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                    1994 STOCK INCENTIVE PLAN


I.  GENERAL

    1.  Purpose.  The purpose of the Plan is to aid the Company
and its Subsidiaries in attracting, retaining, and motivating
management employees.

    2.  Definitions.  Whenever used herein, the following terms
shall have the meanings set forth below:

            a. "Board" means the Board of Directors of the Company.

            b. "Code" means the Internal Revenue Code of 1986, as
    amended.

            c. "Committee" means a committee designated by the
    Board, which shall consist of not less than three members of
    the Board who shall be appointed by and serve at the
    pleasure of the Board and who shall be "disinterested"
    within the meaning of Rule 16b-3 of the General Rules and
    Regulations under the Securities Exchange Act of 1934, as
    amended, and who shall be "outside" directors within the
    meaning of Section 162(m) of the Code.

            d. "Company" means The May Department Stores Company, a
    Delaware corporation.

            e. "Disability" means a permanent and total disability
    which enables the Participant to be eligible for and receive
    a disability benefit under the Federal Social Security Act.

            f. "Fair Market Value" means the average of the high and
    low prices of the Stock on the New York Stock Exchange on
    the date in question, or, if no sale or sales of the Stock
    occurred on such Exchange on that day, the average of the
    high and low prices of the Stock on the last preceding day
    when the Stock was sold on the New York Stock Exchange; with
    respect to a Stock Appreciation Right, the term means the
    average of the high and low prices of the Stock on the New
    York Stock Exchange on such date or dates as may be provided
    in the Stock Appreciation Right Agreement.

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            g. "Incentive Stock Option" means an Option granted
    under the Plan which constitutes and shall be treated as an
    "incentive stock option" as defined in Section 422 of the
    Code.

            h. "Non-Qualified Stock Option" means an Option granted
    under the Plan which shall not constitute or be treated as
    an Incentive Stock Option.

            i. "Non-Tandem Stock Appreciation Right" means a Right
    described in Part III, Section 3.

            j. "Option" means a right or rights to purchase shares
    of Stock described in Part II.

            k. "Option Agreement" means the agreement between the
    Company and a Participant evidencing the grant of an Option
    and containing the terms and conditions, not inconsistent
    with the Plan, that are applicable to such Option.

            l. "Participant" means an individual to whom an Option
    or Right is granted or Restricted Stock Grant is made.

            m. "Performance Restricted Stock" means Restricted Stock
    whose provisions include the restrictions described in Part
    IV, Section 3(b).

            n. "Plan" means the 1994 Stock Incentive Plan of the
    Company, as amended from time to time.

            o. "Related Option" means the Option in relation to
    which a Tandem Stock Appreciation Right is granted.

            p. "Restricted Stock Grant" means a grant described in
    Part IV.

            q. "Retirement" means retirement as that word is defined
    in any retirement plan sponsored by the Company or a
    Subsidiary which is applicable to the Participant.

            r. "Stock" means the Common Stock of the Company.


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            s. "Stock Appreciation Right" or "Right" means a right
    described in Part III which provides for the payment of an
    amount in cash or Stock in accordance with such terms and
    conditions as are provided in the Stock Appreciation Right
    Agreement applicable to such Right; provided however, that
    in Part III, Section 2, "Right" shall refer only to a
    "Tandem Stock Appreciation Right" and that in Part III,
    Section 3, "Right" shall refer only to a "Non-Tandem Stock
    Appreciation Right".

            t. "Stock Appreciation Right Agreement" means the
    agreement between the Company and a Participant evidencing
    the grant of a Stock Appreciation Right and containing the
    terms and conditions, not inconsistent with the Plan, that
    are applicable to such Right.

            u. "Subsidiary" means a subsidiary of the Company or an
    unincorporated organization controlled, directly or
    indirectly, by the Company.

            v. "Tandem Stock Appreciation Right" means a Right
    described in Part III, Section 2.

    3.  Administration.  The Plan shall be administered by the
Committee.  Subject to all applicable provisions of the Plan, the
Committee is authorized to approve grants of Options or Rights or
the making of Restricted Stock Grants in accordance with the
Plan, to construe and interpret the Plan, to prescribe, amend,
and rescind rules and regulations relating to the Plan and to
make all determinations and take all actions necessary or
advisable for the Plan's administration.  The Committee shall act
by vote or written consent of a majority of its members.
Whenever the Plan authorizes or requires the Committee to take
any action, make any determination or decision or form any
opinion, then any such action, determination, decision or opinion
by or of the Committee shall be in the absolute discretion of the
Committee.





                                3

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    4.  Shares Subject to the Plan.

            (a)  Maximum Number of Shares.  Stock issued under the
    Plan shall be treasury shares subject to the following
    limitations:

                       (i)  Plan Maximum. The maximum number of shares of
           Stock which may be issued under the Plan is
           41,361,879, of which no more than 3,400,553 may be
           issued pursuant to Restricted Stock Grants.

                      (ii)  Participant Maximum.  The maximum number of
           Options and Stock Appreciation Rights which may be
           granted to any Participant during the term of the
           Plan is 1,243,093; provided, however, that if a Stock
           Appreciation Right is issued in substitution for an
           existing stock option or in tandem with a stock
           option, then the grant of such a Stock Appreciation
           Right shall not count against the limit.  The maximum
           number of shares of Stock which may be issued to each
           Participant free from restrictions pursuant to a
           grant of Performance Restricted Stock is 82,873 per
           year.1

            (b)    Expired Options or Rights.  If an Option or Right
    expires, terminates, ceases to be exercisable or is
    surrendered without having been exercised in full, then the
    shares relating to the Option or Right shall, unless the
    Plan has been terminated, again become available under the
    Plan.

            (c)    Lapse of Restrictions on Restricted Stock. If any
    shares of Stock shall be returned to the Company pursuant to
    the provisions of Sections 2 or 3 of Part IV or in the
    instruments evidencing the making of Restricted Stock
    Grants, then such shares shall, unless the Plan has been
    terminated, again become available under the Plan.

_________________
     1 The number of shares reflected in this paragraph were
adjusted as of May 24, 1996 to reflect the spin-off by May of
Payless ShoeSource, Inc. and as of March 22, 1999 to reflect a
three-for-two stock split.
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    5.  Participants.  Participants in the Plan shall be
determined as follows:

            (a)    Eligibility. The individuals who are eligible to
    receive Options, Rights or Restricted Stock Grants hereunder
    shall be limited to management employees of the Company and
    its Subsidiaries (including employees who are directors
    and/or officers).

            (b)    Determination.  From time to time the Committee
    shall, in its sole discretion, but subject to all of the
    provisions of the Plan, determine which of those eligible
    employees shall receive Option(s), Stock Appreciation
    Right(s) or Restricted Stock Grant(s) under the Plan and the
    size, terms, conditions and/or restrictions of the
    Option(s), Right(s) or Restricted Stock Grant(s).

            (c)    Differing Terms; Effect of Grant.  The Committee
    may approve the grant of Option(s) or Right(s) or the making
    of Restricted Stock Grant(s) subject to differing terms,
    conditions and/or restrictions to any eligible employee in
    any year.  The Committee's decision to approve the grant of
    an Option or Right or the making of a Restricted Stock Grant
    to an eligible employee in any year shall not require the
    Committee to approve the grant of an Option or Right or the
    making of a Restricted Stock Grant to that employee in any
    other year or to any other employee in any year; nor shall
    the Committee's decision with respect to the size, terms,
    conditions and/or restrictions of any Option or Right to be
    granted to an employee or any Restricted Stock Grant to be
    made to an employee in any year require the Committee to
    approve the grant of an Option or Right or the making of a
    Restricted Stock Grant of the same size or with the same
    terms, conditions and/or restrictions to that employee in
    any other year or to any other employee in any year.  The
    Committee shall not be precluded from approving the grant of
    an Option or Right or the making of a Restricted Stock Grant
    to any eligible employee solely because such employee may
    previously have been granted an Option or Right or may
    previously have received a Restricted Stock Grant.


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    6.  Rights with Respect to Shares of Stock.  A Participant
who has exercised an Option or Right (payable all or in part in
Stock) or to whom a Restricted Stock Grant has been made shall
have, after a certificate or certificates for the number of
shares of Stock granted have been issued in his name, absolute
ownership of such shares including the right to vote the same and
receive dividends thereon; provided, however that rights with
respect to shares issued in connection with a Restricted Stock
Grant shall be subject to the terms, conditions and restrictions
described in the Plan and in the instrument evidencing the making
of the Restricted Stock Grant to such Participant.

    7.  Employment.  In the absence of any specific agreement to
the contrary, no grant of an Option or Right or making of a
Restricted Stock Grant to a Participant under the Plan shall
affect any right of the Company or its Subsidiaries to terminate
the Participant's employment at any time.


II. OPTIONS

    1.  General.  Each employee chosen to receive an Option(s)
may be granted an Incentive Stock Option, a Non-Qualified Stock
Option or both, subject to the following terms, conditions and
restrictions.  Each Option granted under the Plan shall be
evidenced by an Option Agreement which shall contain such terms
and conditions consistent with the Plan as the Committee shall
determine; provided, however, that each Option shall satisfy the
following requirements and each Incentive Stock Option shall
satisfy the requirement of Part II, Section 2:

            (a)  Option Price.  The option price for each share
    purchased under any Option shall be specified in the Option
    Agreement and, subject to the provisions of Part V, Section
    3, shall not be less than Fair Market Value on the date the
    Option is granted; provided, however, that in no event shall
    the option price per share be less than the par value
    thereof.

            (b)  Option Period.


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                   (i)  General.  The period in which an Option may be
        exercised shall not exceed ten years from the date the
        Option is granted; provided, however, that the Option
        may be sooner terminated in accordance with the
        provisions of this paragraph (b).  Subject to the
        foregoing, the Committee may provide that any Option may
        be exercised, in whole or in part, at such time or times
        as the Committee may in its discretion determine.

                   (ii)  Termination of Employment.  If the Participant
        ceases to be an employee of the Company or a Subsidiary
        for any reason other than Retirement, Disability, or
        death, all of such Participant's outstanding Options
        shall immediately terminate.

                   (iii) Retirement or Disability.  If a Participant's
        employment is terminated by Retirement or Disability,
        the term of any then outstanding Option held by the
        Participant shall extend for a period specified by the
        Committee in the agreement pertaining to such Option,
        and the number of shares in respect of which the Option
        may be exercised after the Participant's Retirement or
        Disability shall be determined by the agreement
        pertaining to such Option; provided, however, that such
        agreement shall provide that the Committee may cancel
        the Participant's Option during such period if the
        Participant's Retirement was without the consent of the
        Company, or if the Participant engages during such
        period of Retirement or Disability in employment or
        activities contrary, in the opinion of the Committee, to
        the best interests of the Company.

    2.  Incentive Stock Options.   Each Option Agreement
evidencing an Incentive Stock Option shall satisfy the
requirement that to the extent that the aggregate Fair Market
Value of Stock with respect to which Incentive Stock Options are
exercisable for the first time by any Participant during any
calendar year (under the Plan and all stock option plans of the
Company and its Subsidiaries) exceeds $100,000, such Options
shall be treated as Non-Qualified Stock Options.  For purposes of


                                7
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this Section 2, aggregate Fair Market Value of Stock shall be
determined as of the time the Option with respect to such Stock
is granted.

    3.  Death.  If a Participant's employment is terminated by
death at a time when he or she has not fully exercised any then
outstanding Option, or if a Participant dies after Retirement or
Disability without having fully exercised any then outstanding
Option, the beneficiary designated by the Participant (or, in the
absence of such designation, the executors or administrators or
legatees or distributees of the Participant's estate) shall have
the right to exercise such Option in whole or in part during such
period following the Participant's death as is set forth in the
Option Agreement.  The Company shall prescribe the procedures and
requirements for beneficiary designations not inconsistent with
this provision and has the right to review and approve such
designations.

    4.  Nonassignability.  Each Option shall not be transferable
(other than, upon the death of the Participant, by beneficiary
designation, by last will and testament or by the laws of descent
and distribution) and shall be exercisable during the
Participant's lifetime only by the Participant.

    5.  Payment for Stock.  Full payment in cash or, if the
Committee approves, in Stock, for shares purchased shall be made
at the time of exercising the Option in whole or in part.  No
certificates for shares so purchased shall be issued until full
payment therefor has been made, and a Participant shall have none
of the rights of a shareowner until such certificates are issued
to him or her.  In addition, if the Committee approves, the
Option Agreement may provide that the Participant may elect, on
terms set forth in the Option Agreement, to have the Company
withhold from the shares of Stock payable to the Participant upon
exercise of an Option the number of shares of Stock having a fair
market value equal to the amount of any required withholding
taxes.

    6.  Use of Proceeds.  The proceeds received by the Company
from the sale of Stock pursuant to the exercise of an Option may
be used for general corporate purposes.

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    7.  Restrictions Upon Exercise of Option.  The exercise of
each Option shall be subject to the condition that if at any time
the Company shall determine in its discretion that the
satisfaction of withholding tax or other withholding liabilities
under any state or Federal law, or that the listing, registration
or qualification of any shares otherwise deliverable upon such
exercise upon any securities exchange or under any state or
Federal law, or that the consent or approval of any regulatory
body, is necessary or desirable as a condition of, or in
connection with, such exercise or the delivery or purchase of
shares thereunder, then in any such event such exercise shall not
be effective unless such withholding, listing, registration,
qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company.

    8.  Repricing Prohibited.  There shall be no grant of an
Option(s) to a Participant in exchange for a Participant's
agreement to cancellation of a higher-priced Option(s) that was
previously granted to such Participant.

III.    STOCK APPRECIATION RIGHTS

    1.  General.  Each employee chosen to receive a Stock
Appreciation Right(s) may be granted a Tandem Stock Appreciation
Right, a Non-Tandem Stock Appreciation Right or both, subject to
the following terms, conditions and restrictions and subject to
such additional terms, conditions and restrictions as may be
determined by the Committee from time to time hereafter; provided
however, that no Right shall be subject to additional terms,
conditions or restrictions which are more favorable to a
Participant than the terms, conditions and restrictions set forth
in the Plan.

    2.  Tandem Stock Appreciation Rights.  Each Tandem Stock
Appreciation Right may be granted only with respect to a share(s)
of Stock for which an Option(s) has been granted under the Plan,
and may be awarded concurrently with the grant of such Option or
at any time thereafter while the Option is outstanding.  If the
Committee so determines, a Tandem Stock Appreciation Right may
also be granted with respect to a share(s) of Stock for which an
option has been granted and is outstanding under any other plan

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of the Company. A Stock Appreciation Right shall be evidenced by
a Stock Appreciation Right Agreement which shall contain such
terms and conditions (which may include limitations as to the
time when such Stock Appreciation Right becomes exercisable and
when it ceases to be exercisable that are more restrictive than
the limitations applicable to the Related Option(s)) not
inconsistent with the Plan as the Committee shall determine;
provided, however, that each Tandem Stock Appreciation Right
shall satisfy the following requirements:

            (a)    Termination of a Right.  If the Related Option is
    exercised, in whole or in part, then the Right with respect
    to the shares of Stock purchased pursuant to such exercise
    (but not with respect to any unpurchased shares of Stock)
    shall terminate as of the date of the exercise.  If an
    unexercised Right is otherwise exercisable on the date that
    the Related Option expires, and if the Fair Market Value of
    the shares of Stock with respect to which such Right was
    granted, determined as of the date of such expiration,
    exceeds the Option price of such shares, then,
    notwithstanding Section 2(b), the Right shall automatically
    be deemed to have been exercised as of the date of such
    expiration; otherwise, on the date that the Related Option
    expires, any outstanding Right related thereto shall be
    terminated as of the date of such expiration.

            (b)    Exercise.  Tandem Stock Appreciation Rights may be
    exercised (i) only at such time or times as, and to the
    extent that, the Related Options shall be exercisable, (ii)
    only upon surrender of the Related Options with respect to
    the shares for which the Rights are then being exercised,
    and (iii) subject to the terms and conditions set forth in
    the Stock Appreciation Right Agreement; provided that no
    Tandem Stock Appreciation Right may be exercised prior to
    the expiration of six (6) months from the date of the grant
    and can only be exercised during the ten-day period
    beginning on the third business day following the release of
    the Company's quarterly or annual statement of sales and
    earnings.



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    3.  Non-Tandem Stock Appreciation Rights.  Each Non-Tandem
Stock Appreciation Right may be granted with respect to a
share(s) of Stock or, if the Committee so determines, in exchange
for an outstanding Option or an outstanding stock option granted
under any other plan of the Company.  A Non-Tandem Stock
Appreciation Right shall be evidenced by a Stock Appreciation
Right Agreement which shall contain such terms and conditions not
inconsistent with the Plan as the Committee shall determine;
provided, however, that each Non-Tandem Stock Appreciation Right
shall satisfy the following requirements:

            (a)    Termination of a Right.  A Non-Tandem Stock
    Appreciation Right shall terminate as of the earlier of (i)
    the date of exercise of such Right, to the extent that it is
    exercised; or (ii) the termination date specified in the
    Stock Appreciation Right Agreement.  If an unexercised Right
    is otherwise exercisable on the date that it expires, and if
    the Fair Market Value of the shares of Stock with respect to
    which such Right was granted, determined as of the date of
    such expiration, exceeds the exercise price of such Right
    (set forth in the Stock Appreciation Right Agreement), then
    the Right shall automatically be deemed to have been
    exercised as of the date of such expiration.

            (b)    Exercise.  Non-Tandem Stock Appreciation Rights
    may be exercised in accordance with the terms and conditions
    set forth in the Stock Appreciation Right Agreement;
    provided that (i) no Non-Tandem Stock Appreciation Right
    that is payable all or in part in Stock may be exercised
    prior to the expiration of six (6) months from the date of
    the grant; (ii) the exercise price of any Non-Tandem Stock
    Appreciation Right granted in exchange for an outstanding
    Option or for an outstanding stock option granted under any
    other plan of the Company shall be the same exercise price
    as that outstanding Option or option and (iii) the exercise
    price of any Non-Tandem Stock Appreciation Right not granted
    in exchange for an outstanding Option or for an outstanding
    stock option granted under any other plan of the Company
    shall be the Fair Market Value of the Stock on the date of
    the grant of the Right(s).


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    4.  Payment.

            (a)    Amount.  Upon the exercise of a Stock Appreciation
    Right, a Participant shall be entitled to receive the excess
    of the aggregate Fair Market Value of the shares of Stock
    with respect to which the Right is being exercised
    (determined as of the date of such exercise) over (i) the
    aggregate option price of such shares in the case of Tandem
    Stock Appreciation Rights; or (ii) the aggregate exercise
    price (set forth in the Stock Appreciation Right Agreement)
    in the case of Non-Tandem Stock Appreciation Rights.

            (b)    Form.  Any amount which becomes payable upon
    exercise of a Stock Appreciation Right under the Plan shall
    be paid entirely in cash, entirely in Stock or partly in
    cash and partly in Stock in accordance with such terms and
    conditions as are provided in the applicable Stock
    Appreciation Right Agreement; provided, however, that
    notwithstanding any provision in any Stock Appreciation
    RightAgreement, the Committee may determine in its sole and
    absolute judgment that any amount which may become payable
    upon exercise of a Right shall be paid entirely in cash.

    5.  Termination of Employment.

            (a)   General.  If a Participant ceases to be an
    employee of the Company or of a Subsidiary for any reason
    other than Retirement, Disability or death, all of such
    Participant's outstanding Rights shall immediately
    terminate.

            (b)  Retirement or Disability.  If a Participant's
    employment  is terminated by Retirement or Disability, the
    Participant's right to exercise all or any portion of any
    Right after the date of such Retirement or Disability shall
    be determined by the provisions of the Stock Appreciation
    Right Agreement; provided, however, that such Agreement
    shall provide that the Committee may terminate the
    Participant's Right prior to the date on which the Right is
    exercised if the Participant's Retirement was without the
    consent of the Company, or if the Participant engages during

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    such period of Retirement or Disability in employment or
    activities contrary, in the opinion of the Committee, to the
    best interests of the Company.

            (c) Death.  If a Participant's employment is terminated
    by death at a time when the Participant has not fully
    exercised any then outstanding Rights, or if a Participant
    dies after Retirement or Disability without having fully
    exercised any then outstanding Rights, the beneficiary
    designated by the Participant (or, in the absence of such
    designation, the executors or administrators or legatees or
    distributees of the Participant's estate) shall have the
    right to exercise such Right in whole or in part during such
    period following the Participant's death as set forth in the
    Stock Appreciation Right Agreement.  The Company shall
    prescribe the procedures and requirements for beneficiary
    designations not inconsistent with this provision and has
    the right to review and approve such designations.

    6.  Expiration.  If the period in which a Stock Appreciation
Right is exercisable expires and the Right has not been
exercised, then such Right shall terminate as of the last day on
which it was exercisable.

    7.  Nonassignability.  Each Right shall not be transferable
(other than, upon the death of the Participant, by beneficiary
designation, by last will and testament or by the laws of descent
and distribution) and shall be exercisable during the
Participant's lifetime only by the Participant.

    8.  Restrictions Upon Exercise of Rights.  The exercise of
each Right shall be subject to the condition that if at any time
the Company shall determine in its discretion that the
satisfaction of withholding tax or other withholding liabilities
under any state or Federal law, or that the consent or approval
of any regulatory body, is necessary or desirable as a condition
of, or in connection with, such exercise, then, in any such
event, such exercise shall not be effective unless such
withholding, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company.


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    IV. RESTRICTED STOCK GRANTS

    1.  General.   A Restricted Stock Grant made under the Plan
shall contain the following terms, conditions and restrictions
and such additional terms, conditions and restrictions as may be
determined by the Committee from time to time hereafter;
provided, however, that no Restricted Stock Grant shall be
subject to additional terms, conditions or restrictions which are
more favorable to a Participant than the terms, conditions and
restrictions set forth in the Plan.

    2.  Restrictions.  Subject to the provisions of Part IV,
Section 3, shares of Stock granted to a Participant pursuant to a
Restricted Stock Grant:

            (i)  shall not be sold, assigned, conveyed, transferred,
    pledged, hypothecated, or otherwise disposed of, and

            (ii)  shall be returned to the Company forthwith, and
    all the rights of the Participant to such shares shall
    immediately terminate without any payment or consideration
    by the Company, if the Participant's continuous employment
    with the Company or any Subsidiary shall terminate for any
    reason, except as provided in Part IV, Section 4.  Such
    return of such Stock shall be accomplished by the
    Participant's delivering or causing to be delivered to the
    Secretary or any Assistant Secretary of the Company the
    certificate(s) for such shares of Stock, accompanied by such
    endorsement(s) and/or instrument(s) of transfer as may be
    required by the Secretary or any Assistant Secretary of the
    Company.

    3.  Lapse of Restrictions.

            (a)    General.  Subject to the provisions of Part IV,
    Sections 3(b) and 4 and of Part V, Section 4, the
    restrictions set forth in Part IV, Section 2 shall lapse on
    such date or dates on or after the first anniversary and on
    or before the tenth anniversary of the date as of which the
    Restricted Stock Grant is made, as the Committee shall
    determine at the time of the Restricted Stock Grant.

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<PAGE>
            (b) Performance Restricted Stock.  If the Committee has
    designated the Stock covered by a Restricted Stock Grant as
    Performance Restricted Stock, then the lapse of restrictions
    set forth in Part IV, Section 2 that would otherwise occur
    on a specified date shall also be subject to the following:

                   (i) if the Company meets or exceeds the Target Long-
        Term EPS Growth Objective (after adjustment for Relative
        Performance Rank) for the most recently ended Long-Term
        Performance Period, then the restrictions that would
        otherwise lapse on such date shall lapse as to 100% of
        the shares of such Performance Restricted Stock; and

                   (ii) if the Company meets or exceeds the Threshold
        Long-Term EPS Growth Objective (after adjustment for
        Relative Performance Rank) but does not meet or exceed
        the Target Long-Term Growth Objective (after adjustment
        for Relative Performance Rank) for the most recently
        ended Long-Term Performance Period, then the
        restrictions on the shares of Performance Restricted
        Stock that would otherwise lapse on such date shall
        lapse as to (i) 50% of such shares plus (ii) 50% of such
        shares multiplied by a fraction (not less than zero and
        not greater than one), the numerator of which is the
        Company's actual Long-Term EPS Growth for the most
        recently ended Long-Term Performance Period less the
        Threshold Long-Term EPS Growth Objective for such period
        and the denominator of which is the Target Long-Term EPS
        Growth Objective for such period less the Threshold
        Long-Term EPS Growth Objective for such period, and the
        remaining shares of Performance Restricted Stock shall
        immediately forfeit to the Company; and

                   (iii) if the Company does not meet or exceed the
        Threshold Long-Term EPS Objective (after adjustment for
        Relative Performance Rank) for the most recently ended
        Long-Term Performance Period, then 100% of the shares of
        such Performance Restricted Stock shall immediately
        forfeit to the Company.



                                15
<PAGE>
        For purposes of this Section 3(b), the terms Long-Term
    Performance Period, Relative Performance Rank, Target Long-
    Term EPS Objective and Threshold Long-Term EPS Objective
    shall have the same meanings as in the Company's Executive
    Incentive Compensation Plan for Corporate Executives.  No
    restrictions shall lapse on any Performance Restricted Stock
    until the Committee certifies, in writing, that the
    requirements set forth in this Section 3(b) have been
    satisfied.

            (c)    Forfeiture.  All shares of Stock forfeited under
    this Section 3 shall be returned to the Company forthwith,
    and all the rights of the Participant to such shares shall
    immediately terminate without any payment or consideration
    by the Company.

    4.  Termination of Employment By Reason of Death or
Disability.  If a Participant who has been in the continuous
employment of the Company or of a Subsidiary since the date as of
which a Restricted Stock Grant was made to such Participant
shall, while in such employment, die or become Disabled and such
Participant's death or Disability shall occur more than one year
after the date as of which the Restricted Stock Grant was made to
such Participant, then the restrictions set forth in Part IV,
Section 2 shall lapse as to all shares of Restricted Stock
granted to such Participant pursuant to such Restricted Stock
Grant on the date of such event.  A Participant may file a
written designation of beneficiary to receive, in the event of
the Participant's death, any shares for which restrictions lapse
on the date of death.  The Company shall prescribe procedures and
requirements for beneficiary designations not inconsistent with
this provision and has the right to review and approve such
designations.

    5.  Agreement by Employee Regarding Withholding Taxes.  Each
Participant shall agree that, subject to the provisions of Part
IV, Section 6,

            (i)  no later than the date as of which the restrictions
    mentioned in Part IV, Section 2 and in the instrument
    evidencing the making of the Restricted Stock Grant shall

                                16
<PAGE>
    lapse, such Participant will pay to the Company in cash, or,
    if the Committee approves, in Stock, or make other
    arrangements satisfactory to the Committee regarding payment
    of, any Federal, state or local taxes of any kind required
    by law to be withheld with respect to the shares of Stock
    subject to such Restricted Stock Grant, and

            (ii)  the Company and its Subsidiaries shall, to the
    extent permitted by law, have the right to deduct from any
    payment of any kind otherwise due to the Participant any
    Federal, state or local taxes of any kind required by law to
    be withheld with respect to the shares of Stock subject to
    such Restricted Stock Grant.

    6.  Election to Recognize Gross Income in the Year of Grant.
If any Participant properly elects, within thirty (30) days of
the date of grant, to include in gross income for Federal income
tax purposes an amount equal to the fair market value of the
shares of Stock granted on the date of grant, such Participant
shall pay to the Company, or make arrangements satisfactory to
the Committee to pay to the Company in the year of such grant,
any Federal, state or local taxes required to be withheld with
respect to such shares.  If such Participant shall fail to make
such payments, the Company and its Subsidiaries shall, to the
extent permitted by law, have the right to deduct from any
payment of any kind otherwise due to the employee any Federal,
state or local taxes of any kind required by law to be withheld
with respect to such shares.

    7.  Restrictive Legend; Certificates May be Held in Custody.
Each certificate evidencing shares of Stock granted pursuant to a
Restricted Stock Grant shall, (i) if issued to any person other
than the Company for safekeeping while the restrictions apply,
bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such Restricted Stock Grant and (ii)
if issued to the Company for safekeeping while the restrictions
apply, be noted as restricted on the records of the transfer
agent.  Any attempt to dispose of such shares of Stock in
contravention of such terms, conditions and restrictions shall be
ineffective.  The Committee may adopt rules which provide that
the certificates evidencing such shares may be held in custody by

                                17
<PAGE>
a bank or other institution, or that the Company may itself hold
such shares in custody, until the restrictions thereon shall have
lapsed.

    8.  Restrictions upon Making of Restricted Stock Grants.
The listing upon the New York Stock Exchange or the registration
or qualification under any Federal or state law of any shares of
Stock to be granted pursuant to Restricted Stock Grants (whether
to permit the making of Restricted Stock Grants or the resale or
other disposition of any such shares of Stock by or on behalf of
the employees receiving such shares) may be necessary or
desirable as a condition of or in connection with such Restricted
Stock Grants and if, in any such event, the Board in its sole
discretion so determines, delivery of the certificates for such
shares of Stock shall not be made until such listing,
registration or qualification shall have been completed.  In such
connection, the Company agrees that it will use its best effort
to effect any such listing, registration or qualification;
provided, however, the Company shall not be required to use its
best efforts to effect such registration under the Securities Act
of 1933 other than on Form S-8, as presently in effect, or such
other forms as may be in effect from time to time calling for
information comparable to that presently required to be furnished
under Form S-8.

    9.  Restrictions upon Resale of Stock.  If the shares of
Stock that have been granted to a Participant pursuant to the
terms of the Plan are not registered under the Securities Act of
1933, as amended, pursuant to an effective registration
statement, such Participant, if the Committee shall deem it
advisable, may be required to represent and agree in writing that
(i) any shares of Stock acquired by such employee pursuant to the
Plan will not be sold except pursuant to an effective
registration statement under the Securities Act of 1933, as
amended, or pursuant to an exemption from registration under said
Act and (ii) such Participant is acquiring such shares of Stock
for the Participant's own account and not with a view to the
distribution thereof.




                                18
<PAGE>
V.  MISCELLANEOUS

    1.  Effective Date.  The Plan became effective on March 18,
1994, subject to approval by shareowners before March 18, 1995.

    2.  Duration of Plan.  Unless sooner terminated, the Plan
shall remain in effect until March 18, 2004.  Termination of the
Plan shall not affect any Options or Rights previously granted,
which Options or Rights shall remain in effect until exercised,
surrendered, or cancelled, or until they have expired, all in
accordance with their terms.  Termination of the Plan shall not
affect any Restricted Stock Grants previously made, or Stock
previously granted pursuant to a Restricted Stock Grant; the
terms, conditions and restrictions applicable to shares issued
pursuant to a Restricted Stock Grant shall remain in effect until
such terms, conditions and restrictions shall have lapsed all in
accordance with their terms.

    3.  Changes in Capital Structure.  In the event that there
is any change in the capital structure of the Company through
merger, consolidation, reorganization, recapitalization, spin-off
or otherwise, or if there shall be any dividend on the Company's
Stock, payable in such Stock, or if there shall be a Stock split
or a combination of shares, then:

            (i)    the number of shares reserved for Options (both in
    the aggregate and with respect to each Participant) and the
    number of shares subject to outstanding Options and the
    price per share of each such Option;

            (ii) the number of shares with respect to which Rights
    may be exercised (both in the aggregate and with respect to
    each Participant); and


            (iii)  the number of shares of Stock reserved for
    Restricted Stock Grants under the Plan shall be proportionately adjusted
    by the Board as it deems equitable, in its absolute discretion, to prevent
    dilution or enlargement of the rights of a Participant and any shares issued
    pursuant to such change in capital structure shall be subject to

                                19
<PAGE>
    the same terms, conditions and restrictions as the shares of
    Stock with respect to which newly issued shares are issued.  The
    issuance of Stock for consideration and the issuance of Stock
    rights shall not be considered a change in the Company's capital
    structure.  No adjustment provided for in this Section 3 shall
    require the issuance of any fractional share.

    4.  Change in Control.  If while unexercised Options,
Rights, or Restricted Stock Grants remain outstanding under the
Plan:

            (i)  any "person," as such term is used in Sections
    13(d) and 14(d) of the Securities Exchange Act of 1934, as
    amended (the "Exchange Act") (other than the Company, any
    trustee or other fiduciary holding securities under an
    employee benefit plan of the Company, or any company owned,
    directly or indirectly, by the shareowners of the Company in
    substantially the same proportions as their ownership of
    stock of the Company), is or becomes the "beneficial owner"
    (as defined in Rule 13d-3 under the Exchange Act), directly
    or indirectly, of securities of the Company representing 50%
    or more of the combined voting power of the Company's then
    outstanding securities;

            (ii)  during any period of two consecutive years,
    individuals who at the beginning of such period constitute
    the Board, and any new director (other than a director
    designated by a person who has entered into an agreement
    with the Company to effect a transaction described in clause
    (i), (iii) or (iv) of this Section) whose election by the
    Board or nomination for election by the Company's
    shareowners was approved by a vote of at least two-thirds
    (2/3) of the directors then still in office who either were
    directors at the beginning of the period or whose election
    or nomination for election was previously so approved, cease
    for any reason to constitute at least a majority thereof;

            (iii) the shareowners of the Company approve a merger or
    consolidation of the Company with any other Company, other
    than (1) a merger or consolidation which would result in the
    voting securities of the Company outstanding immediately
    prior thereto continuing to represent (either by remaining
                                20
<PAGE>
    outstanding or by being converted into voting securities of
    the surviving entity) more than 50% of the combined voting
    power of the voting securities of the Company or such
    surviving entity outstanding immediately after such merger
    or consolidation or (2) a merger or consolidation effected
    to implement a recapitalization of the Company (or similar
    transaction) in which no "person" (as hereinabove defined)
    acquires more than 50% of the combined voting power of the
    Company's then outstanding securities; or

            (iv) the shareowners of the Company approve a plan of
    complete liquidation of the Company or an agreement for the
    sale or disposition by the Company of all or substantially
    all of the Company's assets,

then (a) from and after the date of the first of the foregoing
events to occur, all Options and Rights held by active employees
on such date shall be exercisable in full, whether or not
otherwise exercisable; and (b) on the date of the first of the
foregoing events to occur, the restrictions set forth in Part IV,
Section 2 on all outstanding Restricted Stock Grants, including
Performance Restricted Stock Grants, shall lapse.

    5.  Amendment or Termination.  The Board may, by resolution,
amend or terminate the Plan at any time; provided, however, that

        (i) shareowner approval shall be required for any changes to
    the Plan which would require shareowner approval under the
    Delaware General Corporation Law, Rule 16b-3 of the
    Securities Exchange Act of 1934, as amended, or Section
    162(m) of the Code; and

        (ii) the Board may not, without the written consent of the
    Participant, alter, impair or adversely affect any right of
    such Participant with respect to any Option or Right
    previously granted or Restricted Stock Grant previously made
    to such Participant under the Plan except as authorized
    herein.

Notwithstanding the foregoing, the Board may, by resolution,
amend the Plan in any way that it deems necessary or appropriate
in order to make income with respect to the Plan deductible for
                                21
<PAGE>
Federal income tax purposes under Section 162(m) of the Code
without regard to the foregoing provisos (i) and (ii), and any
such amendment shall be effective as of such date as is necessary
to make such income under the Plan so deductible.

    6.  Unfunded Plan.  The Plan shall be unfunded.  Neither the
Company nor the Committee shall be required to segregate any
assets that may at any time be represented by Options or Rights
under the Plan.  Neither the Company nor the Committee shall be
deemed to be a trustee of any amounts to be paid under the Plan.
Any liability of the Company to any Participant with respect to a
right shall be based solely upon any contractual obligations
created by the Plan or a Stock Appreciation Right Agreement or
Option Agreement; no such obligation shall be deemed to be
secured by any pledge or any encumbrance on any property of the
Company.

VI. CANCELLATION AND RESCISSION

    1.  Competition; Confidential Information; Termination for
Cause

            (a)    Unless an Option Agreement or a Stock Appreciation
    Right Agreement (any such agreement being referred to herein
    as an "Agreement") specifies otherwise, the Committee may

        (1)    cancel at any time any unexercised Option or Right; or

        (2)    rescind any exercise of an Option or Right;

    if the Participant is not in compliance with all other
    applicable provisions of the Agreement or the Plan or if,
    prior to any such exercise or within six months after such
    exercise, the Participant

                (i)  engages in a Competing Business, as such term is
        defined in the Agreement; or

                (ii) solicits for employment, hires or offers employment
        to, or discloses information to or otherwise aids or
        assists any other person or entity other than the
                                22
<PAGE>
        Company in soliciting for employment, hiring or offering
        employment to, any employee of the Company; or

                (iii) takes any action which is intended to harm the
        Company or its reputation, which the Company reasonably
        concludes could harm the Company or its reputation or
        which the Company reasonably concludes could lead to
        unwanted or unfavorable publicity to the Company;

                (iv) discloses to anyone outside the Company, or uses in
        other than the Company's business, any "confidential
        information", as such term is defined in the Agreement;
        or

                (v) is terminated by the Company for "cause".

            (b)    Upon exercise of an Option or Right, the
    Participant shall certify on a form acceptable to the
    Committee that the Participant is in compliance with the
    terms and conditions of the Agreement and the Plan.

            (c)    The Company shall immediately notify the
    Participant in writing of any cancellation of any
    unexercised Option or Right.  Following issuance of such
    notice, the Participant shall have no further rights with
    respect to such Option or Right.

            (d)    The Company shall notify the Participant in
    writing of any rescission of an exercise of an Option or
    Right within one year after the activity referred to in Part
    VI, Section 1(a).  Within ten days after receiving such a
    notice from the Company, the Participant shall either (i)
    pay to the Company the excess of the fair market value of
    the Stock on the date of exercise of an Option over the
    exercise price for the Option or the fair market value of
    the Stock and/or cash distributed to the Participant as a
    result of the exercise of a Right or (ii) return the Stock
    received upon the exercise of an Option (in which case the
    Company will return the exercise price to the Participant)
    or return the Stock and/or cash distributed upon the
    exercise of a Right.


                                23
<PAGE>
            (e)  The term "cause" shall mean (i) an intentional act
    of fraud, embezzlement, theft or any other material
    violation of law in connection with the Participant's duties
    or in the course of the Participant's employment with the
    Company; or (ii) intentional damage to assets of the
    Company; or (iii) intentional disclosure of confidential
    information of the Company contrary to the policy of the
    Company; or (iv) breach of the Participant's obligations the
    Company; or (v) intentional engagement in any competitive
    activity which would constitute a breach of the Partici-
    pant's duty of loyalty or of the Participant's obligations
    under any written contract of employment; or (vi)
    intentional breach of any policy of the Company; or (vii)
    the willful and continued failure by the Participant to
    substantially perform the Participant's duties with the
    Company (other than any such failure resulting from the
    Participant's incapacity due to physical or mental illness);
    or (viii) the willful engaging by the Participant in conduct
    which is demonstrably and materially injurious to the
    Company, monetarily or otherwise.

        2.  Agreement by Participant Regarding Deduction.  The
    Participant shall agree and consent to a deduction from any
    amounts the Company owes to the Participant from time to
    time (including amounts owed as wages or other compensation,
    fringe benefits, or vacation pay, as well as any other
    amounts owed to the Participant by the Company) to the
    extent of the amounts the Participant owes the Company under
    this Part VI.  Whether or not the Company elects to make any
    set-off in whole or in part, if the Company does not recover
    by means of set-off the full amount owned by the
    Participant, calculated as set forth in this Part VI, then
    the Participant agrees to pay immediately the unpaid balance
    to the Company.








                                24