<PAGE>

                              ZIMMER HOLDINGS, INC.
                            2001 STOCK INCENTIVE PLAN

      1. PURPOSE: The purpose of the 2001 Stock Incentive Plan is to secure for
the Company and its stockholders the benefits of the incentive inherent in
common stock ownership by the officers and key employees of the Company who will
be largely responsible for the Company's future growth and continued financial
success and by providing long-term incentives in addition to current
compensation to certain key executives of the Company who contribute
significantly to the long-term performance and growth of the Company. It is
intended that the former purpose will be effected through the granting of stock
options, stock appreciation rights, dividend equivalents and restricted stock
under the Plan and that the latter purpose will be effected through an award
conditionally granting performance units or performance shares under the Plan,
either independently or in conjunction with and related to a nonqualified stock
option grant under the Plan.

      2.  DEFINITIONS:  For purposes of this Plan:

      (a) "Affiliate" shall mean any entity in which the Issuer has, directly or
indirectly, an ownership interest of at least 20%.

      (b) "Code" shall mean the Internal Revenue Code of 1986, as amended.

      (c) "Common Stock" shall mean the Issuer's common stock.

      (d) "Company" shall mean the Issuer (Zimmer Holdings, Inc.) and its
Subsidiaries and Affiliates.

      (e) "Disability" or "Disabled" shall mean qualifying for and receiving
payments under a disability pay plan of the Company.

      (f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

      (g) "Fair Market Value" shall mean the average of the high and low sale
prices of a share of Common Stock on the New York Stock Exchange composite tape
on the date of measurement or on any date as determined by the Committee and, if
there were no trades on such date, on the day on which a trade occurred next
preceding such date.

      (h) "Issuer" shall mean Zimmer Holdings, Inc.

      (i) "Prior Plan" shall mean the Bristol-Myers Squibb Company 1997 Stock
Incentive Plan and the Bristol-Myers Squibb Company 1983 Stock Option Plan.

      (j) "Retirement" shall mean termination of the employment of an employee
with the Company on or after (i) the employee's 65th birthday or (ii) the
employee's 55th birthday if the employee has completed 10 years of service with
the Company. For purposes of this Section 2(j) and all other purposes of this
Plan, Retirement shall also mean termination of employment of an employee with
the Company for any reason (other than the employee's death, Disability,
resignation, willful misconduct or activity deemed detrimental to the interests
of the Company)


<PAGE>

where, on termination, the employee's age plus years of service (rounded up to
the next higher whole number) equals at least 70 and the employee has completed
10 years of service with the Company provided the optionee executes a general
release agreement and, where applicable, a non-solicitation and/or non-compete
agreement with the Company.

      (k) "Subsidiary" shall mean any corporation which at the time qualifies as
a subsidiary of the Issuer under the definition of "subsidiary corporation" in
Section 424 of the Code.

      3. AMOUNT OF STOCK: With respect to each calendar year, the amount of
stock which may be made subject to grants of options under the Plan shall not
exceed an amount equal to (i) ___% of the outstanding shares of the Common Stock
on January 1 of such year plus, subject to this Section 3, (ii) in any year the
number of shares equal to the amount of shares that were available for grants
and awards in the prior year but were not made subject to a grant or award in
such prior year and (iii) the number of shares that were subject to options or
awards granted hereunder, which options or awards terminated, expired or were
cancelled, forfeited, exchanged or surrendered in the prior year without being
exercised. No individual may be granted options or awards under Sections 6, 7, 8
or 9, in the aggregate, in respect of more than [_________] shares of the Common
Stock in a calendar year, subject to adjustment in number and kind pursuant to
Section 11. Aggregate shares issued under performance units and performance
share awards made pursuant to Section 8 and restricted stock awards made
pursuant to Section 9 may not exceed [__________] shares over the life of the
Plan, subject to adjustment in number and kind pursuant to Section 11. The
maximum number of shares with respect to which incentive stock options may be
granted under the Plan shall not exceed [____________] shares, subject to
adjustment in number and kind pursuant to Section 11. Common Stock issued
hereunder may be authorized and reissued shares or issued shares acquired by the
Company on the market or otherwise.

      4. ADMINISTRATION: The Plan shall be administered under the supervision of
the Board of Directors of the Issuer, which shall exercise its powers, to the
extent herein provided, through the agency of a Compensation and Management
Development Committee (the "Committee"), which shall be appointed by the Board
of Directors of the Issuer. The Committee shall consist of not less than three
(3) members of the Board who are intended to meet the definition of "outside
director" under the provisions of Section 162(m) of the Code and the definition
of "non-employee directors" under the provisions of the Exchange Act or rules or
regulations promulgated thereunder.

      The Committee, from time to time, may adopt rules and regulations
("Regulations") for carrying out the provisions and purposes of the Plan and
make such other determinations, not inconsistent with the terms of the Plan, as
the Committee shall deem appropriate. The interpretation and construction of any
provision of the Plan by the Committee shall, unless otherwise determined by the
Board of Directors, be final and conclusive.

      The Committee shall maintain a written record of its proceedings. A
majority of the Committee shall constitute a quorum, and the acts of a majority
of the members present at any meeting at which a quorum is present, or acts
unanimously approved in writing, shall be the acts of the Committee.

                                       2
<PAGE>

      5. ELIGIBILITY: Options and awards may be granted only to present or
future officers and key employees of the Company, including Subsidiaries and
Affiliates which become such after the adoption of the Plan. Any officer or key
employee of the Company shall be eligible to receive one or more options or
awards under the Plan. Any director who is not an officer or employee of the
Company shall be ineligible to receive an option or award under the Plan. The
adoption of this Plan shall not be deemed to give any officer or employee any
right to an award or to be granted an option to purchase Common Stock, except to
the extent and upon such terms and conditions as may be determined by the
Committee.

      6. GRANTS AS OF EFFECTIVE DATE: On or after the effective date of the
Plan, the Committee shall grant options and awards with respect to Common Stock
under this Plan ("Replacement Grants") to officers and key employees of the
Company who hold outstanding options and awards with respect to stock of
Bristol-Myers Squibb Company under the Prior Plan ("BMS Grants"). The
Replacement Grants shall replace the employees' outstanding BMS Grants. The
Committee shall establish the option price and number of shares of the
Replacement Grants based on the option price and number of shares of the
corresponding BMS Grants, adjusted to reflect the spinoff of the Issuer from
Bristol-Myers Squibb Company. In other respects, the Replacement Grants shall
have terms generally consistent with the BMS Grants that they replace, with such
changes as the Committee deems appropriate. Service credited under the terms of
the BMS Grants before the date of grant of the Replacement Grants shall be
considered service for purposes of the Replacement Grants.

      7. STOCK OPTIONS: Stock options under the Plan shall consist of incentive
stock options under Section 422 of the Code or nonqualified stock options
(options not intended to qualify as incentive stock options), as the Committee
shall determine. In addition, the Committee may grant stock appreciation rights
in conjunction with an option, as set forth in Section 7(b)(11), or may grant
awards in conjunction with an option, as set forth in Section 7(b)(10) (an
"Associated Option").

      Each option shall be subject to the following terms and conditions:

      (a) GRANT OF OPTIONS. The Committee shall (1) select the officers and key
employees of the Company to whom options may from time to time be granted, (2)
determine whether incentive stock options or nonqualified stock options are to
be granted, (3) determine the number of shares to be covered by each option so
granted, (4) determine the terms and conditions (not inconsistent with the Plan)
of any option granted hereunder (including but not limited to restrictions upon
the options, conditions of their exercise, or restrictions on the shares of
Common Stock issuable upon exercise thereof), (5) determine whether nonqualified
stock options or incentive stock options granted under the Plan shall include
stock appreciation rights and, if so, the Committee shall determine the terms
and conditions thereof in accordance with Section 7(b)(11) hereof, (6) determine
whether any nonqualified stock options granted under the Plan shall be
Associated Options, and (7) prescribe the form of the instruments necessary or
advisable in the administration of options.

      (b) TERMS AND CONDITIONS OF OPTION. Any option granted under the Plan
shall be evidenced by a Stock Option Agreement entered into by the Company and
the optionee, in such form as the Committee shall approve, which agreement shall
be subject to the following terms


                                       3
<PAGE>

and conditions and shall contain such additional terms and conditions not
inconsistent with the Plan, and in the case of an incentive stock option not
inconsistent with the provisions of the Code applicable to incentive stock
options, as the Committee shall prescribe:

            (1) NUMBER OF SHARES SUBJECT TO AN OPTION. The Stock Option
      Agreement shall specify the number of shares of Common Stock subject to
      the Agreement. If the option is an Associated Option, the number of shares
      of Common Stock subject to such Associated Option shall initially be equal
      to the number of performance units or performance shares subject to the
      award, but one share of Common Stock shall be canceled for each
      performance unit or performance share paid out under the award.

            (2) OPTION PRICE. The purchase price per share of Common Stock
      purchasable under an option will be determined by the Committee but will
      be not less than the Fair Market Value of a share of Common Stock on the
      date of the grant of such option, except as provided in Section 6 above.

            (3) OPTION PERIOD.  The period of each option shall be fixed by
      the Committee, but no option shall be exercisable after the expiration
      of ten years from the date the option is granted.

            (4) CONSIDERATION. Unless the Committee determines otherwise, each
      optionee, as consideration for the grant of an option, shall remain in the
      continuous employ of the Company for at least one year from the date of
      the granting of such option, and no option shall be exercisable until
      after the completion of such one year period of employment by the
      optionee.

            (5) EXERCISE OF OPTION. An option may be exercised in whole or in
      part from time to time during the option period (or, if determined by the
      Committee, in specified installments during the option period) by giving
      written notice of exercise to the Company specifying the number of shares
      to be purchased. Such written notice must be accompanied by payment in
      full of the purchase price and Withholding Taxes (as defined in Section 12
      hereof), unless an election to defer receipt of shares is made under
      Section 14, due either (i) by certified or bank check, (ii) by payment
      through a broker in accordance with procedures permitted by Regulation T
      of the Federal Reserve Board, (iii) in shares of Common Stock owned by the
      optionee having a Fair Market Value at the date of exercise equal to such
      purchase price, provided that payment in shares of Common Stock will not
      be permitted unless at least 100 shares of Common Stock are required and
      delivered for such purpose, (iv) in any combination of the foregoing, or
      (v) by any other method that the Committee approves. At its discretion,
      the Committee may modify or suspend any method for the exercise of stock
      options, including any of the methods specified in the previous sentence.
      Delivery of shares for exercising an option shall be made either through
      the physical delivery of shares or through an appropriate certification or
      attestation of valid ownership. Shares of Common Stock used to exercise an
      option shall have been held by the optionee for the requisite period of
      time to avoid adverse accounting consequences to the Company with respect
      to the option. No shares shall be issued until full payment therefor has
      been made. An optionee shall have the rights of a stockholder only with
      respect to shares of stock that have been recorded on the


                                       4
<PAGE>

      Company's books on behalf of the optionee or for which certificates have
      been issued to the optionee.

            Notwithstanding anything in the Plan to the contrary, the Committee
      may, in its sole discretion, allow the exercise of a lapsed grant if the
      Committee determines that: (i) the lapse was solely the result of the
      Company's inability to execute the exercise of an option award due to
      conditions beyond the Company's control and (ii) the optionee made valid
      and reasonable efforts to exercise the award. In the event the Committee
      makes such a determination, the Company shall allow the exercise to occur
      as promptly as possible following its receipt of exercise instructions
      subsequent to such determination.

            (6) NONTRANSFERABILITY OF OPTIONS. No option or stock appreciation
      right granted under the Plan shall be transferable by the optionee other
      than by will or by the laws of descent and distribution, and such option
      or stock appreciation right shall be exercisable, during the optionee's
      lifetime, only by the optionee.

            Notwithstanding the foregoing, the Committee may set forth in a
      Stock Option Agreement at the time of grant or thereafter, that the
      options (other than Incentive Stock Options) may be transferred to members
      of the optionee's immediate family, to one or more trusts solely for the
      benefit of such immediate family members and to partnerships in which such
      family members or trusts are the only partners. For this purpose,
      immediate family means the optionee's spouse, parents, children,
      stepchildren, grandchildren and legal dependants. Any transfer of options
      under this provision will not be effective until notice of such transfer
      is delivered to the Company.

            (7) RETIREMENT AND TERMINATION OF EMPLOYMENT OTHER THAN BY DEATH OR
      DISABILITY. If an optionee shall cease to be employed by the Company for
      any reason (other than termination of employment by reason of death or
      Disability) after the optionee shall have been continuously so employed
      for one year after the granting of the option, or as otherwise determined
      by the Committee, the option shall be exercisable only to the extent that
      the optionee was otherwise entitled to exercise it at the time of such
      cessation of employment with the Company, unless otherwise determined by
      the Committee. If the cessation of employment is on account of Retirement,
      the option shall remain exercisable for the remainder of the option period
      set forth therein. If the cessation of employment is not on account of
      Retirement or death, the option shall remain exercisable for three months
      after such cessation of employment (or, if earlier, the end of the option
      period), unless the Committee determines otherwise. The Plan does not
      confer upon any optionee any right with respect to continuation of
      employment by the Company.

            (8) DISABILITY OF OPTIONEE. An optionee who ceases to be employed by
      reason of Disability shall be treated as though the optionee remained in
      the employ of the Company until the earlier of (i) cessation of payments
      under a disability pay plan of the Company, (ii) the optionee's death, or
      (iii) the optionee's 65th birthday.

            (9) DEATH OF OPTIONEE. Except as otherwise provided in subsection
      (13), in the event of the optionee's death (i) while in the employ of the
      Company, (ii) while Disabled as described in subsection (8) or (iii) after
      cessation of employment due to Retirement,


                                       5
<PAGE>

      the option shall be fully exercisable by the executors, administrators,
      legatees or distributees of the optionee's estate, as the case may be, at
      any time following such death. In the event of the optionee's death after
      cessation of employment for any reason other than Disability or
      Retirement, the option shall be exercisable by the executors,
      administrators, legatees or distributees of the optionee's estate, as the
      case may be, at any time during the twelve month period following such
      death. Notwithstanding the foregoing, unless the Committee determines
      otherwise, in no event shall an option be exercisable unless the optionee
      shall have been continuously employed by the Company for a period of at
      least one year after the option grant, and no option shall be exercisable
      after the expiration of the option period set forth in the Stock Option
      Agreement. In the event any option is exercised by the executors,
      administrators, legatees or distributees of the estate of a deceased
      optionee, the Company shall be under no obligation to issue stock
      thereunder unless and until the Company is satisfied that the person or
      persons exercising the option are the duly appointed legal representatives
      of the deceased optionee's estate or the proper legatees or distributees
      thereof.

            (10) LONG-TERM PERFORMANCE AWARDS. The Committee may from time to
      time grant nonqualified stock options under the Plan in conjunction with
      and related to an award of performance units or performance shares made
      under a Long-Term Performance Award as set forth in Section 8(b)(11). In
      such event, notwithstanding any other provision hereof, (i) the number of
      shares to which the Associated Option applies shall initially be equal to
      the number of performance units or performance shares granted by the
      award, but such number of shares shall be reduced on a one-share-for-one
      unit or share basis to the extent that the Committee determines, pursuant
      to the terms of the award, to pay to the optionee or the optionee's
      beneficiary the performance units or performance shares granted pursuant
      to such award, and (ii) such Associated Option shall be cancelable in the
      discretion of the Committee, without the consent of the optionee, under
      the conditions and to the extent specified in the award.

            (11) STOCK APPRECIATION RIGHTS. In the case of any option granted
      under the Plan, either at the time of grant or by amendment of such option
      at any time after such grant there may be included a stock appreciation
      right which shall be subject to such terms and conditions, not
      inconsistent with the Plan, as the Committee shall impose, including the
      following:

                  (A) A stock appreciation right shall be exercisable to the
            extent, and only to the extent, that the option in which it is
            included is at the time exercisable, and may be exercised within
            such period only at such time or times as may be determined by the
            Committee;

                  (B) A stock appreciation right shall entitle the optionee (or
            any person entitled to act under the provisions of subsection (9)
            hereof) to surrender unexercised the option in which the stock
            appreciation right is included (or any portion of such option) to
            the Company and to receive from the Company in exchange therefor
            that number of shares having an aggregate value equal to (or, in the
            discretion of the Committee, less than) the excess of the value of
            one share (provided such value does not exceed such multiple of the
            option price per share


                                       6
<PAGE>

            as may be specified by the Committee) over the option price per
            share specified in such option times the number of shares called for
            by the option, or portion thereof, which is so surrendered. The
            Committee shall be entitled to cause the Company to settle its
            obligation, arising out of the exercise of a stock appreciation
            right, by the payment of cash equal to the aggregate value of the
            shares the Company would otherwise be obligated to deliver or partly
            by the payment of cash and partly by the delivery of shares. Any
            such election shall be made within 30 business days after the
            receipt by the Committee of written notice of the exercise of the
            stock appreciation right. The value of a share for this purpose
            shall be the Fair Market Value thereof on the last business day
            preceding the date of the election to exercise the stock
            appreciation right;

                  (C) No fractional shares shall be delivered under this
            subsection (11) but in lieu thereof a cash adjustment shall be made;

                  (D) If a stock appreciation right included in an option is
            exercised, such option shall be deemed to have been exercised to the
            extent of the number of shares called for by the option or portion
            thereof which is surrendered on exercise of the stock appreciation
            right and no new option may be granted covering such shares under
            this Plan; and

                  (E) If an option which includes a stock appreciation right is
            exercised, such stock appreciation right shall be deemed to have
            been canceled to the extent of the number of shares called for by
            the option or portion thereof is exercised and no new stock
            appreciation rights may be granted covering such shares under this
            Plan.

            (12) INCENTIVE STOCK OPTIONS. Incentive stock options may only be
      granted to employees of the Issuer and its Subsidiaries and parent
      corporations, as defined in Section 424 of the Code. In the case of any
      incentive stock option granted under the Plan, the aggregate Fair Market
      Value of the shares of Common Stock (determined at the time of grant of
      each option) with respect to which incentive stock options granted under
      the Plan and any other plan of the Issuer or its parent or a Subsidiary
      which are exercisable for the first time by an employee during any
      calendar year shall not exceed $100,000 or such other amount as may be
      required by the Code.

            (13) RIGHTS OF TRANSFEREE. Notwithstanding anything to the contrary
      herein, if an option has been transferred in accordance with Section
      7(b)(6), the option shall be exercisable solely by the transferee. The
      option shall remain subject to the provisions of the Plan, including that
      it will be exercisable only to the extent that the optionee or optionee's
      estate would have been entitled to exercise it if the optionee had not
      transferred the option. In the event of the death of the optionee prior to
      the expiration of the right to exercise the transferred option, the period
      during which the option shall be exercisable will terminate on the date
      one year following the date of the optionee's death. In the event of the
      death of the transferee prior to the expiration of the right to exercise
      the option, the period during which the option shall be exercisable by the
      executors, administrators, legatees and distributees of the transferee's
      estate, as the case may be, will

                                       7
<PAGE>

      terminate on the date one year following the date of the transferee's
      death. In no event will the option be exercisable after the expiration of
      the option period set forth in the Stock Option Agreement. The option
      shall be subject to such other rules as the Committee shall determine.

      8. LONG-TERM PERFORMANCE AWARDS: Awards under the Plan shall consist of
the conditional grant to the participants of a specified number of performance
units or performance shares. The conditional grant of a performance unit to a
participant will entitle the participant to receive a specified dollar value,
variable under conditions specified in the award, if the performance objectives
specified in the award are achieved and the other terms and conditions thereof
are satisfied. The conditional grant of a performance share to a participant
will entitle the participant to receive a specified number of shares of Common
Stock, or the equivalent cash value, if the objectives specified in the award
are achieved and the other terms and conditions thereof are satisfied. Each
award will be subject to the following terms and conditions:

      (a) GRANT OF AWARDS. The Committee shall (1) select the officers and key
executives of the Company to whom awards may from time to time be granted, (2)
determine the number of performance units or performance shares covered by each
award, (3) determine the terms and conditions of each performance unit or
performance share awarded and the award period and performance objectives with
respect to each award, (4) determine the periods during which a participant may
request the Committee to approve deferred payment of a percentage (not less than
25%) of an award (the "Deferred Portion") and the interest or rate of return
thereon or the basis on which such interest or rate of return thereon is to be
determined, (5) determine whether payment with respect to the portion of an
award which has not been deferred (the "Current Portion") and the payment with
respect to the Deferred Portion of an award shall be made entirely in cash,
entirely in Common Stock or partially in cash and partially in Common Stock, (6)
determine whether the award is to be made independently of or in conjunction
with a nonqualified stock option granted under the Plan, and (7) prescribe the
form of the instruments necessary or advisable in the administration of the
awards.

      (b) TERMS AND CONDITIONS OF AWARD. Any award conditionally granting
performance units or performance shares to a participant shall be evidenced by a
Performance Unit Agreement or Performance Share Agreement, as applicable,
executed by the Company and the participant, in such form as the Committee shall
approve, which Agreement shall contain in substance the following terms and
conditions applicable to the award and such additional terms and conditions as
the Committee shall prescribe:

            (1) NUMBER AND VALUE OF PERFORMANCE UNITS. The Performance Unit
      Agreement shall specify the number of performance units conditionally
      granted to the participant. If the award has been made in conjunction with
      the grant of an Associated Option, the number of performance units granted
      shall initially be equal to the number of shares which the participant is
      granted the right to purchase pursuant to the Associated Option, but one
      performance unit shall be canceled for each share of the Company's Common
      Stock purchased upon exercise of the Associated Option or for each stock
      appreciation right included in such option that has been exercised. The
      Performance Unit Agreement shall specify the threshold, target and maximum
      dollar values of each performance unit and corresponding performance
      objectives as provided under Section 8(b)(5). No payout


                                       8
<PAGE>

      under a performance unit award to an individual Participant may exceed
      [_____%] of the pre-tax earnings of the Company for the fiscal year which
      coincides with the final year of the performance unit period.

            (2) NUMBER AND VALUE OF PERFORMANCE SHARES. The Performance Share
      Agreement shall specify the number of performance shares conditionally
      granted to the participant. If the award has been made in conjunction with
      the grant of an Associated Option, the number of performance shares
      granted shall initially be equal to the number of shares which the
      participant is granted the right to purchase pursuant to the Associated
      Option, but one performance share shall be canceled for each share of the
      Company's Common Stock purchased upon exercise of the Associated Option or
      for each stock appreciation right included in such option that has been
      exercised. The Performance Share Agreement shall specify that each
      Performance Share will have a value equal to one (1) share of Common
      Stock.

            (3) AWARD PERIODS. For each award, the Committee shall designate an
      award period with a duration to be determined by the Committee in its
      discretion, but in no event less than three calendar years, within which
      specified performance objectives are to be attained. There may be several
      award periods in existence at any one time and the duration of performance
      objectives may differ from each other.

            (4) CONSIDERATION. Each participant, as consideration for the award
      of performance units or performance shares, shall remain in the continuous
      employ of the Company for at least one year after the date of the making
      of such award, and no award shall be payable until after the completion of
      such one year of employment by the participant, except as otherwise
      determined by the Committee.

            (5) PERFORMANCE OBJECTIVES. The Committee shall establish
      performance objectives with respect to the Company for each award period
      on the basis of such criteria and to accomplish such objectives as the
      Committee may from time to time determine. Performance criteria for awards
      under the Plan shall include one or more of the following measures of the
      operating performance:

            a.  Earnings                        d.  Financial return ratios
            b.  Revenue                         e.  Total Shareholder Return
            c.  Operating or net cash flows     f.  Market share.

            The Committee shall establish the specific targets for the selected
      criteria. These targets may be set at a specific level or may be expressed
      as relative to the comparable measure at comparison companies or a defined
      index. These targets may be based upon the total Company, one or more
      businesses units of the Company, or a defined business unit which the
      executive has responsibility for or influence over.

            (6) DETERMINATION AND PAYMENT OF PERFORMANCE UNITS OR PERFORMANCE
      SHARES EARNED. As soon as practicable after the end of an award period,
      the Committee shall determine the extent to which awards have been earned
      on the basis of the Company's actual performance in relation to the
      established performance objectives as set forth in the


                                       9
<PAGE>

      Performance Unit Agreement or Performance Share Agreement and certify
      these results in writing. The Performance Unit Agreement or Performance
      Share Agreement shall specify that as soon as practicable after the end of
      each award period, the Committee shall determine whether the conditions of
      Sections 8(b)(4) and 8(b)(5) hereof have been met and, if so, shall
      ascertain the amount payable or shares which should be distributed to the
      participant in respect of the performance units or performance shares. As
      promptly as practicable after it has determined that an amount is payable
      or should be distributed in respect of an award, the Committee shall cause
      the Current Portion of such award to be paid or distributed to the
      participant or the participant's beneficiaries, as the case may be, in the
      Committee's discretion, either entirely in cash, entirely in Common Stock
      or partially in cash and partially in Common Stock. The Deferred Portion
      of an award shall be contingently credited and payable to the participant
      over a deferred period and shall be credited with interest, rate of
      return, or other valuation as determined by the Committee. The Committee,
      in its discretion, shall determine the conditions upon, and method of,
      payment of such Deferred Portions and whether such payment will be made
      entirely in cash, entirely in Common Stock or partially in cash and
      partially in Common Stock.

            In making the payment of an award in Common Stock hereunder, the
      cash equivalent of such Common Stock shall be determined by the Fair
      Market Value of the Common Stock on the day the Committee designates the
      performance units shall be payable.

            (7) NONTRANSFERABILITY OF AWARDS AND DESIGNATION OF Beneficiaries.
      No award under this Section of the Plan shall be transferable by the
      participant other than by will or by the laws of descent and distribution,
      except that a participant may designate a beneficiary pursuant to the
      provisions hereof. If any participant or the participant's beneficiary
      shall attempt to assign the participant's rights under the Plan in
      violation of the provisions thereof, the Company's obligation to make any
      further payments to such participant or the participant's beneficiaries
      shall forthwith terminate.

            A participant may name one or more beneficiaries to receive any
      payment of an award to which the participant may be entitled under the
      Plan in the event of the participant's death, on a form to be provided by
      the Committee. A participant may change the participant's beneficiary
      designation from time to time in the same manner. If no designated
      beneficiary is living on the date on which any payment becomes payable to
      a participant's beneficiary, or if no beneficiary has been specified by
      the participant, such payment will be payable to the person or persons in
      the first of the following classes of successive preference:

            (i)   Widow or widower, if then living,
            (ii)  Surviving children, equally,
            (iii) Surviving parents, equally,
            (iv)  Surviving brothers and sisters, equally,
            (v)   Executors or administrators

      and the term "beneficiary" as used in the Plan shall include such
      person or persons.

                                       10
<PAGE>

            (8) RETIREMENT AND TERMINATION OF EMPLOYMENT OTHER THAN BY DEATH OR
      DISABILITY. In the event of the Retirement prior to the end of an award
      period of a participant who has satisfied the one year employment
      requirement of Section 8(b)(4) with respect to an award prior to
      Retirement, or as otherwise determined by the Committee, the participant,
      or his estate, shall be entitled to a payment of such award at the end of
      the award period, pursuant to the terms of the Plan and the participant's
      Performance Unit Agreement or Performance Share Agreement, provided,
      however, that the participant shall be deemed to have earned that
      proportion (to the nearest whole unit or share) of the value of the
      performance units or performance shares granted to the participant under
      such award as the number of months of the award period which have elapsed
      since the first day of the calendar year in which the award was made to
      the end of the month in which the participant's Retirement occurs, bears
      to the total number of months in the award period, subject to the
      attainment of performance objectives associated with the award as
      certified by the Committee. The participant's right to receive any
      remaining performance units or performance shares shall be canceled and
      forfeited.

            Subject to Section 8(b)(6) hereof, the Performance Unit Agreement or
      Performance Share Agreement shall specify that the right to receive the
      performance units or performance shares granted to such participant shall
      be conditional and shall be canceled, forfeited and surrendered if the
      participant's continuous employment with the Company shall terminate for
      any reason, other than the participant's death, Disability or Retirement,
      prior to the end of the award period, or as otherwise determined by the
      Committee.

            (9) DISABILITY OF PARTICIPANT. For the purposes of any award, a
      participant who becomes Disabled shall be deemed to have suspended active
      employment by reason of Disability commencing on the date the participant
      becomes entitled to receive payments under a disability pay plan of the
      Company and continuing until the date the participant is no longer
      entitled to receive such payments. In the event a participant becomes
      Disabled during an award period, but only if the participant has satisfied
      the one year employment requirement of Section 8(b)(4) with respect to an
      award prior to becoming Disabled, or as otherwise determined by the
      Committee, upon the determination by the Committee of the extent to which
      an award has been earned pursuant to Section 8(b)(6), the participant
      shall be deemed to have earned that proportion (to the nearest whole unit)
      of the value of the performance units granted to the participant under
      such award as the number of months of the award period in which the
      participant was not Disabled bears to the total number of months in the
      award period, subject to the attainment of the performance objectives
      associated with the award as certified by the Committee. The participant's
      right to receive any remaining performance units shall be canceled and
      forfeited.

            (10) DEATH OF PARTICIPANT. In the event of the death prior to the
      end of an award period of a participant who has satisfied the one year
      employment requirement with respect to an award prior to the date of
      death, or as otherwise determined by the Committee, the participant's
      beneficiaries or estate, as the case may be, shall be entitled to a
      payment of such award upon the end of the award period, pursuant to the
      terms of the Plan and the participant's Performance Unit Agreement or
      Performance Share


                                       11
<PAGE>

      Agreement, provided, however, that the participant shall be deemed to have
      earned that proportion (to the nearest whole unit or share) of the value
      of the performance units or performance shares granted to the participant
      under such award as the number of months of the award period which have
      elapsed since the first day of the calendar year in which the award was
      made to the end of the month in which the participant's death occurs,
      bears to the total number of months in the award period. The participant's
      right to receive any remaining performance units or performance shares
      shall be canceled and forfeited.

            The Committee may, in its discretion, waive, in whole or in part,
      such cancellation and forfeiture of any performance units or performance
      shares.

            (11) GRANT OF ASSOCIATED OPTION. If the Committee determines that
      the conditional grant of performance units or performance shares under the
      Plan is to be made to a participant in conjunction with the grant of a
      nonqualified stock option under the Plan, the Committee shall grant the
      participant an Associated Option under the Plan subject to the terms and
      conditions of this subsection (11). In such event, such award under the
      Plan shall be contingent upon the participant's being granted such an
      Associated Option pursuant to which: (i) the number of shares the optionee
      may purchase shall initially be equal to the number of performance units
      or performance shares conditionally granted by the award, (ii) such number
      of shares shall be reduced on a one-share-for-one-unit or share basis to
      the extent that the Committee determines, pursuant to Section 8(b)(6)
      hereof, to pay to the participant or the participant's beneficiaries the
      performance units or performance shares conditionally granted pursuant to
      the award, and (iii) the Associated Option shall be cancelable in the
      discretion of the Committee, without the consent of the participant, under
      the conditions and to the extent specified herein and in Section 8(b)(6)
      hereof.

            If no amount is payable in respect of the conditionally granted
      performance units or performance shares, the award and such performance
      units or performance shares shall be deemed to have been canceled,
      forfeited and surrendered, and the Associated Option, if any, shall
      continue in effect in accordance with its terms. If any amount is payable
      in respect of the performance units or performance shares and such units
      or shares were granted in conjunction with an Associated Option, the
      Committee shall, within 30 days after the determination of the Committee
      referred to in the first sentence of Section 8(b)(6), determine, in its
      sole discretion, either:

                  (A) to cancel in full the Associated Option, in which event
            the value of the performance units or performance shares payable
            pursuant to Sections 8(b)(5) and (6) shall be paid or the
            performance shares shall be distributed;

                  (B) to cancel in full the performance units or performance
            shares, in which event no amount shall be paid to the participant in
            respect thereof and no shares shall be distributed but the
            Associated Option shall continue in effect in accordance with its
            terms; or

                  (C) to cancel some, but not all, of the performance units or
            performance shares, in which event the value of the performance
            units payable pursuant to


                                       12
<PAGE>

            Sections 8(b)(5) and (6) which have not been canceled shall be paid
            or the performance shares shall be distributed and the Associated
            Option shall be canceled with respect to that number of shares equal
            to the number of conditionally granted performance units or
            performance shares that remain payable.

            Any action taken by the Committee pursuant to the preceding sentence
      shall be uniform with respect to all awards having the same award period.
      If the Committee takes no such action, it shall be deemed to have
      determined to cancel in full the award in accordance with clause (B)
      above.

      9.  RESTRICTED STOCK:  Restricted stock awards under the Plan shall
consist of grants of shares of Common Stock of the Issuer subject to the
terms and conditions hereinafter provided.

      (a) GRANT OF AWARDS: The Committee shall (i) select the officers and key
employees to whom Restricted Stock may from time to time be granted, (ii)
determine the number of shares to be covered by each award granted, (iii)
determine the terms and conditions (not inconsistent with the Plan) of any award
granted hereunder, and (iv) prescribe the form of the agreement, legend or other
instrument necessary or advisable in the administration of awards under the
Plan.

      (b) TERMS AND CONDITIONS OF AWARDS: Any restricted stock award granted
under the Plan shall be evidenced by a Restricted Stock Agreement executed by
the Issuer and the recipient, in such form as the Committee shall approve, which
agreement shall be subject to the following terms and conditions and shall
contain such additional terms and conditions not inconsistent with the Plan as
the Committee shall prescribe:

            (1) NUMBER OF SHARES SUBJECT TO AN AWARD: The Restricted Stock
      Agreement shall specify the number of shares of Common Stock subject to
      the Award.

            (2) RESTRICTION PERIOD: The period of restriction applicable to each
      Award shall be established by the Committee but may not be less than one
      year, unless the Committee determines otherwise. The Restriction Period
      applicable to each Award shall commence on the Award Date.

            (3) CONSIDERATION: Each recipient, as consideration for the grant of
      an award, shall remain in the continuous employ of the Company for at
      least one year from the date of the granting of such award, or as
      otherwise determined by the Committee, and any shares covered by such an
      award shall lapse if the recipient does not remain in the continuous
      employ of the Company for at least one year from the date of the granting
      of the award, except as otherwise determined by the Committee.

            (4) RESTRICTION CRITERIA: The Committee shall establish the criteria
      upon which the restriction period shall be based. Restrictions shall be
      based upon either or both of (i) the continued employment of the recipient
      or (ii) the attainment by the Company of one or more of the following
      measures of operating performance:

            a.  Earnings                        d.  Financial return ratios
            b.  Revenue                         e.  Total Shareholder Return


                                       13
<PAGE>

            c.  Operating or net cash flows     f.  Market share.

            The Committee shall establish the specific targets for the selected
      criteria. These targets may be set at a specific level or may be expressed
      as relative to the comparable measure at comparison companies or a defined
      index. These targets may be based upon the total Company, one or more
      business units of the Company or a defined business unit which the
      executive has responsibility for or influence over.

            In cases where objective performance criteria are established, the
      Committee shall determine the extent to which the criteria have been
      achieved and the corresponding level to which restrictions will be removed
      from the Award or the extent to which a participant's right to receive an
      Award should be lapsed in cases where the performance criteria have not
      been met and shall certify these determinations in writing. The Committee
      may provide for the determination of the attainment of such restrictions
      in installments where deemed appropriate.

      (c) TERMS AND CONDITIONS OF RESTRICTIONS AND FORFEITURES: The shares of
Common Stock awarded pursuant to the Plan shall be subject to the following
restrictions and conditions:

            (1) During the Restriction Period, the participant will not be
      permitted to sell, transfer, pledge or assign Restricted Stock awarded
      under this Plan.

            (2) Except as provided in Section 9(c)(1), or as the Committee may
      otherwise determine, the participant shall have all of the rights of a
      stockholder of the Issuer, including the right to vote the shares and
      receive dividends and other distributions provided that distributions in
      the form of stock shall be subject to the same restrictions as the
      underlying Restricted Stock.

            (3) In the event of a participant's Retirement, death or Disability
      prior to the end of the Restriction Period for a participant who has
      satisfied the one year employment requirement of Section 9(b)(3) with
      respect to an award prior to Retirement, death or Disability, or as
      otherwise determined by the Committee, the participant, or the
      participant's estate, shall be entitled to receive that proportion (to the
      nearest whole share) of the number of shares subject to the Award granted
      as the number of months of the Restriction Period which have elapsed since
      the Award date to the date at which the participant's Retirement, death or
      Disability occurs, bears to the total number of months in the Restriction
      Period. The participant's right to receive any remaining shares shall be
      canceled and forfeited and the shares will be deemed to be reacquired by
      the Issuer.

            (4) In the event of a participant's Retirement, death, Disability or
      in cases of special circumstances as determined by the Committee, the
      Committee may, in its sole discretion when it finds that such an action
      would be in the best interests of the Company, accelerate or waive in
      whole or in part any or all remaining time based restrictions with respect
      to all or part of such participant's Restricted Stock.

            (5) Upon termination of employment for any reason during the
      Restriction Period, subject to the provisions of paragraph (3) above or in
      the event that the participant fails promptly to pay or make satisfactory
      arrangements as to the withholding taxes as


                                       14
<PAGE>

      provided in the following paragraph, all shares still subject to
      restriction shall be forfeited by the participant and will be deemed to be
      reacquired by the Company.

            (6) A participant may, at any time prior to the expiration of the
      Restriction Period, waive all rights to receive all or some of the shares
      of a Restricted Stock Award by delivering to the Company a written notice
      of such waiver.

            (7) Notwithstanding the other provisions of this Section 9, the
      Committee may adopt rules which would permit a gift by a participant of
      restricted shares to members of the participant's immediate family
      (spouse, parents, children, stepchildren, grandchildren or legal
      dependants) or to a trust whose beneficiary or beneficiaries shall be
      either such a person or persons or the participant.

            (8) Any attempt to dispose of Restricted Stock in a manner contrary
      to the restrictions shall be ineffective.

      10.  DETERMINATION OF BREACH OF CONDITIONS:  The determination of the
Committee as to whether an event has occurred resulting in a forfeiture or a
termination or reduction of the Company's obligations in accordance with the
provisions of the Plan shall be conclusive.

      11. ADJUSTMENT IN THE EVENT OF CHANGE IN STOCK: In the event of changes in
the outstanding Common Stock by reason of stock dividends, recapitalization,
mergers, consolidations, stock splits, combinations or exchanges of shares and
the like, the aggregate number and class of shares available under the Plan, the
aggregate number and class of shares subject to individual limits under the
Plan, and the number, class and the price of shares subject to outstanding
options and awards and the number of performance units and the dollar value of
each unit shall be appropriately adjusted by the Committee, whose determination
shall be conclusive.

      12.  TAXES:

      (a) Each participant shall, no later than the Tax Date (as defined below),
pay to the Company, or make arrangements satisfactory to the Committee regarding
payment of, any Withholding Tax (as defined below) with respect to an option or
award, and the Company shall, to the extent permitted by law, have the right to
deduct such amount from any payment of any kind otherwise due to the
participant. The Company shall also have the right to retain or sell without
notice, or to demand surrender of, shares of Common Stock in value sufficient to
cover the amount of any Withholding Tax, and to make payment (or to reimburse
itself for payment made) to the appropriate taxing authority of an amount in
cash equal to the amount of such Withholding Tax, remitting any balance to the
participant. For purposes of the paragraph, the value of shares of Common Stock
so retained or surrendered shall be the average of the high and low sales prices
per share on the New York Stock Exchange composite tape on the date that the
amount of the Withholding Tax is to be determined (the "Tax Date") and the value
of shares of Common Stock so sold shall be the actual net sale price per share
(after deduction of commissions) received by the Company.

      (b) Notwithstanding the foregoing, if the stock options have been
transferred, the optionee shall provide the Company with funds sufficient to pay
such Withholding Tax. If such


                                       15
<PAGE>

optionee does not satisfy the optionee's tax payment obligation and the stock
options have been transferred, the transferee may provide the funds sufficient
to enable the Company to pay such taxes. However, if the stock options have been
transferred, the Company shall have no right to retain or sell without notice,
or to demand surrender from the transferee of, shares of Common Stock in order
to pay such Withholding Tax.

      (c) The term "Withholding Tax" means the minimum required withholding
amount applicable to the participant, including federal, state and local income
taxes, Federal Insurance Contribution Act taxes and other governmental impost or
levy.

      (d) Notwithstanding the foregoing, the participant shall be entitled to
satisfy the obligation to pay any Withholding Tax, in whole or in part, by
providing the Company with funds sufficient to enable the Company to pay such
Withholding Tax or by requiring the Company to retain or to accept upon delivery
thereof by the participant shares of Common Stock having a Fair Market Value
sufficient to cover the amount of such Withholding Tax. Each election by a
participant to have shares retained or to deliver shares for this purpose shall
be subject to the following restrictions: (i) the election must be in writing
and be made on or prior to the Tax Date; (ii) the election must be irrevocable;
(iii) the election shall be subject to the disapproval of the Committee.

      13. CHANGE IN CONTROL. In the event an optionee's employment with the
Company terminates pursuant to a qualifying termination (as defined below)
during the three (3) year period following a change in control of the Issuer (as
defined below) and prior to the exercise of options granted under this Plan, all
outstanding options shall become immediately fully vested and exercisable
notwithstanding any provisions of the Plan or of the applicable Stock Option
Agreement to the contrary.

      In addition, in the event of a change in control of the Issuer, the
Committee may (i) determine that outstanding options shall be assumed by, or
replaced with comparable options by, the surviving corporation (or a parent or
subsidiary of the surviving corporation) and that outstanding awards shall be
converted to similar awards of the surviving corporation (or a parent or
subsidiary of the surviving corporation), or (ii) take such other actions with
respect to outstanding options and awards as the Committee deems appropriate.

      The following definitions shall apply for purposes of the Plan:

      (a) For the purpose of this Plan, a change in control shall be deemed to
have occurred on the earlier of the following dates:

            (1) The date any person (as defined in Section 13(d)(3) of the
      Exchange Act) shall have become the direct or indirect beneficial owner of
      twenty percent (20%) or more of the then outstanding common shares of the
      Issuer;

            (2) The date the shareholders of the Issuer approve a merger or
      consolidation of the Issuer with any other corporation other than (i) a
      merger or consolidation which would result in the voting securities of the
      Issuer outstanding immediately prior thereto continuing to represent at
      least 75% of the combined voting power of the voting securities of the
      Issuer or the surviving entity outstanding immediately after such merger


                                       16
<PAGE>

      or consolidation, or (ii) a merger or consolidation effected to implement
      a recapitalization of the Issuer in which no Person acquires more than 50%
      of the combined voting power of the Issuer's then outstanding securities;

            (3) The date the shareholders of the Issuer approve a plan of
      complete liquidation of the Issuer or an agreement for the sale or
      disposition by the Issuer of all or substantially all the Issuer's assets;

            (4) The date there shall have been a change in a majority of the
      Board of Directors of the Issuer within a two (2) year period beginning
      after the effective date of the Plan, unless the nomination for election
      by the Issuer's shareholders of each new director was approved by the vote
      of two-thirds of the directors then still in office who were in office at
      the beginning of the two (2) year period.

      (b) For purposes of this Plan provision, a qualifying termination shall be
deemed to have occurred under the following circumstances:

            (1) A Company-initiated termination for reasons other than the
      employee's death, Disability, resignation without good cause, willful
      misconduct or activity deemed detrimental to the interests of the Company,
      provided the optionee executes a general release and, where applicable, a
      non-solicitation and/or non-compete agreement with the Company;

            (2) The optionee resigns with good cause, which includes (i) a
      substantial adverse alteration in the nature or status of the optionee's
      responsibilities, (ii) a reduction in the optionee's base salary or levels
      of entitlement or participation under any incentive plan, award program or
      employee benefit program without the substitution or implementation of an
      alternative arrangement of substantially equal value, or (iii) the Company
      requiring the optionee to relocate to a work location more than fifty (50)
      miles from the optionee's work location prior to the change in control.

      14. DEFERRAL ELECTION: Notwithstanding the provisions of Section 12, any
optionee or participant may elect, with the concurrence of the Committee and
consistent with any rules and regulations established by the Committee, to defer
the delivery of the proceeds of the exercise of any stock option not transferred
under the provisions of Section 7(b)(6) or stock appreciation rights.

      (a) ELECTION TIMING: The election to defer the delivery of the proceeds
from any eligible award must be made at least six months prior to the date such
award is exercised or at such other time as the Committee may specify. Deferrals
will only be allowed for exercises which occur while the optionee or participant
is an active employee of the Company. Any election to defer the delivery of
proceeds from an eligible award shall be irrevocable as long as the optionee or
participant remains an employee of the Company.

      (b) STOCK OPTION DEFERRAL: The deferral of the proceeds of stock options
may be elected by an optionee subject to the Regulations established by the
Committee. The proceeds from such an exercise shall be credited to the
optionee's deferred stock option account as the number of deferred share units
equivalent in value to those proceeds. Deferred share units shall be


                                       17
<PAGE>

valued at the Fair Market Value on the date of exercise. Subsequent to exercise,
the deferred share units shall be valued at the Fair Market Value of Common
Stock. Deferred share units shall accrue dividends at the rate paid upon the
Common Stock, which shall be credited in the form of additional deferred share
units. Deferred share units shall be distributed in shares of Common Stock upon
the termination of employment of the participant or at such other date as may be
approved by the Committee over a period of no more than ten (10) years.

      (c) STOCK APPRECIATION RIGHT DEFERRAL: Upon such exercise, the Company
will credit the optionee's deferred stock option account with the number of
deferred share units equivalent in value to the difference between the Fair
Market Value of a share of Common Stock on the exercise date and the exercise
price of the Stock Appreciation Right multiplied by the number of shares
exercised. Deferred share units shall be valued at the Fair Market Value on the
date of exercise. Subsequent to exercise, the deferred share units shall be
valued at the Fair Market Value of Common Stock. Deferred share units shall
accrue dividends at the rate paid upon the Common Stock, which shall be credited
in the form of additional deferred share units. Deferred share units shall be
distributed in shares of Common Stock upon the termination of employment of the
participant or at such other date as may be approved by the Committee over a
period of no more than ten (10) years.

      (d) ACCELERATED DISTRIBUTIONS: The Committee may, at its sole discretion,
allow for the early payment of an optionee's or participant's deferred share
units account in the event of an "unforeseeable emergency" or in the event of
the death or Disability of the optionee or participant. An "unforeseeable
emergency" is defined as an unanticipated emergency caused by an event beyond
the control of the optionee or participant that would result in severe financial
hardship if the distribution were not permitted. Such distributions shall be
limited to the amount necessary to sufficiently address the financial hardship.
Any distributions under this provision shall be consistent with the Regulations
established under the Code. Additionally, the Committee may use its discretion
to cause deferred share unit accounts to be distributed when continuing the
deferral program is no longer in the best interest of the Company.

      (e) ASSIGNABILITY: No rights to deferred share unit accounts may be
assigned or subject to any encumbrance, pledge or charge of any nature except
that an optionee or participant may designate a beneficiary pursuant to any
rules established by the Committee.

      15. AMENDMENT OF THE PLAN: The Board of Directors may amend or suspend the
Plan at any time and from time to time; provided, however, that the Board of
Directors shall not amend the Plan without shareholder approval if such approval
is required in order to comply with Section 162(m) or 422 of the Code or other
applicable law, or to comply with applicable stock exchange requirements. A
termination or amendment of the Plan that occurs after an option or award is
granted shall not materially impair the rights of an optionee or participant
unless the optionee or participant consents in writing. Notwithstanding the
foregoing, if an option has been transferred in accordance with Section 7(b)(6),
written consent of the transferee (and not the optionee) shall be necessary to
alter or impair any option or award previously granted under the Plan.

      16.  MISCELLANEOUS:

                                       18
<PAGE>

      (a) By accepting any benefits under the Plan, each optionee or participant
and each person claiming under or through such optionee or participant shall be
conclusively deemed to have indicated acceptance and ratification of, and
consent to, any action taken or made to be taken or made under the Plan by the
Company, the Board, the Committee or any other Committee appointed by the Board.

      (b) No participant or any person claiming under or through him shall have
any right or interest, whether vested or otherwise, in the Plan or in any
option, or stock appreciation right or award thereunder, contingent or
otherwise, unless and until all of the terms, conditions and provisions of the
Plan and the Agreement that affect such participant or such other person shall
have been complied with.

      (c) Nothing contained in the Plan or in any Agreement shall require the
Company to segregate or earmark any cash or other property.

      (d) Neither the adoption of the Plan nor its operation shall in any way
affect the rights and powers of the Company to dismiss or discharge any employee
at any time.

      (e) Notwithstanding anything to the contrary in the Plan, neither the
Board nor the Committee shall have any authority to take any action under the
Plan where such action would adversely affect the Company's ability to account
for any business combination as a "pooling of interests."

      17. TERM OF THE PLAN: The Plan is effective as of [__________________].
The Plan shall expire on the day before the fifth anniversary of the effective
date of the Plan, unless suspended or discontinued earlier by action of the
Board of Directors. The expiration of the Plan, however, shall not affect the
rights of optionees under options theretofore granted to them or the rights of
participants under awards theretofore granted to them, and all unexpired options
and awards shall continue in force and operation after termination of the Plan
except as they may lapse or be terminated by their own terms and conditions.

      18. EMPLOYEES BASED OUTSIDE OF THE UNITED STATES: Notwithstanding any
provision of the Plan to the contrary, in order to foster and promote
achievement of the purposes of the Plan or to comply with provisions of laws in
other countries in which the Company operates or has Employees, the Committee,
in its sole discretion, shall have the power and authority to (i) determine
which employees employed outside the United States are eligible to participate
in the Plan, (ii) modify the terms and conditions of options granted to
employees who are employed outside the United States, (iii) establish subplans,
modified option exercise procedures and other terms and procedures to the extent
such actions may be necessary or advisable, and (iv) grant to employees employed
in countries wherein the granting of stock options is impossible or
impracticable, as determined by the Committee, stock appreciation rights with
terms and conditions that, to the fullest extent possible, are substantially
identical to the stock options granted hereunder.

      19. GOVERNING LAW: The validity, construction, interpretation and effect
of the Plan and agreements issued under the Plan shall be governed and construed
by and determined in


                                       19
<PAGE>

accordance with the laws of the State of Indiana, without giving effect to the
conflict of laws provisions thereof.






                                       20