FIRSTENERGY CORP.

EXECUTIVE AND DIRECTOR INCENTIVE COMPENSATION PLAN







                                         FE Plan effective May 1, 1998
                                         Revised November 16, 1998
                                         Revised November 16, 1999
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Table of Contents
                                                                      Page
                                                                      ----


Article 1  Establishment, Purpose, and Duration                         1
1.1  Establishment of the Plan                                          1
1.2  Purpose of the Plan                                                1
1.3  Duration of the Plan                                               1

Article 2  Definitions and Construction                                 1
2.1    Definitions
2.1.1  Award                                                            1
2.1.2  Beneficial Owner                                                 1
2.1.3  Black-Scholes Value                                              1
2.1.4  Board or Board of Directors                                      1
2.1.5  Cash Award                                                       1
2.1.6  Cause                                                            1
2.1.7  Change in Control                                                2
2.1.8  Code                                                             4
2.1.9  Committee                                                        4
2.1.10  Company                                                         4
2.1.11  Covered Employee                                                4
2.1.12  Directors' Award                                                4
2.1.13  Exchange Act                                                    4
2.1.14  Fair Market Value                                               4
2.1.15  Incentive Stock Option or ISO                                   4
2.1.16  Key Employee                                                    4
2.1.17  Nonqualified Stock Option or NSO                                4
2.1.18  Option                                                          4
2.1.19  Outside Director                                                4
2.1.20  Participant                                                     4
2.1.21  Performance Share                                               5
2.1.22  Period of Restriction                                           5
2.1.23  Person                                                          5
2.1.24  Plan                                                            5
2.1.25  Restricted Stock                                                5
2.1.26  Subsidiary                                                      5
2.1.27  Standard Rate                                                   5
2.1.28  Stock                                                           5
2.1.29  Stock Appreciation Right or SAR                                 5
2.1.30  Voting Stock                                                    5
2.2     Gender and Number                                               5
2.3     Severability                                                    5

Article 3  Administration
3.1  The Committee                                                      5
3.2  Authority of the Committee                                         5
3.3  Selection of Participants                                          6
3.4  Decisions Binding                                                  6
3.5  Delegation of Certain Responsibilities                             6
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Table of Contents
                                                                      Page
                                                                      ----

3.6  Procedures of the Committee                                        6
3.7  Award Agreements                                                   7
     Conditions on Awards                                               7
     Saturdays, Sundays, and Holidays                                   7

Article 4  Stock Subject to the Plan
Number of Shares                                                        7
Lapsed Awards                                                           8
Adjustments in Authorized Shares                                        8

Article 5  Eligibility and Participation
Eligibility                                                             8
Actual Participation                                                    8

Article 6  Stock Options
Grant of Options                                                        8
Option Agreement                                                        9
Option Price                                                            9
Duration of Options                                                     9
Exercise of Options                                                     9
Payment                                                                 9
Restrictions on Stock Transferability                                  10
Termination of Employment Due to Death, Disability,                    10
or Retirement
Termination of Employment for Other Reasons                            10
Nontransferability of Options                                          10

Article 7  Stock Appreciation Rights
Grant of Stock Appreciation Rights                                     11
Exercise of SARS in Lieu of Options                                    11
Exercise of SARS in Addition to Options                                11
Exercise of SARS Independent of Options                                11
Payment of SAR Amount                                                  12
Form and Timing of Payment                                             12
Term of SAR                                                            12
Termination of Employment                                              12
Nontransferability of SARs                                             12

Article 8  Restricted Stock
Grant of Restricted Stock                                              12
Restricted Stock Agreement                                             12
Transferability                                                        12
Other Restrictions                                                     13
Certificate Legend                                                     13
Removal of Restrictions                                                13
Voting Rights                                                          13
Dividends and Other Distributions                                      13
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Table of Contents
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Termination of Employment Due to Retirement                            13
Termination of Employment Due to Death or Disability                   14
Termination of Employment for Other Reasons                            14

Article 9  Performance Shares
Grant of Performance Shares                                            14
Value of Performance Shares                                            14
Payment of Performance Shares                                          15
Committee Discretion to Adjust Awards                                  15
Form and Timing of Payment                                             15
Termination of Employment Due to Death, Disability,                    15
or Retirement
Termination of Employment for Other Reasons                            15
Nontransferability                                                     16

Article 10  Cash Awards
Grant of Cash Award                                                    16
Cash Award Performance Criteria                                        16
Payout of Cash awards                                                  16
Conversion of Cash Award Payout to Restricted Stock                    16

Article 11  Directors' Awards
Grant of Director's Awards                                             17
Conversion of Retainer to Stock                                        17
Conversion of Retainer to Restricted Stock                             17
Conversion of Retainer to Stock Options                                17

Article 12  Beneficiary Designation                                    17

Article 13  Rights of Employees
Employment                                                             18
Participation                                                          18
No Implied Rights; Rights on Termination of Service                    18
No Right to Company Assets                                             18

Article 14  Change in Control
Stock Based Awards                                                     18
All Awards Other than Stock Based Awards                               18

Article 15  Amendment, Modification, and Termination
Amendment, Modification, and Termination                               19
Awards Previously Granted                                              19
Deferral of Payments and Distributions                                 19

Article 16  Withholding and Deferral

Tax Withholding                                                        19
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Table of Contents
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Stock Delivery or Withholding                                          19

Article 17  Successors                                                 20

Article 18  Requirements of Law
Requirements of Law                                                    20
Governing Law                                                          20


<PAGE>


Scope of Revision

Rev. 2
Change definition of Fair Market Value from 20 day average to high and low on
date of grant.

Rev. 1
Reformatted from Landscape to Portrait, made numbering consistence throughout
document.
Included Table of Contents and Scope of Revision pages.
Changed the NQSO acronym to NSO throughout.
Clarified that the Chief Executive Officer could grant awards for all Key
employees, except those defined as Covered Employees.
Incorporated the changes to Rule 16b-3 requirements.
Clarified how dates referenced in the Agreements are to be handled when the
date falls on a Saturday, Sunday, or Holiday.
Clarified how cashless exercises are handled.
Clarified that exercising portions of grants are permissible.
Added language to 18.2 regarding conflicts of law.
Rev. 0
Plan approved by FirstEnergy Board of Directors on February 17, 1998
Plan approved by common shareholders on April 30, 1998
Plan became effective on May 1, 1998

<PAGE>


ARTICLE 1  ESTABLISHMENT, PURPOSE, AND DURATION
           ------------------------------------

1.1   ESTABLISHMENT OF THE PLAN.  FirstEnergy Corp. (hereinafter referred to
as "FirstEnergy"), established, effective May 1, 1998, an incentive
compensation plan known as the "Executive and Director Incentive Compensation
Plan" (hereinafter referred to as the "Plan"), which permits the grant of
Incentive Stock Options, Non-qualified Stock Options, Stock Appreciation
Rights, Restricted Stock, Performance Shares, Cash Awards and Directors'
Awards.

1.2   PURPOSE OF THE PLAN.  The purpose of the Plan is to promote the success
of the Company and its Subsidiaries by providing incentives to Key Employees
and Directors that will link their personal interests to the long-term
financial success of the Company and its Subsidiaries, and to growth in
shareholder value. The Plan is designed to provide flexibility to the Company
and its Subsidiaries in their ability to motivate, attract, and retain the
services of Key Employees upon whose judgment, interest, and special effort
the successful conduct of their operations is largely dependent. The Plan is
intended to preserve maximum deductibility of all awards made under the plan
within the structure of Section 162(m) of the Internal Revenue Code of 1986 as
amended "the Code".

1.3   DURATION OF THE PLAN.  The Plan will commence on May 1, 1998, as
described in Section 1.1 herein. The Plan shall remain in effect, subject to
the right of the Board of Directors to terminate the Plan at any time, until
all Shares subject to it shall have been purchased or acquired according to
the provisions herein.


ARTICLE 2  DEFINITIONS AND CONSTRUCTION
           ----------------------------

2.1.  DEFINITIONS.  Whenever used in the Plan, the following terms shall have
the meanings set forth below and, when the meaning is intended, the initial
letter of the word is capitalized:

2.1.1  "Award" means, individually or collectively, a grant under this Plan of
Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation
Rights, Restricted Stock, Performance Shares, Cash Awards or Directors'
Awards.
2.1.2  "Beneficial Owner" shall have the meaning ascribed to such term in Rule
13d-3 of the General Rules and Regulations under the Exchange Act.
2.1.3  "Black-Scholes Value" means the value of one stock option as calculated
by the Black-Scholes Valuation Model as prescribed under Financial Accounting
Standard 123.
2.1.4  "Board" or "Board of Directors" means the Board of Directors of the
Company.
2.1.5  "Cash Award" means an award in the form of cash that is a bonus made
pursuant to the terms of Article 10.
<PAGE>

2.1.6  "Cause" shall mean the occurrence of any one of the following:
(i)   the willful and continued failure by a Participant to substantially
perform his/her duties (other than any such failure resulting from the
Participant's disability), after a written demand for substantial performance
is delivered to the Participant that specifically identifies the manner in
which the Company or any of its Subsidiaries, as the case may be, believes
that the Participant has not substantially performed his/her duties, and the
Participant has failed to remedy the situation within ten (10) business days
of receiving such notice; or
(ii)  the Participant's conviction for committing a felony or a crime
involving an act of moral turpitude, dishonesty or misfeasance; or
(iii) the willful engaging by the Participant in gross misconduct materially
and demonstrably injurious to the Company or any of its Subsidiaries. However,
no act, or failure to act, on the Participant's part shall be considered
"willful" unless done, or omitted to be done, by the Participant not in good
faith and without reasonable belief that his/her action or omission was in the
best interest of the Company or any of its Subsidiaries.
2.1.7  "Change in Control" shall mean:
(i)   The acquisition by Person of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 50% (25% if such Person
proposes any individual for election to the Board or any member of the Board
is the representative of such Person) or more of either
(a)  the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or
(b)  the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that the
following acquisitions shall not constitute a Change in Control:
(1)  any acquisition directly from the Company (excluding an acquisition by
virtue of the exercise of a conversion privilege),
(2)  any acquisition by the Company,
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or
(4)  any acquisition by any corporation pursuant to a reorganization, merger
or consolidation, if, following such reorganization, merger or consolidation,
the conditions described in clauses (a), (b) and (c) of subsection (iii) of
this subsection 2.1.7 are satisfied; or
(ii)  Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of the Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
Approval by the shareholders of the Company of a reorganization, merger or
consolidation, in each case, unless, following such reorganization, merger or
<PAGE>

consolidation,
(a)  more than 75% of, respectively, the then outstanding shares of common
stock of the corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be,
no Person (excluding the Company, an employee benefit plan (or related trust)
of the Company or such corporation resulting from such reorganization, merger
or consolidation and any Person beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or indirectly, 25% or more
of the Outstanding Company Common Stock or Outstanding Voting Securities, as
the case may be) beneficially owns, directly or indirectly, 25% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation or the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and
at least a majority of the members of the board of directors of the
corporation resulting from such reorganization, merger or consolidation were
members of the Incumbent Board at the time of the execution of the initial
agreement providing for such reorganization, merger or consolidation; or
(iv) Approval by the shareholders of the Company of (a) a complete liquidation
or dissolution of the Company or (b) the sale or other disposition of all or
substantially all of the assets of the Company, other than to a corporation,
with respect to which following such sale or other disposition (1) more than
75% of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition
in substantially the same proportion as their ownership, immediately prior to
such sale or other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (2) no Person
(excluding the Company and any employee benefit plan (or related trust) of the
Company or such corporation and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or indirectly, 25% or more
of the Outstanding Company Common Stock or Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 25%
or more of, respectively, the then outstanding share of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors and (3) at least a majority of the members of the board of directors
of such corporation were members of the Incumbent Board at the time of the
<PAGE>

execution of the initial agreement or action of the Board providing for such
sale or other disposition of assets of the Company.

However, in no event shall a Change in Control be deemed to have occurred,
with respect to a Participant, if the Participant is part of a purchasing
group, which consummates the Change in Control transaction.  The Participant
shall be deemed "part of a purchasing group. . . " for purposes of the
preceding sentence if the Participant is an equity participant or has agreed
to become an equity participant in the purchasing company or group (except for
(i) passive ownership of less than 5% of the voting securities of the
purchasing company or (ii) ownership of equity participation in the purchasing
company or group which is otherwise not deemed to be significant, as
determined prior to the Change in Control by a majority of the non-employee
continuing members of the Board).
2.1.8  "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.1.9  "Committee" means the Compensation Committee of the Board.
2.1.10  "Company" means FirstEnergy Corp., an Ohio corporation, or any
successor thereto as provided in Article 17 herein.
2.1.11  "Covered Employee" means any Participant designated prior to the grant
of Stock Options, Stock Appreciation Rights, Restricted Stock, Performance
Shares or Cash Award by the Committee who is or may be a "covered employee"
within the meaning of Section 162(m)(3) of the Code in the year in which such
Stock Options, Stock Appreciation Rights, Restricted Stock, Performance Shares
or Cash Award are taxable to such Participant.
2.1.12  "Directors' Award" means an Award made pursuant to Article 11 of this
Plan.
2.1.13  "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
2.1.14  "Fair Market Value" means the average of the high and low sale prices
of the common stock as reported on the composite tape of the New York Stock
Exchange for the date in which the determination of the fair market value is
made, or, if there are no sales of common stock on that date, then on the next
preceding date on which there were sales of common stock.
2.1.15  "Incentive Stock Option" or "ISO" means an option to purchase Stock,
granted under Article 6 herein, which is designated as an incentive stock
option and is intended to meet the requirements of Section 422 of the Code.
2.1.16  "Key Employee" means an employee of the Company or any of its
Subsidiaries, including an employee who is an officer or a director of the
Company or any of its Subsidiaries, who, in the opinion of the Committee, can
contribute significantly to the growth and profitability of the Company and
its Subsidiaries. "Key Employee" also may include any other employee,
identified by the Committee, in special situations involving extraordinary
performance, promotion, retention, or recruitment. The granting of an Award
under this Plan shall be deemed a determination by the Committee that such
employee is a Key Employee, but shall not create a right to remain a Key
Employee.
2.1.17  "Nonqualified Stock Option" or "NSO" means an option to purchase
Stock, granted under Article 6 herein, which is not intended to be an
Incentive Stock Option.
2.1.18  "Option" means an Incentive Stock Option or a Nonqualified Stock
<PAGE>

Option.
2.1.19  "Outside Director" means any director who qualifies as an "outside
director" as that term is defined in Code Section 162(m) and the regulations
issued thereunder.
2.1.20  "Participant" means a Key Employee or Director who has been granted an
Award under the Plan.
2.1.21  "Performance Share" means an Award, designated as a performance share,
granted to a Participant pursuant to Article 9 herein.
2.1.22  "Period of Restriction" means the period during which the transfer or
sale of Shares of Restricted Stock by the participant is restricted.
2.1.23  "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) thereof.
2.1.24  "Plan" means this Executive and Director Incentive Compensation Plan
of FirstEnergy Corp., as herein described and as hereafter from time to time
amended.
2.1.25  "Restricted Stock" means an Award of Stock granted to a Participant
pursuant to Article 8 herein.
2.1.26  "Subsidiary" shall mean any corporation of which more than 50% (by
number of votes) of the Voting Stock at the time outstanding is owned,
directly or indirectly, by the Company.
2.1.27  "Standard Rate" means the electric utility median base salary level
for a given position as determined in the judgment of the Committee.
2.1.28  "Stock" or "Shares" means the common stock with a 10 cent par value of
the Company.
2.1.29  "Stock Appreciation Right" or "SAR" means an Award, designated as a
Stock Appreciation Right, granted to a Participant pursuant to Article 7
herein.
2.1.30  "Voting Stock" shall mean securities of any class or classes of stock
of a corporation, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors.

2.2  GENDER AND NUMBER.  Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.

2.3.  SEVERABILITY.  In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.


ARTICLE 3   ADMINISTRATION
            --------------

3.1   THE COMMITTEE.  The Plan shall be administered by the Committee, which
consists of not less than three Directors who shall be appointed from time to
time by, and shall serve at the discretion of, the Board of Directors. To the
extent required to comply with Rule 16b-3 under the Exchange Act, each member
of the Committee shall qualify as a "Non-Employee Director" as defined in Rule
16b-3 or any successor definition adopted by the Securities and Exchange
<PAGE>

Commission. To the extent required to comply with Code Section 162(m), each
member of the Committee shall also be an Outside Director.

3.2   AUTHORITY OF THE COMMITTEE.  Subject to the provisions of the Plan, the
Committee shall have full power to construe and interpret the Plan; to
establish, amend or waive rules and regulations for its administration; to
accelerate the exercisability of any Award or the end of a performance period
or the termination of any Period of Restriction or any award agreement, or any
other instrument relating to an Award under the Plan; and (subject to the
provisions of Article 15 herein) to amend the terms and conditions of any
outstanding Option, Stock Appreciation Right or other Award to the extent such
terms and conditions are within the discretion of the Committee as provided in
the Plan. Notwithstanding the foregoing, the Committee shall have no authority
to adjust upwards the amount payable to a Covered Employee with respect to a
particular Award, to take any of the foregoing actions, or to take any other
action to the extent that such action or the Committee's ability to take such
action would cause any Award under the Plan to any Covered Employee to fail to
qualify as "performance-based compensation" within the meaning of Code Section
162(m)(4) and the regulations issued thereunder. Subject to section 4.3, in no
event shall the Committee have the right to i) cancel outstanding Options or
SARs for the purpose of replacing or regranting such Options or SARs with an
exercise price that is less than the original exercise price of the Option or
SAR, or ii) change the Option Price of an Option or SAR to an exercise price
that is less than the original Option or SAR exercise price, without first
obtaining the approval of shareholders.  Also notwithstanding the foregoing,
no action of the Committee (other than pursuant to Section 4.3 hereof or
Section 9.4 hereof) may, without the consent of the person or persons entitled
to exercise any outstanding Option or Stock Appreciation Right or to receive
payment of any other outstanding Award, adversely affect the rights of such
person or persons.

3.3   SELECTION OF PARTICIPANTS.  The Committee shall have the authority to
grant Awards under the Plan, from time to time, to such Key Employees and
Directors as may be selected by it. The Committee shall select Participants
from among those who they have identified as being Key Employees or Directors.

3.4   DECISIONS BINDING.  All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board of Directors shall be final, conclusive and binding
on all persons, including the Company and its Subsidiaries, its stockholders,
employees, and Participants and their estates and beneficiaries, and such
determinations and decisions shall not be reviewable.

3.5   DELEGATION OF CERTAIN RESPONSIBILITIES.  The Committee may, in its sole
discretion, delegate to an officer or officers of the Company the
administration of the Plan under this Article 3; provided, however, that no
such delegation by the Committee shall be made with respect to the
administration of the Plan as it affects Directors of the Company or Covered
Employees and provided further that the Committee may not delegate its
authority to correct errors, omissions or inconsistencies in the Plan. The
Committee may delegate to the Chief Executive Officer of the Company its
<PAGE>

authority under this Article 3 to grant Awards to Key Employees who are not
Covered Employees.  All authority delegated by the Committee under this
Section 3.5 shall be exercised in accordance with the provisions of the Plan
and any guidelines for the exercise of such authority that may from time to
time be established by the Committee.

3.6   PROCEDURES OF THE COMMITTEE.  All determinations of the Committee shall
be made by not less than a majority of its members present at the meeting (in
person or otherwise) at which a quorum is present. A majority of the entire
Committee shall constitute a quorum for the transaction of business. Any
action required or permitted to be taken at a meeting of the Committee may be
taken without a meeting if a unanimous written consent, which sets forth the
action, is signed by each member of the Committee and filed with the minutes
for proceedings of the Committee. Service on the Committee shall constitute
service as a director of the Company so that members of the Committee shall be
entitled to indemnification, limitation of liability and reimbursement of
expenses with respect to their services as members of the Committee to the
same extent that they are entitled under the Company's Articles of
Incorporation and Ohio law for their services as directors of the Company.

3.7   AWARD AGREEMENTS.  Stock-based Awards under the Plan shall be evidenced
by an award agreement, which shall be signed by an authorized officer of the
Company or delegate and by the Participant, and shall contain such terms and
conditions as may be approved by the Committee. Such terms and conditions need
not be the same in all cases.

3.8   CONDITIONS ON AWARDS.  Notwithstanding any other provision of the Plan,
the Board or the Committee may impose such conditions on any Award (including,
without limitation, the right of the Board or the Committee to limit the time
of exercise to specified periods).

Notwithstanding any other provisions of the Plan, all Awards under this Plan
shall be subject to the following conditions:

Except in the case of death, no SAR, ISO, NSO or other option granted pursuant
to Article 6 shall be exercisable for at least six months after its grant; and
Except in the case of death, no Restricted Stock or Performance Share (or a
Share issued in payment thereof) shall be sold for at least six months after
its grant.

SATURDAYS, SUNDAYS AND HOLIDAYS.  When a date referenced in an award Agreement
falls on a Saturday, Sunday or other day when the FirstEnergy General Office
is closed, the date reference will revert back to the day prior to such date.


ARTICLE 4  STOCK SUBJECT TO THE PLAN
           -------------------------

4.1  NUMBER OF SHARES.  Subject to adjustment as provided in Section 4.3
herein, the aggregate number of Shares that may be delivered under the Plan at
any time shall not exceed 7,500,000 Shares of common stock of the Company. No
<PAGE>

more than three-quarters of such aggregate number of such Shares shall be
issued as Restricted Stock under Article 8 of the Plan or as Performance
Shares under Article 9. Stock delivered under the Plan may consist, in whole
or in part, of authorized and unissued shares, treasury shares or shares
purchased on the open market. The exercise of a Stock Appreciation Right,
whether paid in cash or Stock, shall be deemed to be an issuance of Stock
under the Plan.

4.2   LAPSED AWARDS.  If any Award granted under this Plan terminates,
expires, or lapses for any reason, any Stock subject to such Award again shall
be available for the grant of an Award under the Plan, subject to Section 7.2
herein. If the value of any Performance Shares issued under Article 9 are paid
in cash after a Performance Period has ended, such stock subject to such award
shall again be available for the grant of an award under the Plan.

4.3   ADJUSTMENTS IN AUTHORIZED SHARES.  In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation,
stock dividend, split-up, share combination, or other change in the corporate
structure of the Company affecting the Stock, such adjustment shall be made in
the number and class of shares which may be delivered under the Plan, and in
the number and class of and/or price of shares subject to outstanding Options,
Stock Appreciation Rights, Restricted Stock Awards and Performance Shares,
granted under the Plan, as may be determined to be appropriate and equitable
by the Committee, in its sole discretion, to prevent dilution or enlargement
of rights; and provided that the number of shares subject to any Award shall
always be a whole number. Any adjustment of an Incentive Stock Option under
this paragraph shall be made in such a manner so as not to constitute a
modification within the meaning of Section 425(h)(3) of the Code.


ARTICLE 5  ELIGIBILITY AND PARTICIPATION
           -----------------------------

5.1   ELIGIBILITY.  Persons eligible to receive Awards under all Articles of
this Plan except Article 11 include all employees of the Company and its
Subsidiaries who, in the opinion of the Committee, are Key Employees. Key
Employees may include employees who are members of the Board, but may not
include Directors who are not employees. Directors who are not employees may
receive Awards under this Plan exclusively under Articles 6 and 8, subject to
Article 11.

5.2  ACTUAL PARTICIPATION.  Subject to the provisions of the Plan, the
Committee may from time to time select those Key Employees to whom Awards
shall be granted and determine the nature and amount of each Award. No
employee shall have any right to be granted an Award under this Plan even if
previously granted an Award.

ARTICLE 6  STOCK OPTIONS
           -------------
6.1   GRANT OF OPTIONS.  Subject to the terms and provisions of the Plan,
Options may be granted to Participants at any time and from time to time as
<PAGE>

shall be determined by the Committee. The maximum number of Shares subject to
Options granted to any individual Participant in any calendar year shall be
two hundred thousand (200,000) Shares. The Committee shall have the sole
discretion, subject to the requirements of the Plan, to determine the actual
number of Shares subject to Options granted to any Participant. The Committee
may grant any type of Option to purchase Stock that is permitted by law at the
time of grant, including, but not limited to, ISO's and NSO's. However, no
employee may receive an Award of Incentive Stock Options that are first
exercisable during any calendar year to the extent that the aggregate Fair
Market Value of the Stock (determined at the time the options are granted)
exceeds $100,000. Nothing in this Article 6 shall be deemed to prevent the
grant of NSO's in excess of the maximum established by Section 422 of the
Code. Unless otherwise expressly provided at the time of grant, Options
granted under the Plan will be NSO's. Notwithstanding any other provision of
the Plan, no ISO shall be granted after May 1, 2008.

6.2  OPTION AGREEMENT.  Each Option grant shall be evidenced by an Option
agreement that shall specify the type of Option granted, the Option price, the
duration of the Option, the number of Shares to which the Option pertains, and
such other provisions as the Committee shall determine. The Option agreement
shall specify whether the Option is intended to be an Incentive Stock Option
within the meaning of Section 422 of the Code, or a Nonqualified Stock Option
whose grant is not intended to be subject to the provisions of Code Section
422.

6.3   OPTION PRICE.  The purchase price per share of Stock covered by an
Option shall be determined by the Committee but shall not be less than 100% of
the Fair Market Value of such Stock on the date the Option is granted.

An Incentive Stock Option granted to an Employee who, at the time of grant,
owns (within the meaning of Section 425(d) of the Code) Stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company, shall have an exercise price which is at least 110% of the Fair
Market Value of the Stock subject to the Option.

6.4   DURATION OF OPTIONS.  Each Option shall expire at such time as the
Committee shall determine at the time of grant; provided, however, that no
Option shall be exercisable later than the tenth (10th) anniversary date of
its grant.

6.5  EXERCISE OF OPTIONS.  Subject to Section 3.8 herein, Options granted
under the Plan shall be exercisable at such times and be subject to such
restrictions and conditions as the Committee shall in each instance approve,
which need not be the same for all Participants. All options within a single
grant need not be exercised at one time.

6.6   PAYMENT.  Options shall be exercised by the delivery of a written notice
to the Company setting forth the number of Shares with respect to which the
Option is to be exercised, accompanied by full payment for the Shares. The
Option price upon exercise of any Option shall be payable to the Company in
full either:
<PAGE>

in cash or its equivalent;
by tendering Shares of previously acquired Stock having a Fair Market Value at
the time of exercise equal to the total Option price,
by foregoing compensation under rules established by the Committee,
by delivery by the Participant of irrevocable instructions to an approved
broker to promptly deliver to the Company the amount of the sale or loan
proceeds to pay the exercise price, or
such other consideration as the Committee may deem appropriate.

The proceeds from such a payment shall be added to the general funds of the
Company and shall be used for general corporate purposes. As soon as
practicable, after the Company's receipt of written notification and payment,
the Participant shall receive either:
stock certificates in an appropriate amount based upon the number of Options
exercised, issued in the Participant's name:
cash in an amount equal to the difference between the sale price of such
Shares and the Option price less taxes and administrative expenses; or
a combination of the foregoing.

6.7   RESTRICTIONS ON STOCK TRANSFERABILITY.  The Committee shall impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
under the Plan as it may deem advisable, including, without limitation,
restrictions under applicable Federal securities law, under the requirements
of any stock exchange upon which such Shares are then listed and under any
blue sky or state securities laws applicable to such Shares.

6.8   TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT. In
the event the employment of a Participant is terminated by reason of death,
any of such Participant's outstanding Options shall become immediately
exercisable at any time prior to the expiration date of the Options or within
one year after such date of termination of employment, whichever period is
shorter, by such person or persons as shall have acquired the Participant's
rights under the Option pursuant to Article 12 hereof or by will or by the
laws of descent and distribution. In the event the employment of a Participant
is terminated by reason of disability or retirement (as defined under the then
established rules of the Company or any of its Subsidiaries, as the case may
be), any of such Participant's outstanding Options shall become immediately
exercisable, at any time prior to the expiration date of the Options or within
one year after such date of termination of employment, whichever period is
shorter. Notwithstanding the foregoing to the contrary, the Committee may, in
its sole discretion, lengthen the exercise period up to the expiration date
for an individual participant if it deems this is in the best interest of the
Company. In the case of Incentive Stock Options, the favorable tax treatment
prescribed under Section 422 of the Internal Revenue Code of l986, as amended,
may not be available if the Options are not exercised within the Code Section
422 prescribed time period after termination of employment for death,
disability, or retirement.

6.9  TERMINATION OF EMPLOYMENT FOR OTHER REASONS.  If the employment of a
Participant shall terminate for any reason other than death, disability,
retirement or for Cause, the Participant shall have the right to exercise such
<PAGE>

Participant's outstanding Options within 90 days after the date of his
termination, but in no event beyond the expiration of the term of the Options
and only to the extent that the Participant was entitled to exercise the
Options at the date of his termination of employment. In its sole discretion,
the Committee may extend the 90 days to up to one year but, however, in no
event beyond the expiration date of the Option.

If the employment of the Participant shall terminate for Cause, all of the
Participant's outstanding Options shall be immediately forfeited back to the
Company.

6.10  NONTRANSFERABILITY OF OPTIONS.  No Option granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution. Further,
all Options granted to a Participant under the Plan shall be exercisable
during his lifetime only by such Participant.


ARTICLE 7   STOCK APPRECIATION RIGHTS
            -------------------------

7.1   GRANT OF STOCK APPRECIATION RIGHTS.  Subject to the terms and conditions
of the Plan, Stock Appreciation Rights may be granted to Participants, at the
discretion of the Committee, in any of the following forms:
in lieu of Options;
in addition to Options;
independent of Options; or
in any combination of (a), (b), or (c).

The maximum numbers of Shares subject to SARs granted to any individual
Participant in any calendar year shall be two hundred thousand (200,000)
Shares. Subject to the immediately preceding sentence, the Committee shall
have the sole discretion, subject to the requirements of the Plan, to
determine the actual number of Shares subject to SARs granted to any
Participant.

7.2  EXERCISE OF SARS IN LIEU OF OPTIONS.  SARs granted in lieu of Options may
be exercised for all or part of the Shares subject to the related Option upon
the surrender of the related Options representing the right to purchase an
equivalent number of Shares. The SAR may be exercised only with respect to the
Shares of Stock for which its related Option is then exercisable. Option Stock
with respect to which the SAR shall have been exercised may not be subject
again to an Award under the Plan.

Notwithstanding any other provision of the Plan to the contrary, with respect
to a SAR granted in lieu of an Incentive Stock Option:
(i)  the SAR will expire no later than the expiration of the underlying
Incentive Stock Option;
the SAR amount may be for no more than one hundred percent (100%) of the
difference between the exercise price of the underlying Incentive Stock Option
and the Fair Market Value of the Stock subject to the underlying Incentive
<PAGE>

Stock Option at the time the SAR is exercised; and
the SAR may be exercised only when the Fair Market Value of the Stock subject
to the Incentive Stock Option exceeds the exercise price of the Incentive
Stock Option.

7.3   EXERCISE OF SARS IN ADDITION TO OPTIONS.  SARs granted in addition to
Options shall be deemed to be exercised upon the exercise of the related
Options. The deemed exercise of SARs granted in addition to Options shall not
necessitate a reduction in the number of related Options.

7.4   EXERCISE OF SARS INDEPENDENT OF OPTIONS. Subject to Section 3.8 herein
and Section 7.5 herein, SARs granted independently of Options may be exercised
upon whatever terms and conditions the Committee, in its sole discretion,
imposes upon the SARs, including, but not limited to, a corresponding
proportional reduction in previously granted Options.

7.5   PAYMENT OF SAR AMOUNT.  Upon exercise of the SAR, the holder shall be
entitled to receive payment of an amount determined by multiplying:
The difference between the market price of a Share on the date of exercise
over the price fixed by the Committee at the date of grant (which price shall
not be less than 100% of the market price of a Share on the date of grant)
(the Exercise Price); by
The number of Shares with respect to which the SAR is exercised.

7.6   FORM AND TIMING OF PAYMENT.  Payment to a Participant, upon SAR
exercise, will be made in cash or stock, at the discretion of the Committee,
as soon as administratively possible after exercise.

7.7   TERM OF SAR.  The term of an SAR granted under the Plan shall not exceed
ten years.

7.8   TERMINATION OF EMPLOYMENT.  In the event the employment of a Participant
is terminated by reason of death, disability, retirement, or any other reason,
the exercisability of any outstanding SAR granted in lieu of or in addition to
an Option shall terminate in the same manner as its related Option as
specified under Sections 6.8 and 6.9 herein. The exercisability of any
outstanding SARs granted independent of Options also shall terminate in the
manner provided under Sections 6.8 and 6.9 hereof.

7.9   NONTRANSFERABILITY OF SARS.  No SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, all SARs
granted to a Participant under the Plan shall be exercisable during his
lifetime only by such Participant.


ARTICLE 8   RESTRICTED STOCK
            ----------------

8.1   GRANT OF RESTRICTED STOCK.  Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
<PAGE>

Restricted Stock under the Plan to such Participants and in such amounts, as
it shall determine. The Committee may condition the vesting or lapse of the
Period of Restriction established pursuant to Section 8.3 upon the attainment
of one or more of the performance goals utilized for purposes of Performance
Shares pursuant to Article 9 hereof. As required for valuation of grants under
the Plan, Restricted Stock will be valued at its Fair Market Value. The
maximum number of Shares subject to issuance as Restricted Stock granted to
any individual Participant in any calendar year is one hundred thousand
(100,000) Shares.

8.2   RESTRICTED STOCK AGREEMENT.  Each Restricted Stock grant shall be
evidenced by a Restricted Stock agreement that shall specify the Period of
Restriction, or periods, the number of Shares of Restricted Stock granted, and
such other provisions as the Committee shall determine.

8.3   TRANSFERABILITY.  Except as provided in this Article 8 or in Section 3.8
herein, the Shares of Restricted Stock granted hereunder may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until
the termination of the applicable Period of Restriction or for such period of
time as shall be established by the Committee and as shall be specified in the
Restricted Stock agreement, or upon earlier satisfaction of other conditions
(including any performance goals) as specified by the Committee in its sole
discretion and set forth in the Restricted Stock agreement. All rights with
respect to the Restricted Stock granted to a Participant under the Plan shall
be exercisable during his lifetime only by such Participant.

8.4  OTHER RESTRICTIONS.  The Committee shall impose such other restrictions
on any Shares of Restricted Stock granted pursuant to the Plan as it may deem
advisable including, without limitation, restrictions under applicable Federal
or state securities laws, and the Committee may legend certificates
representing Restricted Stock to give appropriate notice of such restrictions.

8.5  CERTIFICATE LEGEND.  In addition to any legends placed on certificates
pursuant to Section 8.4 herein, each certificate representing Shares of
Restricted Stock granted pursuant to the Plan shall bear the following legend:

"The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer set forth in the Executive and
Director Incentive Compensation Plan of FirstEnergy Corp., in the rules and
administrative procedures adopted pursuant to such Plan, and in a Restricted
Stock Agreement dated __________. A copy of the Plan, such rules and
procedures, and such Restricted Stock agreement may be obtained from the
Secretary of FirstEnergy Corp."

8.6   REMOVAL OF RESTRICTIONS.  Except as otherwise provided in this Article,
Shares of Restricted Stock covered by each Restricted Stock grant made under
the Plan shall become freely transferable by the Participant after the last
day of the Period of Restriction. Once the Shares are released from the
restrictions, the Participant shall be entitled to have the legend required by
Section 8.5 removed from his Stock certificate.
<PAGE>

8.7   VOTING RIGHTS.  During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares.

8.8   DIVIDENDS AND OTHER DISTRIBUTIONS.  During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder shall be
entitled to receive all dividends and other distributions paid with respect to
those Shares while they are so held. If any such dividends or distributions
are paid in Shares, the Shares shall be subject to the same restrictions on
transferability as the Shares of Restricted Stock with respect to which they
were paid.

8.9   TERMINATION OF EMPLOYMENT DUE TO RETIREMENT. In the event that a
Participant terminates his employment with the Company or any of its
Subsidiaries because of retirement (as defined under the then established
rules of the Company or any of its Subsidiaries, as the case may be), the
Committee in its sole discretion (subject to Section 3.8 herein) may waive or
modify the restrictions remaining on any or all Shares of Restricted Stock as
it deems appropriate.

8.10 TERMINATION OF EMPLOYMENT DUE TO DEATH OR DISABILITY.  In the event a
Participant's employment is terminated because of death or disability (as
defined under the then established rules of the Company or any of its
Subsidiaries, as the case may be) during the Period of Restriction, any
remaining Period of Restriction applicable to the Restricted Stock shall
automatically terminate and, except as otherwise provided in Section 8.4.
herein, the Shares of Restricted Stock shall thereby be free of restrictions
and be fully transferable.

8.11 TERMINATION OF EMPLOYMENT FOR OTHER REASONS.  In the event that a
Participant terminates his employment with the Company or any of its
Subsidiaries for any reason other than for death, disability, or retirement,
as set forth in Sections 8.9 and 8.10 herein, during the Period of
Restriction, then any Shares of Restricted Stock still subject to restrictions
as of the date of such termination shall automatically be forfeited and
returned to the Company; provided, however, that in the event of a termination
of the employment of a Participant by the Company or any of its Subsidiaries
other than for Cause, the Committee, in its sole discretion (subject to
Section 3.8 herein), may waive or modify the automatic forfeiture of any or
all such Shares as it deems appropriate.


ARTICLE 9  PERFORMANCE SHARES
           ------------------

9.1   GRANT OF PERFORMANCE SHARES.  Subject to the terms and provisions of the
Plan, Performance Shares may be granted to Participants at any time and from
time to time as shall be determined by the Committee. The maximum number of
Shares that may be issued to any Participant in a calendar year shall not
exceed one hundred thousand (100,000), subject to adjustment as provided in
Section 4.3.

9.2    VALUE OF PERFORMANCE SHARES.  The Committee shall set performance goals
over certain periods to be determined in advance by the Committee
("Performance Periods"). Prior to each grant of Performance Shares, the
Committee shall establish an initial number of Shares for each Performance
Share granted to each Participant for that Performance Period. Prior to each
grant of Performance Shares, the Committee also shall set the performance
goals that will be used to determine the extent to which the Participant
receives a payment of the number of Shares for the Performance Shares awarded
for such Performance Period. These goals will be based on the attainment by
the Company or its Subsidiaries of certain objective performance measures,
which may include, but are not limited to one or more of the following:  total
shareholder return, return on equity, return on capital, earnings per share,
market share, stock price, sales, costs, net income, cash flow, retained
earnings, results of customer satisfaction surveys, aggregate product price
and other product price measures, safety record, service reliability, demand-
side management (including conservation and load management), operating and
maintenance cost management, and energy production availability performance
measures. Such performance goals also may be based upon the attainment of
specified levels of performance of the Company or one or more Subsidiaries
under one or more of the measures described above, relative to the performance
of other corporations. The Committee may provide for the crediting of dividend
equivalents during the performance period. With respect to each such
performance measure utilized during a Performance Period, the Committee shall
assign percentages to various levels of performance which shall be applied to
determine the extent to which the Participant shall receive a payout of the
number of Performance Shares awarded. With respect to Covered Employees, all
performance goals shall be objective performance goals satisfying the
requirements for "performance-based compensation" within the meaning of
Section 162(m)(4) of the Code, and shall be set by the Committee within the
time period prescribed by Section 162(m) of the Code and related regulations.

9.3   PAYMENT OF PERFORMANCE SHARES.  After a Performance Period has ended,
the holder of a Performance Share shall be entitled to receive the value
thereof as determined by the Committee. The Committee shall make this
determination by first determining the extent to which the performance goals
set pursuant to Section 9.2 have been met. It will then determine the
applicable percentage (which may exceed 100%) to be applied to, and will apply
such percentage to, the number of Performance Shares to determine the payout
to be received by the Participant. In addition, with respect to Performance
Shares granted to any Covered Employee, no payout shall be made hereunder
except upon written certification by the Committee that the applicable
performance goal or goals have been satisfied to a particular extent. The
amount payable in cash in a calendar year to any Participant with respect to
any Performance Period pursuant to any Performance Share award shall not
exceed $1,000,000.

9.4   COMMITTEE DISCRETION TO ADJUST AWARDS.  Subject to Section 3.2 regarding
Awards to Covered Employees, the Committee shall have the authority to modify,
amend or adjust the terms and conditions of any Performance Share award, at
any time or from time to time, including but not limited to the performance
goals.

9.5   FORM AND TIMING OF PAYMENT.  The payment described in Section 9.3 herein
shall be made in cash, Stock, or a combination thereof as determined by the
Committee. Payment may be made in a lump sum or installments as
<PAGE>

prescribed by the Committee. If any payment is to be made on a deferred basis,
the Committee may provide for the payment of dividend equivalents or interest
during the deferral period. Any stock issued in payment of a Performance Share
shall be subject to the restrictions on transfer in Section 3.8 herein.

9.6   TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT.  In
the case of death, disability, or retirement (each of disability and
retirement as defined under the established rules of the Company or any of its
Subsidiaries, as the case may be), the holder of a Performance Share shall
receive a prorated payment based on the Participant's number of full months of
service during the Performance Period, further adjusted based on the
achievement of the performance goals, as computed by the Committee. The
Committee may require that a Participant have a minimum number of full months
of service during the Performance Period to qualify for an Award payout.

9.7   TERMINATION OF EMPLOYMENT FOR OTHER REASONS.  In the event that a
Participant terminates employment with the Company or any of its Subsidiaries
for any reason other than death, disability, or retirement, all Performance
Shares shall be forfeited; provided, however, that in the event of a
termination of the employment of the Participant by the Company or any of its
Subsidiaries other than for Cause, the Committee in its sole discretion may
waive the automatic forfeiture provisions.

9.8   NONTRANSFERABILITY.  No Performance Shares granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution until the
termination of the applicable Performance Period. All rights with respect to
Performance Shares granted to a Participant under the Plan shall be
exercisable during his/her lifetime only by such Participant.


ARTICLE 10  CASH AWARDS
           ------------

10.1 GRANT OF CASH AWARD.  Subject to the terms of this Plan, Cash Awards may
be made to Participants at any time and from time to time as shall be
determined by the Committee. The Committee shall have complete discretion in
the determining the form of the Cash Awards granted to Participants.

10.2 CASH AWARD PERFORMANCE CRITERIA.  All Cash Awards made under this Plan
shall be subject to pre-established, objective, business-related Performance
Measures. The performance measures shall be approved for use by the Committee
and the Committee shall certify their attainment and the resulting payout of
Cash Awards. Performance Measures for Cash Awards may be measurable for
periods of one year to five years (allowing for prorated periods for new
Participants). The Performance Measures may include, but shall not be limited
to: operational measures (e.g. attaining merger milestones, customer
satisfaction, service reliability, safety and tactical objectives), financial
measures (e.g. expense control, revenue, margins and shareholder value added
levels "SVA") and individual measures. Performance Measures can be made on
overlapping cycles, (i.e. one-year cycles could emphasize operational measures
<PAGE>

and three-year cycles could emphasize SVA Performance Measures.) Each cycle of
Performance Measures could have a distinct Cash Award associated with it.

10.3 PAYOUT OF CASH AWARDS.  Payouts of Cash Awards are made in relationship
to a target payout level determined prior to each cycle on a per Participant
basis. Target levels under multiple cycles will be calibrated to provide, in
total, an annualized level of incentives consistent with the Company's
compensation philosophy as set by the Committee. Actual payouts of Cash Awards
will vary with performance results as follows:  actual payouts based upon
operational or individual Performance Measures will vary from 50% (if
threshold performance is attained) to 150% of the target level; actual payouts
based upon Company SVA and other corporate financial measures will vary from
50% (if threshold performance is attained) up to 200% of the target level. The
maximum Cash Award payable in a calendar year to any Participant with respect
to any Performance Period shall not exceed $1,000,000.

10.4 CONVERSION OF CASH AWARD PAYOUT TO RESTRICTED STOCK.  At the request of
the Participant, but subject to the discretion of the Committee, any Cash
Award payout may be converted to Restricted Stock at a discount. The
conversion to Restricted Stock will occur by multiplying the Cash Award by a
premium, but in no event more than 120% and dividing the product by the Fair
Market Value of the Restricted Stock on the date of conversion, which shall be
chosen by the Committee at least 10 days in advance, to determine the number
of shares of Restricted Stock that will be provided as full settlement of the
Cash Award. The shares of Restricted Stock provided to Participants in
settlement of Cash Awards shall be Restricted Stock subject to Article 8.


ARTICLE 11  DIRECTORS' AWARDS
            -----------------

11.1 GRANT OF DIRECTORS' AWARDS.  In lieu of a portion of their retainer,
Directors' Awards can be made in the form of Stock Options or Restricted Stock
under Articles 6 and 8 respectively. No other Awards may be made to Directors
under the Plan.

11.2 CONVERSION OF RETAINER TO STOCK.  At the request of a Director but
subject to the election of the Committee, a Director may convert any retainer
otherwise due to be paid by the Company in cash to an aggregate equivalent
value of either Stock Options, Restricted Stock or both.

11.3 CONVERSION OF RETAINER TO RESTRICTED STOCK.  Retainer, otherwise payable
in cash may be converted to Restricted Stock under Article 8. The conversion
to Restricted Stock will occur by multiplying the retainer by a premium, but
in no event more than 120% and dividing the product by the Fair Market Value
of the Restricted Stock on the date of conversion, which shall be chosen by
the Committee at least 10 days in advance, into the amount of the retainer to
determine the number of shares of Restricted Stock that will be provided as
full settlement of the retainer.


<PAGE>

11.4 CONVERSION OF RETAINER TO STOCK OPTIONS.  Retainer otherwise due to be
paid in cash may be converted to Stock Options under Article 6 at the request
of the Participant but subject to the election of the Committee. Retainer
shall be converted by multiplying the retainer by a premium, but in no event
more than 120% and dividing the product by the amount equal to the Black-
Scholes Value of the Stock Option on the date of conversion. The quotient of
which is the number of Stock Options that shall be awarded.


ARTICLE 12  BENEFICIARY DESIGNATION
            -----------------------

Each Participant under the Plan may, from time to time, name any beneficiary
or beneficiaries (who may be named contingently or successively and who may
include a trustee under a will or living trust) to whom any benefit under the
Plan is to be paid in case of his/her death before he receives any or all of
such benefit. Each designation will revoke all prior designations by the same
Participant, shall be in a form prescribed by the Committee, and will be
effective only when filed by the Participant in writing with the Committee
during his lifetime. In the absence of any such designation or if all
designated beneficiaries predecease the Participant, benefits remaining unpaid
at the Participant's death shall be paid to the Participant's estate.


ARTICLE 13  RIGHTS OF EMPLOYEES
            -------------------

13.1 EMPLOYMENT.  Nothing in the Plan shall interfere with or limit in any way
the right of the Company or any of its Subsidiaries to terminate any
Participant's employment at any time, nor confer upon any Participant any
right to continue in the employ of the Company or any of its Subsidiaries.

13.2 PARTICIPATION.  No employee shall have a right to be selected as a
Participant, or, having been so selected, to be selected again as a
Participant.

13.3 NO IMPLIED RIGHTS; RIGHTS ON TERMINATION OF SERVICE.  Neither the
establishment of the Plan nor any amendment thereof shall be construed as
giving any Participant, beneficiary, or any other person any legal or
equitable right unless such right shall be specifically provided for in the
Plan or conferred by specific action of the Committee in accordance with the
terms and provisions of the Plan. Except as expressly provided in this Plan,
neither the Company nor any of its Subsidiaries shall be required or be liable
to make any payment under the Plan.

13.4 NO RIGHT TO COMPANY ASSETS.  Neither the Participant nor any other person
shall acquire, by reason of the Plan, any right in or title to any assets,
funds or property of the Company or any of its Subsidiaries whatsoever
including, without limiting the generality of the foregoing, any specific
funds, assets, or other property which the Company or any of its Subsidiaries,
in its sole discretion, may set aside in anticipation of a liability
<PAGE>

hereunder. Any benefits which become payable hereunder shall be paid from the
general assets of the Company or the applicable subsidiary. The Participant
shall have only a contractual right to the amounts, if any, payable hereunder
unsecured by any asset of the Company or any of its Subsidiaries. Nothing
contained in the Plan constitutes a guarantee by the Company or any of its
Subsidiaries that the assets of the Company or the applicable subsidiary shall
be sufficient to pay any benefit to any person.


ARTICLE 14  CHANGE IN CONTROL
            -----------------

14.1 STOCK BASED AWARDS.  Notwithstanding any other provisions of the Plan, in
the event of a Change in Control, all Stock based awards granted under this
Plan shall immediately vest 100% in each Participant (subject to Section 3.8
herein), including Incentive Stock Options, Nonqualified Stock Options, Stock
Appreciation Rights, and Restricted Stock.

14.2 ALL AWARDS OTHER THAN STOCK BASED AWARDS.  Notwithstanding any other
provisions of the Plan, in the event of a Change in Control, all Awards other
than Stock Based Awards granted under this Plan shall be immediately paid out
in cash, including Performance Shares.  The amount of the payout shall be
based on the higher of:  (i) the extent, as determined by the Committee, to
which performance goals, established for the Performance Period then in
progress have been met up through and including the effective date of the
Change in Control or (ii) 100% of the value on the date of grant of the number
of Performance Shares.


ARTICLE 15  AMENDMENT, MODIFICATION, AND TERMINATION
            ----------------------------------------

15.1 AMENDMENT, MODIFICATION, AND TERMINATION.  At any time and from time to
time, the Board or Committee may terminate, amend, or modify the Plan.
However, without the approval of the stockholders of the Company if required
by the Code, by the insider trading rules of Section 16 of the Exchange Act,
by any national securities exchange or system on which the Stock is then
listed or reported, or by any regulatory body having jurisdiction with respect
hereto, no such termination, amendment, or modification may:

Increase the total amount of Stock which may be issued under this Plan, except
as provided in Section 4.3 herein; or
Change the class of Employees eligible to participate in the Plan;
Materially increase the cost of the Plan or materially increase the benefits
to Participants; or
Extend the maximum period after the date of grant during which Options or
Stock Appreciation Rights may be exercised.

15.2 AWARDS PREVIOUSLY GRANTED.  No termination, amendment or modification of
the Plan other than pursuant to Section 4.3 hereof shall in any manner
adversely affect any Award theretofore granted under the Plan, without the
<PAGE>

written consent of the Participant.

15.3 DEFERRAL OF PAYMENTS AND DISTRIBUTIONS.  Cash Awards pursuant to Article
10 may be eligible for deferral by any plan(s) offered by the company, subject
to the approval of the Committee and any administrative requirements imposed
by the Committee.


ARTICLE 16  WITHHOLDING AND DEFERRAL
            ------------------------

16.1 TAX WITHHOLDING.  The Company and any of its Subsidiaries shall have the
power and the right to deduct or withhold, or require a Participant to remit
to the Company or any of its Subsidiaries, an amount sufficient to satisfy
Federal, state and local taxes (including the Participant's FICA obligation)
required by law to be withheld with respect to any grant, exercise, or payment
made under or as a result of this Plan.

16.2 STOCK DELIVERY OR WITHHOLDING.  With respect to withholding required upon
the exercise of Stock Options, or upon the lapse of restrictions on Restricted
Stock, participants may elect, subject to the approval of the Committee, to
satisfy the withholding requirement, in whole or in part, by tendering to the
Company Shares of previously acquired Stock or by having the Company withhold
Shares of Stock, in each such case in an amount having a Fair Market Value
equal to the amount required to be withheld to satisfy the tax withholding
obligations described in Section 16.1. The value of the Shares to be tendered
or withheld is to be based on the Fair Market Value of the Stock on the date
that the amount of tax to be withheld is to be determined. All Stock
withholding elections shall be irrevocable and made in writing, signed by the
Participant on forms approved by the Committee in advance of the day that the
transaction becomes taxable.

Stock withholding elections made by Participants who are subject to the short-
swing profit restrictions of Section 16 of the Exchange Act must comply with
the additional restrictions of Section 16 and Rule 16b-3 in making their
elections.


ARTICLE 17  SUCCESSORS
            ----------

All obligations of the Company under the Plan, with respect to Awards granted
hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the
business and/or assets of the Company.


ARTICLE 18  REQUIREMENTS OF LAW
            -------------------

<PAGE>

18.1 REQUIREMENTS OF LAW.  The granting of Awards and the issuance of Shares
of Stock under this Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

18.2 GOVERNING LAW.  The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Ohio
without giving effect to the principles of the conflicts of laws.





Plan, Rev 2.doc
11/30/99 6:02 AM