ex10qq.htm


    Exhibit
10-qq

    


    


    BELLSOUTH
CORPORATION

    


    STOCK AND
INCENTIVE COMPENSATION PLAN

    


    (As
Amended June 28, 2004)

    


    


    1.     Purpose.

    


    The
purpose of the Plan is to strengthen BellSouth Corporation, a Georgia
corporation (the "Company"), by providing an incentive to its and its
Subsidiaries' (as defined herein) employees, officers, consultants and
directors, thereby encouraging them to devote their abilities and industry to
the success of the Company's business enterprise.  It is intended that
this purpose be achieved by extending to employees (including future employees
who have received a formal written offer of employment), officers, consultants
and directors of the Company and its Subsidiaries an added incentive for high
levels of performance and unusual efforts through the grant of Restricted Stock,
Restricted Stock Units, Options, Stock Appreciation Rights, Dividend Equivalent
Rights, Performance Awards, Annual Incentive Awards and Share Awards (as each
term is herein defined).

    


    2.     Definitions.

    


    For purposes of the
Plan:

    


      2.1    "Administrator"
means the Compensation Committee, the Director Committee or the Company
Administrator, as applicable.

    


      2.2    "Affiliate"
means any entity directly or indirectly controlled by, controlling or under
common control with the Company.

    


      2.3    "Agreement"
means a written or electronic agreement between the Company and a Participant
evidencing the grant of an Option or Award and setting forth the terms and
conditions thereof.

    


      2.4    "Annual
Bonus Pool" has the meaning set forth in Section 10.2.

    


      2.5    "Annual
Incentive Award" has the meaning set forth in Section 10.2.

    


      2.6    "Award"
means a grant of Restricted Stock, a Restricted Stock Unit, a Stock Appreciation
Right, a Performance Award, a Dividend Equivalent Right, a Share Award, an
Annual Incentive Award or any or all of them.

    


      2.7    "Beneficiary"
means an individual designated as a Beneficiary pursuant to Section
21.4.

    


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

    


      2.9    "Cause"
means:  (a) intentional failure to perform reasonably assigned duties,
(b) dishonesty or willful misconduct in the performance of duties, (c)
involvement in a transaction in connection with the performance of duties to the
Company or any of its Subsidiaries which transaction is adverse to the interests
of the Company or any of its Subsidiaries and which is engaged in for personal
profit or (d) willful violation of any law, rule or regulation in connection
with the performance of duties (other than traffic violations or similar
offenses).

    


      2.10   "Change
in Capitalization" means any increase or reduction in the number of Shares, any
change (including, but not limited to, in the case of a spin-off, dividend or
other distribution in respect of Shares, a change in value) in the Shares or any
exchange of Shares for a different number or kind of Shares or other securities
of the Company or another corporation, by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, spin-off, split-up,
issuance of warrants, rights or debentures, stock dividend, stock split or
reverse stock split, cash dividend, property dividend, combination or exchange
of Shares, repurchase of Shares, change in corporate structure or
otherwise.

    


      2.11   "Change
in Control" means the occurrence of any of the following:

    


    (a)  An acquisition (other
than directly from the Company) of any voting securities of the Company (the
"Voting Securities") by any "Person" (as the term "person" is used for purposes
of Section 13(d) or 14(d) of the Exchange Act), immediately after which such
Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of more than twenty percent (20%) of (i) the
then-outstanding Shares or (ii) the combined voting power of the Company's
then-outstanding Voting Securities; provided, however, that in determining
whether a Change in Control has occurred pursuant to this paragraph (a), the
acquisition of Shares or Voting Securities in a Non-Control Acquisition (as
hereinafter defined) shall not constitute a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a
trust forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person the majority of the voting power, voting equity
securities or equity interest of which is owned, directly or indirectly, by the
Company (for purposes of this definition, a "Related Entity"), (ii) the Company
or any Related Entity, or (iii) any Person in connection with a Non-Control
Transaction (as hereinafter defined);

    


    (b)  The individuals who,
as of the effective date of the Plan, are members of the Board (the "Incumbent
Board"), cease for any reason to constitute at least a majority of the members
of the Board or, following a Merger (as  hereinafter defined), the
board of directors of (i) the corporation resulting from such Merger (the
"Surviving Corporation"), if fifty percent (50%) or more of the combined voting
power of the then-outstanding voting securities of the Surviving Corporation is
not Beneficially Owned, directly or indirectly, by another Person (a "Parent
Corporation") or (ii) if there is one or more than one Parent Corporation, the
ultimate Parent Corporation; provided, however, that, if the election, or
nomination for election by the Company's common shareholders, of any new
director was approved by a vote of at least two-thirds of the Incumbent Board,
such new director shall, for purposes of the Plan, be considered a member of the
Incumbent Board; and provided, further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of an actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board (a "Proxy Contest"),
including by reason of any agreement intended to avoid or settle any Proxy
Contest; or

    


    (c)  The consummation
of:

    


    (i)  A merger,
consolidation or reorganization (x) with or into the Company or (y) in which
securities of the Company are issued (a "Merger"), unless such Merger is a
"Non-Control Transaction."  A "Non-Control Transaction" shall mean a
Merger in which:

    


    (A)  the shareholders of
the Company immediately before such Merger own directly or indirectly
immediately following such Merger at least sixty percent (60%) of the combined
voting power of the outstanding voting securities of (1) the Surviving
Corporation, if there is no Parent Corporation or (2) if there is one or more
than one Parent Corporation, the ultimate Parent Corporation;

    


    (B)  the individuals who
were members of the Incumbent Board immediately prior to the execution of the
agreement providing for such Merger constitute at least a majority of the
members of the board of directors of (1) the Surviving Corporation, if there is
no Parent Corporation, or (2) if there is one or more than one Parent
Corporation, the ultimate Parent Corporation; and

    


    (C)  no Person other than
(1) the Company or another corporation that is a party to the agreement of
Merger, (2) any Related Entity, or (3) any employee benefit plan (or any trust
forming a part thereof) that, immediately prior to the Merger, was maintained by
the Company or any Related Entity, or (4) any Person who, immediately prior to
the Merger had Beneficial Ownership of twenty percent (20%) or more of the then
outstanding Shares or Voting Securities, has Beneficial Ownership, directly or
indirectly, of twenty percent (20%) or more of the combined voting power of the
outstanding voting securities or common stock of (x) the Surviving Corporation,
if there is no Parent Corporation, or (y) if there is one or more than one
Parent Corporation, the ultimate Parent Corporation; provided, however, that any
Person described in clause (4) of this subsection (C) may not, immediately
following the Merger, Beneficially Own more than thirty percent (30%) of the
combined voting power of the outstanding voting securities of the Surviving
Corporation or the Parent Corporation, as applicable, for the Merger to
constitute a Non-Control Transaction;

    


    (ii)  A complete
liquidation or dissolution of the Company; or

    


    (iii)  The sale or other
disposition of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole to any Person (other than (x) a transfer to a
Related Entity or (y) the distribution to the Company's shareholders of the
stock of a Related Entity or any other assets).

    


    Notwithstanding the foregoing, a
Change in Control shall not be deemed to occur solely because any Person (the
"Subject Person") acquired Beneficial Ownership of more than the permitted
amount of the then outstanding Shares or Voting Securities as a result of the
acquisition of Shares or Voting Securities by the Company which, by reducing the
number of Shares or Voting Securities then outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Persons;
provided that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Shares or Voting Securities by the
Company and, after such share acquisition by the Company, the Subject Person
becomes the Beneficial Owner of any additional Shares or Voting Securities and
such Beneficial Ownership increases the percentage of the then outstanding
Shares or Voting Securities Beneficially Owned by the Subject Person, then a
Change in Control shall occur.

    


    If a Participant's employment is
terminated by the Company without Cause prior to the date of a Change in Control
but the Participant reasonably demonstrates that the termination (A) was at the
request of a third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control or (B) otherwise arose in
connection with, or in anticipation of, a Change in Control which has been
threatened or proposed, such termination shall be deemed to have occurred after
a Change in Control for purposes of the Plan provided a Change in Control shall
actually have occurred.

    


      2.12   "Chief
Executive Officer" means the Chief Executive Officer of the
Company.

    


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

    


      2.14   "Company"
means BellSouth Corporation, a Georgia corporation.

    


      2.15   "Company
Administrator" means the Chief Executive Officer, the Company's senior officer
responsible for human resources matters or such other person or persons as are
designated by the Compensation Committee to administer the Plan on behalf of
Participants who are neither Non-Employee Directors nor Covered
Employees.

    


      2.16   "Compensation
Committee" means the Executive Nominating and Compensation Committee of the
Board, or any successor committee of the Board which administers the Plan as
provided in Section 3.

    


      2.17   "Covered
Employee" means, with respect to any grant of an Option or Award, a Participant
who (a) the Compensation Committee deems may be or become a covered employee as
defined in Section 162(m)(3) of the Code for any year that such Option or Award
may result in remuneration to the Participant and for which year such
Participant may receive remuneration over $1 million which would not be
deductible under Section 162(m) of the Code but for the provisions of the Plan
and any other "qualified performance-based compensation" plan (as defined under
Section 162(m) of the Code) of the Company; provided, however, that the
Compensation Committee may determine that a Participant has ceased to be a
Covered Employee prior to settlement of any Option or Award or (b) is designated
as a Covered Employee for purposes of the Plan.

    


      2.18   "Director"
means a member of the Board.

    


      2.19   "Director
Committee" means the Director Nominating and Corporate Governance Committee of
the Board, or any successor committee of the Board which administers the Plan as
provided in Section 3.

    


      2.20   "Disability":

    


    (a)  shall have the meaning
set forth in the Company's principal management long-term disability plan under
which the Participant is covered, if any; or

    


    (b)  if the Participant is
not covered under the Company's principal management long-term disability plan,
shall have the meaning set forth in any other Company-sponsored long-term
disability plan under which the Participant is covered; or

    


    (c)  if Participant is not
covered under any such plan, shall mean disability within the meaning of Section
22(e)(3) of the Code.

    


      2.21   "Division"
means any of the operating units or divisions of the Company designated as a
Division by the Administrator.

    


      2.22   "Dividend
Equivalent Right" means a right to receive cash or Shares based on the value of
dividends that are paid with respect to Shares.

    


      2.23   "Effective
Date" means the date of approval of the Plan by the Company's shareholders`
pursuant to Section 21.5.

    


      2.24   "Eligible
Director" means a Director who is not an employee of the Company or any
Subsidiary.

    


      2.25   "Eligible
Individual" means any of the following individuals who is designated by the
Administrator as eligible to receive Options or Awards subject to the conditions
set forth herein:  (a) any Director, officer or employee of the
Company or a Subsidiary, (b) any individual to whom the Company or a Subsidiary
has extended a formal, written offer of employment, and (c) any consultant or
advisor of the Company or a Subsidiary.

    


      2.26   "Eligible
Officer" means an Officer designated by the Compensation Committee under Section
10.1.

    


      2.27   "Exchange
Act" means the Securities Exchange Act of 1934, as amended.

    


      2.28   "Fair
Market Value" on any date means (a) for purposes of Sections 4.2, 5.7, 6.5, 8.2,
9.1(d) and 21.2, and for purposes of Sections 5.2 and 6.3(b) with respect to
Covered Employees and Directors, the average of the high and low sales prices of
the Shares on such date on the New York Stock Exchange, or if there are no sales
on such day, for the most recent prior day in which a Share was sold on the New
York Stock Exchange, and (b) for all other purposes means a price that is based
on the opening, closing, actual, high, low, or average selling prices of a Share
on the applicable date, the preceding trading day, the next succeeding trading
day, or an average of trading days, as determined by the Compensation Committee
in its discretion.  Such definition(s) of Fair Market Value shall be
specified in each Agreement and may differ depending on whether Fair Market
Value is in reference to the grant, exercise, vesting, settlement, or payout of
an Award.  If, however, the accounting standards used to account for
equity awards granted to Participants are substantially modified subsequent to
the effective date of the Plan, the Compensation Committee shall have the
ability to determine an Award's Fair Market Value based on the relevant facts
and circumstances.

    


      2.29   "Good
Reason" means a reduction in a Participant's annual base salary as in effect
immediately before a Change in Control or the failure to pay abonus award to
which a Participant is otherwise entitled under any of the

    short-term
or long-term incentive plans in which the Participant participates (or any
successor incentive compensation plans) at the time such awards are usually
paid.

    


      2.30   "Incentive
Stock Option" means an Option satisfying the requirements of Section 422 of the
Code and designated by the Administrator as an Incentive Stock
Option.

    


      2.31   "Net
Income" for a fiscal year means the amount reported as "income before cumulative
effect of accounting changes" in the Company's Form 10-K filed with the
Securities and Exchange Commission for that fiscal year, as determined in
accordance with generally accepted accounting principles.

    


      2.32   "Nonemployee
Director" means a Director who is a "nonemployee director" within the meaning of
Rule 16b-3 promulgated under the Exchange Act.

    


      2.33   "Nonqualified
Stock Option" means an Option which is not an Incentive Stock
Option.

    


      2.34   "Operating
Cash Flow" for a fiscal year means the amount reported as "net cash provided by
operating activities" in the Company's Form 10-K filed with the Securities and
Exchange Commission for that fiscal year, as determined in accordance with
generally accepted accounting principles.

    


      2.35   "Option"
means a Nonqualified Stock Option and/or an Incentive Stock Option.

    


      2.36   "Outside
Director" means a Director who is an "outside director" within the meaning of
Section 162(m) of the Code and the regulations promulgated
thereunder.

    


      2.37   "Parent"
means any corporation which is a "parent corporation" (within the meaning of
Section 424(e) of the Code) with respect to the Company.

    


      2.38   "Participant"
means a person to whom an Award or Option has been granted under the
Plan.

    


      2.39   "Performance
Awards" means Performance Shares, Performance Units, Performance-Based
Restricted Stock or any or all of them.

    


      2.40   "Performance-Based
Compensation" means any Option or Award that is intended to constitute
"performance based compensation" within the meaning of Section 162(m)(4)(C) of
the Code and the regulations promulgated thereunder.

    


      2.41   "Performance-Based
Restricted Stock" means Shares issued or transferred to an Eligible Individual
under Section 9.2.

    


      2.42   "Performance
Cycle" means the time period specified by the Administrator at the time
Performance Awards are granted during which the performance of the Company, a
Subsidiary or a Division will be measured.

    


      2.43   "Performance
Objectives" means the objectives set forth in Sections 9.3 and 10.2 for the
purpose of determining the degree of payout and/or vesting of Performance Awards
and Annual Incentive Awards, respectively.

    


      2.44   "Performance
Shares" means Performance Shares granted to an Eligible Individual under Section
9.1.

    


      2.45   "Performance
Units" means Performance Units granted to an Eligible Individual under Section
9.1.

    


      2.46   "Plan"
means the BellSouth Corporation Stock and Incentive Compensation Plan, as
amended from time to time.

    


      2.47   "Prior
Plans" means the Amended and Restated BellSouth Corporation Stock Plan, the
BellSouth Corporation Stock Option Plan, the BellSouth Executive Long Term
Incentive Plan, the BellSouth Corporation Non-Employee Director Stock Option
Plan and the BellSouth Corporation Non-Employee Director Stock
Plan.

    


      2.48   "Restricted
Stock" means Shares issued or transferred to an Eligible Individual pursuant to
Section 8.

    


      2.49   "Restricted
Stock Units" means rights granted to an Eligible Individual under Section 8
representing a number of hypothetical Shares.

    


      2.50   "Share
Award" means an Award of Shares granted pursuant to Section 11.

    


      2.51   "Shares"
means the common stock, par value $1 per share, of the Company and any other
securities into which such Shares are changed or for which such Shares are
exchanged.

    


      2.52    "Stock
Appreciation Right" means a right to receive all or some portion of the
increase, if any, in the value of the Shares as provided in Section 6
hereof.

    


      2.53   "Subsidiary"
means (a) except as provided in subsection (b) below, any corporation which is a
subsidiary corporation within the meaning of Section 424(f) of the Code with
respect to the Company, and (b) in relation to the eligibility to receive
Options or Awards other than Incentive Stock Options and continued employment
for purposes of Options and Awards (unless the Administrator determines
otherwise), any entity, whether or not incorporated, in which the Company
directly or indirectly owns at least ten percent (10%) or more of the
outstanding equity or other ownership interests.

    


      2.54   "Ten-Percent
Shareholder" means an Eligible Individual who, at the time an Incentive Stock
Option is to be granted to him or her, owns (within the meaning of Section
422(b)(6) of the Code) stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company, a Parent or a
Subsidiary.

    


      2.55   "Termination
Date" means the date that is ten (10) years after the Effective Date, unless the
Plan is earlier terminated by the Board pursuant to Section 17
hereof.

    


    3.       Administration.

    


      3.1    Committees;
Procedure.  The Plan shall be administered by the Compensation
Committee with respect to Covered Employees, by the Director Committee with
respect to Eligible Directors and, subject to rules, regulations and guidelines
that may be established by the Compensation Committee, by the Company
Administrator with respect to all other Eligible Individuals.  The
Compensation Committee or the Director Committee may adopt such rules,
regulations and guidelines as it deems are necessary or appropriate for the
administration of the Plan.  Subject to such rules, regulations or
guidelines, the Company Administrator shall have the power to adopt rules,
regulations and guidelines to permit it to administer the Plan with respect to
Eligible Individuals other than Covered Employees.  The Compensation
Committee shall consist of at least two (2) Directors, each of whom shall be a
Nonemployee Director and an Outside Director.  For purposes of the
preceding sentence, if one or more members of the Compensation Committee is not
a Nonemployee Director and an Outside Director but recuses himself or herself or
abstains from voting with respect to a particular action taken by the
Compensation Committee, then the Compensation Committee, with respect to that
action, shall be deemed to consist only of the members of the Compensation
Committee who have not recused themselves or abstained from voting.

    


      3.2    Administrator
Powers.  Subject to the express terms and conditions set forth herein,
the Administrator shall have the power from time to time to:

    


    (a)  determine those
Eligible Individuals to whom Options shall be granted under the Plan and the
number of such Options to be granted and prescribe the terms and conditions
(which need not be identical) of each such Option, including the exercise price
per Share, the vesting schedule and the duration of each Option, and make any
amendment or modification to any Option Agreement consistent with the terms of
the Plan;

    


    (b)  select those Eligible
Individuals to whom Awards shall be granted under the Plan and determine the
number of Shares or amount of cash in respect of which each Award is granted,
the terms and conditions (which need not be identical) of each such Award, and
make any amendment or modification to any Agreement consistent with the terms of
the Plan;

    


    (c)  construe and interpret
the Plan and the Options and Awards granted hereunder and establish, amend and
revoke rules and regulations for the administration of the Plan, including, but
not limited to, correcting any defect or supplying any omission, or reconciling
any inconsistency in the Plan or in any Agreement, in the manner and to the
extent it shall deem necessary or advisable, including so that the Plan and the
operation of the Plan comply with Rule 16b-3 under the Exchange Act, the Code to
the extent applicable and other applicable law, and otherwise to make the Plan
fully effective;

    


    (d)  determine the duration
and purposes for leaves of absence which may be granted to a Participant on an
individual basis without constituting a termination of employment or service for
purposes of the Plan;

    


    (e)  exercise its
discretion with respect to the powers and rights granted to it as set forth in
the Plan; and

    


    (f)  generally, exercise
such powers and perform such acts as are deemed necessary or advisable to
promote the best interests of the Company with respect to the Plan.

    


    All decisions and determinations by
the Administrator in the exercise of the above powers shall be final, binding
and conclusive upon the Company, its Subsidiaries, the Participants and all
other persons having any interest therein.

    


      3.3    Notwithstanding
anything herein to the contrary, with respect to Participants working outside
the United States, the Administrator may determine the terms and conditions of
Options and Awards and make such adjustments to the terms thereof as are
necessary or advisable to fulfill the purposes of the Plan taking into account
matters of local law or practice, including tax and securities laws of
jurisdictions outside the United States.

    


      3.4    Indemnification.  No
member of the Compensation Committee, the Director Committee or the Company
Administrator shall be liable for any action, failure to act, determination or
interpretation made in good faith with respect to the Plan or any transaction
hereunder.  The Company hereby agrees to indemnify each member of the
Compensation Committee, the Director Committee and the Company Administrator for
all costs and expenses and, to the extent permitted by applicable law, any
liability incurred in connection with defending against, responding to,
negotiating for the settlement of or otherwise dealing with any claim, cause of
action or dispute of any kind arising in connection with any actions in
administering the Plan or in authorizing or denying authorization to any
transaction hereunder.

    


      3.5    No
Repricing of Options or Stock Appreciation Rights.  The Administrator
shall have no authority to make any adjustment (other than in connection with a
stock dividend, recapitalization or other transaction where an adjustment is
permitted or required under the terms of the Plan) or amendment, and no such
adjustment or amendment shall be made, that reduces or would have the effect of
reducing the exercise price of an Option or Stock Appreciation Right previously
granted under the Plan, whether through amendment, cancellation or replacement
grants, or other means, unless the Company's shareholders shall have approved
such adjustment or amendment.

    


    4.       Stock
Subject to the Plan; Grant Limitations.

    


      4.1    Aggregate
Number of Shares Authorized for Issuance.  Subject to any adjustment
as provided in the Plan, the Shares to be issued under the Plan may be, in whole
or in part, authorized but unissued Shares or issued Shares which shall have
been reacquired by the Company and held by it as treasury shares. The aggregate
number of Shares that may be made the subject of Awards or Options granted under
the Plan shall not exceed eighty million (80,000,000), no more than five million
(5,000,000) of which may be granted as Incentive Stock Options.

    


      4.2    Individual
Limit.  The aggregate number of Shares that may be the subject of
Options, Stock Appreciation Rights, Performance-Based Restricted Stock and
Performance Shares, together with the Share-Equivalent number of Performance
Units, granted to an Eligible Individual in any calendar year may not exceed two
and one-half million (2,500,000).  For purposes of this Section 4, the
Share-Equivalent number of Performance Units shall be equal to the quotient of
(i) the aggregate dollar amount in which the Performance Units are denominated,
divided by (ii) the Fair Market Value of a Share on the date of
grant.

    


      4.3    Calculating
Shares Available.

    


    (a)  Upon the granting of
an Award or an Option, the number of Shares available under this Section 4 for
the granting of further Awards and Options shall be reduced as
follows:

    


    (i)  In connection with the
granting of an Option, Stock Appreciation Right (other than a Stock Appreciation
Right Related to an Option), Restricted Stock Unit, Share Award or Award of
Restricted Stock, Performance-Based Restricted Stock or Performance Shares, the
number of Shares available under this Section 4 for the granting of further
Options and Awards shall be reduced by the number of Shares in respect of which
the Option or Award is granted or denominated; provided, however, that if any
Option is exercised by tendering Shares, either actually or by attestation, to
the Company as full or partial payment of the Option Price, the maximum number
of Shares available under this Section 4 shall be increased by the number of
Shares so tendered.

    


    (ii)  In connection with
the granting of a Performance Unit, the number of Shares available under this
Section 4 for the granting of further Options and Awards initially shall be
reduced by Shares Equivalent number of Performance Units granted, with a
corresponding adjustment if the Performance Unit is ultimately settled in whole
or in part with a different number of Shares.

    


    (iii)  In connection with
the granting of a Dividend Equivalent Right, the number of Shares available
under this Section 4 shall not be reduced; provided, however, that if Shares are
issued in settlement of a Dividend Equivalent Right, the number of Shares
available for the granting of further Options and Awards under this Section 4
shall be reduced by the number of Shares

    so
issued.

    


    (b)  Notwithstanding
Section 4.3(a), in the event that an Award is granted that, pursuant to the
terms of the Agreement, cannot be settled in Shares, the aggregate number of
Shares that may be made the subject of Awards or Options granted under the Plan
shall not be reduced.  Whenever any outstanding Option or Award or
portion thereof expires, is canceled, is settled in cash (including the
settlement of tax withholding obligations using Shares) or is otherwise
terminated for any reason without having been exercised or payment having been
made in respect of the entire Option or Award, the number of Shares available
under this Section 4 shall be increased by the number of Shares previously
allocable under Section 4.3(a) to the expired, canceled, settled or otherwise
terminated portion of the Option or Award.  In addition, upon
settlement of a Stock Appreciation Right in Shares, the excess of the number of
Shares covered by the Stock Appreciation Right over the number of Shares issued
in settlement of the Stock Appreciation Right may again be the subject of
Options or Awards granted hereunder.

    


    5.       Stock
Options.

    


      5.1    Authority
of Administrator.  Subject to the provisions of the Plan, the
Administrator shall have full and final authority to select those Eligible
Individuals who will receive Options, and the terms and conditions of the grant
to any such Eligible Individual shall be set forth in an
Agreement.  Incentive Stock Options may be granted only to Eligible
Individuals who are employees of the Company or any Subsidiary.

    


      5.2    Exercise
Price.  The purchase price or the manner in which the exercise price
is to be determined for Shares under each Option shall be determined by the
Administrator and set forth in the Agreement; provided, however, that the
exercise price per Share under each Option shall not be less than the greater of
(i) the par value of a Share and (ii) 100% of the Fair Market Value of a Share
on the date the Option is granted (110% in the case of an Incentive Stock Option
granted to a Ten-Percent Shareholder); provided, further, however, that Fair
Market Value with respect to Options granted to Covered Employees and Directors
shall be determined in accordance with Section 2.28(a).

    


      5.3    Maximum
Duration.  Options granted hereunder shall be for such term as the
Administrator shall determine; provided that an Incentive Stock Option shall not
be exercisable after the expiration of ten (10) years from the date it is
granted (five (5) years in the case of an Incentive Stock Option granted to a
Ten-Percent Shareholder) and a Nonqualified Stock Option shall not be
exercisable after the expiration of ten (10) years from the date it is granted;
provided, further, however, that unless the Administrator provides otherwise an
Option (other than an Incentive Stock Option) may, upon the death of the
Participant prior to the expiration of the Option, be exercised for up to one
(1) year following the date of the Participant's death even if such period
extends beyond ten (10) years from the date the Option is
granted.  The Administrator may, subsequent to the granting of any
Option, extend the term thereof, but in no event shall the term as so extended
exceed the maximum term provided for in the preceding sentence.

    


      5.4    Vesting.  Subject
to Section 5.9, each Option shall become exercisable in such installments (which
need not be equal) and at such times as may be designated by the Administrator
and set forth in the Agreement.  To the extent not exercised,
installments shall accumulate and be exercisable, in whole or in part, at any
time after becoming exercisable, but not later than the date the Option
expires.  The Administrator may accelerate the exercisability of any
Option or portion thereof at any time.

    


      5.5    Limitations
on Incentive Stock Options.     To the extent that the
aggregate Fair Market Value (determined as of the date of the grant) of Shares
with respect to which Incentive Stock Options granted under the Plan and
"incentive stock options" (within the meaning of Section 422 of the Code)
granted under all other plans of the Company or its Subsidiaries (in either case
determined without regard to this Section 5.5) are exercisable by a Participant
for the first time during any calendar year exceeds $100,000, such Incentive
Stock Options shall be treated as Nonqualified Stock Options.  In
applying the limitation in the preceding sentence in the case of multiple Option
grants, unless otherwise required by applicable law, Options which were intended
to be Incentive Stock Options shall be treated as Nonqualified Stock Options
according to the order in which they were granted such that the most recently
granted Options are first treated as Nonqualified Stock Options.

    


      5.6    Transferability.

    


    (a)  Except as otherwise
provided in this Section 5.6, no Option shall be transferable by the Participant
otherwise than by will or by the laws of descent and distribution, and an Option
shall be exercisable during the lifetime of such Participant only by the
Participant or his or her guardian or legal representative.  The
Administrator may set forth in the Agreement evidencing an Option (other than an
Incentive Stock Option) at the time of grant or thereafter, that the Option, or
a portion thereof, may be transferred to any third party, including but not
limited 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.  In addition, for
purposes of the Plan, unless otherwise determined by the Administrator at the
time of grant or thereafter, a transferee of an Option pursuant to this Section
5.6(a) shall be deemed to be the Participant; provided that the rights of any
such transferee thereafter shall be nontransferable except that such transferee,
where applicable under the terms of the transfer by the Participant, shall have
the right previously held by the Participant to designate a
Beneficiary.  For this purpose, immediate family means the
Participant's spouse, parents, children, stepchildren and grandchildren and the
spouses of such parents, children, stepchildren and
grandchildren.  The terms of an Option shall be final, binding and
conclusive upon the beneficiaries, executors, administrators, heirs and
successors of the Participant.  Notwithstanding Section 21.2, or the
terms of any Agreement, the Company or any Subsidiary shall not withhold any
amount attributable to the Participant's tax liability from any payment of cash
or Shares to a transferee or transferee's Beneficiary under this Section 5.6(a),
but may require the payment of an amount equal to the Company's or any
Subsidiary's withholding tax obligation as a condition to exercise or as a
condition to the release of cash or Shares upon exercise or upon transfer of the
option.

    


    (b)  The approval of this
Plan by the Company's shareholders shall constitute an amendment of each of the
Prior Plans in a manner such that the provisions of Section 5.6(a) above shall
be incorporated into each of the Prior Plans and any inconsistent provisions in
the Prior Plans shall be deleted.  Outstanding option grants under the
Prior Plans shall be interpreted in a manner consistent with the amendment to
the Prior Plans described in the preceding sentence.  The election by
a Participant or Beneficiary (including for this purpose a participant or
beneficiary under the Prior Plans) to transfer any such options pursuant to this
Section 5.6(b) shall constitute consent by the Participant or Beneficiary to
such amendment if such consent is required.

    


      5.7    Method
of Exercise.  The exercise of an Option shall be made only by giving
written notice delivered in person or by mail to the person designated by the
Company, specifying the number of Shares to be exercised and, to the extent
applicable, accompanied by payment therefor and otherwise in accordance with the
Agreement pursuant to which the Option was granted.  The exercise
price for any Shares purchased pursuant to the exercise of an Option shall be
paid in any or any combination of the following forms:  (a) cash or
its equivalent (e.g., a check) or (b) the transfer, either actually or by
attestation, to the Company of Shares that have been held by the Participant for
at least six (6) months (or such lesser period as may be permitted by the
Administrator) prior to the exercise of the Option, such transfer to be upon
such terms and conditions as determined by the Administrator or (c) in the form
of other property as determined by the Administrator.  In addition,
Options may be exercised through a registered broker-dealer pursuant to such
cashless exercise procedures that are, from time to time, deemed acceptable by
the Administrator.  Any Shares transferred to the Company as payment
of the exercise price under an Option shall be valued at their Fair Market Value
on the date of exercise of such Option.  If requested by the
Administrator, the Participant shall deliver the Agreement evidencing the Option
to the Company, which shall endorse thereon a notation of such exercise and
return such Agreement to the Participant.  No fractional Shares (or
cash in lieu thereof) shall be issued upon exercise of an Option and the number
of Shares that may be purchased upon exercise shall be rounded to the nearest
number of whole Shares.

    


      5.8    Rights
of Participants.  No Participant shall be deemed for any purpose to be
the owner of any Shares subject to any Option unless and until (a) the Option
shall have been exercised pursuant to the terms thereof, (b) the Company shall
have issued and delivered Shares (whether or not certificated) to the
Participant, a securities broker acting on behalf of the Participant or such
other nominee of the Participant, and (c) the Participant's name, or the name of
his or her broker or other nominee, shall have been entered as a shareholder of
record on the books of the Company.  Thereupon, the Participant shall
have full voting, dividend and other ownership rights with respect to such
Shares, subject to such terms and conditions as may be set forth in the
applicable Agreement.

    


      5.9    Effect
of Change in Control.  Unless otherwise provided in an Agreement, (a)
in the event of a Change in Control, all Options outstanding on the date of such
Change in Control shall become immediately and fully exercisable and (b) in the
event that a Participant's (other than a Director's) employment with the Company
and its Subsidiaries terminates within two (2) years following a Change in
Control as a result of a termination by the Company without Cause or by the
Participant for Good Reason, each Option held by the Participant that was
exercisable as of the date of termination of the Participant's employment shall
remain exercisable for a period ending not before the earlier of (a) the first
anniversary of the termination of the Participant's employment or service and
(b) the expiration of the stated term of the Option.

    


    6.       Stock
Appreciation Rights.

    


      6.1    Grant.  The
Administrator may in its discretion, either alone or in connection with the
grant of an Option, grant Stock Appreciation Rights to Eligible Individuals in
accordance with the Plan, the terms and conditions of which shall be set forth
in an Agreement.  A Stock Appreciation Right may be granted (a) at any
time if unrelated to an Option or (b) if related to an Option, either at the
time of grant or at any time thereafter during the term of the
Option.

    


      6.2    Stock
Appreciation Right Related to an Option.  If granted in connection
with an Option, a Stock Appreciation Right shall cover the same Shares covered
by the Option (or such lesser number of Shares as the Administrator may
determine) and shall, except as provided in this Section 6, be subject to the
same terms and conditions as the related Option.

    


    a)  Exercise;
Transferability.  A Stock Appreciation Right granted in connection
with an Option (i) shall be exercisable at such time or times and only to the
extent that the related Option is exercisable, (ii) shall be exercisable only if
the Fair Market Value of a Share on the date of exercise exceeds the exercise
price specified in the Agreement evidencing the related Incentive Stock Option
and (iii) shall not be transferable except to the extent the related Option is
transferable.

    


    (b)  Amount
Payable.  Upon the exercise of a Stock Appreciation Right related to
an Option, the Participant shall be entitled to receive an amount determined by
multiplying (i) the excess of the Fair Market Value of a Share on the date
preceding the date of exercise of such Stock Appreciation Right over the per
Share exercise price under the related Option, by (ii) the number of Shares as
to which such Stock Appreciation Right is being exercised. Notwithstanding the
foregoing, the Administrator may limit in any manner the amount payable with
respect to any Stock Appreciation Right by including such a limit in the
Agreement evidencing the Stock Appreciation Right at the time it is
granted.

    


    (c)  Treatment of Related
Options and Stock Appreciation Rights Upon Exercise.  Upon the
exercise of a Stock Appreciation Right granted in connection with an Option, the
Option shall be canceled to the extent of the number of Shares as to which the
Stock Appreciation Right is exercised, and upon the exercise of an Option
granted in connection with a Stock Appreciation Right, the Stock Appreciation
Right shall be canceled to the extent of the number of Shares as to which the
Option is exercised or surrendered.

    


      6.3    Stock
Appreciation Right Unrelated to an Option.  A Stock Appreciation Right
unrelated to an Option shall cover such number of Shares as the Administrator
shall determine.

    


    (a)  Terms;
Duration.  Stock Appreciation Rights unrelated to Options shall
contain such terms and conditions as to exercisability, vesting and duration as
the Administrator shall determine, but in no event shall they have a term of
greater than ten (10) years; provided that unless the Administrator provides
otherwise a Stock Appreciation Right may, upon the death of the Participant
prior to the expiration of the Award, be exercised for up to one (1) year
following the date of the Participant's death even if such period extends beyond
ten (10) years from the date the Stock Appreciation Right is
granted.

    


    (b)  Amount
Payable.  Upon exercise of a Stock Appreciation Right unrelated to an
Option, the Grantee shall be entitled to receive an amount determined by
multiplying (i) the excess of the Fair Market Value of a Share on the date
immediately preceding the date of exercise of such Stock Appreciation Right over
the Fair Market Value of a Share on the date the Stock Appreciation Right was
granted, by (ii) the number of Shares as to which the Stock Appreciation Right
is being exercised; provided, however, that for purposes of this Section 6.3(b),
in respect of Stock Appreciation Rights granted to Covered Employees and
Directors, Fair Market Value shall be determined in accordance with Section
2.28(a).  Notwithstanding the foregoing, the Administrator may limit
in any manner the amount payable with respect to any Stock Appreciation Right by
including such a limit in the Agreement evidencing the Stock Appreciation Right
at the time it is granted.

    


    (c)  Transferability.  (i)
Except as otherwise provided in this Section 6.3(c), no Stock Appreciation Right
unrelated to an Option shall be transferable by the Participant otherwise than
by will or the laws of descent and distribution, and a Stock Appreciation Right
shall be exercisable during the lifetime of such Participant only by the
Participant or his or her guardian or legal representative.  The
Administrator may set forth in the Agreement evidencing a Stock Appreciation
Right at the time of grant or thereafter, that the Award, or a portion thereof,
may be transferred to any third party, including but not limited 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.  In addition, for purposes of the Plan,
unless otherwise determined by the Administrator at the time of grant or
thereafter, a transferee of a Stock Appreciation Right pursuant to this Section
6.3(c) shall be deemed to be the Participant; provided that the rights of any
such transferee thereafter shall be nontransferable except that such transferee,
where applicable under the terms of the transfer by the Participant, shall have
the right previously held by the Participant to designate a
Beneficiary.  For this purpose, immediate family means the
Participant's spouse, parents, children, stepchildren and grandchildren and the
spouses of such parents, children, stepchildren and
grandchildren.  The terms of a Stock Appreciation Right shall be
final, binding and conclusive upon the beneficiaries, executors, administrators,
heirs and successors of the Participant.  Notwithstanding Section
21.2, or the terms of any Agreement, the Company or any Subsidiary shall not
withhold any amount attributable to the Participant's tax liability from any
payment of cash or Shares to a transferee or transferee's Beneficiary under this
Section 6.3(c), but may require the payment of an amount equal to the Company's
or any Subsidiary's withholding tax obligation as a condition to exercise or as
a condition to the release of cash or Shares upon exercise or upon transfer of
the Stock Appreciation Right.

    


    (ii)  The approval of this
Plan by the Company's shareholders shall constitute an amendment of each of the
Prior Plans in a manner such that the provisions of Section 6.3(c)(i) above
shall be incorporated into each of the Prior Plans and any inconsistent
provisions in the Prior Plans shall be deleted. Outstanding stock appreciation
rights under the Prior Plans shall be interpreted in a manner consistent with
the amendment to the Prior Plans described in the preceding
sentence.  The election by a Participant or Beneficiary (including for
this purpose a participant or beneficiary under the Prior Plans) to transfer any
such stock appreciation rights pursuant to this Section 6.3(c) shall constitute
consent by the Participant or Beneficiary to such amendment if such consent is
required.

    


      6.4    Method
of Exercise.  Stock Appreciation Rights shall be exercised by a
Participant only by giving written notice delivered in person or by mail to the
person designated by the Company, specifying the number of Shares with respect
to which the Stock Appreciation Right is being exercised.  If
requested by the Administrator, the Participant shall deliver the Agreement
evidencing the Stock Appreciation Right being exercised and the Agreement
evidencing any related Option to the Company, which shall endorse thereon a
notation of such exercise and return such Agreement to the
Participant.

    


      6.5    Form
of Payment.  Payment of the amount determined under Section 6.2(b) or
6.3(b) may be made in the discretion of the Administrator solely in whole Shares
in a number determined at their Fair Market Value on the date preceding the date
of exercise of the Stock Appreciation Right, or solely in cash, or in a
combination of cash and Shares.  If the Administrator decides to make
full payment in Shares and the amount payable results in a fractional Share,
payment for the fractional Share will be made in cash.

    


      6.6    Effect
of Change in Control.   Unless otherwise provided in an
Agreement, (a) in the event of a Change in Control, all Stock Appreciation
Rights shall become immediately and fully exercisable and (b) in the event a
Participant's (other than a Director's) employment with the Company and its
Subsidiaries terminates as a result of a termination within two (2) years
following a Change in Control by the Company without Cause or by the Participant
for Good Reason, each Stock Appreciation Right held by the Participant that was
exercisable as of the date of termination of the Participant's employment shall
remain exercisable for a period ending not before the earlier of the first
anniversary of (a) the termination of the Participant's employment or service
and (b) the expiration of the stated term of the Stock Appreciation
Right.

    


    7.       Dividend
Equivalent Rights.

    


    The Administrator may in its
discretion, grant Dividend Equivalent Rights either in tandem with an Option or
Award or as a separate Award, to Eligible Individuals in accordance with the
Plan.  The terms and conditions applicable to each Dividend Equivalent
Right shall be specified in the Agreement under which the Dividend Equivalent
Right is granted.  Amounts payable in respect of Dividend Equivalent
Rights may be payable currently or, if applicable, deferred until the lapsing of
restrictions on such Dividend Equivalent Rights or until the vesting, exercise,
payment, settlement or other lapse of restrictions on the Option or Award to
which the Dividend Equivalent Rights relate.  In the event that the
amount payable in respect of Dividend Equivalent Rights are to be deferred, the
Administrator shall determine whether such amounts are to be held in cash or
reinvested in Shares or deemed (notionally) to be reinvested in
Shares.  If amounts payable in respect of Dividend Equivalent Rights
are to be held in cash, there may be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Administrator, in its discretion, may determine.
Dividend Equivalent Rights may be settled in cash or Shares or a combination
thereof, in a single installment or multiple installments, as determined by the
Administrator.

    


    8.       Restricted
Stock; Restricted Stock Units.

    


      8.1    Restricted
Stock.  The Administrator may grant to Eligible Individuals Awards of
Restricted Stock, which shall be evidenced by an Agreement.  Each
Agreement shall contain such restrictions, terms and conditions as the
Administrator may, in its discretion, determine and (without limiting the
generality of the foregoing) such Agreements may require that an appropriate
legend be placed on Share certificates.  Awards of Restricted Stock
shall be subject to the terms and provisions set forth below in this Section 8.1
and in Section 8.3.

    


    (a)  Rights of
Participant.  Shares of Restricted Stock granted pursuant to an Award
hereunder shall be issued in the name of the Participant as soon as reasonably
practicable after the Award is granted provided that the Participant has
executed an Agreement evidencing the Award, the appropriate blank stock powers
and, in the discretion of the Administrator, an escrow agreement and any other
documents which the Administrator may require as a condition to the issuance of
such Shares.  At the discretion of the Administrator, Shares issued in
connection with an Award of Restricted Stock shall be deposited together with
the stock powers with an escrow agent (which may be the Company) designated by
the Administrator.  Unless the Administrator determines otherwise and
as set forth in the Agreement, upon delivery of the Shares to the escrow agent,
the Participant shall have all of the rights of a shareholder with respect to
such Shares, including the right to vote the Shares and to receive all dividends
or other distributions paid or made with respect to the Shares.

    


    (b)  Non-transferability.  Until
all restrictions upon the Shares of Restricted Stock awarded to a Participant
shall have lapsed in the manner set forth in Section 8.1(c), such Shares shall
not be sold, transferred or otherwise disposed of and shall not be pledged or
otherwise hypothecated.

    


    (c)  Lapse of
Restrictions.

    


    (i)  Generally.  Subject
to the provisions of Section 8.3, restrictions upon Shares of Restricted Stock
awarded hereunder shall lapse at such time or times and on such terms and
conditions as the Administrator may determine.  The Agreement
evidencing the Award shall set forth any such restrictions.

    


    ii)  Effect of Change in
Control.  Unless otherwise determined by the Administrator at the time
of grant and set forth in the Agreement evidencing the Award of Restricted
Stock, restrictions on Shares of Restricted Stock shall lapse upon termination
of a Participant's employment with, or service as a Director of, the Company and
its Subsidiaries within two (2) years following a Change in Control if such
termination is by the Company without Cause or by the Participant for Good
Reason.  The Administrator may determine at the time of the grant or
thereafter and set forth in the Agreement evidencing the Award of Restricted
Stock that terminations of employment under other circumstances within two (2)
years following a Change in Control will result in the lapse of restrictions on
Shares of Restricted Stock.

    


    (d)  Treatment of
Dividends.  At the time an Award of Restricted Stock is granted, the
Administrator may, in its discretion, determine that the payment to the
Participant of dividends, or a specified portion thereof, declared or paid on
such Shares by the Company shall be (i) deferred until the lapsing of the
restrictions imposed upon such Shares and (ii) held by the Company for the
account of the Participant until such time.  In the event that
dividends are to be deferred, the Administrator shall determine whether such
dividends are to be reinvested in Shares (which shall be held as additional
Shares of Restricted Stock) or held in cash.  If deferred dividends
are to be held in cash, there may be credited interest on the amount of the
account at such times and at a rate per annum as the Administrator, in its
discretion, may determine.  Payment of deferred dividends in respect
of Shares of Restricted Stock (whether held in cash or as additional Shares of
Restricted Stock), together with interest accrued thereon, if any, shall be made
upon the lapsing of restrictions imposed on the Shares in respect of which the
deferred dividends were paid, and any dividends deferred (together with any
interest accrued thereon) in respect of any Shares of Restricted Stock shall be
forfeited upon the forfeiture of such Shares.

    


    (e)  Delivery of
Shares.  Upon the lapse of the restrictions on Shares of Restricted
Stock, the Administrator shall cause a stock certificate or evidence of book
entry Shares to be delivered to the Participant with respect to such Shares of
Restricted Stock, free of all restrictions hereunder.

    


      8.2    Restricted
Stock Unit Awards.  The Administrator may grant to Eligible
Individuals Awards of Restricted Stock Units, which shall be evidenced by an
Agreement.  Each such Agreement shall contain such restrictions, terms
and conditions as the Administrator may, in its discretion,
determine.  Awards of Restricted Stock Units shall be subject to the
terms and provisions set forth below in this Section 8.2 and in Section
8.3.

    


    (a)  Payment of
Awards.  Each Restricted Stock Unit shall represent the right of the
Participant to receive a payment upon vesting of the Restricted Stock Unit or on
any later date specified by the Administrator equal to the Fair Market Value of
a Share as of the date the Restricted Stock Unit was granted, the vesting date
or such other date as determined by the Administrator at the time the Restricted
Stock Unit was granted.  The Administrator may, at the time a
Restricted Stock Unit is granted, provide a limitation on the amount payable in
respect of each Restricted Stock Unit.  The Administrator may provide
for the settlement of Restricted Stock Units in cash or with Shares having a
Fair Market Value equal to the payment to which the Participant has become
entitled.

    


    (b)  Effect of Change in
Control. Unless otherwise determined by the Administrator at the time of grant
and set forth in the Agreement evidencing the Award of Restricted Stock Units,
Restricted Stock Units shall become fully vested upon termination of a
Participant's employment with, or service as a Director of, the Company and its
Subsidiaries within two (2) years following a Change in Control if such
termination is by the Company without Cause or by the Participant for Good
Reason.  The Administrator may determine at the time of the grant or
thereafter and set forth in the Agreement evidencing the Award of Restricted
Stock Units that terminations of employment under other circumstances within two
(2) years following a Change in Control will result in the full vesting of
Restricted Stock Units.

    


      8.3    Minimum
Vesting for Restricted Stock and Restricted Stock Unit Award.  Except
as otherwise provided in Sections 8.1(c)(ii) and 8.2(b), Awards of Restricted
Stock and Restricted Stock Units shall not vest more rapidly than with respect
to one-third of the Shares subject to such Award on each of the first three
anniversaries of the date such Award is granted, other than with respect to up
to four million (4,000,000) Shares, which may be subject to such shorter vesting
schedules as the Administrator shall determine.

    


    9.       Performance
Awards.

    


      9.1    Performance
Units and Performance Shares.  The Administrator, in its discretion,
may grant Awards of Performance Units and/or Performance Shares to Eligible
Individuals, the terms and conditions of which shall be set forth in an
Agreement.

    


    (a)  Performance
Units.  Performance Units shall be denominated in a specified dollar
amount and, contingent upon the attainment of specified Performance Objectives
within the Performance Cycle, represent the right to receive payment as provided
in Sections 9.1(c) and (d) of the specified dollar amount or a percentage (which
may be more than 100%) of the specified dollar amount depending on the level of
Performance Objective attained; provided, however, that the Administrator may at
the time a Performance Unit is granted specify a maximum amount payable in
respect of a vested Performance Unit.  Each Agreement shall specify
the number of Performance Units to which it relates, the Performance Objectives
which must be satisfied in order for the Performance Units to vest and the
Performance Cycle within which such Performance Objectives must be
satisfied.

    


    (b)  Performance
Shares.  Performance Shares shall be denominated in Shares and,
contingent upon the attainment of specified Performance Objectives within the
Performance Cycle, each Performance Share represents the right to receive
payment as provided in Sections 9.1(c) and (d) of the Fair Market Value of a
Share on the date the Performance Share was granted, the date the Performance
Share became vested or any other date specified by the Administrator or a
percentage (which may be more than 100%) of such amount depending on the level
of Performance Objective attained; provided, however, that the Administrator may
at the time a Performance Share is granted specify a maximum amount payable in
respect of a vested Performance Share.  Each Agreement shall specify
the number of Performance Shares to which it relates, the Performance Objectives
which must be satisfied in order for the Performance Shares to vest and the
Performance Cycle within which such Performance Objectives must be
satisfied.

    


    (c)  Vesting and
Forfeiture.  Subject to Sections 9.3(c) and 9.4, a Participant shall
become vested with respect to the Performance Shares and Performance Units to
the extent that the Performance Objectives set forth in the Agreement are
satisfied for the Performance Cycle; provided, however, that, except as may be
provided pursuant to Section 9.4, no Performance Cycle for Performance Shares
and Performance Units shall be less than one (1) year.

    


    (d)  Payment of
Awards.  Subject to Sections 9.3(c) and 9.4, payment to Participants
in respect of vested Performance Shares and Performance Units shall be made as
soon as practicable after the last day of the Performance Cycle to which such
Award relates or at such other time or times as the Administrator may
determine.  Subject to Section 9.4, such payments may be made entirely
in Shares valued at their Fair Market Value, entirely in cash, or in such
combination of Shares and cash as the Administrator in its discretion shall
determine at any time prior to such payment;  provided, however, that
if the Administrator in its discretion determines to make such payment entirely
or partially in Shares of Restricted Stock, the Administrator must determine the
extent to which such payment will be in Shares of Restricted Stock and the terms
of such Restricted Stock at the time the Award is granted.

    


      9.2    Performance-Based
Restricted Stock.  The Administrator, in its discretion, may grant
Awards of Performance-Based Restricted Stock to Eligible Individuals, the terms
and conditions of which shall be set forth in an Agreement.  Each
Agreement may require that an appropriate legend be placed on Share
certificates.  Awards of Performance-Based Restricted Stock shall be
subject to the following terms and provisions:

    


    (a)  Rights of
Participant.  Performance-Based Restricted Stock shall be issued in
the name of the Participant as soon as reasonably practicable after the Award is
granted or at such other time or times as the Administrator may determine;
provided, however, that no Performance-Based Restricted Stock shall be issued
until the Participant has executed an Agreement evidencing the Award, the
appropriate blank stock powers and, in the discretion of the Administrator, an
escrow agreement and any other documents which the Administrator may require as
a condition to the issuance of such Performance-Based Restricted
Stock.  At the discretion of the Administrator, Shares issued in
connection with an Award of Performance-Based Restricted Stock shall be
deposited together with the stock powers with an escrow agent (which may be the
Company) designated by the Administrator.  Except as restricted by the
terms of the Agreement, upon delivery of the Shares to the escrow agent, the
Participant shall have, in the discretion of the Administrator, all of the
rights of a shareholder with respect to such Shares, including the right to vote
the Shares and to receive all dividends or other distributions paid or made with
respect to the Shares.  Each Agreement shall specify the number of
Shares of Performance-Based Restricted Stock to which it relates, the
Performance Objectives which must be satisfied in order for the
Performance-Based Restricted Stock to vest and the Performance Cycle within
which such Performance Objectives must be satisfied.

    


    (b)  Lapse of
Restrictions.  Subject to Sections 9.3(c) and 9.4, restrictions upon
Performance-Based Restricted Stock awarded hereunder shall lapse and such
Performance-Based Restricted Stock shall become vested at such time or times and
on such terms, conditions and satisfaction of Performance Objectives as the
Administrator may, in its discretion, determine at the time an Award is granted;
provided, however, that, except as may be provided pursuant to Section 9.4, no
Performance Cycle for Performance-Based Restricted Stock shall be less than one
(1) year.

    


    (c)  Treatment of
Dividends.  At the time the Award of Performance-Based Restricted
Stock is granted, the Administrator may, in its discretion, determine that the
payment to the Participant of dividends, or a specified portion thereof,
declared or paid on Shares represented by such Award which have been issued by
the Company to the Participant shall be (i) deferred until the lapsing of the
restrictions imposed upon such Performance-Based Restricted Stock and (ii) held
by the Company for the account of the Participant until such time.  In
the event that dividends are to be deferred, the Administrator shall determine
whether such dividends are to be reinvested in Shares (which shall be held as
additional Shares of Performance-Based Restricted Stock) or held in
cash.  If deferred dividends are to be held in cash, there may be
credited interest on the amount of the account at such times and at a rate per
annum as the Administrator, in its discretion, may determine.  Payment
of deferred dividends in respect of Shares of Performance-Based Restricted Stock
(whether held in cash or in additional Shares of Performance-Based Restricted
Stock), together with interest accrued thereon, if any, shall be made upon the
lapsing of restrictions imposed on the Performance-Based Restricted Stock in
respect of which the deferred dividends were paid, and any dividends deferred
(together with any interest accrued thereon) in respect of any Performance-Based
Restricted Stock shall be forfeited upon the forfeiture of such
Performance-Based Restricted Stock.

    


    (d)  Delivery of
Shares.  Upon the lapse of the restrictions on Shares of
Performance-Based Restricted Stock awarded hereunder, the Administrator shall
cause a stock certificate or evidence of book entry Shares to be delivered to
the Participant with respect to such Shares, free of all restrictions
hereunder.

    


      9.3    Performance
Objectives

    


    (a)  Establishment.  Performance
Objectives for Performance Awards may be expressed in terms of (i) consolidated
earnings before or after taxes (including earnings before interest, taxes,
depreciation and amortization), (ii) net income, (iii) operating income, (iv)
earnings per Share, (v) book value per Share, (vi) return on shareholders'
equity, (vii) expense management, (viii) return on investment, (ix) improvement
in capital structure, (x) profitability of an identifiable business unit or
product, (xi) maintenance or improvement of profit margins, (xii) stock price,
(xiii) market share, (xiv) revenues or sales, (xv) costs, (xvi) cash flow,
(xvii) working capital, (xviii) return on assets, (xix) total shareholder return
or (xx) any combination of the foregoing.  Performance Objectives may
be in respect of the performance of the Company, any of its Subsidiaries, any of
its Divisions or any combination thereof.  Performance Objectives may
be absolute or relative (to prior performance of the Company or to the
performance of one or more other entities or external indices) and may be
expressed in terms of a progression within a specified range.  The
Performance Objectives with respect to a Performance Cycle shall be established
in writing by the Administrator by the earlier of (i) the date on which a
quarter of the Performance Cycle has elapsed and (ii) the date which is ninety
(90) days after the commencement of the Performance Cycle, and in any event
while the performance relating to the Performance Objectives remain
substantially uncertain.

    


    (b)  Effect of Certain
Events.  Unless otherwise provided by the Administrator at the time
the Performance Objectives in respect of a Performance Award are established,
performance shall be adjusted to omit the effects of extraordinary items, gain
or loss on the disposal of a business segment (other than provisions for
operating losses or income during the phase-out period), unusual or infrequently
occurring events and transactions that have been publicly disclosed and the
cumulative effects of changes in accounting principles, all as determined in
accordance with generally accepted accounting principles (to the extent
applicable).  In addition, at the time of the granting of a
Performance Award, or at any time thereafter, the Administrator may provide for
the manner in which performance will be measured against the Performance
Objectives (or may adjust the Performance Objectives) to reflect the impact of
specified corporate transactions (such as a stock split or stock dividend),
special charges, and tax law changes; provided, that in respect of Performance
Awards to Covered Employees, such provisions shall be permitted only to the
extent permitted under Section 162(m) of the Code and the regulations
promulgated thereunder without adversely affecting the treatment of any
Performance Award as Performance-Based Compensation.

    


    (c)  Determination of
Performance.  Prior to the vesting, payment, settlement or lapsing of
any restrictions with respect to any Performance Award granted to a Covered
Employee, the Administrator shall certify in writing that the applicable
Performance Objectives have been satisfied to the extent necessary for such
Award to qualify as Performance-Based Compensation.  In respect of a
Performance Award, the Administrator may, in its sole discretion, reduce the
amount of cash paid or number of Shares issued that become vested or on which
restrictions lapse.  The Administrator shall not be entitled to
exercise any discretion otherwise authorized hereunder with respect to such
Awards if the ability to exercise such discretion or the exercise of such
discretion itself would cause the compensation attributable to such Awards to
fail to qualify as Performance-Based Compensation.

    


      9.4    Effect
of Change in Control.  In the event of a Change in Control, unless
otherwise determined by the Administrator and set forth in the Agreement
evidencing the Award:

    


    (a)  Participants shall (i)
become vested in a portion of all then outstanding Performance Units and
Performance Shares determined by multiplying (x) the number of such Performance
Units and Performance Shares that would have vested based on the greater of
actual levels of achievement attained against the applicable Performance
Objective (determined as if the Performance Cycle ended on the date of the
Change in Control) and the target levels of achievement established for the
Performance Cycle, by (y) a fraction, the numerator of which is the number of
days that have elapsed during the Performance Cycle through the date of the
Change in Control and the denominator of which is the total number of days in
the Performance Cycle and (ii) be entitled to receive in respect of all
Performance Units and Performance Shares which become vested as a result of a
Change in Control a cash payment within ten (10) days after such Change in
Control.

    


    (b)  All restrictions shall
lapse immediately on a portion of all then outstanding Shares of
Performance-Based Restricted Stock determined by multiplying (x) the number of
such Shares on which such restrictions would have lapsed based on the greater of
actual levels of achievement attained against the applicable Performance
Objective (determined as if the Performance Cycle ended on the date of the
Change in Control) and the target levels of achievement established for the
Performance Cycle, by (y) a fraction, the numerator of which is the number of
days that have elapsed during the Performance Cycle through the date of the
Change in Control and the denominator of which is the total number of days in
the Performance Cycle.

    


      9.5    Non-transferability.  Until
the vesting of Performance Units and Performance Shares or the lapsing of any
restrictions on Performance-Based Restricted Stock, as the case may be, such
Performance Units, Performance Shares or Performance-Based Restricted Stock
shall not be sold, transferred or otherwise disposed of and shall not be pledged
or otherwise hypothecated.

    


    10.      Annual
Incentive Awards.

    


      10.1   Eligibility.  The
Compensation Committee shall designate which Officers are eligible for Annual
Incentive Awards under the Plan ("Eligible Officers"). An individual shall not
be ineligible by reason of being a Director.  The Compensation
Committee may establish such additional rules for eligibility as it determines
are appropriate.  The actual payment of an Annual Incentive Award to
any Eligible Officer shall be subject to the provisions of this Section
10.

    


      10.2   Awards.  Eligible
Officers are eligible to receive a cash payment in respect of a fiscal year (an
"Annual Incentive Award") determined as a percentage of an incentive pool, which
pool is equal to the greater of: (a) nine-tenths of one percent (0.9%) of the
Operating Cash Flow for the fiscal year; or (b) one and one-half percent (1.5%)
of the Net Income for the fiscal year (the "Annual Bonus Pool").  The
terms and conditions of Annual Incentive Awards shall be as determined by the
Compensation Committee and set forth in an Award Agreement.  Such
terms and conditions shall be consistent with the provisions of this Section 10
and shall be consistent with such awards qualifying as Performance-Based
Compensation.

    


      10.3   Performance
Objectives and Performance-Based Limit.  Annual Incentive Awards shall
only be payable under the Plan in respect of a fiscal year if the Company has
positive Operating Cash Flow or Net Income for such year.  Within the
first ninety (90) days of each fiscal year, the Compensation Committee shall
determine the percentage of the Annual Bonus Pool that represents the potential
Annual Incentive Award for each Eligible Officer for that fiscal
year.  In no event may the Annual Bonus Pool percentage for any
Eligible Officer exceed twenty-five percent (25%) of the Annual Bonus
Pool.  The sum of the Annual Bonus Pool percentages for all Eligible
Officers cannot exceed one hundred percent (100%) of the Annual Bonus
Pool.

    


      10.4   Determination
of Performance.  Prior to the payment of any Annual Incentive Award to
an Eligible Officer and following receipt of a report from the Company's
independent auditor of the Operating Cash Flow and Net Income for the year, the
Compensation Committee shall certify in writing that the applicable Performance
Objective has been satisfied and the amount of the Annual Bonus Pool, in each
case, to the extent necessary so that all Annual Incentive Awards for Eligible
Officers who are Covered Employees qualify as Performance-Based
Compensation.

    


      10.5   Calculation
of Annual Incentive Awards.  As soon as practicable after the
determination of the Annual Bonus Pool for a fiscal year, the Compensation
Committee shall calculate the amount of each Eligible Officer's Annual Incentive
Award based on his or her allocated portion of the Annual Bonus Pool; provided,
however, that the Compensation Committee may, in its discretion, reduce the
amount payable in respect of an Annual Incentive Award for any Eligible
Officer.  In no event may the portion of the Annual Bonus Pool
allocated to an Eligible Officer be increased in any way, including as a result
of the reduction of any other Eligible Officer's allocated
portion.  No portion of the Annual Bonus Pool which is not paid to
Eligible Officers in respect of a particular year shall be carried over to any
subsequent year.

    


      10.6   Payment
of Annual Incentive Awards.  All Annual Incentive Awards shall be paid
by the Company and its Subsidiaries in cash as soon as practicable following
certification by the Compensation Committee pursuant to Section 10.4 and the
calculation pursuant to Section 10.5.  Such payment, however, may be
subject to deferral under any plan or program the Administrator may establish
for this purpose, provided that any additional amounts credited under any such
deferral plan or program during the period of deferral shall be determined based
either on a reasonable rate of interest or on a specific investment or deemed
investment including Shares, as may be determined by the Compensation Committee
within the limits of the regulations under Section 162(m) of the
Code.

    


      10.7   Effect
of Certain Events.  At the time of the granting of an Annual Incentive
Award, or at any time thereafter, the Compensation Committee may provide for the
manner in which performance will be measured against the Performance Objectives
(or may adjust the Performance Objectives) to reflect the impact of specified
corporate transactions (such as a stock split or stock dividend), special
charges, and tax law changes; provided, however, that such provisions shall be
permitted only to the extent permitted under Section 162(m) of the Code and the
regulations promulgated thereunder without adversely affecting the treatment of
any Annual Incentive Award as Performance-Based Compensation.

    


      10.8   Non-transferability.  Annual
Incentive Awards shall not be sold, transferred or otherwise disposed of and
shall not be pledged or otherwise hypothecated.

    


      10.9   No
Right to Award.  No person shall have any claim to be paid an Annual
Incentive Award under the Plan and there is no obligation for uniformity of
treatment of Eligible Officers under Section 10 of the Plan.  The
selection of Eligible Officers to receive Annual Incentive Awards and the amount
of the Annual Incentive Awards rest completely in the absolute and final
discretion of the Compensation Committee.  The Compensation
Committee's discretion is limited only by the Annual Bonus Pool and the limits
provided in Sections 10.3 and 10.5. Neither the existence of the Annual Bonus
Pool, nor any prior practice by the Compensation Committee as to the payment or
amount of Annual Incentive Awards, shall be deemed to create an obligation for
the Compensation Committee to pay any Annual Incentive Award for any year or to
pay an Annual Incentive Award equal to the allocated percentage of the Annual
Bonus Pool or any other amount.

    


    11.      Share
Awards.

    


    The Administrator may grant a Share
Award to any Eligible Individual on such terms and conditions as the
Administrator may determine in its sole discretion.  Share Awards may
be made as additional compensation for services rendered by the Eligible
Individual or may be in lieu of cash or other compensation to which the Eligible
Individual is entitled from the Company.

    


    12.      Awards
to Directors.

    


      12.1   Authority
of Director Committee.  Subject to the provisions of the Plan, the
Director Committee shall have the full and final authority to award Options and
Awards to Eligible Directors, and the terms and conditions of any grant to any
such Eligible Director shall be set forth in an Agreement.  This
Section 12 sets forth special provisions that, unless otherwise provided in an
Agreement, shall be applicable to Options and Awards granted to Eligible
Directors under the Plan.

    


      12.2   Aggregate
Limit.  Options or Awards in respect of no more than two and one-half
million (2,500,000) Shares shall be granted to Eligible Directors under the
Plan.

    


      12.3   Individual
Limit.  Grants of Options and Awards to any Eligible Director in any
calendar year shall not be made in respect of more than twenty-five thousand
(25,000) Shares.

    


      12.4   Vesting.  Unless
otherwise provided in an Agreement, an Option or Award granted to an Eligible
Director under the Plan shall become exercisable and the restrictions on an
Award granted to an Eligible Director shall lapse, as applicable, on the first
anniversary of the date of grant; provided, however, that in the event that,
prior to the first anniversary of the date of grant, (a) the Director terminates
his service on the Board by reason of (i) death, (ii) Disability, or (iii)
retirement (as determined in accordance with the then applicable retirement
policy for Directors), or (b) a Change in Control shall occur, then an Option or
Award shall become immediately exercisable and the restrictions on an Award
shall immediately lapse, as applicable, upon the occurrence of such
event.  Subject to the foregoing, an Option or Stock Appreciation
Right granted to a Director shall be exercisable at any time in whole or in part
(but if in part, in an amount equal to at least 100 Shares or, if less, the
number of Shares remaining to be exercised under the Award or Option) on any
business day of the Company before the date such Option or Award expires in
accordance with Section 12.4.

    


      12.5   Duration.  Unless
otherwise provided in an Agreement, an Option or Stock Appreciation Right
granted to an Eligible Director shall expire on the earlier of:

    


    (a)  the first date on or
after the date of grant and prior to a Change in Control on which the Director
(i) resigns from or is not re-elected to the Board prior to being eligible for
retirement or (ii) resigns as a result of an interest or affiliation which would
prohibit continued service as a director;

    


    (b)  the date the Option or
Stock Appreciation Right has been exercised in full; or

    


    c)  one day after the
expiration of the ten-year period which begins on the date of grant of the
Option or Stock Appreciation Right or, in the case of a Director who dies within
one (1) year prior to such day, the last day of the one-year period which begins
on the date of the Director's death.

    


    13.      Effect
of a Termination of Employment.

    


    The Agreement evidencing the grant of
each Option and each Award shall set forth the terms and conditions applicable
to such Option or Award upon a termination or change in the status of the
employment of the Participant by the Company, a Subsidiary or a Division
(including a termination or change by reason of the sale of a Subsidiary or a
Division), which, except for Director Options, shall be as the Administrator
may, in its discretion, determine at the time the Option or Award is granted or
thereafter.

    


    14.      Adjustment
Upon Changes in Capitalization.

    


      14.1   In
the event of a Change in Capitalization, the Administrator shall conclusively
determine the appropriate adjustments, if any, to (a) the maximum number and
class of Shares or other stock or securities with respect to which Options or
Awards may be granted under the Plan, (b) the maximum number and class of Shares
or other stock or securities that may be issued upon exercise of Incentive Stock
Options, (c) the maximum number and class of Shares or other stock or securities
with respect to which Options or Awards may be granted to any Eligible
Individual in any calendar year, (d) the number and class of Shares or other
stock or securities which are subject to outstanding Options or Awards granted
under the Plan and the exercise price therefore, if applicable and (e) the
Performance Objectives.

    


      14.2   Any
such adjustment in the Shares or other stock or securities (a) subject to
outstanding Incentive Stock Options (including any adjustments in the exercise
price) shall be made in such manner as not to constitute a modification as
defined by Section 424(h)(3) of the Code and only to the extent otherwise
permitted by Sections 422 and 424 of the Code or (b) subject to outstanding
Options or Awards that are intended to qualify as Performance-Based Compensation
shall be made in such a manner as not to adversely affect the treatment of the
Options or Awards as Performance-Based Compensation.

    


      14.3   If,
by reason of a Change in Capitalization, a Participant shall be entitled to, or
shall be entitled to exercise an Option with respect to, new, additional or
different shares of stock or securities of the Company or any other corporation,
such new, additional or different shares shall thereupon be subject to all of
the conditions, restrictions and performance criteria which were applicable to
the Shares subject to the Award or Option, as the case may be, prior to such
Change in Capitalization.

    


    15.      Effect
of Certain Transactions.

    


    Subject to Sections 5.9, 6.6,
8.1(c)(ii), 8.2(c) and 9.4 or as otherwise provided in an Agreement, following
(a) the liquidation or dissolution of the Company or (b) a merger or
consolidation of the Company (a "Transaction"), either (i) each outstanding
Option or Award shall be treated as provided for in the agreement entered into
in connection with the Transaction or (ii) if not so provided in such agreement,
each Optionee and Grantee shall be entitled to receive in respect of each Share
subject to any outstanding Options or Awards, as the case may be, upon exercise
of any Option or payment or transfer in respect of any Award, the same number
and kind of stock, securities, cash, property or other consideration that each
holder of a Share was entitled to receive in the Transaction in respect of a
Share; provided, however, that such stock, securities, cash, property, or other
consideration shall remain subject to all of the conditions, restrictions and
performance criteria which were applicable to the Options and Awards prior to
such Transaction.  Without limiting the generality of the foregoing,
the treatment of outstanding Options and Stock Appreciation Rights pursuant to
clause (i) of this Section 15 in connection with a Transaction in which the
consideration paid or distributed to the Company's stockholders is not entirely
shares of common stock of the acquiring or resulting corporation may include the
cancellation of outstanding Options and Stock Appreciation Rights upon
consummation of the Transaction provided either (x) the holders of affected
Options and Stock Appreciation Rights have been given a period of at least
fifteen (15) days prior to the date of the consummation of the Transaction to
exercise the Options or Stock Appreciation Rights (whether or not they were
otherwise exercisable) or (y) the holders of the affected Options and Stock
Appreciation Rights are paid (in cash or cash equivalents) in respect of each
Share covered by the Option or Stock Appreciation Right being cancelled an
amount equal to the excess, if any, of the per share price paid or distributed
to stockholders in the transaction (the value of any non-cash consideration to
be determined by the Administrator in its sole discretion) over the exercise
price of the Option or Stock Appreciation Right.  For avoidance of
doubt, (1) the cancellation of Options and Stock Appreciation Rights pursuant to
clause (y) of the preceding sentence may be effected notwithstanding anything to
the contrary contained in this Plan or any Agreement and (2) if the amount
determined pursuant to clause (y) of the preceding sentence is zero or less, the
affected Option or Stock Appreciation Right may be cancelled without any payment
therefor.  The treatment of any Option or Award as provided in this
Section 15 shall be conclusively presumed to be appropriate for purposes of
Section 14.

    


    16.      Interpretation.

    


      16.1   Section
16 Compliance.  The Plan is intended to comply with Rule 16b-3
promulgated under the Exchange Act and the Administrator shall interpret and
administer the provisions of the Plan or any Agreement in a manner consistent
therewith.  Any provisions inconsistent with such Rule shall be
inoperative and shall not affect the validity of the Plan.

    


      16.2   Section
162(m).  Unless otherwise expressly stated in the relevant Agreement,
each Option, Stock Appreciation Right, Annual Incentive Award and Performance
Award granted to a Covered Employee under the Plan is intended to be
Performance-Based Compensation.  Accordingly, unless otherwise
determined by the Administrator, if any provision of the Plan or any Agreement
relating to such an Option or Award does not comply or is inconsistent with
Section 162(m) of the Code or the regulations promulgated thereunder (including
IRS Regulation 1.162-27 unless and to the extent it is superseded by an interim
or final regulation), such provision shall be construed or deemed amended to the
extent necessary to conform to such requirements, and no provision shall be
deemed to confer upon the Administrator discretion to increase the amount of
compensation otherwise payable to a Covered Employee in connection with any such
Option or Award upon the attainment of the Performance Objectives.

    


    17.      Termination
and Amendment of the Plan or Modification of Options and Awards.

    


      17.1   Plan
Amendment or Termination.   The Board may at any time terminate
the Plan and the Board may at any time and from time to time amend, modify or
suspend the Plan; provided, however, that:

    


    (a)  no such amendment,
modification, suspension or termination shall impair or adversely alter any
Options or Awards theretofore granted under the Plan, except with the consent of
the Participant, nor shall any amendment, modification, suspension or
termination deprive any Participant of any Shares which he or she may have
acquired through or as a result of the Plan; and

    


    (b)  no material amendment
and, to the extent necessary under any applicable law, regulation or exchange
requirement, no other amendment shall be effective unless approved by the
shareholders of the Company in accordance with applicable law, regulation or
exchange requirement.

    


      17.2   Modification
of Options and Awards.  No modification of an Option or Award shall
adversely alter or impair any rights or obligations under the Option or Award
without the consent of the Participant.

    


    18.      Non-Exclusivity
of the Plan.

    


    The adoption of the Plan by the Board
shall not be construed as amending, modifying or rescinding any previously
approved incentive arrangement or as creating any limitations on the power of
the Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options otherwise than
under the Plan, and such arrangements may be either applicable generally or only
in specific cases.

    


    19.      Limitation
of Liability.

    


    As illustrative of the limitations of
liability of the Company, but not intended to be exhaustive thereof, nothing in
the Plan shall be construed to:

    


    (a)  give any person any
right to be granted an Option or Award other than at the sole discretion of the
Administrator;

    


    (b)  give any person any
rights whatsoever with respect to Shares except as specifically provided in the
Plan;

    


    (c)  limit in any way the
right of the Company or any Subsidiary to terminate the employment of any person
at any time; or

    


    (d)  be evidence of any
agreement or understanding, express or implied, that the Company will employ any
person at any particular rate of compensation or for any particular period of
time.

    


    20.      Regulations
and Other Approvals; Governing Law.

    


      20.1   Except
as to matters of federal law, the Plan and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the laws of the
State of Georgia without giving effect to conflicts of laws principles
thereof.

    


      20.2   The
obligation of the Company to sell or deliver Shares with respect to Options and
Awards granted under the Plan shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws, and the
obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Administrator.

    


      20.3   The
Board may make such changes as may be necessary or appropriate to comply with
the rules and regulations of any government authority, or to obtain for Eligible
Individuals granted Incentive Stock Options the tax benefits under the
applicable provisions of the Code and regulations promulgated
thereunder.

    


      20.4   Each
Option and Award is subject to the requirement that, if at any time the
Administrator determines, in its discretion, that the listing, registration or
qualification of Shares issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Option or Award or the
issuance of Shares, no Options or Awards shall be granted or payment made or
Shares issued, in whole or in part, unless listing, registration, qualification,
consent or approval has been effected or obtained free of any conditions as
acceptable to the Administrator.

    


      20.5   Notwithstanding
anything contained in the Plan or any Agreement to the contrary, in the event
that the disposition of Shares acquired pursuant to the Plan is not covered by a
then current registration statement under the Securities Act of 1933, as amended
(the "Securities Act"), and is not otherwise exempt from such registration, such
Shares shall be restricted against transfer to the extent required by the
Securities Act and Rule 144 or other regulations promulgated
thereunder.  The Administrator may require any individual receiving
Shares pursuant to an Option or Award granted under the Plan, as a condition
precedent to receipt of such Shares, to represent and warrant to the Company in
writing that the Shares acquired by such individual are acquired without a view
to any distribution thereof and will not be sold or transferred other than
pursuant to an effective registration thereof under the Securities Act or
pursuant to an exemption applicable under the Securities Act or the rules and
regulations promulgated thereunder.  The certificates evidencing any
of such Shares shall be appropriately amended or have an appropriate legend
placed thereon to reflect their status as restricted securities as
aforesaid.

    


    21.      Miscellaneous.

    


      21.1   Multiple
Agreements.  The terms of each Option or Award may differ from other
Options or Awards granted under the Plan at the same time, or at some other
time.  The Administrator may also grant more than one Option or Award
to a given Eligible Individual during the term of the Plan, either in addition
to, or subject to Section 3.4, in substitution for, one or more Options or
Awards previously granted to that Eligible Individual.

    


      21.2   Withholding
of Taxes.

    


    (a)  The Company or any
Subsidiary shall withhold from any payment of cash or Shares to a Participant or
other person under the Plan an amount sufficient to cover any withholding taxes
which may become required with respect to such payment or shall take any other
action as it deems necessary to satisfy any income or other tax withholding
requirements as a result of the grant or exercise of any Award under the
Plan.  The Company or any Subsidiary shall have the right to require
the payment of any such taxes and require that any person furnish information
deemed necessary by the Company or any Subsidiary to meet any tax reporting
obligation as a condition to exercise or before making any payment pursuant to
an Award or Option.  Unless otherwise specified in an Agreement at the
time of grant, a Participant may, in satisfaction of his or her obligation to
pay withholding taxes in connection with the exercise, vesting or other
settlement of an Option or Award, elect to have withheld a portion of the Shares
then issuable to him or her having an aggregate Fair Market Value equal to the
withholding taxes.

    


    (b)  If a Participant makes
a disposition, within the meaning of Section 424(c) of the Code and regulations
promulgated thereunder, of any Share or Shares issued to such Participant
pursuant to the exercise of an Incentive Stock Option within the two-year period
commencing on the day after the date of the grant or within the one-year period
commencing on the day after the date of transfer of such Share or Shares to the
Participant pursuant to such exercise, the Participant shall, within ten (10)
days of such disposition, notify the Company thereof, by delivery of written
notice to the Company at its principal executive office.

    


      21.3   Plan
Unfunded.  The Plan shall be unfunded.  Except for reserving
a sufficient number of authorized Shares to the extent required by law to meet
the requirements of the Plan, the Company shall not be required to establish any
special or separate fund or to make any other segregation of assets to assure
payment of any Award or Option granted under the Plan.

    


      21.4   Beneficiary
Designation.  Each Participant may, from time to time, name one or
more individuals (each, a "Beneficiary") to whom any benefit under the Plan is
to be paid in case of the Participant's death before he or she receives any or
all of such benefit.  Each such designation shall revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing
with the Company during the Participant's lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant's death shall be paid
to the Participant's estate.

    


      21.5   Effective
Date/Term.  The effective date of the Plan shall be the date on which
the Plan is approved by the affirmative vote of the holders of a majority of the
securities of the Company present, or represented, and entitled to vote at a
meeting of shareholders duly held in accordance with the applicable laws of the
State of Georgia within twelve (12) months of the adoption of the Plan by the
Board (the "Effective Date").  Upon such approval of the Plan by the
shareholders, no further awards shall be granted under the Prior Plans or under
the BellSouth Corporation Officer Short Term Incentive Award Plan.

    


    The Plan shall terminate on the
Termination Date.  No Option or Award shall be granted after the
Termination Date.  The applicable terms of the Plan, and any terms and
conditions applicable to Options and Awards granted prior to the Termination
Date shall survive the termination of the Plan and continue to apply to such
Options and Awards.