MORRISON, OBE MC

Alastair G.A. Morrison was one of four partners who
founded DSL (as hereafter defined) in 1981. He served as Chief Executive of DSL
from 1981 to 1995 and has served as Chairman of DSL Holdings Limited, a wholly
owned subsidiary of DSL ("DSL Holdings") since 1995. From 1961 to 1981, Mr.
Morrison was an officer in the British SAS.

THE HON. RICHARD N. BETHELL MBE

Richard N. Bethell has served as the Chief Executive
Officer of DSL Holdings since 1995. Mr. Bethell previously served as a Director
of DSL Holdings from 1991 to 1995. From 1988 to 1991, Mr. Bethell was Director
and Deputy Chief Executive of Leadership Trust, a leadership training company
for senior executives. From 1968 to 1988, Mr. Bethell was an officer in the
British SAS.

MARTIN BRAYSHAW

Martin Brayshaw has served as a member of the Board of
Directors and as Commercial Director of DSL Holdings since August 1996. Mr.
Brayshaw was Chairman and Chief Executive Officer of PEX Plc from June 1995
until the sale of the company in December 1995. From October 1989 to December
1994, Mr. Brayshaw served as Finance Director of Clayform Properties Plc.

EXECUTIVE COMPENSATION

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth all compensation, in excess
of $100,000, awarded to, earned by or paid to the Company's Chief Executive
Officer and the four other most highly compensated executive officers of the
Company (the "Named Executive Officers") for the fiscal years 1996, 1995 and
1994.

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG TERM COMPENSATION (1)
AWARDS

NAME AND PRINCIPAL ALL OTHER
POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)
- ----------------- ---- --------- -------- ---------- ---------------

Jonathan M. Spiller 1996 160,000 60,000 24,000 5,775(2)
----
Chief Executive Officer and 1995 160,000 21,000 18,000 ---
----
President 1994 140,000 62,000 432,000 ---
----

Richard T. Bistrong 1996 120,000 107,000 50,000 ---
----
Vice President- 1995 120,000 105,000 50,000 ---
----
Sales and Marketing 1994 --- --- --- ---
----

Robert R. Schiller 1996 44,210(3) 45,000 150,000 17,500(4)
----
Vice President- 1995 --- --- --- ---
----
Corporate Development 1994 --- --- --- ---
----

- -------------------
(1) The Company has no long term incentive compensation plan other than the
1994 Incentive Stock Option Plan and the 1996 Stock Option Plan and
various individually granted options. The Company does not award stock
appreciation rights, restricted stock awards or long term incentive
plan pay-outs.

(2) Represents the dollar value of 7,500 stock option grants awarded to Mr.
Spiller in December, 1995, which options became fully vested on January
19, 1996.

(3) Mr. Schiller became an employee of the Company on July 24, 1996. He was
paid at an annual rate of salary of $120,000.

(4) Represents compensation earned by Mr. Schiller in his capacity as a
consultant to the Company prior to the execution of his employment
agreement.

OPTIONS GRANTED IN FISCAL 1996

The following information is furnished for the fiscal year
ended December 28, 1996 with respect to the Named Executive Officers for stock
options granted during such fiscal year. Stock options were granted without
tandem stock appreciation rights.

NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE
OPTIONS TO EMPLOYEES IN PRICE PER EXPIRATION
NAME GRANTED(#)(1) FISCAL YEAR SHARE ($/S) DATE
- ---- ------------- --------------- ---------- ----------

Jonathan M. Spiller 24,000 5.1% $1.00 1/19/2006

Richard T. Bistrong 50,000 10.7% $ .97 1/19/2006

Robert R. Schiller 150,000 32.1% $6.06 7/24/2006

(1) All options granted to such officers (except those granted to Mr.
Schiller) have a term of 10 years and were granted under the Company's
1994 Incentive Stock Option Plan. The options granted to Mr. Schiller
have a term of 10 years and were granted under the Company's 1996 Stock
Option Plan. The exercise price per share of such options was the market
value per share on the date of grant.

AGGREGATED OPTION EXERCISES IN FISCAL
1996 AND FISCAL YEAR END OPTION VALUES

The following information is furnished for the fiscal year
ended December 28, 1996 with respect to the Named Executive Officers for stock
option exercises during such fiscal year.

SHARES ACQUIRED VALUE NUMBER OF SECURITIES UNDERLYING
NAME ON EXERCISE(#) REALIZED($) UNEXERCISED OPTIONS AT 12/28/96 (#)
- ---- -------------- -----------
EXERCISABLE NON-EXERCISABLE
----------- ---------------

Jonathan M. Spiller 0 0 474,000 0

Richard T. Bistrong 0 0 50,000 50,000

Robert R. Schiller 0 0 0 150,000

(Restubbed From Above)

VALUE OF UNEXERCISED IN-THE-
MONEY OPTIONS AT 12/28/96($)

NAME EXERCISABLE NON-EXERCISABLE
- ---- ------------ ----------------

Jonathon M. Spiller --- ---

Richard T. Bistrong --- ---

Robert R. Schiller --- ---

EMPLOYMENT AGREEMENTS

Set forth below are descriptions of the Company's
employment agreements with Messrs. Spiller, Bistrong and Schiller.

JONATHAN M. SPILLER

Mr. Spiller's employment agreement, dated as of January
18, 1996, provides that he will serve as the President and Chief Executive
Officer of the Company for an initial term expiring January 17, 1999, at a base
salary for 1996 of $160,000 per annum. Commencing January 1, 1997, pursuant to
the terms of his employment agreement, Mr. Spiller's base salary was increased
to $200,000 per annum. In addition to his base salary, Mr. Spiller shall also be
entitled to a yearly bonus during the term of his employment agreement. The
bonus shall be based upon the Company's earnings before interest and taxes. Mr.
Spiller will also be entitled, at the sole and absolute discretion of the Option
Committee of the Board of Directors, to participate in the Company's incentive
stock plan and other bonus plans adopted by the Company. Eligibility to
participate in the Company's incentive stock plan shall be based upon, among
other things, the performance of Mr. Spiller and the Company. As part of his
compensation package, the Company provides Mr. Spiller with other benefits
commensurate with his position, as more fully set forth in his employment
agreement. Mr. Spiller's employment with the Company shall continue, unless
earlier terminated by Mr. Spiller or due to Mr. Spiller's death or disability or
by the Company, for successive one year periods, on terms to be mutually agreed
upon by the Company and Mr. Spiller.

Of the 690,205 shares deemed to be beneficially owned
by Mr. Spiller, 646,664 are subject to a three year lock-up agreement between
Mr. Spiller and KFH. Pursuant to the terms of a letter agreement, dated January
18, 1996 (the "Letter Agreement"), Mr. Spiller agreed that he will not, directly
or indirectly, without the prior written consent of KFH, offer to sell, sell,
grant any options for the sale of, assign, transfer, pledge, hypothecate or
otherwise encumber or dispose of such shares of Common Stock of the Company or
securities convertible into, exercisable or exchangeable for or evidencing any
right to purchase or subscribe for, such shares of Common Stock of the Company
or dispose of any beneficial interest therein for a period of three years from
January 18, 1996, except as provided in such Letter Agreement.

RICHARD T. BISTRONG

Mr. Bistrong's employment agreement, dated as of
January 18, 1996, provides that he will serve as Vice President-Sales and
Marketing of the Company for an initial term expiring January 17, 1999, at a
base salary of $120,000 per annum. Mr. Bistrong shall also be entitled to a
yearly bonus during the term of his employment agreement. In addition to his
base salary and bonus, Mr. Bistrong received non-qualified options to purchase
21,250 shares of the Company's Common Stock and incentive stock options to
purchase 28,750 shares of the Company's Common Stock, in each case at an
exercise price of $.97 per share of Common Stock. These options are exercisable
for a period of eight years from the date of the grant, and all of such options
vest on January 18, 1999. The vesting of the options may be accelerated on a pro
rata basis in the event of the occurrence of certain events. Pursuant to his
employment agreement, Mr. Bistrong will also be entitled, at the sole and
absolute discretion of the Option Committee of the Board of Directors, to
participate in the Company's incentive stock plan and other bonus plans adopted
by the Company. Eligibility to participate in the Company's incentive

stock plan shall be based upon, among other things, the performance of Mr.
Bistrong and the Company. As part of his compensation package, the Company
provides Mr. Bistrong other benefits commensurate with his position, as more
fully set forth in his employment agreement. Mr. Bistrong's employment with the
Company shall continue, unless earlier terminated by Mr. Bistrong or due to Mr.
Bistrong's death or disability or by the Company, for successive one year
periods, on terms to be mutually agreed upon by the Company and Mr. Bistrong.

Excluding the stock options granted to Mr. Bistrong
pursuant to the terms of his employment agreement, all of the shares underlying
vested but unexercised and unvested stock options owned by Mr. Bistrong are
subject to a three year lock-up agreement between Mr. Bistrong and KFH (the
"Bistrong Lock-Up"). Pursuant to the Bistrong Lock-Up, Mr. Bistrong agreed that
he will not, directly or indirectly, without the prior written consent of KFH,
offer to sell, sell, grant any options for the sale of, assign, transfer,
pledge, hypothecate or otherwise encumber or dispose of any shares of Common
Stock of the Company or securities convertible into, exercisable or exchangeable
for or evidencing any right to purchase or subscribe for any shares of Common
Stock of the Company or dispose of any beneficial interest therein for a period
of three years from January 18, 1996, except as provided in such agreement. Mr.
Bistrong owns no shares of Common Stock as of the date of this Proxy Statement.

ROBERT R. SCHILLER

Mr. Schiller's employment agreement, dated as of July
24, 1996, provides that he will serve as Vice President-Corporate Development of
the Company for an initial term expiring July 23, 1999, at a base salary of
$120,000 per annum. Effective January 1, 1997, Mr. Schiller's base salary was
increased by the Company to $130,000 per annum. Mr. Schiller is also entitled to
a one-time relocation bonus of $45,000. In addition to his base salary, Mr.
Schiller received incentive stock options to purchase 150,000 shares of the
Company's Common Stock, in each case at an exercise price per share equal to
$6.06, the market price of the Common Stock on July 24, 1996, the date of the
grant. These options vest over a period of three years from the date of the
grant, and all of such options become exercisable on July 24, 1999. The vesting
of the options may be accelerated on a pro rata basis in the event of the
occurrence of certain events. Pursuant to his employment agreement, Mr. Schiller
will also be entitled, at the sole and absolute discretion of the Option
Committee of the Board of Directors, to participate in the Company's incentive
stock plan and other bonus plans adopted by the Company. Eligibility to
participate in the Company's incentive stock plan shall be based upon, among
other things, the performance of Mr. Schiller and the Company. As part of his
compensation package, the Company provides Mr. Schiller's other benefits
commensurate with his position, as more fully set forth in his employment
agreement. Mr. Schiller's employment with the Company shall continue, unless
earlier terminated by Mr. Schiller or due to Mr. Schiller's death or disability
or by the Company, for successive one year periods, on terms to be mutually
agreed upon by the Company and Mr. Schiller.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

TRANSACTIONS WITH MANAGEMENT AND OTHERS

The Company has historically purchased substantially
all of the ballistic resistant fabric used in the manufacture of its products
from Clark Schwebel, a subsidiary of Springs and a former holder of 45.7% of the
Company's outstanding capital stock. KFH purchased all of the capital stock of
the Company owned by Clark Schwebel on January 18, 1996. Warren B. Kanders, the
Chairman of the Board of Directors of the Company, is the sole director and sole
stockholder of KFH. The Company's purchases from Clark Schwebel totalled
approximately $5,000,000, $5,100,000 and $3,400,000 in fiscal years 1996, 1995
and 1994, respectively, and were made in the normal course of business at prices
which the Company believes were competitive with other available sources for
such materials.

On May 15, 1996, the Company issued options to purchase
300,000 shares of the Company's Common Stock to Richmont at an exercise price of
$7.50 per share, subject to adjustment (the "Richmont Options"). The Richmont
Options and the underlying shares, whether vested or unvested, are callable by
the Company in the event that the closing price per share of the Company's
Common Stock is equal to or greater than $10 for a period of 10 consecutive
trading days after December 31, 1997, upon written notice to Richmont given
within 30 days of the conclusion of such ten consecutive trading days during
which the closing price per share of the Company's Common Stock was equal to or
greater than $10. In such event, the Company may require Richmont to exercise
the Richmont Options in whole with respect to all such shares within 10 days of
such notice to Richmont. In the event that Richmont does not exercise the
Richmont Options, the Richmont Options will lapse and be of no further force or
effect.

Richmont was also the holder of a 5% Convertible
Subordinated Note of the Company (the "Convertible Note") in the principal
amount of $3,000,000. Richmont converted its Convertible Note into 600,000
shares of Common Stock pursuant to the terms of that certain Convertible
Subordinated Note Purchase Agreement between the Company and the purchasing
parties thereto (the "Convertible Subordinated Note Purchase Agreement") on
December 18, 1996. Taking the 200,000 Richmont Options which have fully vested
and the shares into which Richmont's Convertible Note were converted into
account, Richmont is the beneficial owner of 6.8% of the Company's outstanding
Common Stock. Richard C. Bartlett, a Director of the Company, is the Chairman of
the Board of Directors of the Richmont Group, the parent corporation of
Richmont. Mr. Bartlett disclaims beneficial ownership of any shares of Common
Stock beneficially owned by Richmont.

Burtt R. Ehrlich, a Director of the Company, was the
holder of a Convertible Note in the principal amount of $250,000. Mr. Ehrlich
converted his Convertible Note into 50,000 shares of Common Stock pursuant to
the terms of the Convertible Subordinated Note Purchase Agreement on December
18, 1996.

Thomas W. Strauss, a Director of the Company, was the
holder of a Convertible Note in the principal amount of $200,000. Mr. Strauss
converted his Convertible Note into 40,000 shares of Common Stock pursuant to
the terms of the Convertible Subordinated Note Purchase Agreement on December
18, 1996.

Alan Kanders, Beatrice Kanders and Emily Kanders,
siblings of Warren B. Kanders, the Chairman of the Board of Directors of the
Company, were each holders of Convertible Notes in the principal amounts of
$20,000, $25,000 and $25,000, respectively. Pursuant to the terms of the
Convertible Subordinated Note Purchase Agreement, they each converted their
Notes into 4,000, 5,000 and 5,000 shares of Common Stock, respectively, on
December 18, 1996.

The Jeanne Kanders Revocable Inter Vivos Trust and The
Ralph F. Kanders Revocable Inter Vivos Trust, named for the parents of Warren B.
Kanders, the Chairman of the Board of Directors of the Company, were holders of
Convertible Notes in the principal amounts of $150,000 and $100,000,
respectively. The trusts converted their Convertible Notes into 30,000 and
20,000 shares of Common Stock, respectively, pursuant to the terms of the
Convertible Subordinated Note Purchase Agreement on December 18, 1996.

Other than as described above, there have not been, nor
are there any currently proposed transactions, or any series of similar
transactions, since the beginning of Fiscal 1996, to which the Company was or is
to be a party, in which the amount involved exceeds $60,000 and in which any
director, executive officer, security holder or any member of the immediate
family of any of the foregoing persons had, or will have, a direct or indirect
material interest.

Since the beginning of Fiscal 1996, no director or
executive officer of the Company, nor any member of their immediate family or
any affiliate thereof is, has become or was indebted to the Company in an amount
in excess of $60,000.

PROPOSAL 2

PLAN OF INTERNAL RESTRUCTURING

INTRODUCTION

The Company is incorporated under the laws of the State
of Delaware. Its corporate headquarters are in Jacksonville, Florida. The
Company is engaged in, among other things, the development, manufacture and
distribution of bullet and projectile resistant garments. These include bullet
resistant and sharp instrument penetration resistant vests, bullet resistant
blankets, bomb disposal suits and helmets, bomb protection and disposal
equipment and load bearing vests.

NIK Public Safety, Inc., a Delaware corporation and a
wholly owned subsidiary of the Company ("NIK"), is the leading manufacturer and
distributor of portable narcotic identification kits used for the identification
of narcotic substances by law enforcement agencies.

Defense Technology Corporation of America, a Delaware
corporation and a wholly owned subsidiary of the Company ("DTC"), is a leading
manufacturer of less-than- lethal products including pepper sprays, distraction
devices, flameless expulsion grenades, specialty impact munitions and dry
powdered oleoresin capsicum, which it distributes to law enforcement agencies
and military services in the United States and abroad. DTC also distributes
other similar products including gas masks, riot helmets and gun holsters.

Supercraft (Garments) Limited, a corporation
incorporated under the laws of England and an indirect wholly owned subsidiary
of the Company, is a leading European manufacturer of military apparel, high
visibility garments and bullet resistant vests, which it distributes to law
enforcement and military agencies throughout Europe, the Middle East and Asia.

DSL Group Limited, a corporation incorporated under the
laws of England and Wales and an indirect wholly owned subsidiary of the Company
("DSL"), is engaged in the design and implementation of solutions to complex
security problems in high risk areas. DSL provides detailed threat assessments,
security planning, security training, the provision, training and supervision of
specialists manpower and other services, including the implementation and
management of fully integrated security systems.

The Company presently operates as an operating entity
- -- holding certain of its assets and conducting certain of its operations
directly -- and as a holding company pursuant to which it owns all of the
outstanding capital stock of four subsidiary corporations which hold other
assets and conduct other operations related to the business of the Company.

The Board of Directors has determined that it would be
in the best interests of the Company and its Stockholders for the Board of
Directors to have the flexibility to transfer some or substantially all of the
operating assets held by the Company to one or more wholly-owned subsidiaries,
with the result that the Company would become solely a holding company (the
"Restructuring"). Toward this end, the Board of Directors has approved a plan of
restructuring (the "Restructuring Plan") providing for the transfer of
substantially all of the Company's operating assets and related liabilities to
one or more wholly-owned subsidiaries that the Company will incorporate for such
purpose. To effect the Restructuring, the Company will form a subsidiary
corporation under Delaware law called American Body Armor & Equipment, Inc., a
Delaware corporation ("ABA-DE"). Following the formation of ABA-DE, the Company
will transfer into ABA-DE all of the Company's operating assets and related
liabilities.

The implementation of the Restructuring Plan will not
have a material effect on the consolidated financial statements of the Company,
nor will it alter Stockholders' percentage ownership interests. Consummation of
the Restructuring will not affect the voting rights and dividend and liquidation
rights of the Stockholders. If the Stockholders approve the

Restructuring Plan and the Company obtains all required third party consents,
including, but not limited to, the consent of the Bankruptcy Court, if required,
the Board of Directors may choose to implement the entire plan or a portion of
the plan, or the Board of Directors may elect not to implement the plan at all
if it determines that the costs or other considerations relating to the
implementation of the Restructuring Plan outweigh the benefits to be gained by
the Restructuring.

The submission of the Restructuring Plan to
Stockholders is not intended to affect the Company's right under applicable
Delaware law to dispose of less than all or substantially all of its assets
without Stockholder approval. If in the event the Restructuring Plan is not
approved by the Stockholders but all required third party consents are obtained,
including, but not limited to, the consent of the Bankruptcy Court, if required,
the Company may nevertheless from time to time in the future transfer portions
of its assets to subsidiaries or to third parties on terms and for consideration
approved by the Board of Directors, subject to applicable Delaware law, without
seeking Stockholder approval. Approval of the Restructuring Plan will not
preclude any Stockholder's right to challenge any future dispositions by the
Company of the assets of the Company (including the stock of any subsidiaries),
if such dispositions are not made in compliance with applicable law.

REASONS FOR THE RESTRUCTURING

The new structure of the Company and its subsidiaries
will permit greater flexibility in the management and financing of new and
existing business operations. The holding company structure will also provide
the Company with greater flexibility to expand in the future through
acquisitions of companies which may be strategically advantageous to the
Company's long-term growth. Moreover, the Board of Directors believes that the
holding company structure is better suited to the development of the Company's
international business. The Board of Directors also believes that the
line-of-business restructuring could further the objective of operating the
Company's businesses on a more self-sufficient, independent economic basis. In
addition, the holding company structure could permit improved delineation of
administrative and other responsibilities within the corporate structure because
it will permit a designated group of executive employees to concentrate their
efforts on the concerns of the consolidated enterprise as a whole, while
allowing the subsidiaries and subsidiary management to focus on
subsidiary-specific objectives. This will enable the Company to further link
executive compensation to Company performance, thereby providing for better
accountability.

EFFECT ON STOCKHOLDERS' RIGHTS

The outstanding stock of the Company will not be
affected by the proposed Restructuring. Consummation of the Restructuring Plan
will not affect the voting, dividend, liquidation rights or ownership interests
of the Stockholders.

The Stockholders of the Company will not directly elect
the directors of the operating subsidiaries. Directors of the subsidiaries are
elected by the Board of Directors of the Company, with the Company being the
sole stockholder of the subsidiaries. The overall

management of the affairs and operations of the Company will continue to be
under the direction of the Board of Directors.

The Company has no present intention to cause any
subsidiary which may be formed to make a further transfer of assets to any
affiliate of the Company (other than other wholly-owned subsidiaries) or to any
unrelated third party. The Company does not intend to seek Stockholder approval
of any subsequent dispositions of assets by a subsidiary or the stock of any
subsidiary unless such assets or stock to be transferred constitute all or
substantially all of the assets of the Company and its subsidiaries taken as a
whole and where Stockholder approval is required by law.

EFFECT ON COMPANY'S FINANCIAL STATEMENTS

The implementation of the Restructuring Plan will not
have a material effect on the financial statements of the Company.

OTHER EFFECTS ON THE COMPANY AND ITS STOCKHOLDERS

Except for the structural changes, consummation of the
Restructuring Plan is not expected to result in any material change in the
overall operation of the Company or location of its facilities. Similarly, the
Restructuring will not result in any changes in the current membership of the
Board of Directors of the Company, and the officers of the Company will remain
in place after consummation of the Restructuring. In addition, some persons who
are currently serving as officers of the Company may become officers or
directors of one or more of the subsidiaries.

While the transactions presently contemplated under the
Restructuring Plan do not create a conflict of interest between the Company and
any of its Stockholders, in the event that any of the subsidiaries, through
public or private sale, should be owned in part by persons other than the
Company, such conflicts could arise. The Company has no present intention to
effect a public or private sale of a part of the ownership of any of its
subsidiaries.

If the Restructuring Plan is consummated, the Company
will retain administrative functions and related assets, as well as a core group
of senior management officers and employees.

TRANSFER OF ASSETS

Except for those operations conducted by the Company's
subsidiaries, all of the Company's operations are conducted directly by the
Company. If the Restructuring Plan is implemented as contemplated, all of the
operating assets and related liabilities of the Company's business except those
held by the Company's subsidiaries would be transferred to one or more wholly
owned subsidiaries.

DISADVANTAGES OF RESTRUCTURING

The Board of Directors believes that the disadvantages
of the Restructuring are not significant or material and will be offset by both
the increased focus on asset utilization and responsibility. Possible
disadvantages of the Restructuring include a possible small increase in
accounting and administrative costs and possible duplication of some
administrative functions.

As previously noted, the Stockholders of the Company
will elect the directors of the Company, who will have overall responsibility
for the management of the Company and its subsidiaries. The Stockholders'
statutory right to inspect the books, records and stockholder lists of the
Company under applicable Delaware law may not extend to the books and records of
the operating subsidiaries.

TAX CONSEQUENCES OF THE RESTRUCTURING

It is currently contemplated that any assets
transferred pursuant to the Restructuring Plan will be conveyed to the
subsidiary or subsidiaries on a tax-free basis pursuant to Section 351 of the
Internal Revenue Code of 1986, as amended.

VOTE REQUIRED

The affirmative vote of holders of a majority of the
outstanding shares of the Company's Common Stock is required for the
ratification of the Restructuring Plan under Delaware law.

RECOMMENDATION OF THE BOARD OF DIRECTORS

The Board of Directors has adopted and recommends a
vote FOR Proposal 2 on the Proxy Card.

PROPOSAL 3

PROPOSED AMENDMENTS TO THE
1996 NON-EMPLOYEE DIRECTORS
STOCK OPTION PLAN

At the Meeting, the Stockholders will be asked to
consider and vote upon a proposal to amend and restate the Company's 1996
Non-Employee Directors Stock Option Plan (the "1996 Directors Plan") to increase
by 150,000 shares the total number of shares of the Company's Common Stock that
may be awarded under the 1996 Directors Plan.

On March 24, 1997, the Board of Directors approved an
amendment to the 1996 Directors Plan to increase the number of shares of Common
Stock available for issuance pursuant to the 1996 Directors Plan by 150,000
shares to a total of 450,000 shares and to make

certain minor adjustments to comport with recent amendments to Rule 16b-3
promulgated under the Exchange Act. The Board of Directors directed that such
amendment be submitted for approval of the Stockholders at the Meeting. The 1996
Directors Plan, which was approved by the Stockholders on July 16, 1996 at the
annual meeting of stockholders, originally provided for the grant to
non-employee directors of the Company of stock options to purchase up to 300,000
shares of Common Stock. Should the amendment not be approved, the 1996 Directors
Plan will remain in force without taking into effect this proposed amendment.

The purpose of the 1996 Directors Plan, which is virtually
unchanged by the proposed amendments, is to benefit the Company and its
stockholders by allowing those members of the Board of Directors of the Company
who are neither current nor former employees of the Company to increase their
financial stake in the Company through ownership of Common Stock, thus
underscoring the directors' mutual interest with stockholders in increasing the
long-term value of the Company's stock. In order that the 1996 Directors Plan
continue to serve its intended purpose, the proposed amendment would increase
the number of shares of Common Stock available for issuance under the 1996
Directors Plan.

The following summary of the 1996 Directors Plan is qualified
in its entirety by reference to the text of the 1996 Directors Plan, as amended
and as set forth as Appendix A hereto.

GENERAL INFORMATION

Participation in the 1996 Directors Plan is limited to members
of the Board of Directors who are not current or former employees of the Company
or any of its subsidiaries ("Non-Employee Directors"). After the election of
seven directors at the Meeting, there will be six Non-Employee Directors.

STOCK OPTION GRANT

The 1996 Directors Plan is a formula plan pursuant to which
non-qualified options to acquire 75,000 shares of the Company's Common Stock
will be automatically granted to each Non-Employee Director upon the date of his
or her initial election or appointment to the Board of Directors in
consideration for service as a Director. There are 300,000 shares of Common
Stock reserved for issuance under the 1996 Directors Plan. Options covering all
300,000 shares available under the 1996 Directors Plan have been granted. If the
Stockholders approve the amendment, an additional 150,000 shares will be
available for future option grants to non-employee directors who may join the
Board of Directors in the future, bringing the total number of shares available
under the 1996 Directors Plan to 450,000. Under the 1996 Directors Plan's
formula, the exercise price for all 75,000 options granted to each Non-Employee
Director under the 1996 Directors Plan will be the closing price on the date of
the grant of the Company's Common Stock as quoted on the composite tape of the
American Stock Exchange, or on such exchange as the Company's Common Stock may
then be trading. Of the 75,000 options granted to each Non-Employee Director,
options to acquire 25,000 shares become exercisable upon each

of the first three anniversary dates following the date of the grant and all
75,000 options granted to each Non-Employee Director shall expire ten years from
the date of grant. The exercise price must be paid in cash. If, on the day of
the grant, counsel for the Company determines, in her/his sole discretion, that
the Company is in possession of material, undisclosed information that would
prevent it from issuing securities, then the grant of options to Non-Employee
Directors will be suspended until the second day after public dissemination of
the information (or the first trading day thereafter). The amount, pricing and
other terms of the grant will remain as set forth in the 1996 Directors Plan,
with the exercise price of the option to be determined in accordance with the
formula on the date the option is finally granted.

CESSATION OF SERVICE

Upon retirement, a Non-Employee Director's options will
continue to become exercisable and must be exercised by the earlier of (i) 36
months following the date of retirement or (ii) the expiration of the applicable
option period, or such options shall be forfeited. Upon a Non-Employee
Director's disability or death, those options held by the Non-Employee Director
for at least one year prior to the date of death or the date of cessation of
service following disability shall become immediately exercisable; the
Non-Employee Director or his/her legal representatives or heirs must exercise
such options by the earlier of (i) 6 months or 36 months from the date of
cessation of service due to disability or death, respectively, as the case may
be, or (ii) the expiration of the applicable option period, or such options
shall be forfeited. Should an individual cease to serve as a Non-Employee
Director for any reason other than retirement, disability, death or cause,
he/she will have 90 days within which to exercise only those options which were
exercisable as of the date he/she ceased to serve as a director.

FEDERAL INCOME TAX CONSEQUENCES

The grant of a non-qualified stock option will not result in
income for the grantee or in a deduction for the Company. The exercise of a
stock option would result in ordinary income for the grantee and a deduction for
the Company measured by the difference between the option price and the fair
market value of the shares received at the time of exercise.

OTHER INFORMATION

Upon their initial election to the Board of Directors on
January 18, 1996, each of Messrs. Ehrlich and Sokolow, both of whom are
Non-Employee Directors, were granted 75,000 stock options pursuant to the terms
of the 1996 Directors Plan, subject to Stockholder approval of the plan. The
Stockholders approved the 1996 Directors Plan at the 1996 annual meeting of
stockholders held on July 16, 1996. Such options vest in three equal annual
installments on January 18, 1997, 1998 and 1999, at an exercise price of $3.75
per share, the closing trading price of the Company's Common Stock on National
Association of Securities Dealers Automated Quotation System ("NASDAQ") on
January 18, 1996.

Upon his initial election to the Board of Directors on May 13,
1996, Mr. Strauss, a Non-Employee Director, was granted 75,000 stock options
pursuant to the terms of the 1996 Directors Plan, subject to Stockholder
approval of the plan. The Stockholders approved the 1996 Directors Plan at the
1996 annual meeting of stockholders held on July 16, 1996. Such options vest in
three equal annual installments on May 13, 1997, 1998, and 1999, at an exercise
price of $7.50 per share, the closing trading price of the Company's Common
Stock on the American Stock Exchange on May 13, 1996.

Upon her initial election to the Board of Directors on
December 9, 1996, Ms. Townsend, a Non-Employee Director, was granted 75,000
stock options pursuant to the terms of the 1996 Directors Plan. Such options
vest in three equal annual installments on December 9, 1997, 1998 and 1999, at
an exercise price of $8.00 per share, the closing trading price of the Company's
Common Stock on the American Stock Exchange on December 9, 1996.

The amendment to the 1996 Directors Plan will become effective
upon the approval of the Company's Stockholders.

On May 22, 1997, the last full trading date prior to the
printing and mailing of this Proxy Statement, the reported closing price of the
Company's Common Stock on the American Stock Exchange was $10.25.

VOTE REQUIRED

The affirmative vote of holders of a majority of the
outstanding shares of Common Stock present or represented by proxy and voting at
a stockholders meeting at which a quorum is present is required for the approval
of the proposed amendment to the 1996 Directors Plan.

RECOMMENDATION OF THE BOARD OF DIRECTORS

The Board of Directors has adopted and recommends that the
Stockholders vote FOR Proposal 3 on the Proxy Card.

PROPOSAL 4

PROPOSED AMENDMENTS TO THE 1996 STOCK OPTION PLAN

At the Meeting, the Stockholders will be asked to consider and
vote upon a proposal to amend and restate the Company's 1996 Stock Option Plan
(the "1996 Plan") to: (i) increase by 250,000 shares the total number of shares
of the Company's Common Stock that may be awarded under the 1996 Plan; (ii)
change the governing law of the 1996 Plan from Florida to Delaware; (iii)
comport with recent amendments to Rule 16b-3 promulgated under the Exchange Act;
and (iv) adopt a schedule to the 1996 Plan to permit the grant of options to
employees of the Company's United Kingdom subsidiaries ("U.K. Employees"), with
such

amendments as the Board of Directors deems necessary or desirable or, if
relevant, as may be required to obtain the approval of the U.K. Inland Revenue
(such proposals collectively, the "Amendments").

On March 24, 1997 and April 11, 1997, the Board of Directors
approved the Amendments to the 1996 Plan and directed that such Amendments be
submitted for the approval of the Stockholders at the Meeting. The 1996 Plan,
which was approved by the Stockholders on July 16, 1996 at the annual meeting of
Stockholders, originally provided for the grant to employees, officers,
directors and consultants (collectively, "Participants") of stock options to
purchase up to 1,500,000 shares of Common Stock. If the Amendments are approved:
(i) the number of shares of Common Stock available for option grants under the
1996 Plan will be 1,750,000; (ii) the governing law of the 1996 Plan will change
from Florida to Delaware; (iii) the 1996 Plan will be restated to comport with
recent amendments to Rule 16b-3 promulgated under the Exchange Act; and (iv) a
schedule will be adopted pursuant to which the Company's U.K. Employees would be
eligible to participate in the 1996 Plan. Should the Amendments not be approved,
the 1996 Plan will remain in force without taking into effect the proposed
Amendments.

The purpose of the 1996 Plan, which is unchanged by the
proposed Amendments, is to advance the interests of the Company by encouraging
and enabling the acquisition of a financial interest in the Company by its
directors, officers, employees and consultants. The 1996 Plan is intended to aid
the Company in attracting and retaining competent employees, to stimulate the
efforts of such employees and to strengthen their desire to remain with the
Company. In order that the Plan may continue to serve its intended purposes, the
proposed Amendments would, among other things, increase the number of shares of
Common Stock available for issuance under the 1996 Plan, enable the Company's
U.K. Employees to participate in the 1996 Plan and conform the 1996 Plan to the
requirements of Rule 16b-3, which was recently amended by the Commission. As a
result of the recent amendments to Rule 16b-3, among other things, the
definition of a "disinterested person" has been removed from Rule 16b-3 and
replaced with the concept of a "non-employee director," as such term is defined
in the amended Rule 16b-3.

The following summary of the 1996 Plan, as proposed to be
amended, is qualified in its entirety by reference to the text of the 1996 Plan,
as amended and as set forth as Appendix B hereto.

SUMMARY DESCRIPTION OF THE 1996 PLAN

The 1996 Plan is administered by the Option Committee of the
Board of Directors which is composed entirely of directors who meet the criteria
of "outside director" under Section 162(m) of the Internal Revenue Code of 1986,
as amended ( the "Code") and "non-employee director" under Section 16 of the
Exchange Act. The Option Committee determines those individuals who will receive
options, the time period during which the options may be partially or fully
exercised, the number of shares of Common Stock that may be purchased under

each option and the option exercise price. Under certain conditions, the Board
of Directors has the power to administer the 1996 Plan.

Generally, Options may be granted only to employees employed
and consultants engaged by the Company or of any subsidiary corporation or
parent corporation of the Company. Directors who are also employees of the
Company are also eligible to participate. Consultants are eligible to receive
awards of Non-Qualified Options, but are not eligible to receive Incentive
Options. No person who owns, directly or indirectly, at the time of the granting
of an Incentive Option to him, 10% or more of the total combined voting power of
all classes of stock of the Company will be eligible to receive any Incentive
Options under the 1996 Plan unless the option price is at least 110% of the fair
market value of the Common Stock subject to the option, determined on the date
of grant.

Common Stock purchased on the exercise of Options may be paid
for in cash or by certified check, or with shares of the Company's Common Stock
(if permitted by the terms of the Option and by applicable law) or by payment on
such terms as the Option Committee shall determine.

The Option Committee shall have the option at any time to
suspend or terminate the 1996 Plan, provided that rights and obligations under
any Option granted while the 1996 Plan was in effect may not be altered or
impaired by suspension or termination of the 1996 Plan, except with the consent
of the holder thereof.

The Board of Directors or the Option Committee, as the case
may be, shall have the right, from time to time, to amend the 1996 Plan,
provided that no amendment shall be made without the approval of the
Stockholders to the extent required by Rule 16b-3 or for the exception for
performance-based compensation under Section 162(m) of the Code that will: (i)
increase the total number of shares reserved for Options under the 1996 Plan
(other than an increase resulting from certain adjustments); (ii) reduce the
exercise price of any Option granted thereunder; (iii) modify the provisions of
the 1996 Plan relating to eligibility; or (iv) materially increase the benefits
accruing to participants under the 1996 Plan or extend the maximum option period
thereunder. The Board of Directors or the Option Committee, as the case may be,
shall be authorized to amend the 1996 Plan and the Options granted thereunder to
permit the Incentive Options granted thereunder to qualify as incentive stock
options within the meaning of Section 422 of the Code.

In the event of any change in the outstanding shares of the
Company's Common Stock (through events such as a stock split, stock dividend,
recapitalization of the Company or other like change in its capital structure),
the Option Committee will make such adjustment to each outstanding Option that
it, in its sole discretion, deems appropriate, subject to the provisions of
Section 424(a) of the Code as to Incentive Options. It is intended that
Incentive Options granted under the 1996 Plan will meet the definitional
requirements of Section 422(b) of the Code for "incentive stock options."

The 1996 Plan incorporates a schedule (the "Schedule") which
sets forth certain alterations to the 1996 Plan and conditions for the grant of
certain options to the U.K. Employees in compliance with U.K. Inland Revenue
rules and regulations which treat such options, for U.K. tax purposes, in a
manner similar to incentive stock options granted to U.S. employees under the
1996 Plan. The Schedule provides for certain differences in the terms and
conditions of the 1996 Plan applicable to the U.K. Employees principally,
including, but not limited to, the following: (a) the Schedule to the 1996 Plan
must be approved by the U.K. Inland Revenue; (b) there can be no contractual
agreement, condition or restriction on the resale of shares purchased upon the
exercise of an option except as required to comply with applicable laws,
including the U.S. securities laws; (c) no options can be granted to a U.K.
director or employee unless the director regularly works at least twenty-five
(25) hours per week for the Company or its subsidiaries and the employee
regularly works at least twenty (20) hours per week for the Company or its
subsidiaries; (d) the maximum value of all options granted under the Schedule to
the 1996 Plan to a U.K. director or employee cannot exceed the greater of (i)
four times such person's annual remuneration or (ii) (pound)100,000; (e) the
price of the options cannot be less than the fair market value of the Common
Stock on the date of grant and must be payable in cash in full upon exercise of
the option; (f) the date upon which the options may be exercised must be fixed
at the date of grant and may not be subsequently changed by the Option Committee
or the Board of Directors but must be exercised within ten (10) years of the
grant; (g) options may not be granted in tandem with stock appreciation rights
or other rights; and (h) the terms of the options granted pursuant to the
Schedule may not be varied without the approval of the U.K. Inland Revenue.

THE FOLLOWING DISCUSSION CONCERNING CERTAIN TAX CONSEQUENCES OF THE 1996 PLAN
DOES NOT ADDRESS ANY TAX EFFECTS ON THE U.K. EMPLOYEES OR THE EMPLOYEES OF ANY
OTHER FOREIGN AFFILIATE OF THE COMPANY.

Under the Code, an employee generally is not subject to
regular income tax upon the grant or exercise of an Incentive Option if,
subsequent to its exercise, the employee holds the stock received for the longer
of two years from the date of the grant or one year from the date of exercise
(the "Required Holding Period"). Upon the sale of such stock subsequent to the
Required Holding Period, the difference, if any, between the amount realized
from the sale and the tax basis to the employee will be taxed as long-term
capital gain or loss (provided that such stock was held by the employee as a
capital asset at such time).

In general, if an employee: (i) exercises an Incentive Option
by delivering stock previously acquired pursuant to the exercise of an Incentive
Option before the end of the Required Holding Period applicable to such stock;
or (ii) after exercising an Incentive Option, disposes of the stock so acquired
before the end of the Required Holding Period (i.e., in either case, makes a
"disqualifying disposition"), such employee would be deemed in receipt of
ordinary income in the year of the disqualifying disposition in an amount equal
to the excess of the fair market value of the stock at the date of exercise over
the exercise price. However, if the disposition of the stock is a sale or
exchange with respect to which a loss, if sustained, would be recognized to such
employee, and if the sale proceeds are less than the fair market

value of the stock on the date of exercise of the Incentive Option, the
employee's ordinary income would be limited to the excess, if any, of the amount
realized on such disposition over the tax basis of such stock. If the amount
realized upon a taxable disposition of the stock exceeds the fair market value
of the stock on the date of exercise, the excess would be treated as short-term
or long-term capital gain, depending on the applicable holding period on the
disposition date (provided that such stock was held by the employee as a capital
asset at such time).

A deduction is not allowed to the Company for federal income
tax purposes with respect to the grant or exercise of an Incentive Option or the
disposition, after the Required Holding Period, of stock acquired upon exercise.
In the event of a disqualifying disposition, a federal income tax deduction will
be allowed to the Company in an amount equal to the ordinary income taxable to
the employee, provided that such amount constitutes an ordinary and necessary
business expense to the Company and is reasonable.

For purposes of computing whether an employee is subject to
any alternative minimum tax liability, an employee who exercises an Incentive
Option generally would be required to increase alternative minimum taxable
income, and compute the tax basis in the stock so acquired, in the same manner
as if the optionee had exercised a Non-Qualified Option.

A Participant who receives a Non-Qualified Option will not
recognize any taxable income upon the grant of such Non-Qualified Option. In
general, upon exercise of a Non-Qualified Option, a participant will be treated
as having received ordinary income in an amount equal to the excess of the fair
market value of the stock at the time of exercise over the exercise price.

Any holder of a Non-Qualified Option who is subject to the
reporting requirements of Section 16(a) of the Exchange Act should consult his
tax advisor as to whether the timing of income recognition is deferred for any
period following exercise of such Non-Qualified Option (the "Deferral Period").
Absent a written election filed with the IRS within thirty days after the date
of exercise pursuant to Section 83(b) of the Code to include in income, as of
the exercise date, the excess of the fair market value of the stock on the
exercise date over the exercise price, recognition of income by the holder will
be deferred until the expiration of the Deferral Period, if any.

The 1996 Plan is not qualified under the provisions of Section
401(a) of the Code and is not subject to any of the provisions of the Employee
Retirement Income Security Act of 1974, as amended.

Except as hereinafter set forth, the number of stock options
that will be awarded to the Company's Chief Executive Officer and the other
named executive officers of the Company pursuant to the 1996 Plan are not
currently determinable. Except as hereinafter set forth, no awards to the
Company's Chief Executive Officer and the other named executive officers were
made in 1996. In 1996, an aggregate of 354,000 stock options under the 1996

Plan were granted to 16 employees of the Company, including Robert R. Schiller,
Vice President of Corporate Development of the Company, who received 150,000 of
such stock options. In 1996, no stock options were granted under the 1996 Plan
to Directors who were not executive officers.

VOTE REQUIRED

RECOMMENDATION OF THE BOARD OF DIRECTORS

The Board of Directors has adopted and recommends that the
Stockholders vote FOR Proposal 4 on the Proxy Card.

PROPOSAL 5

RATIFICATION OF APPOINTMENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

Upon the recommendation of the Audit Committee of the Board of
Directors, the Board has appointed Deloitte & Touche LLP as independent
certified public accountants for the Company to audit the consolidated financial
statements of the Company and its subsidiaries for the fiscal year ending
December 27, 1997 ("Fiscal 1997"). Deloitte & Touche LLP has acted in this
capacity since 1990.

The Company's Board of Directors recommends the ratification
of the appointment of Deloitte & Touche LLP as independent certified public
accountants for the Company to audit the financial statements of the Company for
Fiscal 1997. If a majority of the Stockholders voting at the Meeting at which a
quorum is present, in person or by proxy, should not approve such appointment,
the Audit Committee and the Board of Directors of the Company will reconsider
the appointment of independent certified public accountants.

VOTE REQUIRED

The affirmative vote of holders of a majority of the
outstanding shares of Common Stock present and voting at a Meeting at which a
quorum is present is required for the reappointment of Deloitte & Touche LLP as
the Company's independent certified public accountants for Fiscal 1997.

RECOMMENDATION OF THE BOARD OF DIRECTORS

The Board of Directors recommends that the Stockholders
reappoint Deloitte & Touche LLP as independent certified public accountants of
the Company for the Fiscal 1997 by voting FOR Proposal 5 on the Proxy Card.

OTHER MATTERS

As of the date of this Proxy Statement, the Board of Directors
does not intend to present any other matter for action at the Meeting other than
as set forth in the Notice of Annual Meeting and this Proxy Statement. If any
other matters properly come before the Meeting, it is intend that the shares
represented by the proxies will be voted, in the absence of contrary
instructions, in the discretion of the persons named in the proxy.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company's
directors and executive officers and any persons who own more than 10% of the
Company's capital stock to file with the Commission (and, if such security is
listed on a national securities exchange, with such exchange), various reports
as to ownership of such capital stock. Such persons are required by Commission
regulations to furnish the Company with copies of all Section 16(a) forms they
file.

Based solely upon reports and representations submitted by the
directors, executive officers and holders of more than 10% of the Company's
capital stock, all Forms 3, 4 and 5 showing ownership of and changes of
ownership in the Company's capital stock during Fiscal 1996 were timely filed
with the Commission, NASDAQ and the American Stock Exchange, except as
hereinafter set forth. Two directors and an executive officer did not timely
file Form 3 reports upon assuming their positions with the Company, and did not
timely report a total of 4 transactions on such form. In addition, two directors
did not timely report a total of four transactions on Forms 3 and 4.

ANNUAL REPORT

A copy of the Company's 1996 Annual Report to Stockholders
accompanies this Proxy Statement. Any Stockholder who has not received a copy of
the 1996 Annual Report to Stockholders and wishes to do so should contact the
Company's Corporate Secretary by mail at the address set forth on the notice of
annual meeting or by telephone at (904) 741-5400.

FORM 10-KSB

The Company will provide, without charge, to each Stockholder
as of the Record Date, on the written request of the Stockholder, a copy of the
Company's Annual Report on Form 10-KSB and all amendments thereto for the year
ended December 28, 1996, including the financial statements and schedules, as
filed with the Commission. Stockholders should direct

the written request to the Company's Corporate Secretary at c/o Armor Holdings,
Inc., 13386 International Parkway, Jacksonville, Florida 32218.

PROPOSALS BY STOCKHOLDERS

Any proposal of a Stockholder intended to be presented at the
annual meeting of stockholders to be held in 1998 must be received by the
Company no later than January 27, 1998 to be considered for inclusion in the
Proxy Statement and form of proxy for the 1998 annual meeting. Proposals must
comply with Rule 14a-8 promulgated by the Commission pursuant to the Exchange
Act.

FOR THE BOARD OF DIRECTORS

CAROL T. BURKE
SECRETARY

APPENDIX A

ARMOR HOLDINGS, INC.

AMENDED AND RESTATED
1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

The Amended and Restated 1996 Non-Employee Directors Stock
Option Plan (the "Plan") is established to attract, retain and compensate for
service as members of the Board of Directors of Armor Holdings, Inc. (the
"Company") highly qualified individuals who are not current or former employees
of the Company and to enable them to increase their ownership in the Company's
Common Stock. The Plan will be beneficial to the Company and its stockholders
since it will allow these directors to have a greater personal financial stake
in the Company through the ownership of Company stock, in addition to
underscoring their common interest with shareholders in increasing the value of
the Company stock longer term.

1. ELIGIBILITY

All members of the Company's Board of Directors who are not
current or former employees of the Company or any of its subsidiaries
("Non-Employee Directors") are eligible to participate in the Plan.

2. OPTIONS

Only nonqualified stock options ("NQSOs") may be granted under
the Plan. Grants shall be evidenced by Option Agreements in form promulgated by
the Board of Directors from time to time.

3. SHARES AVAILABLE

a) NUMBER OF SHARES AVAILABLE: There is hereby reserved for
issuance under the Plan 450,000 shares of Company Common Stock, par value $.01
per share, which may be authorized but unissued shares, treasury shares, or
shares purchased on the open market.

b) RECAPITALIZATION ADJUSTMENT: In the event of a reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, rights offering, or any other change in the corporate structure
or shares of the Company, adjustments in the number and kind of shares
authorized by the Plan, in the number and kind of shares covered by, and in the
option price of outstanding NQSOs under the Plan shall be made if, and in the
same manner as, such adjustments are made to NQSOs issued under the Company's
1996 Stock Option Plan.

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4. ANNUAL GRANT OF NONQUALIFIED STOCK OPTIONS

Upon each Non-Employee Director's initial election or
appointment to the Board of Directors, such Non-Employee Director shall
automatically receive NQSOs covering 75,000 shares of the Company's Common
Stock. Notwithstanding the foregoing, if, on that day, counsel for the Company
determines, in her/his sole discretion, that the Company is in possession of
material, undisclosed information about the Company, then the grant of NQSOs to
Non-Employee Directors shall be suspended until the second day after public
dissemination of such information and the price, exercisability date and option
period shall then be determined by reference to such later date. If Company
Common Stock is not traded on the American Stock Exchange or on such exchange as
such stock may then be trading on any date a grant would otherwise be awarded,
then the grant shall be made the next day thereafter that Company Common Stock
is so traded.

5. OPTION PRICE

The price of all 75,000 NQSOs granted to each Non-Employee
Director under the Plan shall be the closing price on the date of the grant of
the Company's Common Stock as quoted on the composite tape of the American Stock
Exchange or of such exchange upon which the Company's Common Stock may then
currently be trading.

6. OPTION PERIOD

Except as otherwise provided herein, of the 75,000 NQSOs
granted to each Non-Employee Director under the Plan, NQSOs covering 25,000
shares shall become exercisable upon each of the first three anniversary dates
following the date of the grant and all 75,000 NQSOs granted to each
Non-Employee Director shall expire ten years after the date of the grant
("Option Period").

7. PAYMENT

The NQSO price shall be paid in cash in U.S. dollars at the
time the NQSO is exercised.

8. CESSATION OF SERVICE

Upon cessation of service as a Non-Employee Director (for
reasons other than retirement, death, disability or "cause"), only those NQSOs
immediately exercisable at the date of cessation of service shall be exercisable
by the grantee. Such NQSOs must be exercised within ninety days of cessation of
service (but in no event after the expiration of the Option Period) or they
shall be forfeited.

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(a) RETIREMENT

If a grantee ceases service as a Non-Employee Director and is
at least age 65 with ten or more years of service or age 70 with five or more
years of service, then any of his/her outstanding NQSOs shall continue to become
exercisable. All outstanding NQSOs must be exercised by the earlier of (i)
thirty-six (36) months following the date of such cessation of service or (ii)
the expiration of the Option Period, or such NQSOs shall be forfeited.

(b) DISABILITY

If a grantee ceases service as a Non-Employee Director on
account of disability, then those of his/her NQSOs which had been held for at
least twelve (12) months on the date of cessation of service shall become
immediately exercisable. All NQSOs which became exercisable upon cessation of
service following disability and those NQSOs which were exercisable on the date
of such termination of employment following disability must be exercised by the
earlier of (i) six (6) months following the date of such cessation of service or
(ii) the expiration of the Option Period, or such NQSOs shall be forfeited.

"Disability" shall mean total and permanent disability as
defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended.

Upon the death of a grantee, those NQSOs which had been held
for at least twelve months at date of death shall become immediately exercisable
upon death. The NQSOs which become exercisable upon the date of death and those
NQSOs which were exercisable on the date of death may be exercised by the
grantee's legal representatives or heirs by the earlier of (i) thirty-six (36)
months from the date of death or (ii) the expiration of the Option Period; if
not exercised by the earlier of (i) or (ii), such NQSOs shall be forfeited.

(d) CAUSE

Upon removal of a Non-Employee Director, failure to stand for
reelection or failure to be renominated for "cause," or if the Company obtains
or discovers information after termination of service of a Non-Employee Director
that would have justified his/her removal for cause during such directorship,
all outstanding Options granted to such Non-Employee Director pursuant to this
Plan shall, upon giving written notice thereof by the Company, shall immediately
terminate and shall be null and void.

"Cause" shall mean an act or a failure to act that constitutes
"cause" for removal of a director under applicable Delaware law.

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9. ADMINISTRATION AND AMENDMENT OF THE PLAN

The Plan shall be administered by the Option Committee of the
Board of Directors of the Company. The Plan may be terminated or amended by the
Board of Directors as it deems advisable. However, an amendment revising the
price, date of exercisability, option period of, or amount of shares under a
NQSO shall not be made more frequently than every six (6) months unless
necessary to comply with applicable laws or regulations. No amendment may revoke
or alter in a manner unfavorable to the grantees any NQSOs then outstanding, nor
may the Board of Directors amend the Plan without shareholder approval where the
absence of such approval would cause the Plan to fail to comply with Rule 16b-3
under the Securities Exchange Act of 1934 (the "Act"), or any other requirement
of applicable law or regulation. A NQSO may not be granted under the Plan after
December 31, 2006 but NQSOs granted prior to that date shall continue to become
exercisable and may be exercised according to their terms.

10. NON-TRANSFERABILITY

No NQSO granted under the Plan is transferable other than by
will or the laws of descent and distribution. During the grantee's lifetime, a
NQSO may only be exercised by the grantee or the grantee's guardian or legal
representative.

11. COMPLIANCE WITH SEC REGULATIONS

It is the Company's intent that the Plan comply in all
respects with Rule 16b-3 of the Act, and any regulations promulgated thereunder.
If any provision of the Plan is later found not to be in compliance with the
Rule, the provision shall be deemed null and void. All grants and exercises of
NQSOs under the Plan shall be executed in accordance with the requirements of
Section 16 of the Act, as amended, and any regulations promulgated thereunder.

12. RESTRICTIONS ON DELIVERY AND SALE OF SHARES

Each award granted under the Plan is subject to the condition
that if at anytime the Option Committee, in its discretion, shall determine that
the listing, registration or qualification of the stock covered by such award
upon any securities exchange or under any state or federal law is necessary or
desirable as a condition of or in connection with the granting of such award or
the purchase or delivery of stock thereunder, the delivery of any or all shares
pursuant to such award may be withheld unless and until such listing,
registration or qualification shall have been effected. If a registration
statement is not in effect under the Securities Act of 1933 or any applicable
state securities laws with respect to the shares of stock purchasable or
otherwise deliverable under awards then outstanding, the Option Committee may
require, as a condition of any delivery of stock pursuant to the award a written
representation, from the recipient, that such shares are being acquired for
investment and not with a view to distribution and agreeing that the stock will
not be disposed of except pursuant to an effective registration statement,
unless the Company shall have received an opinion of counsel that such
disposition is exempt from such requirement under the Securities Act of 1933 and
any applicable state

A-4

securities laws. The Company may endorse on certificates representing shares
delivered pursuant to an award such legends referring to the foregoing
representations or restrictions or any applicable restrictions applicable on
resale as the Company, in its discretion, shall deem appropriate.

13. MISCELLANEOUS

Except as provided in the Plan, no Non-Employee Director shall
have any claim or right to be granted a NQSO under the Plan. Neither the Plan
nor any action thereunder shall be construed as giving any director any right to
be retained in the service of the Company.

14. EFFECTIVE DATE

The Plan shall be effective on such date as stockholder
approval is obtained.

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APPENDIX B

ARMOR HOLDINGS, INC.

AMENDED AND RESTATED 1996 STOCK OPTION PLAN

I. PURPOSE

ARMOR HOLDINGS, Inc. (the "Company") desires to afford certain
of its key employees and consultants and the key employees and consultants of
any subsidiary corporation or parent corporation of the Company now existing or
hereafter formed or acquired who are responsible for the continued growth of the
Company an opportunity to acquire a proprietary interest in the Company, and
thus to create in such key employees and consultants an increased interest in
and a greater concern for the welfare of the Company and its subsidiaries.

The Company, by means of this Amended and Restated 1996 Stock
Option Plan (the "Plan"), seeks to retain the services of key employees and
consultants and to enable the Company to attract and retain persons of
competence.

The stock options ("Options") offered pursuant to the Plan are
a matter of separate inducement and are not in lieu of any salary or other
compensation for the services of any key employee or consultant.

The Options granted under the Plan are intended to be either
incentive stock options ("Incentive Options") within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), or options that
do not meet the requirements for Incentive Options ("Non-Qualified Options"),
but the Company makes no warranty as to the qualification of any Option as an
Incentive Option.

II. AMOUNT OF STOCK SUBJECT TO THE PLAN
AND OTHER LIMITATIONS

(a) The total number of shares of common stock of the Company
which may be purchased or acquired pursuant to the exercise of Options granted
under the Plan shall not exceed, in the aggregate, 1,750,000 shares of the
authorized common stock, $.01 par value per share (the "Common Stock"), of the
Company (the "Shares"), such number subject to adjustment as provided in Article
XI hereof. Shares of Common Stock that are the subject of Options shall be
counted only once in determining whether the maximum number of Shares of Common
Stock that may be purchased or awarded under the Plan has been exceeded.

(b) Shares of Common Stock acquired under the Plan may be
either authorized but unissued Shares or Shares of issued stock held in the
Company's treasury, or both, at the discretion of the Company. If and to the
extent that Options granted under the Plan expire or

B-1

terminate without having been exercised, the Shares of Common Stock covered by
such expired or terminated Options shall again become available for award under
the Plan.

Except as provided in Articles XVIII and XXI, the Company may,
from time to time during the period beginning on the date of the adoption of the
Plan by the Company (the "Effective Date") and ending on the date which is ten
(10) years from the Effective Date (the "Termination Date"), grant to
Participants (as defined in Article IV), Incentive Options and/or Non-Qualified
Options under the terms hereinafter set forth.

As used in the Plan, the terms "subsidiary corporation" and
"parent corporation" shall mean, respectively, a corporation coming within the
definition of such terms contained in Sections 424(f) and 424(e) of the Code.

III. ADMINISTRATION

The board of directors of the Company (the "Board of
Directors") shall designate from among its members an option committee (the
"Committee") to administer the Plan. The Committee shall consist of not less
than two (2) members of the Board who meet the definition of "outside director"
under the provisions of Section 162(m) of the Code and the definition of
"non-employee director" under the provisions of Rule 16b-3 (or any successor
rule or regulation ("Rule 16b-3") promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). No member of the Committee shall have
been within one year prior to appointment to, or while serving on, the Committee
granted or awarded equity securities of the Company pursuant to this or any
other plan of the Company except to the extent that participation in any such
plan or receipt of any such grant or award would not adversely affect the
Committee member's status as a "non-employee director" or as an "outside
director." A majority of the members of the Committee shall constitute a quorum,
and the act of a majority of the members of the Committee shall be the act of
the Committee. Any member of the Committee may be removed at any time, either
with or without cause, by resolution adopted by the Board of Directors, and any
vacancy on the Committee at any time may be filled by resolution adopted by the
Board of Directors.

Any or all powers and functions of the Committee may be
exercised at any time and from time to time by the Board of Directors.

Subject to the express provisions of the Plan, the Board of
Directors or the Committee, as the case may be, shall have authority, in its
discretion, to determine the Participants (as defined in Article IV) to whom
Options shall be granted, the time when such Options shall be granted, the
number of Shares of Common Stock which shall be subject to each Option, the
exercise price of each Option, the period(s) during which such Options shall be
exercisable (whether in whole or in part) and the other terms and provisions
thereof (which need not be identical).

Subject to the express provisions of the Plan, the Board of
Directors or the Committee, as the case may be, also shall have authority to
construe the Plan and the Options granted thereunder, to amend the Plan and the
Options thereunder, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine the terms and provisions of the

B-2

Options (which need not be identical) granted thereunder and to make all other
determinations necessary or advisable for administering the Plan. The Board of
Directors or the Committee, as the case may be, also shall have the authority to
require, in its discretion, as a condition of the granting of any such Option,
that the Participants (as defined in Article IV) agree (i) not to sell or
otherwise dispose of Shares of Common Stock acquired pursuant to the exercise of
such Option for a period of six (6) months following the date of the acquisition
of such Option and (ii) that in the event of termination of employment of such
employee or the engagement of such consultant, as the case may be, other than as
a result of dismissal without cause, such Participant (as defined in Article IV)
will not, for a period to be fixed at the time of the grant of the Option, enter
into any other employment or consulting arrangement or participate directly or
indirectly in any other business or enterprise which is competitive with the
business of the Company or any subsidiary corporation or parent corporation of
the Company, or enter into any employment in which such employee or consultant,
as the case may be, will be called upon to utilize special knowledge obtained
through employment with or retention by the Company or any subsidiary
corporation or parent corporation thereof. In no event will a Participant (as
defined in Article IV) who is subject to the reporting requirements of Section
16(a) of the Exchange Act be entitled to sell or otherwise dispose of any Shares
of Common Stock acquired pursuant to exercise of any such Options for a period
of six (6) months from the date of the acquisition of such Options.

The determination of the Board of Directors or the Committee,
as the case may be, on matters referred to in this Article III shall be
conclusive.

The Board of Directors or the Committee, as the case may be,
may employ such legal counsel, consultants and agents as it may deem desirable
for the administration of the Plan and may rely upon any opinion or computation
received from any such legal counsel, consultant or agent. Expenses incurred by
the Board of Directors or the Committee, as the case may be, in the engagement
of such counsel, consultant or agent shall be paid by the Company. No member or
former 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 award
of Options granted hereunder.

IV. ELIGIBILITY

Options may be granted only to persons employed and
consultants engaged by the Company or of any subsidiary corporation or parent
corporation of the Company (such employees and consultants hereinafter at times
collectively referred to as the "Participants"), except as hereinafter provided,
and shall not be granted to any director who is not also an employee of the
Company.

Incentive Options shall not be granted to consultants.

The Plan does not create a right in any employee or consultant
to participate in the Plan, to become or remain an employee of the Company, nor
does it create a right in any Participant to have any Options granted to him or
her.

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V. OPTION PRICE AND PAYMENT

The exercise price for each Share of Common Stock purchasable
under any Non-Qualified Option granted hereunder shall be such amount as the
Board of Directors or the Committee, as the case may be, shall deem appropriate,
but in no event less than the par value of a Share of Common Stock.

The price for each Share of Common Stock purchasable under any
Incentive Option granted hereunder shall be such amount as the Board of
Directors or the Committee, as the case may be, shall, in its best judgment,
determine to be not less than one hundred per cent (100%) of the fair market
value per Share at the date the Option is granted; provided, however, that in
the case of an Incentive Option granted to a person who, at the time such Option
is granted, owns shares of the Company or any subsidiary corporation or parent
corporation of the Company which possess more than ten percent (10%) of the
total combined voting power of all classes of shares of the Company or of any
subsidiary corporation or parent corporation of the Company, the purchase price
for each Share of Common Stock shall be such amount as the Board of Directors or
the Committee, as the case may be, in its best judgment, shall determine to be
not less than one hundred ten percent (110%) of the fair market value per Share
at the date the Option is granted. In determining stock ownership of a
Participant for any purposes under the Plan, the rules of Section 424(d) of the
Code shall be applied, and the Board of Directors or the Committee, as the case
may be, may rely on representations of fact made to it by the Participant and
believed by it to be true.

If the Common Stock is listed on a national securities
exchange in the United States on any date on which the fair market value per
Share is to be determined, the fair market value per Share shall be deemed to be
the average of the high and low quotations at which such Shares are sold on such
national securities exchange on the date such Option is granted. If the Common
Stock is listed on a national securities exchange in the United States on such
date, but is not traded on such date, or such national securities exchange is
not open for business on such date, the fair market value per Share shall be
determined as of the closest preceding date on which such exchange shall have
been open for business and the Common Stock was traded. If the Common Stock is
listed on more than one national securities exchange in the United States on the
date on which the fair market value per Share is to be determined, the Board of
Directors or the Committee, as the case may be, shall determine which national
securities exchange shall be used for the purpose of determining the fair market
value per Share.

For purposes of this Plan, the determination by the Board of
Directors or the Committee, as the case may be, of the fair market value of a
Share shall be conclusive.

Upon the exercise of an Option granted hereunder, the Company
shall cause the purchased Shares of Common Stock to be issued only when it shall
have received the full purchase price for the Shares in cash or by certified
check or such other arrangement for the satisfaction of the full purchase price
as the Committee may determine to the extent permitted by applicable law,
including but not limited to, by delivering to the Company shares of Common
Stock of the Company (in proper form for transfer and accompanied by all
requisite stock transfer tax stamps or cash in lieu thereof) owned by such
holder free and clear of all liens and encumbrances having a fair market value
equal to the exercise price applicable to that portion of the Option being
exercised by the delivery of such Shares. The fair market value of the stock

B-4

so delivered shall be determined by the Committee, in its sole discretion, as of
the date immediately preceding the date on which the Option is exercised, or as
may be required in order to comply with or to conform to the requirements of any
applicable laws or regulations.

VI. USE OF PROCEEDS

The cash proceeds of the sale of Shares of Common Stock
pursuant to the Plan are to be added to the general funds of the Company and
used for its general corporate purposes as the Board of Directors shall
determine.

VII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE

Any Option shall be exercisable at such times, in such amounts
and during such period or periods as the Board of Directors or the Committee, as
the case may be, shall determine at the date of the grant of such Option;
provided, however, that an Incentive Option shall not be exercisable after the
expiration of ten (10) years from the date such Option is granted; and provided
further that, in the case of an Incentive Option granted to a person who, at the
time such Option is granted, owns stock of the Company or any subsidiary
corporation or parent corporation of the Company possessing more than ten per
cent (10%) of the total combined voting power of all classes of stock of the
Company or of any subsidiary corporation or parent corporation of the Company,
such Option shall not be exercisable after the expiration of five (5) years from
the date such Option is granted.

Except to the extent otherwise provided under the Code, to the
extent that the aggregate fair market value of Common Stock for which Incentive
Options are exercisable for the first time by a Participant during any calendar
year (under all stock option plans of the Company or of any parent corporation
or subsidiary corporation of the Company) exceeds one hundred thousand dollars
($100,000), such Options shall be treated as Non-Qualified Options. For purposes
of this limitation, (i) the fair market value of Common Stock is determined as
of the time the Option is granted, and (ii) the limitation will be applied by
taking into account Options in the order in which they were granted.

Subject to the provisions of Article XVII, the Board of
Directors or the Committee, as the case may be, shall have the right to
accelerate, in whole or in part, from time to time, conditionally or
unconditionally, rights to exercise any Option granted hereunder.

To the extent that an Option is not exercised within the
period of exercisability specified therein, it shall expire as to the then
unexercised part.

In no event shall an Option granted hereunder be exercised for
a fraction of a Share.

The Committee may at any time on behalf of the Company offer
to buy out an Option previously granted, based on such terms and conditions as
the Committee shall establish and communicate to the Participant at the time
that such offer is made.

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VIII. EXERCISE OF OPTIONS

Options granted under the Plan shall be exercised by the
optionee as to all or part of the Shares covered thereby by the giving of
written notice of the exercise thereof to the Corporate Secretary of the Company
at the principal business office of the Company, specifying the number of shares
to be purchased and specifying a business day not more than fifteen (15) days
from the date such notice is given for the payment of the purchase price against
delivery of the Shares of Common Stock being purchased. Subject to the terms of
Articles XIII, XV, and XVI, the Company shall cause certificates for the Shares
of Common Stock so purchased to be delivered to the optionee at the principal
business office of the Company, against payment of the full purchase price, on
the date specified in the notice of exercise.

IX. NON-TRANSFERABILITY OF OPTIONS

No option granted hereunder shall be transferable otherwise
than by will or by the laws of descent and distribution, and such option shall
be exercisable, during the Participant's lifetime, only by the Participant.
Notwithstanding the foregoing, the Committee may set forth in a stock option
agreement at the time of grant or thereafter, that the options (other than
Incentive Options) may be transferred to members of the Participant's immediate
family, to trusts solely for the benefit of such immediate family members and to
partnerships in which such family members and/or trusts are the only partners.
For this purpose, immediate family means the Participant's spouse, parents,
children, stepchildren, grandchildren and legal dependents. Any transfer of
options made under this provision will not be effective until notice of such
transfer is delivered to the Company.

X. TERMINATION OF EMPLOYMENT

Upon termination of the employment of any Participant with the
Company and all subsidiary corporations and parent corporations of the Company,
an Option previously granted to the Participant, unless otherwise specified by
the Board of Directors or the Committee, as the case may be, shall, to the
extent not theretofore exercised, terminate and become null and void, provided
that:

(a) if the Participant shall die while in the employ of
such corporation or during either the three (3) month
or one (1) year period, whichever is applicable,
specified in clause (b) below and at a time when such
Participant was entitled to exercise an Option as
herein provided, the legal representative of such
Participant, or such person who acquired such Option
by bequest or inheritance or by reason of the death
of the Participant, may, not later than one (1) year
from the date of death, but in no event later than
the expiration of the stated term of such Option,
exercise such Option, to the extent not theretofore
exercised, in respect of any or all of such number of
Shares of Common Stock as specified by the Board of
Directors or the Committee, as the case may be, in
such Option; and

B-6

(b) if the employment of any Participant to whom such
Option shall have been granted shall terminate by
reason of the Participant's retirement (at such age
or upon such conditions as shall be specified by the
Board of Directors), disability (as defined in
Section 22(e)(3) of the Code) or dismissal by the
employer other than for "cause" (as defined below),
and while such Participant is entitled to exercise
such Option as herein provided, such Participant
shall have the right to exercise such Option so
granted, to the extent not theretofore exercised, in
respect of any or all of such number of Shares of
Common Stock as specified by the Board of Directors
or the Committee, as the case may be, in such Option,
at any time up to and including (i) three (3) months
after the date of such termination of employment in
the case of termination by reason of dismissal other
than for cause, and (ii) one (1) year after the date
of termination of employment in the case of
termination by reason of retirement or disability.
Notwithstanding anything to the foregoing to the
contrary contained herein, upon the termination
without cause of any Participant who has been granted
Non-Qualified Options pursuant to the Plan, the Board
of Directors or the Committee, as the case may be,
shall have the right, in their sole discretion (only
with respect to Non-Qualified Options granted
pursuant to the Plan), to either (i) accelerate the
time period during which a Participant may exercise
all or a part of any such Option previously granted
and/or (ii) extend the time period in which such
Participant may exercise such Option, to a period of
up to one (1) year after the date of such
Participant's termination without cause.

In no event, however, shall any person be entitled to exercise
any Option after the expiration of the period of exercisability of such Option
as specified therein.

If the Participant voluntarily terminates his or her
employment, other than by reason of his/her retirement, or is discharged for
cause, any Option granted hereunder shall, unless otherwise specified by the
Board of Directors or the Committee, as the case may be, forthwith terminate
with respect to any unexercised portion thereof.

If an Option granted hereunder shall be exercised by the legal
representative of a deceased or disabled Participant or former Participant, or
by a person who acquired an Option granted hereunder by bequest or inheritance
or by reason of death of any Participant or former Participant, written notice
of such exercise shall be accompanied by a certified copy of letters
testamentary or equivalent proof of the right of such legal representative or
other person to exercise such Option.

For the purposes of the Plan, the term "for cause" shall mean
(i) with respect to a Participant who is party to a written agreement with, or,
alternatively, participates in a compensation or benefit plan of the Company or
a subsidiary corporation or parent corporation of the Company, which agreement
or plan contains a definition of "for cause" or "cause" (or words of like
import) for purposes of termination of employment thereunder by the Company or
such subsidiary corporation or parent corporation of the Company, "for cause" or
"cause" as defined in the most recent of such agreements or plans, or (ii) in
all other cases, as

B-7

determined by the Board of Directors or the Committee, as the case may be, in
its sole discretion, (a) the willful commission by a Participant of a criminal
or other act that causes or probably will cause substantial economic damage to
the Company or a subsidiary corporation or parent corporation of the Company or
substantial injury to the business reputation of the Company or a subsidiary
corporation or parent corporation of the Company; (b) the commission by a
Participant of an act of fraud in the performance of such Participant's duties
on behalf of the Company or a subsidiary corporation or parent corporation of
the Company; or (c) the continuing willful failure of a Participant to perform
the duties of such Participant to the Company or a subsidiary corporation or
parent corporation of the Company (other than such failure resulting from the
Participant's incapacity due to physical or mental illness) after written notice
thereof (specifying the particulars thereof in reasonable detail) and a
reasonable opportunity to be heard and cure such failure are given to the
Participant by the Board of Directors. For purposes of the Plan, no act, or
failure to act, on the Participant's part shall be considered "willful" unless
done or omitted to be done by the Participant not in good faith and without
reasonable belief that the Participant's action or omission was in the best
interest of the Company or a subsidiary corporation or parent corporation of the
Company.

For the purposes of the Plan, an employment relationship shall
be deemed to exist between an individual and a corporation if, at the time of
the determination, the individual was an "employee" of such corporation for
purposes of Section 422(a) of the Code. If an individual is on military, sick
leave or other bona fide leave of absence, such individual shall be considered
an "employee" for purposes of the exercise of an Option and shall be entitled to
exercise such Option during such leave if the period of such leave does not
exceed ninety (90) days, or, if longer, so long as the individual's right to
reemployment with the corporation granting the option (or a related corporation)
is guaranteed either by statute or by contract. If the period of leave exceeds
ninety (90) days, the employment relationship shall be deemed to have terminated
on the ninety-first (91st) day of such leave, unless the individual's right to
reemployment is guaranteed by statute or contract.

A termination of employment shall not be deemed to occur by
reason of (i) the transfer of a Participant from employment by the Company to
employment by a subsidiary corporation or a parent corporation of the Company,
or (ii) the transfer of a Participant from employment by a subsidiary
corporation or a parent corporation of the Company to employment by the Company
or by another subsidiary corporation or parent corporation of the Company.

In the event of the complete liquidation or dissolution of a
subsidiary corporation, or in the event that such corporation ceases to be a
subsidiary corporation, any unexercised Options theretofore granted to any
person employed by such subsidiary corporation will be deemed cancelled unless
such person is employed by the Company or by any parent corporation or another
subsidiary corporation after the occurrence of such event. In the event an
Option is to be cancelled pursuant to the provisions of the previous sentence,
notice of such cancellation will be given to each Participant holding
unexercised Options and such holder will have the right to exercise such Options
in full (without regard to any limitation set forth or imposed pursuant to
Article VII) during the thirty (30) day period following notice of such
cancellation.

B-8

XI. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS

In the event of any change in the outstanding Shares of Common
Stock through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, split-up, split- off, spin-off, combination of shares,
exchange of shares, or other like change in capital structure of the Company,
the Board of Directors or the Committee, as the case may be, shall make such
adjustment to each outstanding Option that it, in its sole discretion, deems
appropriate. The term "Shares" after any such change shall refer to the
securities, cash and/or property then receivable upon exercise of an Option. In
addition, in the event of any such change, the Board of Directors or the
Committee, as the case may be, shall make any further adjustment as may be
appropriate to the maximum number of Shares which may be acquired under the Plan
pursuant to the exercise of Options, the maximum number of Shares which may be
so acquired by one Participant and the number of Shares and price per Share
subject to outstanding Options as shall be equitable to prevent dilution or
enlargement of rights under such Options, and the determination of the Board of
Directors as to these matters shall be conclusive. Notwithstanding the
foregoing, (i) each such adjustment with respect to an Incentive Option shall
comply with the rules of Section 424(a) of the Code, and (ii) in no event shall
any adjustment be made which would render any Incentive Option granted hereunder
to be other than an "incentive stock option" for purposes of Section 422 of the
Code.

XII. RIGHT TO TERMINATE EMPLOYMENT

The Plan shall not impose any obligation on the Company or on
any subsidiary corporation or parent corporation thereof to continue the
employment of any holder of Options and it shall not impose any obligation on
the part of any holder of Options to remain in the employ of the Company or of
any subsidiary corporation or parent corporation thereof.

XIII. PURCHASE FOR INVESTMENT

Except as hereinafter provided, the Board of Directors or the
Committee, as the case may be, may require a Participant, as a condition upon
exercise of any Option granted hereunder, to execute and deliver to the Company
(a) stock powers with respect to Shares underlying a particular Option and
required to be held by a custodian, and (b) a written statement, in form
satisfactory to the Board of Directors or the Committee, as the case may be, in
which the Participant represents and warrants that Shares are being acquired for
such person's own account for investment only and not with a view to the resale
or distribution thereof. The Participant shall, at the request of the Board of
Directors or the Committee, as the case may be, be required to represent and
warrant in writing that any subsequent resale or distribution of Shares by the
Participant shall be made only pursuant to either (i) a Registration Statement
on an appropriate form under the Securities Act of 1933, as amended (the
"Securities Act"), which Registration Statement has become effective and is
current with regard to the Shares being sold, or (ii) a specific exemption from
the registration requirements of the Securities Act, but in claiming such
exemption the Participant shall, prior to any offer of sale or sale of such
Shares, obtain a prior favorable written opinion of counsel, in form and
substance satisfactory to counsel for the Company, as to the application of such
exemption thereto. The foregoing restriction shall not apply to (i) issuances by
the Company so long as the Shares being issued are registered under the
Securities Act and a prospectus in respect thereof is current, or (ii)
re-offerings of

B-9

Shares by affiliates of the Company (as defined in Rule 405 or any successor
rule or regulation promulgated under the Securities Act) if the Shares being
re-offered are registered under the Securities Act and a prospectus in respect
thereof is current.

XIV. ISSUE OF CERTIFICATES, LEGENDS, PAYMENT OF EXPENSES

Upon any exercise of an Option which may be granted hereunder
and, in the case of an Option, payment of the purchase price, a certificate or
certificates for the Shares shall be issued by the Company in the name of the
person exercising the Option and shall be delivered to or upon the order of such
person.

The Company may endorse such legend or legends upon the
certificates for Shares issued pursuant to the Plan and may issue such "stop
transfer" instructions to its transfer agent in respect of such Shares as, in
its discretion, it determines to be necessary or appropriate to (i) prevent a
violation of, or to perfect an exemption from, the registration requirements of
the Securities Act, (ii) implement the provisions of the Plan and any agreement
between the Company and the optionee or grantee with respect to such Shares, or
(iii) permit the Company to determine the occurrence of a disqualifying
disposition, as described in Section 421(b) of the Code, of Shares transferred
upon exercise of an Incentive Option granted under the Plan.

The Company shall pay all issue or transfer taxes with respect
to the issuance or transfer of Shares, as well as all fees and expenses
necessarily incurred by the Company in connection with such issuance or
transfer, except fees and expenses which may be necessitated by the filing or
amending of a Registration Statement under the Securities Act, which fees and
expenses shall be borne by the recipient of the Shares, unless such Registration
Statement under the Securities Act has been filed by the Company for its own
corporate purposes (and the Company so states) in which event the recipient of
the Shares shall bear only such fees and expenses as are attributable solely to
the inclusion of the Shares he or she receives in the Registration Statement.

All Shares issued as provided herein shall be fully paid and
non-assessable to the extent permitted by law.

XV. WITHHOLDING TAXES

The Company may require a Participant, if applicable,
exercising a Non-Qualified Option granted hereunder, or disposing of Shares
acquired pursuant to the exercise of an Incentive Option in a disqualifying
disposition (within the meaning of Section 421(b) of the Code), to reimburse the
corporation that employs such Participant for any taxes required by any
government to be withheld or otherwise deducted and paid by such corporation in
respect of the issuance or disposition of such Shares. In lieu thereof, the
corporation that employs such Participant shall have the right to withhold the
amount of such taxes from any other sums due or to become due from such
corporation to the Participant upon such terms and conditions as the Board of
Directors shall prescribe. The corporation that employs such Participant may, in
its discretion, hold the stock certificate to which such Participant is entitled
upon the exercise of an Option as security for the payment of such withholding
tax liability, until cash sufficient to pay that liability has been accumulated.
In addition, at any time that the Company becomes

B-10

subject to a withholding obligation under applicable law with respect to the
exercise of a Non- Qualified Option (the "Tax Date"), except as set forth below,
a holder of a Non-Qualified Option may elect to satisfy, in whole or in part,
the holder's related personal tax liabilities (an "Election") by (i) directing
the Company to withhold from Shares of Common Stock issuable in the related
exercises either a specified number of Shares or Shares having a specified value
(in each case not in excess of the related personal tax liabilities), (ii)
tendering Shares previously issued pursuant to the exercise of an Option or
other Shares of the Company's Common Stock owned by the holder, or (iii)
combining any or all of the foregoing options in any fashion. An Election shall
be irrevocable. The withheld Shares and other Shares tendered in payment shall
be valued at their fair market value (determined in accordance with the
principles set forth in Article V of the Plan) on the Tax Date. The Board of
Directors or the Committee, as the case may be, may disapprove of any Election,
suspend or terminate the right to make Elections or provide that the right to
make Elections shall not apply to particular Shares of Common Stock or
exercises. The Board of Directors or the Committee, as the case may be, may
impose any additional conditions or restrictions on the right to make an
Election as it shall deem appropriate.

XVI. LISTING OF SHARES AND RELATED MATTERS

The Board of Directors or the Committee, as the case may be,
may delay any award, issuance or delivery of Shares of Common Stock if it
determines that listing, registration or qualification of Shares of Common Stock
or the consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the sale or purchase of
Shares under the Plan, until such listing, registration, qualification, consent
or approval shall have been effected or obtained, or otherwise provided for,
free of any conditions not acceptable to the Board of Directors or the
Committee, as the case may be.

XVII. AMENDMENT OF THE PLAN

The Board of Directors or the Committee, as the case may be,
may, from time to time, amend the Plan, provided that no amendment shall be
made, without the approval of the stockholders of the Company, to the extent
required by Rule 16b-3 or for the exception for performance-based compensation
under Section 162(m) of the Code, that will (i) increase the total number of
Shares reserved for Options under the Plan (other than an increase resulting
from an adjustment provided for in Article XI), (ii) reduce the exercise price
of any Option granted hereunder, (iii) modify the provisions of the Plan
relating to eligibility, or (iv) materially increase the benefits accruing to
Participants under the Plan or extend the maximum option period under Section
VII. The Board of Directors or the Committee, as the case may be, shall be
authorized to amend the Plan and the Options granted hereunder to permit the
Incentive Options granted hereunder to qualify as incentive stock options within
the meaning of Section 422 of the Code. The rights and obligations under any
Option granted before amendment of the Plan or any unexercised portion of such
Option shall not be adversely affected by amendment of the Plan or Option
without the consent of the holder of such Option.

XVIII. TERMINATION OR SUSPENSION OF THE PLAN

The Board of Directors or the Committee, as the case may be,
may at any time suspend or terminate the Plan. The Plan, unless sooner
terminated under Article XXI or by

B-11

action of the Board of Directors, shall terminate at the close of business on
the Termination Date. Options may not be granted while the Plan is suspended or
after it is terminated. Rights and obligations under any Option granted while
the Plan is in effect shall not be altered or impaired by suspension or
termination of the Plan, except upon the consent of the person to whom the
Option was granted. The power of the Board of Directors to construe and
administer any Options granted prior to the termination or suspension of the
Plan under Article III nevertheless shall continue after such termination or
during such suspension.

XIX. GOVERNING LAW

The Plan and such Options as may be granted thereunder and all
related matters shall be governed by, and construed and enforced in accordance
with, the laws of the State of Delaware from time to time obtaining or such
other jurisdiction as the Company may become reincorporated under.

XX. PARTIAL INVALIDITY

The invalidity or illegibility of any provision hereof shall
not be deemed to affect the validity of any other provision.

XXI. EFFECTIVE DATE

The Plan shall become effective upon its approval by the
stockholders of the Company.

B-12

(NO.1) SCHEDULE (INLAND REVENUE APPROVED)

ARMOR HOLDINGS, INC.
AMENDED AND RESTATED 1996 STOCK OPTION PLAN

ALTERATION AND AMENDMENTS TO THE PLAN IN RESPECT OF ITS
OPERATION IN RELATION TO UNITED KINGDOM EMPLOYEES

1. In this Schedule, "Plan" refers to the Armor Holdings, Inc. Amended and
Restated 1996 Stock Option Plan and words and expressions defined
therein shall have the same meaning when used in this Schedule. The
provisions of the Plan shall apply to the provisions of this Schedule
except where expressly varied herein.

2. It is intended that Options granted by the Company pursuant to this
Schedule to persons ("UK Participants") employed by the Company and/or
its subsidiary corporations in the UK and subject to UK Income Tax of
such employment will be granted pursuant to an approved share option
scheme within the provisions of Section 185 of and Schedule 9 to the
United Kingdom Income and Corporation Taxes Act 1988 ("ICTA 1988").

3. Article II shall be amended in relation to Options granted pursuant to
this Schedule so that: (i) "Share" shall mean "an ordinary share in the
capital of the Company which complies with the conditions of paragraphs
10-14 Schedule 9 ICTA 1988"; (ii) "subsidiary corporation" shall mean
"any company of which the Company has control", and (iii) "parent
corporation" shall mean "any company which has control of the Company",
in each case within the meaning of Section 416 of ICTA 1988.

4. Article III (apart from the third paragraph thereof) shall not apply
and the following clause shall be added to that paragraph: "Options may
be granted so that their exercise shall be subject to such objective
conditions (not inconsistent with the provisions of this Schedule) as
the Directors may, in their discretion, think fit."

5. Options may only be granted pursuant to this Schedule to UK
Participants who are employees of the Company or any subsidiary
corporation and who are (i) not excluded by paragraph 8 of Schedule 9
ICTA 1988; and (ii) required to devote substantially the whole of
his/her working time to the affairs of the Company and/or any
subsidiary corporation, and the provisions of Article IV shall be
amended accordingly. No employee shall be eligible to participate in
the Plan pursuant to this Schedule unless required in that capacity to
work for the Company and/or any subsidiary corporation for at least 20
hours per week excluding meal breaks (or, in the case of directors, at
least 25 hours per week excluding meal breaks).

No option may be granted pursuant to this Schedule to any UK
Participant to this Schedule which would result in the aggregate
purchase price of Shares comprised in

B-13

outstanding Options granted to him or her under the Plan together with
the aggregate purchase price of shares in subsisting options granted to
him or her under any other scheme, (not being a savings related share
option scheme), approved under Schedule 9 ICTA 1988 and established by
the Company or any associated company (within the meaning of Section
416 ICTA 1988) exceeding the limit from time to time specified in
paragraph 28(1) of Schedule 9 ICTA 1988.

6. The first two paragraphs of Article V shall not apply in relation to
Options granted pursuant to this Schedule, but the following provisions
shall apply instead:

a) the price for each Share under Option shall be determined by
the Board of Directors or the Committee and be denominated in
dollars, but shall not be less than the greater of:

(i) while the Shares are listed on the
American Stock Exchange (or the New
York Stock Exchange), the average of
the high and low quotations at which
the Shares are sold on the American
Stock Exchange (or such other stock
exchange) on the date of grant. If
the Shares are not traded on such
date, the closest preceding date on
which Shares were traded shall be
taken;

(ii) if the Shares are not so listed, the
market value of a Share on the date
of the grant of the Option or on the
business day immediately preceding
that date determined in accordance
with Part VII of the United Kingdom
Taxation of Chargeable Gains Act
1992 and agreed in advance for the
purpose of the Plan with the United
Kingdom Inland Revenue Shares
Valuation Division; and

(iii) the nominal value of the Share.

b) the price for each Share purchasable under such Option shall
be payable in cash in full on the exercise of the Option.

7. Article VII shall not apply in relation to Options granted pursuant to
this Schedule and the following provisions shall apply instead:

"An Option shall be exercisable at such times, in such amounts
and during such periods as the Board of Directors or the
Committee, as the case may be, shall determine at the date of
the grant of such Option but shall not be exercisable in any
event after the expiration of ten years from the date of
grant;"

No Option may be exercised by any UK Participant at any time when he or
she is precluded by paragraph 8 of Schedule 9 ICTA 1988 from
participating in the Plan.

B-14

8. The following shall apply in place of Article X:

"On the occurrence of any of the circumstances described in
the following paragraphs and subject to the fulfillment of any
performance condition(s), an Option shall become, if it is not
already, exercisable and shall remain exercisable until the
expiry of the relevant period specified:-

(a) the death of the Participant

-12 months commencing on the date of the
Participant's death, not to exceed the expiration of
the period of exercisability of such Option;

(b) the Participant ceasing to hold Employment by reason
of:

(i) -disability, as defined in the Plan, or
injury

-12 months commencing on the date of the
occurrence of such disability or injury not
to exceed the expiration of the term of such
Option

(ii) -retirement of the Participant whether at
contractual retirement age or (with the
consent of the Board of Directors) at an
earlier age

-12 months commencing on the date of such
retirement, not to exceed the expiration of
the term of such Option

(iii) -redundancy

-three months commencing on the date of such
cessation, not to exceed the expiration of
the period of exercisability of such Option

(iv) -any other circumstances which the Board of
Directors or the Committee may in its
discretion determine (such determination to
take place within two months of such
cessation) to fall within this Rule

12 months commencing on the date of such
cessation, not to exceed the expiration of
the period of exercisability of such Option

An Option shall lapse and cease to be exercisable
upon the earliest to happen of the following:-

(i) the expiry of the period of
exercisability specified by the
Board of Directors or the Committee
under Article VII;

B-15

(ii) the first anniversary of the date of
death of the Participant;

(iii) the date upon which the Participant
ceases to hold employment by reason
of "cause" as defined in the Plan;

(iv) the date upon which the Participant
is adjudicated bankrupt;

(v) any breach or purported breach of
Article IX by the Participant;

(vi) the expiry of any of the periods
mentioned in this Rule;

(vii) the date on which the Participant
ceases to hold Employment for any
reason other than any of the matters
referred to in (b) and the Board of
Directors or the Committee does not
within two months determine that his
or her options may be exercised."

9. Article XI shall, in the case of any Option granted pursuant to this
Schedule, be amended to exclude references to "split-up, split-off and
spin-off" and any adjustment made under that Article shall be subject
to:

a) confirmation from the auditors of the Company that such
adjustment is fair and reasonable;

b) prior approval of the United Kingdom Inland Revenue ("Inland
Revenue");

c) the Shares continuing to satisfy the conditions specified in
paragraphs 10 to 14 inclusive of Schedule 9 of ICTA 1988.

10. Article XVII shall apply with the additional requirement that no
amendment shall have effect until approved by the Inland Revenue.

B-16

(No. 2) SCHEDULE (UNAPPROVED)

TO
ARMOR HOLDINGS, INC.
AMENDED AND RESTATED 1996 STOCK OPTION PLAN

In this Schedule 2 "Plan" refers to the Armor Holdings, Inc. Amended and
Restated 1996 Stock Option Plan together with the (No. 1) Schedule and words and
expressions defined therein shall have the same meaning when used in this (No.
2) Schedule. The provisions of the Plan shall apply to the provisions of this
(No. 2) Schedule except where expressly varied herein.

1. Options may be granted by the Company pursuant to this (No. 2) Schedule
to UK Participants. It is intended that the (No. 2) Schedule to the
Plan will not be approved by the Inland Revenue pursuant to Schedule 9
to ICTA 1988.

2. The limit on the aggregate exercise price of options that may be held
by an individual set out in clause 5 of the (No. 1) Schedule, shall not
apply to Options granted under this (No. 2) Schedule.

3. All requirements in the Plan for the approval, consent or agreement of
the Inland Revenue shall not apply.

B-17

This Proxy is Solicited by the Board of Directors of
Armor Holdings, Inc.

ANNUAL MEETING

JUNE 12, 1997

The undersigned hereby appoints Jonathan M. Spiller and Warren B. Kanders as
proxies to represent the undersigned, with full power of substitution, at the
Annual Meeting of Stockholders of Armor Holdings, Inc. (the "Company"), to be
held on June 12, 1997 at 10:00 A.M., New York City time, at The Metropolitan
Club, 1 East 60th Street, New York, New York 10022 and any adjournments and
postponements thereof:

1. ELECTION OF -- FOR all nominees listed below
DIRECTORS (except as marked to the contrary below)

-- WITHHOLD AUTHORITY to vote for all nominees
listed below

Warren B. Kanders Burtt R. Ehrlich
Thomas W. Strauss Jonathan M. Spiller
Nicolas Sokolow Richard C. Bartlett
Alair A. Townsend

INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through or otherwise strike
the nominee's name in the list above.

2. To vote upon a proposal pursuant to which the Company will become a
holding company and own the capital stock of its subsidiary
corporations, through which all of the operations of the Company will
be conducted. As part of such proposal, all of the business, assets,
liabilities and operations of the Company relating to its body armor
business will be transferred to a wholly-owned subsidiary corporation
in order to implement such holding company structure (Proposal 2);

|_| FOR |_| AGAINST |_| WITHHOLD AUTHORITY TO VOTE

3. To vote upon a proposal to amend and restate the Company's 1996
Non-Employee Directors Stock Option Plan to: (i) increase by 150,000
shares, the total number of shares of the Company's common stock, $.01
par value per share, that may be awarded under such plan; and (ii)
comport with recent amendments to Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (Proposal 3);

|_| FOR |_| AGAINST |_| WITHHOLD AUTHORITY TO VOTE

4. To vote upon a proposal to amend and restate the Company's 1996 Stock
Option Plan to: (i) increase by 250,000 shares the total number of
shares of the Company's common stock, $.01 par value per share, that
may be awarded under such plan; (ii) change the governing law of such
plan from Florida to Delaware; (iii) comport with recent amendments to
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended; and (iv) adopt a schedule to such plan to permit the grant of
options to employees of the Company's United Kingdom subsidiaries
(Proposal 4).

|_| FOR |_| AGAINST |_| WITHHOLD AUTHORITY TO VOTE

5. To vote upon a resolution ratifying the selection of Deloitte & Touche
LLP as the Company's independent certified public accountants for the
1997 fiscal year (Proposal 5).

|_| FOR |_| AGAINST |_| WITHHOLD AUTHORITY TO VOTE

In their discretion, the Proxies are authorized to vote upon such other
business that may properly come before the meeting.

THIS BALLOT, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. UNLESS OTHERWISE SPECIFIED, THE SHARES WILL BE
VOTED "FOR" EACH PROPOSAL.

Dated:__________________ ____________________________ ________________________
Signatures of Stockholder(s)

NOTE: Signature should agree with name on stock certificate as printed
thereon. Executors, administrators, trustees and other fiduciaries
should so indicate when signing.

PLEASE DATE, SIGN AND RETURN THIS PROXY. THANK YOU.