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                                                                   Exhibit 10.06

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                                    EQUITABLE
                                    RESOURCES

                          1994 LONG-TERM INCENTIVE PLAN

                           (Adopted January 21, 1994)


                                       and


                                   PROSPECTUS

                              (Dated May 27, 1999)



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                         1994 EQUITABLE RESOURCES, INC.

                            LONG-TERM INCENTIVE PLAN


SECTION 1. PURPOSES

1.01     The purpose of the 1994 Equitable Resources, Inc. Long-Term Incentive
         Plan (the "Plan") is to enable Equitable Resources, Inc. (together with
         any successor thereto, the "Company") to focus key executives' efforts
         on performance which will increase the value of the Company for its
         shareholders. The Plan is intended to align the interests of key
         executives with those of the shareholders by encouraging share
         ownership. The Plan is also intended to help to attract and retain key
         executives.

SECTION 2. DEFINITIONS; CONSTRUCTION

2.01     DEFINITIONS. In addition to the terms defined elsewhere in the Plan,
         the following terms as used in the Plan shall have the following
         meanings when used with initial capital letters:

         2.01.1   "Award" means any Option, Stock Appreciation Right, Restricted
                  Stock, Deferred Stock, Performance Award, Dividend Equivalent,
                  or Other Stock-Based Award, or any other right or interest
                  relating to Shares or cash granted under the Plan.

         2.01.2   "Award Agreement" means any written agreement, contract or
                  other instrument or document evidencing an Award.

         2.01.3   "Board" means the Company's Board of Directors.

         2.01.4   "Code" means the Internal Revenue Code of 1986, as amended
                  from time to time, together with rules, regulations and
                  interpretations promulgated thereunder.

         2.01.5   "Committee" means the Compensation Committee or such other
                  Committee of the Board as may be designated by the Board to
                  administer the Plan, as referred to in Section 3.01 hereof;
                  provided however, that the Committee shall qualify to
                  administer the Plan as contemplated by Rule 16b-3(c)(2)(i) of
                  the Exchange Act or any successor and by Section 162(m)(4)(C)
                  of the Code or any successor.

         2.01.6   "Common Stock" means shares of the common stock without par
                  value, and such other securities of the Company as may be
                  substituted for Shares pursuant to Section 8.01 hereof.

         2.01.7   "Covered Employee" shall have the meaning provided in Section
                  162(m)(3) of the Code.





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         2.01.8   "Deferred Stock" means Shares, granted under Section 6.05
                  hereof, receipt of which is deferred for a specified deferral
                  period.

         2.01.9   "Dividend Equivalent" means a right, granted under Section
                  6.07 hereof, to receive interest or dividends, or interest or
                  dividend equivalents.

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

         2.01.11  "Fair Market Value" of shares of any stock, including but not
                  limited to Common Stock, or units of any other securities
                  (herein "shares"), shall be the mean between the following
                  prices, as applicable, for the date as of which Fair Market
                  Value is to be determined as quoted in The Wall Street Journal
                  (or in such other reliable publication as the Committee, in
                  its discretion, may determine to rely upon): (a) if the shares
                  are listed on the New York Stock Exchange, the highest and
                  lowest sales prices per share as quoted in the NYSE-Composite
                  Transactions listing for such date, (b) if the shares not
                  listed on such exchange, the highest and lowest sales prices
                  per share for such date on (or on any composite index
                  including) the principal United States securities exchange
                  registered under the Exchange Act on which the shares are
                  listed, or (c) if the shares are not listed on any such
                  exchange, the highest and lowest sales prices per share for
                  such date on the National Association of Securities Dealers
                  Automated Quotations System or any successor system then in
                  use ("NASDAQ"). If there are no such sale price quotations for
                  the date as of which Fair Market Value is to be determined but
                  there are such sale price quotations within a reasonable
                  period both before and after such date, then Fair Market Value
                  shall be determined by taking a weighted average of the means
                  between the highest and lowest sales prices per share as so
                  quoted on the nearest date before and the nearest date after
                  the date as of which Fair Market Value is to be determined.
                  The average should be weighted inversely by the respective
                  numbers of trading days between the selling dates and the date
                  as of which Fair Market Value is to be determined. If there
                  are no such sale price quotations on or within a reasonable
                  period both before and after the date as of which Fair Market
                  Value is to be determined, then Fair Market Value of the
                  shares shall be the mean between the bona fide bid and asked
                  prices per share as so quoted for such date on NASDAQ, or if
                  none, the weighted average of the means between such bona fide
                  bid and asked prices on the nearest trading date before and
                  the nearest trading date after the date as of which Fair
                  Market Value is to be determined, if both such dates are
                  within a reasonable period. The average is to be determined in
                  the manner described above in this Section 2.01.10. If the
                  Fair Market Value of shares on the date as of which Fair
                  Market Value is to be determined cannot be determined on the
                  basis previously set forth in this Section 2.01.10, or if a
                  determination is required as to the Fair Market Value on any



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                  date of property other than shares, the Committee shall in
                  good faith determine the Fair Market Value of such shares or
                  other property on such date. Fair Market Value shall be
                  determined without regard to any restriction other than a
                  restriction which, by its terms, will never lapse.

         2.01.12  "Incentive Stock Option" means an Option that is intended to
                  meet the requirements of Section 422 of the Code or any
                  successor provision thereto and is designated as such in the
                  Award Agreement relating thereto.

         2.01.13  "Option" means a right, granted under Section 6.02 hereof, to
                  purchase Shares at a specified price during specified time
                  periods. An Option may be either an Incentive Stock Option or
                  a nonstatutory stock option, which is an Option not intended
                  to be an Incentive Stock Option.

         2.01.14  "Other Stock-Based Award" means an Award, granted under
                  Section 6.08 hereof, that is denominated or payable in, valued
                  in whole or in part by reference to, or otherwise based on, or
                  related to, Shares.

         2.01.15  "Participant" means a key employee of the Company or any
                  Subsidiary, including, but not limited to, Covered Employees,
                  who is granted an Award under the Plan.

         2.01.16  "Performance Award" means a right, granted under Section 6.06
                  hereof, to receive Awards based upon performance criteria
                  specified by the Committee.

         2.01.17  "Person" shall have the meaning assigned in the Exchange Act.

         2.01.18  "Restricted Stock" means Shares, granted under Section 6.04
                  hereof, that are subject to certain restrictions.

         2.01.19  "Rule 16b-3" means Rule 16b-3 under the Exchange Act, as
                  amended from time to time, or any successor to such Rule
                  promulgated by the Securities and Exchange Commission under
                  Section 16 of the Exchange Act.

         2.01.20  "Shares" means the common stock of the Company, without par
                  value, and such other securities of the Company as may be
                  substituted for Shares pursuant to Section 8.01 hereof.

         2.01.21  "Stock Appreciation Right" means a right, granted under
                  Section 6.03 hereof, to be paid an amount measured by the
                  appreciation in the Fair Market Value of Shares from the date
                  of grant to the date of exercise.

         2.01.22  "Subsidiary" means any corporation in an unbroken chain of
                  corporations beginning with the Company, if each of the
                  corporations



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                  other than the last corporation in the chain owns stock
                  possessing at least 50% of the total combined voting power of
                  all classes of stock in one of the other corporations in the
                  chain.

         Definitions of the terms "Change of Control," "Change of Control
         Price," "Potential Change of Control," "Related Party," "Voting
         Securities or Security" and "Beneficial Ownership" are set forth in
         Section 9.03 hereof.

2.02     CONSTRUCTION. For purposes of the Plan, the following rules of
         construction shall apply:

         2.02.1   The word "or" is disjunctive but not necessarily exclusive.

         2.02.2   Words in the singular include the plural; words in the plural
                  include the singular; words in the neuter gender include the
                  masculine and feminine genders, and words in the masculine or
                  feminine gender include the other and neuter genders.

SECTION 3. ADMINISTRATION

3.01     The Plan shall be administered by the Committee. The Committee shall
         have full and final authority to take the following actions, in each
         case subject to and consistent with the provisions of the Plan:

         (i)      to designate Participants;

         (ii)     to determine the type or types of Awards to be granted to each
                  Participant;

         (iii)    to determine the number of Awards to be granted, the number of
                  Shares or amount of cash or other property to which an Award
                  will relate, the terms and conditions of any Award (including,
                  but not limited to, any exercise price, grant price or
                  purchase price, any limitation or restriction, any schedule
                  for lapse of limitations, forfeiture restrictions or
                  restrictions on exercisability or transferability, and
                  accelerations or waivers thereof, based in each case on such
                  considerations as the Committee shall determine), and all
                  other matters to be determined in connection with an Award;

         (iv)     to determine whether, to what extent and under what
                  circumstances an Award may be settled in, or the exercise
                  price of an Award may be paid in cash, Shares, other Awards or
                  other property, or an Award may be accelerated, vested,
                  canceled, forfeited, exchanged or surrendered;

         (v)      to determine whether, to what extent and under what
                  circumstances cash, Shares, other Awards, other property and
                  other amounts payable with respect to an Award shall be
                  deferred, whether




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                  automatically or at the election of the Committee or at the
                  election of the Participant;

         (vi)     to interpret and administer the Plan and any instrument or
                  agreement relating to, or Award made under, the Plan;

         (vii)    to prescribe the form of each Award Agreement, which need not
                  be identical for each Participant;

         (viii)   to adopt, amend, suspend, waive and rescind such rules and
                  regulations as the Committee may deem necessary or advisable
                  to administer the Plan;

         (ix)     to correct any defect or supply any omission or reconcile any
                  inconsistency, and to construe and interpret the Plan, the
                  rules and regulations, any Award Agreement or other instrument
                  entered into or Award made under the Plan;

         (x)      to make all other decisions and determinations as may be
                  required under the terms of the Plan or as the Committee may
                  deem necessary or advisable for the administration of the
                  Plan;

         (xi)     to submit for shareholder approval or not as may be
                  appropriate and to take such other actions and make such other
                  decisions as may be required by the Revenue Reconciliation Act
                  of 1993 with respect to the definition of performance-based
                  compensation as it may from time to time be defined; and

         (xii)    to make such filings and take such actions as may be required
                  from time to time by appropriate state, regulatory and
                  governmental agencies.

         Any action of the Committee with respect to the Plan shall be final,
         conclusive and binding on all Persons, including the Company,
         Subsidiaries, Participants, any Person claiming any rights under the
         Plan from or through any Participant, employees and shareholders. The
         express grant of any specific power to the Committee, and the taking of
         any action by the Committee, shall not be construed as limiting any
         power or authority of the Committee. The Committee may delegate to
         officers or managers of the Company or any Subsidiary the authority,
         subject to such terms as the Committee shall determine, to perform
         administrative functions under the Plan and, with respect to
         Participants who are not subject to Section 16 of the Exchange Act, to
         take such actions and perform such functions under the Plan as the
         Committee may specify. Each member of the Committee shall be entitled
         to, in good faith, rely or act upon any report or other information
         furnished to him by an officer, manager or other employee of the
         Company or a Subsidiary, the Company's independent certified public
         accountants, or any executive compensation consultant or other
         professional retained by the Company to assist in the administration of
         the Plan.




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SECTION 4. SHARES SUBJECT TO THE PLAN

4.01     The maximum number of shares of Common Stock in respect of which Awards
         may be granted under the Plan in any calendar year, subject to
         adjustment as provided in Section 8.01 of the Plan, shall be (a) in
         1994 the sum of (1) one percent (1%) of the total number of issued and
         outstanding shares of Common Stock as of December 31, 1993 and (2) the
         number of shares of Common Stock which are reserved but not subject to
         grants under the Company's Key Employee Restricted Stock Option and
         Stock Appreciation Rights Incentive Compensation Plan as of the date
         this Plan is approved by the shareholders of the Company and (b) in
         each succeeding calendar year the sum of (1) one percent (1%) of the
         total number of issued and outstanding shares of Common Stock as of the
         close of the preceding calendar year, (2) the number of shares of
         Common Stock which were available for Awards under this Section 4.01 as
         of the close of the preceding calendar year and (3) any shares of
         Common Stock which are subject to an outstanding Award at the beginning
         of such year but which thereafter again become available for Awards
         under the Plan as provided in the fourth paragraph of this Section
         4.01; provided, however, that in no event may:

         (i)      the sum of (x) the number of Shares subject to all outstanding
                  Awards under the Plan and (y) the number of Shares previously
                  issued under the Plan at any time equal or exceed 5% of the
                  total number of shares of Common Stock outstanding on the date
                  of shareholder approval of the Plan; or

         (ii)     the sum of (x) the number of Shares subject to all outstanding
                  Options and Stock Appreciation Rights granted under the Plan
                  and held by any single Participant and (y) the number of
                  shares previously issued to such Participant upon exercise of
                  Options and Stock Appreciation Rights granted under the Plan
                  at any time exceed 25% of the sum of (A) the total number of
                  Shares subject to all outstanding Awards under the Plan, (B)
                  the total number of Shares previously issued under the Plan
                  and (C) the total number of Shares then available for the
                  grant of additional Awards under the Plan.

         Subject to subparagraphs (i) and (ii) above, but notwithstanding
         anything else contained above in this Section 4.01, in the event of a
         Change of Control, the maximum number of shares of Common Stock
         available for Awards under the Plan shall be 5% of the total number of
         shares of Common Stock issued and outstanding on the date of
         shareholder approval of the Plan, less (1) the number of Shares subject
         to outstanding Awards under the Plan and (2) the number of Shares
         previously issued under the Plan.

         For purposes of this Section 4.01, the number of Shares to which an
         Award relates shall be counted against the number of Shares reserved
         and available under the Plan at the time of grant of the Award, unless
         such number of Shares cannot be determined at that time, in which case
         the number of Shares actually distributed pursuant to the Award shall
         be counted against the number of Shares reserved and available under
         the Plan at the time of distribution; provided,



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         however, that Awards related to or retroactively added to, or granted
         in tandem with, substituted for or converted into, other Awards shall
         be counted or not counted against the number of Shares reserved and
         available under the Plan in accordance with procedures adopted by the
         Committee so as to ensure appropriate counting but avoid double
         counting.

         If any Shares to which an Award relates are forfeited, or payment is
         made to the Participant in the form of cash, cash equivalents or other
         property other than Shares, or the Award otherwise terminates without
         payment being made to the Participant in the form of Shares, any Shares
         counted against the number of Shares reserved and available under the
         Plan with respect to such Award shall, to the extent of any such
         forfeiture, alternative payment or termination, again be available for
         Awards under the Plan provided, however, forfeited Shares may not again
         be made available to the extent the Participant received dividends or
         other benefits of ownership (not including voting rights) prior to such
         forfeiture. The payment of the exercise price of an Award in Shares
         shall not increase the number of Shares available under the Plan.

         Any Shares distributed pursuant to an Award may consist, in whole or
         part, of authorized and unissued Shares or of treasury Shares,
         including Shares repurchased by the Company for purposes of the Plan.

SECTION 5. ELIGIBILITY

5.01     Awards may be granted only to individuals who are key full-time
         employees (including, without limitation, employees who also are
         directors or officers and Covered Employees) of the Company or any
         Subsidiary; provided, however, that no Award shall be granted to any
         member of the Committee.

SECTION 6. SPECIFIC TERMS OF AWARDS

6.01     GENERAL. Subject to the terms of the Plan and any applicable Award
         Agreement, Awards may be granted as set forth in this Section 6. In
         addition, the Committee may impose on any Award or the exercise
         thereof, at the date of grant or thereafter (subject to the terms of
         Section 10.01), such additional terms and conditions, not inconsistent
         with the provisions of the Plan, as the Committee shall determine,
         including separate escrow provisions and terms requiring forfeiture of
         Awards in the event of termination of employment by the Participant.
         Except as provided in Section 7.01, or as required by applicable law,
         Awards may be granted for no consideration other than prior and/or
         future services.

6.02     OPTIONS. The Committee is authorized to grant Options to Participants
         on the following terms and conditions:

         (i)      EXERCISE PRICE. The exercise price per Share of an Option
                  shall be 100% of the Fair Market Value of a Share on the date
                  of grant of such Option, except as otherwise provided in
                  Section 7.01, and except that in the case of an Incentive
                  Stock Option granted to an employee who, immediately prior to
                  such grant, owns stock possessing more than



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                  10% of the total combined voting power of all classes of stock
                  of the Company or any Subsidiary (a "Ten Percent Employee")
                  such exercise price shall be 110% of the Fair Market Value of
                  a Share on the date of grant. For purposes of the preceding
                  sentence, an individual (A) shall be considered as owning not
                  only shares of stock owned individually but also all shares of
                  stock that are at the time owned, directly or indirectly, by
                  or for the spouse, ancestors, lineal descendants and brothers
                  and sisters (whether by the whole or half blood) of such
                  individual and (B) shall be considered as owning
                  proportionately any shares owned, directly or indirectly, by
                  or for any corporation, partnership, estate or trust in which
                  such individual is a shareholder, partner or beneficiary.

         (ii)     OPTION TERM. The term of each Option shall be determined by
                  the Committee, except that no Incentive Stock Option shall be
                  exercisable after the expiration of ten years from the date of
                  grant, and no Incentive Stock Option granted to a Ten Percent
                  Employee shall be exercisable after the expiration of five
                  years from the date of grant.

         (iii)    TIMES AND METHODS OF EXERCISE. The Committee shall determine
                  the time or times at which an Option may be exercised in whole
                  or in part, the methods by which such exercise price may be
                  paid or deemed to be paid, and the form of such payment,
                  including, without limitation, cash, Shares, other outstanding
                  Awards or other property (including notes or other contractual
                  obligations of Participants to make payment on a deferred
                  basis, to the extent permitted by law) or any combination
                  thereof, having a Fair Market Value on the date of exercise
                  equal to the exercise price, provided, however, that (1) in
                  the case of a Participant who is at the time of exercise
                  subject to Section 16 of the Exchange Act, any portion of the
                  exercise price representing a fraction of a Share shall in any
                  event be paid in cash or in property other than any equity
                  security (as defined by the Exchange Act) of the Company and
                  (2) except as otherwise determined by the Committee, in its
                  discretion, at the time the Option is granted, no shares which
                  have been held for less than six months may be delivered in
                  payment of the exercise price of an Option.

                  Delivery of Shares in payment of the exercise price of an
                  Option, if authorized by the Committee, may be accomplished
                  through the effective transfer to the Company of Shares held
                  by a broker or other agent. Unless otherwise determined by the
                  Committee, the Company will also cooperate with any person
                  exercising an Option who participates in a cashless exercise
                  program of a broker or other agent under which all or part of
                  the Shares received upon exercise of the Option are sold
                  through the broker or other agent, or under which the broker
                  or other agent makes a loan to such person, for the purpose of
                  paying the exercise price of an Option. Notwithstanding the
                  preceding sentence, unless the Committee, in its discretion,
                  shall otherwise determine, the exercise of the Option shall
                  not be deemed to occur,



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                  and no Shares will be issued by the Company upon exercise of
                  an Option, until the Company has received payment in full of
                  the exercise price.

Notwithstanding any other provision contained in the Plan or in any Award
Agreement, but subject to the possible exercise of the Committee's discretion
contemplated in the last sentence of this Section 6.02(iii), the aggregate Fair
Market Value, determined as of the date of grant, of the Shares with respect to
which Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year under all plans of the corporation
employing such employee, any parent or subsidiary corporation of such
corporation and any predecessor corporation of any such corporation shall not
exceed $100,000. If the date on which one or more of such Incentive Stock
Options could first be exercised would be accelerated pursuant to any provision
of the Plan or any Award Agreement, and the acceleration of such exercise date
would result in a violation of the restriction set forth in the preceding
sentence, then, notwithstanding any such provision, but subject to the
provisions of the next succeeding sentence, the exercise dates of such Incentive
Stock Options shall be accelerated only to the date or dates, if any, that do
not result in a violation of such restriction and, in such event, the exercise
dates of the Incentive Stock Options with the lowest option prices shall be
accelerated to the earliest such dates. The Committee may, in its discretion,
authorize the acceleration of the exercise date of one or more Incentive Stock
Options even if such acceleration would violate the $100,000 restriction set
forth in the first sentence of this paragraph and even if such Incentive Stock
Options are thereby converted in whole or in part to nonstatutory stock options.

6.03     STOCK APPRECIATION RIGHTS. The Committee is authorized to grant Stock
         Appreciation Rights to Participants on the following terms and
         conditions:

         (i)      RIGHT TO PAYMENT. A Stock Appreciation Right shall confer on
                  the Participant to whom it is granted a right to receive, upon
                  exercise thereof, the excess of (a) the Fair Market Value of a
                  Share on the date of exercise or, if the Committee shall so
                  determine in the case of any such right other than one related
                  to any Incentive Stock Option, at any time during a specified
                  period before or after the date of exercise, over (b) the
                  grant price of the Stock Appreciation Right as determined by
                  the Committee as of the date of grant of the Stock
                  Appreciation Right, which, except as provided in Section 7.01,
                  shall be equal to the Fair Market Value of a Share on the date
                  of grant.

         (ii)     OTHER TERMS. The term, methods of exercise, methods of
                  settlement and any other terms and conditions of any Stock
                  Appreciation Right shall be determined by the Committee.

6.04     RESTRICTED STOCK. The Committee is authorized to grant Restricted Stock
         to Participants on the following terms and conditions:

         (i)      ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject
                  to such restrictions on transferability and other restrictions
                  as the Committee may impose (including, without limitation,
                  limitations on the right to vote Restricted Stock or the right
                  to receive dividends thereon), which



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                  restrictions may lapse separately or in combination at such
                  times, under such circumstances, in such installments or
                  otherwise, as the Committee shall determine at the time of
                  grant or thereafter.

         (ii)     FORFEITURE. Except as otherwise determined by the Committee at
                  the time of grant or thereafter, upon termination of
                  employment (as determined under criteria established by the
                  Committee) during the applicable restriction period,
                  Restricted Stock that is at that time subject to restrictions
                  shall be forfeited and reacquired by the Company; provided,
                  however, that the Committee may provide, by rule or regulation
                  or in any Award Agreement, that restrictions on Restricted
                  Stock shall be waived in whole or in part in the event of
                  terminations resulting from specified causes, and the
                  Committee may in other cases waive in whole or in part
                  restrictions on Restricted Stock.

         (iii)    CERTIFICATES FOR SHARES. Restricted Stock granted under the
                  Plan may be evidenced in such manner as the Committee shall
                  determine, including, without limitation, issuance of
                  certificates representing Shares. Certificates representing
                  Shares of Restricted Stock shall be registered in the name of
                  the Participant and shall bear an appropriate legend referring
                  to the terms, conditions and restrictions applicable to such
                  Restricted Stock.

6.05     DEFERRED STOCK. The Committee is authorized to grant Deferred Stock to
         Participants on the following terms and conditions:

         (i)      ISSUANCE AND LIMITATIONS. Delivery of Shares shall occur upon
                  expiration of the deferral period specified for the Award of
                  Deferred Stock by the Committee. In addition, an Award of
                  Deferred Stock shall be subject to such limitations as the
                  Committee may impose, which limitations may lapse at the
                  expiration of the deferral period or at other specified times,
                  separately or in combination, in installments or otherwise as
                  the Committee shall determine at the time of grant or
                  thereafter. A Participant awarded Deferred Stock shall have no
                  voting rights and shall have no rights to receive dividends in
                  respect of Deferred Stock, unless and only to the extent that
                  the Committee shall award Dividend Equivalents in respect of
                  such Deferred Stock.

         (ii)     FORFEITURE. Except as otherwise determined by the Committee
                  upon termination of employment (as determined under criteria
                  established by the Committee) during the applicable deferral
                  period, Deferred Stock that is at that time subject to
                  deferral (other than a deferral at the election of the
                  Participant) shall be forfeited; provided, however, that the
                  Committee may provide, by rule or regulation or in any Award
                  Agreement, that forfeiture of Deferred Stock shall be waived
                  in whole or in part in the event of terminations resulting
                  from specified causes, and the Committee may in other cases
                  waive in whole or in part the forfeiture of Deferred Stock.



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6.06     PERFORMANCE AWARDS. The Committee is authorized to grant Performance
         Awards to Participants on the following terms and conditions:

         (i)      RIGHT TO PAYMENT. A Performance Award shall confer upon the
                  Participant rights, valued as determined by the Committee, and
                  payable to, or exercisable by, the Participant to whom the
                  Performance Award is granted, in whole or in part, as the
                  Committee shall establish. The performance criteria and all
                  other terms and conditions of the Performance Award shall be
                  determined by the Committee upon the grant of each Performance
                  Award or thereafter.

         (ii)     OTHER TERMS. A Performance Award may be denominated or payable
                  in cash, deferred cash, Shares, other Awards or other
                  property, and other terms and conditions of Performance Awards
                  shall be as determined by the Committee.

6.07     DIVIDEND EQUIVALENTS. The Committee is authorized to grant Dividend
         Equivalents to Participants. Dividend Equivalents shall confer upon the
         Participant rights to receive, currently or on a deferred basis,
         interest or dividends, or interest or dividend equivalents, with
         respect to a number of Shares, or otherwise, as determined by the
         Committee. The Committee may provide that Dividend Equivalents shall be
         paid or distributed when accrued or shall be deemed to have been
         reinvested in additional Shares or additional Awards or otherwise
         reinvested.

6.08     OTHER STOCK-BASED AWARDS. The Committee is authorized, subject to
         limitations under applicable law, to grant to Participants such other
         Awards that are denominated or payable in, valued in whole or in part
         by reference to, or otherwise based on, or related to, Shares, as
         deemed by the Committee to be consistent with the purposes of the Plan
         and, with respect to Participants who are subject to Section 16 of the
         Exchange Act, to comply with Rule 16b-3 and applicable law including,
         without limitation, purchase rights, Shares awarded which are not
         subject to any restrictions or conditions, convertible securities,
         exchangeable securities or other rights convertible or exchangeable
         into Shares, as the Committee in its discretion may determine. In the
         discretion of the Committee, such Other Stock-Based Awards, including
         Shares, or other types of Awards authorized under the Plan, may be used
         in connection with, or to satisfy obligations of the Company or a
         Subsidiary under, other compensation or incentive plans, programs or
         arrangements of the Company or any Subsidiary for eligible
         Participants, including without limitation the Short-Term Incentive
         Compensation Plan, the Supplemental Executive Retirement Plan (SERP)
         and executive contracts.

         The Committee shall determine the terms and conditions of Other
         Stock-Based Awards. Except as provided in Section 7.01, Shares or
         securities delivered pursuant to a purchase right granted under this
         Section 6.08 shall be purchased for such consideration, paid for by
         such methods and in such forms, including, without limitation, cash,
         Shares, outstanding Awards or other property or any hereof, as the
         Committee shall determine, but the value of such consideration shall



                                       11


<PAGE>   13



         not be less than the Fair Market Value of such Shares or other
         securities on the date of grant of such purchase right. Delivery of
         Shares or other securities in payment of a purchase right, if
         authorized by the Committee, may be accomplished through the effective
         transfer to the Company of Shares or other securities held by a broker
         or other agent. Unless otherwise determined by the Committee, the
         Company will also cooperate with any person exercising a purchase right
         who participates in a cashless exercise program of a broker or other
         agent under which all or part of the Shares or securities received upon
         exercise of a purchase right are sold through the broker or other
         agent, or under which the broker or other agent makes a loan to such
         person, for the purpose of paying the exercise price of a purchase
         right. Notwithstanding the preceding sentence, unless the Committee, in
         its discretion, shall otherwise determine, the exercise of the purchase
         right shall not be deemed to occur, and no Shares or other securities
         will be issued by the Company upon exercise of a purchase right, until
         the Company has received payment in full of the exercise price.

6.09     EXCHANGE PROVISIONS. The Committee may at any time offer to exchange or
         buy out any previously granted Award for a payment in cash, Shares,
         another Award or other property, based on such terms and conditions as
         the Committee shall determine and communicate to the Participant at the
         time that such offer is made.

SECTION 7. GENERAL TERMS OF AWARDS

7.01     STAND-ALONE, TANDEM AND SUBSTITUTE AWARDS. Awards granted under the
         Plan may, in the discretion of the Committee, be granted either alone
         or in addition to, in tandem with or in substitution for, any other
         Award granted under the Plan or any award granted under the Management
         Incentive Compensation Plan, or any other plan, program or arrangement
         of the Company or any Subsidiary (subject to the terms of Section
         10.01) or any business entity acquired or to be acquired by the Company
         or a Subsidiary. If an Award is granted in substitution for another
         Award or award, the Committee shall require the surrender of such other
         Award or award in consideration for the grant of the new Award. Awards
         granted in addition to or in tandem with other Awards or awards may be
         granted either at the same time as or at a different time from the
         grant of such other Awards or awards, except that Awards may be granted
         in tandem with an Incentive Stock Option only at the time the Incentive
         Stock Option is granted. The exercise price of any Option, the grant
         price of any Stock Appreciation Right or the purchase price of any
         other Award conferring a right to purchase Shares:

         (i)      granted in substitution for an outstanding Award or award
                  shall be not less than the Fair Market Value of Shares at the
                  date such substitute Award is granted; provided, however, that
                  (1) except in the case of (a) an Incentive Stock Option or (b)
                  an Option or Stock Appreciation Right granted to a Covered
                  Employee, the exercise, grant or purchase price per share of
                  the substituted Award may be reduced to reflect the Fair
                  Market Value of the Award or award required to be surrendered
                  by the Participant as a condition to receipt of such
                  substitute Award, and (2) in the case of any Participant, the
                  Committee may, in lieu of such price reduction, make an
                  additional Award or payment to the



                                       12


<PAGE>   14


                  Participant reflecting the Fair Market Value of the Award or
                  award required to be surrendered; or

         (ii)     retroactively granted in tandem with an outstanding Award or
                  award shall be not less than the lesser of the Fair Market
                  Value of Shares at the date of grant of the later Award or the
                  Fair Market Value of Shares at the date of grant of the
                  earlier Award.

7.02     CERTAIN RESTRICTIONS UNDER RULE 16b-3. Upon the effectiveness of any
         amendment to Rule 16b-3, this Plan and any Award Agreement for an
         outstanding Award held by a Participant then subject to Section 16 of
         the Exchange Act shall be deemed to be amended, without further action
         on the part of the Committee, the Board or the Participant, to the
         extent necessary for Awards under the Plan or such Award Agreement to
         qualify for the exemption provided by Rule 16b-3, as so amended,
         except to the extent any such amendment requires shareholder approval.

         7.02.1   SIX-MONTH LIMITATIONS ON SALES AND EXERCISES. Any equity
                  security (as defined by the Exchange Act), other than a
                  derivative security, granted or awarded pursuant to the Plan
                  to a Participant who is at the time of grant or award subject
                  to Section 16 of the Exchange Act must be held by the
                  Participant for at least six months after grant (or, if later,
                  after the date of shareholder approval of the Plan), except in
                  the case of death. If a derivative security is granted or
                  awarded to a Participant who is at the time of grant or award
                  subject to Section 16 of the Exchange Act, (1) the
                  Participant may not dispose of the derivative security (other
                  than through exercise or conversion or upon death) or of any
                  equity security acquired upon its exercise or conversion
                  (other than upon death) until six months have elapsed from the
                  date of grant or award of the derivative security (or, if
                  later, from the date of shareholder approval of the Plan) and
                  (2) except with respect to an Option, the derivative security
                  may not be exercised or converted within such six-month period
                  (other than upon death) unless such exercise would not cause
                  the grant or award of the derivative security to cease to be
                  exempt under Rule 16b-3. The limitations in this Section
                  7.02.1 shall not apply to the extent such limitations are not
                  at the time required for the grant of the Award to continue to
                  qualify for the exemption provided by Rule 16b-3.
                  Certificates issued for Shares subject to limitations under
                  this Section 7.02.1 may be made subject to stop-transfer
                  orders, legended and/or made subject to a custodial
                  arrangement as provided in Section 7.07.

         7.02.2   NONTRANSFERABILITY. Awards which constitute derivative
                  securities shall not be transferable by a Participant except
                  by will or the laws of descent and distribution and shall be
                  exercisable during a Participant's lifetime only by such
                  Participant; provided, however, that, if so determined by the
                  Committee, a Participant may, in the manner established by the
                  Committee, designate a beneficiary or beneficiaries to
                  exercise the rights of the Participant, and to receive any
                  distribution with respect to any Award (other than an
                  Incentive Stock Option),



                                       13


<PAGE>   15



                  upon the death of the Participant; and provided, further, that
                  the Committee may determine that these restrictions on
                  transferability shall not apply to Awards (other than an
                  Incentive Stock Option) granted to any Participant who, at the
                  time of the initial grant and the transfer, is not subject to
                  Section 16 of the Exchange Act or shall not apply to Awards
                  (other than an Incentive Stock Option) granted to a
                  Participant subject to Section 16 to the extent such
                  restrictions are not at the time required for the Plan to
                  continue to meet the requirements of Rule 16b-3.

         7.02.3   DECISIONS REQUIRED TO BE MADE BY THE COMMITTEE. Other
                  provisions of the Plan and any Award Agreement
                  notwithstanding, if any decision regarding an Award or the
                  exercise of any right by a Participant, at any time such
                  Participant is subject to Section 16 of the Exchange Act, is
                  required to be made or approved by the Committee in order that
                  the Plan will continue to meet the requirements of Rule 16b-3
                  or in order that a transaction by such Participant will be
                  exempt under Rule 16b-3, then the Committee shall retain full
                  and exclusive power and authority to make such decision or to
                  approve or disapprove any such decision by the Participant.

7.03     TERM OF AWARDS. The term of each Award shall be for such period as may
         be determined by the Committee; provided, however, that in no event
         shall the term of any Incentive Stock Option, or a Stock Appreciation
         Right granted in tandem therewith, exceed a period of ten years from
         the date of its grant.

7.04     FORM OF PAYMENT OF AWARDS. Subject to the terms of the Plan and any
         applicable Award Agreement, payments or substitutions to be made by the
         Company upon the grant, exercise or other payment or distribution of an
         Award may be made in such forms as the Committee shall determine at the
         time of grant or thereafter (subject to the terms of Section 10.01),
         including, without limitation, cash, Shares, other Awards or other
         property or any combination thereof, and may be made in a single
         payment or substitution, in installments or on a deferred basis, in
         each case in accordance with rules and procedures established, or as
         otherwise determined, by the Committee. Such rules and procedures or
         determinations may include, without limitation, provisions for the
         payment or crediting of reasonable interest on installment or deferred
         payments or the grant or crediting of Dividend Equivalents in respect
         of installment or deferred payments.

7.05     LIMITS ON TRANSFER OF AWARDS; BENEFICIARIES. No right or interest of a
         Participant in any Award shall be pledged, encumbered or hypothecated
         to or in favor of any Person other than the Company, or shall be
         subject to any lien, obligation or liability of such Participant to any
         Person other than the Company or a Subsidiary. Unless otherwise
         determined by the Committee (subject to the requirements of Section
         7.02.2), no Award and no rights or interests therein shall be
         assignable or transferable by a Participant otherwise than by will or
         the laws of descent and distribution except to the Company or a
         Subsidiary under the terms of the Plan; provided, however, that, if so
         determined by the Committee, a Participant may, in the manner
         established by the Committee, designate a beneficiary or beneficiaries



                                       14


<PAGE>   16


         to exercise the rights of the Participant, and to receive any
         distribution with respect to any Award, upon the death of the
         Participant. A beneficiary, guardian, legal representative or other
         Person claiming any rights under the Plan from or through any
         Participant shall be subject to all the terms and conditions of the
         Plan and any Award Agreement applicable to such Participant as well as
         any additional restrictions or limitations deemed necessary or
         appropriate by the Committee.

7.06     REGISTRATION AND LISTING COMPLIANCE. No Award shall be paid and no
         Shares or other securities shall be distributed with respect to any
         Award in a transaction subject to the registration requirements of the
         Securities Act of 1933, as amended, or any state securities law or
         subject to a listing requirement under any listing agreement between
         the Company and any national securities exchange, and no Award shall
         confer upon any Participant rights to such payment or distribution
         until such laws and contractual obligations of the Company have been
         complied with in all material respects. Except to the extent required
         by the terms of an Award Agreement or another contract between the
         Company and the Participant, neither the grant of any Award nor
         anything else contained herein shall obligate the Company to take any
         action to comply with any requirements of any such securities laws or
         contractual obligations relating to the registration (or exemption
         therefrom) or listing of any Shares or other securities, whether or not
         necessary in order to permit any such payment or distribution.

7.07     STOCK CERTIFICATES. All certificates for Shares delivered under the
         terms of the Plan shall be subject to such stop-transfer orders and
         other restrictions as the Committee may deem advisable under federal or
         state securities laws, rules and regulations thereunder, and the rules
         of any national securities exchange or automated quotation system on
         which Shares are listed or quoted. The Committee may cause a legend or
         legends to be placed on any such certificates to make appropriate
         reference to such restrictions or any other restrictions or limitations
         that may be applicable to Shares. In addition, during any period in
         which Awards or Shares are subject to restrictions or limitations under
         the terms of the Plan or any Award Agreement, or during any period
         during which delivery or receipt of an Award or Shares has been
         deferred by the Committee or a Participant, the Committee may require
         any Participant to enter into an agreement providing that certificates
         representing Shares issuable or issued pursuant to an Award shall
         remain in the physical custody of the Company or such other Person as
         the Committee may designate.

SECTION 8. ADJUSTMENT PROVISIONS

8.01     In the event that the Committee shall determine that any dividend or
         other distribution (whether in the form of cash, Shares, other
         securities or other property), recapitalization, stock split, reverse
         stock split, reorganization, merger, consolidation, split-up, spin-off,
         combination, repurchase, exchange of Shares or other securities of the
         Company, or other similar corporate transaction or event affects the
         Shares such that an adjustment is determined by the Committee to be
         appropriate in order to prevent dilution or enlargement of
         Participants' rights under the Plan, then the Committee shall, in such
         manner as it may deem equitable, adjust any or all of (i) the number
         and kind of Shares which may thereafter be




                                       15
<PAGE>   17




         issued in connection with Awards; (ii) the number and kind of Shares
         issued or issuable in respect of outstanding Awards; and (iii) the
         exercise price, grant price or purchase price relating to any Award or,
         if deemed appropriate, make provision for a cash payment with respect
         to any outstanding Award; provided, however, in each case, that (1)
         with respect to Incentive Stock Options, no such adjustment shall be
         authorized to the extent that such authority would cause the Plan to
         violate Section 422(b)(1) of the Code or any successor provision
         thereto and (2) with respect to Options and Stock Appreciation Rights
         held by a Covered Employee, no such adjustment shall be authorized to
         the extent that such authority would cause such Awards to fail to
         qualify as "performance-based compensation" under Section 162(m)(4)(C)
         of the Code. In addition, the Committee is authorized to make
         adjustments in the terms and conditions of, and the criteria of, Awards
         in recognition of unusual or nonrecurring events (including, without
         limitation, events described in the preceding sentence) affecting the
         Company or the financial statements of the Company, or in response to
         changes in applicable laws, regulations or accounting principles;
         provided, however, that (1) with respect to Incentive Stock Options, no
         such adjustment shall be authorized to the extent that such authority
         would cause the Plan to violate Section 422(b)(1) of the Code or any
         successor provision thereto and (2) with respect to Options and Stock
         Appreciation Rights held by a Covered Employee, no such adjustment
         shall be authorized to the extent that such authority would cause such
         Awards to fail to qualify as "performance-based compensation" under
         Section 162(m)(4)(C) of the Code.

SECTION 9. CHANGE OF CONTROL PROVISIONS

9.01     ACCELERATION OF EXERCISABILITY AND LAPSE OF RESTRICTIONS; AUTOMATIC
         CASH-OUT OF AWARDS. In the event of a Change of Control, the following
         acceleration and cash-out provisions shall apply unless otherwise
         provided by the Committee at the time of the Award grant:

         (i)      All outstanding Awards pursuant to which the Participant may
                  have rights, the exercise of which is restricted or limited,
                  shall become fully exercisable, except as may be otherwise
                  provided in Section 7.02.1; unless the right to lapse of
                  restrictions or limitations is waived or deferred by a
                  Participant prior to such lapse, all restrictions or
                  limitations (including risks of forfeiture and deferrals) on
                  outstanding Awards subject to restrictions or limitations
                  under the Plan shall lapse, except as may be otherwise
                  provided in Section 7.02.1; and all performance criteria and
                  other conditions to payment of Awards under which payments of
                  cash, Shares or other property are subject to conditions shall
                  be deemed to be achieved or fulfilled and shall be waived by
                  the Company, except as may be otherwise (required to comply
                  with Rule 16b-3.

         (ii)     All outstanding Awards not subject to limitations under
                  Section 7.02.1 shall be automatically surrendered, and the
                  Participants shall receive, in full satisfaction therefor,
                  cash payments equal to the value of such outstanding Awards
                  calculated on the basis of the Change of Control



                                       16


<PAGE>   18




                  Price of any Shares or the Fair Market Value of any property
                  other than Shares relating to such Award; provided, however,
                  that (a) in the case of a nonstatutory stock option, or a
                  Stock Appreciation Right granted in tandem therewith, the cash
                  payment shall be equal to the Change of Control Price of the
                  Shares subject to the Option reduced by the exercise price
                  thereof, (b) in the case of an Incentive Stock Option, or a
                  Stock Appreciation Right granted in tandem therewith, the cash
                  payment shall be equal to the Fair Market Value of the Shares
                  subject to the Option on the date on which the Change of
                  Control occurred reduced by the exercise price thereof, (c) in
                  the case of a Stock Appreciation Right not granted in tandem
                  with another award, the cash payment shall be equal to the
                  Change of Control Price of the Shares subject to the Stock
                  Appreciation Right reduced by the grant price thereof, and (d)
                  in the case of any other purchase right, the cash payment
                  shall be reduced by the Fair Market Value of the consideration
                  otherwise required to exercise such purchase right. In the
                  event that an Award is granted in tandem with another Award
                  such that the Participant's right to payment for such Award is
                  an alternative to payment of another Award, the Participant
                  shall surrender all alternative Awards and receive payment for
                  the Award which produces the highest payment to the
                  Participant. In no event will an Award be automatically
                  surrendered or a Participant have the right to receive cash
                  under this Section 9.02(ii) with respect to an Award (1) if
                  the Participant is subject to Section 16 of the Exchange Act
                  (or was subject to Section 16 of the Exchange Act at the date
                  of grant of the Award) and at least six months shall not have
                  elapsed from the date on which the Participant was granted the
                  Award (or, if later, from the date of shareholder approval of
                  the Plan) before the date of the Change of Control (unless
                  this restriction is not at such time required under Rule
                  16b-3(c)(1) or Rule 16b-3(e)) or (2) if the Participant is
                  subject to Section 16 of the Exchange Act and had the power to
                  control the occurrence or timing of the Change of Control such
                  that the surrender and right to receive cash under this
                  Section 9.01(ii) would fail to be exempt pursuant to Rule
                  16b-3(e).

         (iii)    In the event that any Award is subject to limitations under
                  Section 7.02.1 at the time of a Change of Control, then,
                  solely for the purpose of determining the rights of the
                  Participant under Section 9.02(ii) with respect to such Award,
                  a Change of Control shall be deemed to occur at the close of
                  business on the first business day following the date on which
                  the limitations on such Award under Section 7.02.1 have
                  expired; provided, however, that this Section 9.01 (iii) shall
                  not apply if its application would cause the surrender of the
                  Award and the receipt of cash under Section 9.01 (ii) to fail
                  to be exempt pursuant to Rule 16b-3(e).

         (iv)     In the discretion of the Committee, the Committee may permit
                  any Participant not subject to Section 16 of the Exchange Act
                  on the date of a Change of Control to elect, in such manner
                  and at such time or



                                       17


<PAGE>   19



                  times or within such periods as the Committee may determine
                  (whether before or after a Change of Control), and subject to
                  such other terms, conditions or restrictions, if any, as the
                  Committee may determine to impose, not to surrender for cash
                  pursuant to Section 9.02(ii) all or any portion of any Award
                  or Awards held by the Participant.

9.02     CREATION AND FUNDING OF TRUST. Upon the occurrence of a Potential
         Change of Control, the Company shall deposit with the trustee of a
         trust for the benefit of Participants monies or other property having a
         Fair Market Value at least equal to the value of the cash, Shares and
         other property to be paid or distributed in connection with Awards
         outstanding at that date. The trust shall be a grantor trust which
         shall preserve the "unfunded" status of Awards under the Plan.
         Subsequent to a Potential Change of Control which is no longer
         continuing and prior to a Change of Control and termination of the
         trust, upon the request of the Company the trustee shall deliver the
         monies or other property held in the trust to the Company. In the
         discretion of the Committee, monies or other property may also be
         deposited in the trust created under this Section 9.02 for the benefit
         of participants in any other compensation or benefit plan, program,
         contract or arrangement of the Company or any Subsidiary.

9.03     DEFINITION OF CERTAIN TERMS. For purposes of this Section 9, the
         following definitions, in addition to those set forth in Section 2.01,
         shall apply:


         9.03.1   "Change of Control" means and shall be deemed to have occurred
                  if (i) any Person, other than the Company or a Related Party,
                  purchases or otherwise acquires, under a tender offer or
                  otherwise, Beneficial Ownership of any Voting Securities
                  which, when combined with other Voting Securities then
                  Beneficially Owned by such Person, represent twenty percent
                  (20%) or more of the total voting power of all the then
                  outstanding Voting Securities; or (ii) the individuals (a) who
                  as of the effective date of the Plan constitute the Board or
                  (b) who thereafter are elected to the Board and whose
                  election, or nomination for election, to the Board was
                  approved by a vote of at least two-thirds of the directors
                  then still in office who either were directors as of the
                  effective date of the Plan or whose election or nomination for
                  election was previously so approved (the "Continuing
                  Directors"), cease for any reason to constitute a majority of
                  the members of the Board; or (iii) the Company is a party to a
                  merger, consolidation, share exchange, recapitalization or
                  reorganization of the Company or an acquisition of securities
                  or assets by the Company, other than any such transaction (a)
                  which would result in the Voting Securities outstanding
                  immediately prior thereto continuing to represent either by
                  remaining outstanding or by being converted into voting
                  securities of the surviving or acquiring entity, at least
                  fifty percent (50%) of the total voting power represented by
                  the voting securities of such surviving or acquiring entity
                  outstanding immediately after such transaction and (b) in or
                  as a result of which the voting rights of each Voting Security
                  relative to the voting rights of all other Voting Securities
                  are not altered other than



                                       18


<PAGE>   20


                  through the exercise of dissenters' rights; or (iv) the
                  shareholders of the Company approve a plan of complete
                  liquidation of the Company; or (v) the Company shall sell or
                  otherwise dispose of, other than to a Related Party, in a
                  single or a series of related transactions otherwise than in
                  the ordinary course of business, assets of the Company and/or
                  stock or assets of any Subsidiary, having a book value equal
                  to 50% or more of the consolidated total assets of the
                  Company, in each case measured as the date of the most recent
                  quarterly or annual balance sheet of the Company required to
                  be included or incorporated by reference in any proxy or
                  information statement of the Company furnished to the
                  shareholders of the Company in connection with such
                  transaction, or if no such proxy or information statement is
                  furnished to shareholders or no such balance sheet is required
                  to be included or incorporated by reference therein, as of the
                  date of the most recent quarterly or annual balance sheet of
                  the Company required to be filed with the Securities and
                  Exchange Commission prior to the date of any such transaction;

         9.03.2   "Change of Control Price" means, with respect to a Share, the
                  higher of (i) the highest reported sales price of Shares on
                  the New York Stock Exchange's consolidated transaction
                  reporting system (or if the Common Stock is not then listed on
                  such Exchange, on or on any composite index including the
                  principal United States securities exchange on which the
                  Common Stock is then listed, or if none, on NASDAQ or any
                  similar system then in use, and in the absence of any such
                  reported sales prices, the highest publicly reported bid price
                  for Shares) during the 30 calendar days preceding the date of
                  a Change of Control or (ii) the highest price paid or offered
                  in a transaction which either (a) results in a Change of
                  Control or (b) would be consummated but for another
                  transaction which results in a Change of Control and, if it
                  were consummated, would result in a Change of Control. With
                  respect to clause (ii) in the preceding sentence, the "price
                  paid or offered" will be equal to the sum of (a) the face
                  amount of any portion of the consideration consisting of cash
                  or cash equivalents and (b) the fair market value of any
                  portion of the consideration consisting of real or personal
                  property other than cash or cash equivalents, as established
                  by an independent appraiser selected by the Committee.

         9.03.3   "Potential Change of Control" means and shall be deemed to
                  have arisen if (i) the Company enters into an agreement, the
                  consummation of which would result in the occurrence of the
                  Change of Control; or (ii) any Person (including the Company)
                  publicly announces an intention to take or to consider taking
                  actions which if consummated would constitute a Change of
                  Control; or (iii) any Person, other than a Related Party,
                  files with the Securities and Exchange Commission a Schedule
                  13D pursuant to Rule 13d-1 under the Exchange Act with
                  respect to Voting Securities; or (iv) any Person, other than
                  the Company or a Related Party, files with the Federal Trade
                  Commission a notification and report form pursuant to the
                  Hart-Scott-Rodino Antitrust Improvements Act of 1976 with
                  respect to any Voting Securities or any assets of the Company
                  or a Subsidiary; or (v)



                                       19


<PAGE>   21



                  the Board or a committee thereof adopts a resolution to the
                  effect that, for purposes of the Plan, a Potential Change of
                  Control has arisen. A Potential Change of Control will be
                  deemed to continue (a) with respect to an agreement within the
                  purview of clause (i) of the preceding sentence, until the
                  agreement is canceled or terminated; or (b) with respect to an
                  announcement within the purview of clause (ii) of the
                  preceding sentence, until the Person making the announcement
                  publicly abandons the stated intention or fails to act on such
                  intention for a period of 12 calendar months; or (c) with
                  respect to the filing of a Schedule 13D within the purview of
                  clause (iii) of the preceding sentence, until the Person
                  involved publicly announces that its ownership or acquisition
                  of the Voting Securities is for investment purposes only and
                  not for the purpose of seeking a Change of Control or such
                  Person disposes of all Voting Securities exceeding 5% of the
                  outstanding shares of any class; or (d) with respect to the
                  filing of a notification and report form within the purview of
                  clause (iv) of the preceding sentence with respect to Voting
                  Securities or assets, until the Person publicly abandons the
                  transaction which was the subject of such filing or fails to
                  act thereon for a period of 12 calendar months or, in the
                  case of a filing with respect to Voting Securities, until the
                  Person involved (1) publicly announces that its ownership or
                  acquisition of the Voting Securities is for investment
                  purposes only and not for the purpose of seeking a Change of
                  Control or (2) following completion of such transaction
                  disposes of all Voting Securities exceeding 5% of the
                  outstanding shares of any class; or (e) until a Change of
                  Control has occurred if the majority of the Continuing
                  Directors, on reasonable belief after due investigation,
                  adopts a resolution that either (1) the Potential Change of
                  Control has ceased to exist or (2) the Potential Change of
                  Control is believed to be not reasonably likely to result in a
                  Change of Control.

         9.03.4   "Related Party" means (i) a Subsidiary; or (ii) a trustee or
                  other fiduciary holding securities under an employee benefit
                  plan of the Company or any Subsidiary; or (iii) a Company
                  owned directly or indirectly by the shareholders of the
                  Company in substantially the same proportion as their
                  ownership of Voting Securities.

         9.03.5   "Voting Securities or Security" means any securities of the
                  Company which carry the right to vote generally in the
                  election of directors.

         9.03.6   "Beneficial Ownership" shall be determined in accordance with
                  Regulation 13D-G under the Exchange Act, as in effect on the
                  effective date of the Plan.

SECTION 10. AMENDMENTS TO AND TERMINATION OF THE PLAN

10.01    The Board may amend, alter, suspend, discontinue or terminate the Plan
         without the consent of shareholders or Participants, except that,
         without the approval of the shareholders of the Company, no amendment,
         alteration, suspension, discontinuation or termination shall be made if
         shareholder approval is required by



                                       20


<PAGE>   22


         any federal or state law or regulation, or if the Board in its
         discretion determines that obtaining such shareholder approval is for
         any reason advisable; provided, however, that except as provided in
         Section 7.02, without the consent of the Participant, no amendment,
         alteration, suspension, discontinuation or termination of the Plan may
         materially and adversely affect the rights of such Participant under
         any Award theretofore granted to him. The Committee may waive any
         conditions or rights under, amend any terms of, or amend, alter,
         suspend, discontinue or terminate, any Award theretofore granted,
         prospectively or retrospectively; provided, however, that except as
         provided in Section 7.02, without the consent of a Participant, no
         amendment, alteration, suspension, discontinuation or termination of
         any Award may materially and adversely affect the rights of such
         Participant under any Award theretofore granted to him.

SECTION 11. GENERAL PROVISIONS

11.01    NO RIGHT TO AWARDS; NO SHAREHOLDER RIGHTS. No Participant or employee
         shall have any claim to be granted any Award under the Plan, and there
         is no obligation for uniformity of treatment of Participants and
         employees, except as provided in any other compensation arrangement. No
         Award shall confer on any Participant any of the rights of a
         shareholder of the Company unless and until Shares are in fact issued
         to such Participant in connection with such Award.

11.02    WITHHOLDING. To the extent required by applicable Federal, state, local
         or foreign law, the Participant or his successor shall make
         arrangements satisfactory to the Company, in its discretion, for the
         satisfaction of any withholding tax obligations that arise in
         connection with an Award. The Company shall not be required to issue
         any Shares or make any cash or other payment under the Plan until such
         obligations are satisfied.

         The Company is authorized to withhold from any Award granted or any
         payment due under the Plan, including from a distribution of Shares,
         amounts of withholding taxes due with respect to an Award, its exercise
         or any payment thereunder, and to take such other action as the
         Committee may deem necessary or advisable to enable the Company and
         Participants to satisfy obligations for the payment of such taxes. This
         authority shall include authority to withhold or receive Shares, Awards
         or other property and to make cash payments in respect thereof in
         satisfaction of such tax obligations.

11.03    NO RIGHT TO EMPLOYMENT. Nothing contained in the Plan or any Award
         Agreement shall confer, and no grant of an Award shall be construed as
         conferring, upon any Participant any right to continue in the employ of
         the Company or to interfere in any way with the right of the Company to
         terminate his employment at any time or increase or decrease his
         compensation from the rate in existence at the time of granting of an
         Award, except as provided in any Award Agreement or other compensation
         arrangement.

11.04    UNFUNDED STATUS OF AWARDS; CREATION OF TRUSTS. The Plan is intended to
         constitute an "unfunded" plan for incentive and deferred compensation.
         With respect to any payments not yet made to a Participant pursuant to
         an Award, nothing contained



                                       21


<PAGE>   23


         in the Plan or any Award shall give any such Participant any rights
         that are greater than those of a general unsecured creditor of the
         Company; provided, however, that, in addition to the requirements of
         Section 9.02, the Committee may authorize the creation of trusts or
         make other arrangements to meet the Company's obligations under the
         Plan to deliver cash, Shares or other property pursuant to any Award,
         which trusts or other arrangements shall be consistent with the
         "unfunded" status of the Plan unless the Committee otherwise
         determines.

11.05    NO LIMIT ON OTHER COMPENSATORY ARRANGEMENTS. Nothing contained in the
         Plan shall prevent the Company from adopting other or additional
         compensation arrangements (which may include, without limitation,
         employment agreements with executives and arrangements which relate to
         Awards under the Plan), and such arrangements may be either generally
         applicable or applicable only in specific cases. Notwithstanding
         anything in the Plan to the contrary (other than the provisions of
         Section 7.02), the terms of each Award shall be construed so as to be
         consistent with such other arrangements in effect at the time of the
         Award.

11.06    NO FRACTIONAL SHARES. No fractional Shares shall be issued or delivered
         pursuant to the Plan or any Award. The Committee shall determine
         whether cash, other Awards or other property shall be issued or paid in
         lieu of fractional Shares or whether such fractional Shares or any
         rights thereto shall be forfeited or otherwise eliminated.

11.07    GOVERNING LAW. The validity, interpretation, construction and effect of
         the Plan and any rules and regulations relating to the Plan shall be
         governed by the laws of the Commonwealth of Pennsylvania (without
         regard to the conflicts of laws thereof), and applicable Federal law.

11.08    SEVERABILITY. If any provision of the Plan or any Award is or becomes
         or is deemed invalid, illegal or unenforceable in any jurisdiction, or
         would disqualify the Plan or any Award under any law deemed applicable
         by the Committee, such provision shall be construed or deemed amended
         to conform to applicable laws or if it cannot be construed or deemed
         amended without, in the determination of the Committee, materially
         altering the intent of the Plan or Award, it shall be deleted and the
         remainder of the Plan or Award shall remain in full force and effect;
         provided, however, that, unless otherwise determined by the Committee,
         the provision shall not be construed or deemed amended or deleted with
         respect to any Participant whose rights and obligations under the Plan
         are not subject to the law of such jurisdiction or the law deemed
         applicable by the Committee.

SECTION 12. EFFECTIVE DATE AND TERM OF THE PLAN

12.01    The effective date and date of adoption of the Plan shall be January
         21, 1994, the date of adoption of the Plan by the Board, provided that
         such adoption of the Plan is approved by the affirmative vote of a
         majority of the shares of Common Stock present in person or represented
         by proxy and entitled to vote at a duly held meeting of shareholders of
         the Company held on or prior to December 31, 1994. Notwithstanding
         anything else contained in the Plan or in any Award Agreement, no
         Option, Stock Appreciation Right or other purchase right granted under
         the Plan



                                       22
<PAGE>   24






         may be exercised, and no Shares may be distributed pursuant to any
         Award granted under the Plan, prior to such shareholder approval or
         prior to any required approval or consent from those governmental
         agencies having jurisdiction in these matters. In the event such
         shareholder or regulatory approval is not obtained, all Awards granted
         under the Plan shall automatically be deemed void and of no effect. No
         Award may be granted under the Plan subsequent to May 27, 1999.




                                       23


<PAGE>   25





     ----------------------------------------------------------------------
                                   PROSPECTUS
     ----------------------------------------------------------------------
















<PAGE>   26









May 27, 1999


                                                     This document constitutes
                                                     part of a prospectus
                                                     covering securities that
                                                     have been registered under
                                                     the Securities Act of 1933.


                         1994 EQUITABLE RESOURCES, INC.
                            LONG-TERM INCENTIVE PLAN

 1.      GENERAL INFORMATION

         This Plan covers shares of the common stock of Equitable Resources,
Inc. (together with any successor, the "Company") which may be issued pursuant
to awards of restricted stock, deferred stock and other stock-based awards; the
grant and exercise of stock options and stock appreciation rights; and the grant
of dividend equivalents and performance awards, under the 1994 Equitable
Resources, Inc. Long-Term Incentive Plan (the "Plan"). The Plan was adopted by
the Board of Directors of the Company on January 21, 1994 and was approved by a
vote of the shareholders of the Company on May 27, 1994.

         The purpose of the Plan is to enable the Company to focus key
executives' efforts on performance which will increase the value of the Company
for its shareholders. The Plan is intended to align the interests of key
executives with those of the shareholders by encouraging share ownership. The
Plan is also intended to attract and retain key executives.

         Additional information about the Plan and its administration may be
obtained by calling Johanna G. O'Loughlin, Vice President, General Counsel and
Corporate Secretary at (412) 553-7760. Alternatively, Ms. O'Loughlin can be
contacted by writing to Equitable Resources, Inc., One Oxford Centre, Suite
3300, Pittsburgh, Pennsylvania 15219, Attention: Johanna G. O'Loughlin, Vice
President, General Counsel and Corporate Secretary.

         The Company's latest annual report on Form 10-K, all other reports
filed by the Company since December 31, 1993 pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, and the description of the
Company's common stock in




                                       1
<PAGE>   27







Registration Statement No. 33-49905 are incorporated by reference into this
prospectus. All such documents are available without charge, upon oral or
written request, at the telephone number and address stated above.

2.       ELIGIBILITY, GRANT AND TERMS

         Under the Plan, key employees of the Company or any of its subsidiaries
are selected by the Compensation Committee of the Board of Directors (the
"Committee") to receive stock-based and other types of awards. The types of
awards which may be granted include stock options, stock appreciation rights,
restricted stock, deferred stock, stock, non-stock performance awards, dividend
equivalents, and other stock-based awards. Following is a summary of these
awards:

                  a.   STOCK OPTIONS - The exercise price of each share of an
                       option will be 100 percent of the mean of the high and
                       low New York Stock Exchange trading prices for the common
                       stock on the date of grant. The period during which each
                       option may be exercised will be determined by the
                       Committee. Options may be exercised upon such terms and
                       by such methods as may be designated by the Committee,
                       including payment by cash or common stock. Unless
                       permitted by the Committee, no shares of common stock
                       held for less than six (6) months may be used to pay for
                       the exercise of an option. Certain options may be
                       designated by the Compensation Committee as Incentive
                       Stock Options. The fair market value of Incentive Stock
                       Options exercisable by a Participant in any calendar year
                       may not exceed $100,000 (based on fair market value on
                       the date of grant).

                  b.   STOCK APPRECIATION RIGHTS - Stock Appreciation Rights
                       ("SAR") give a Participant the right to receive upon
                       exercise of the SAR the difference between the fair
                       market value of the number of shares covered by the SAR
                       on the date of exercise and the grant price of the SAR.
                       The grant price of the SAR is normally the fair market
                       value of the shares on the date of grant. Stock
                       Appreciation Rights will have such other terms as may be
                       determined by the Committee.



                                       2
<PAGE>   28









                 c.    RESTRICTED STOCK - A key employee receiving a grant of
                       restricted stock will not be required to make any payment
                       to the Company for such stock. Restricted stock will be
                       subject to forfeiture for such periods, and upon such
                       terms, as the Committee may determine. Except as
                       otherwise provided by the Committee, termination of
                       employment during the applicable restriction period will
                       result in a forfeiture of the restricted shares.

                  d.   DEFERRED STOCK - Deferred stock provides for the delivery
                       of shares upon expiration of a deferral period specified
                       by the Committee. A Participant awarded deferred stock
                       shall have no voting rights or rights to receive
                       dividends (unless the Committee awards dividend
                       equivalents in respect of such stock). Except as provided
                       by the Committee, a termination of employment during the
                       applicable deferral period will result in forfeiture of
                       the right to receive the shares.

                  e.   PERFORMANCE AWARDS - The Compensation Committee may grant
                       Participants the right to receive cash, stock or other
                       property based upon the achievement of performance
                       criteria specified by the Committee.

                  f.   DIVIDEND EQUIVALENTS - The Committee may grant
                       Participants the right to receive, on a current or
                       deferred basis, interest or dividends, or interest or
                       dividend equivalents, relating to a specified number of
                       shares of stock or otherwise.

                  g.   OTHER STOCK-BASED AWARDS - The Committee may grant
                       Participants other types of awards based on the issuance
                       of stock to Participants.

         Options may be exercised during a Participant's lifetime only by the
Participant or his legal representative and options or other awards may not be
transferred to any other party. However, the Committee may permit the
Participant to designate a beneficiary to exercise any rights of a Participant
and to receive any distribution upon the Participant's death (other than an
Incentive Stock Option). No interest in any option or restricted stock


                                       3
<PAGE>   29





may be pledged or encumbered by any Participant except in favor of the Company
or shall otherwise by subject to any lien or liability.

         No awards under this Plan shall be made after May 27, 1999. The maximum
aggregate number of shares of common stock that may be issued under the Plan is
equal to five (5) percent of the number of the outstanding shares of the
Company's common stock on the date of shareholder approval of the Plan (May 27,
1994). The number of shares which may be issued under the Plan and under
existing options, along with the exercise price of such options, is subject to
adjustment by the Committee in certain circumstances, including stock splits,
dividends, recapitalizations and major corporate changes.

3.       AMENDMENT OF PLAN

         The Board of Directors may amend, discontinue or terminate the Plan at
any time without shareholder approval except to the extent that Federal or state
law or regulation so requires or that the Board determines that shareholder
approval is advisable. Without the consent of the Participant, no such action
shall adversely affect the rights of any Participant in any award previously
granted to him.

4.       ADMINISTRATION

         The Plan is administered by the Compensation Committee of the Board of
Directors. The Committee shall have full and final authority to interpret and
administer the Plan; to adopt, amend and rescind regulations to administer the
Plan; to designate Participants; to determine the types, number and terms of
awards granted under the Plan; and to make all decisions that the Committee
deems necessary or advisable in the administration of the Plan.

5.       SALES OF RESTRICTED OR OPTION STOCK

         Because officers may be deemed "affiliates" of the Company as that term
is defined in the regulations adopted pursuant to the Securities Act of 1933,
the most prudent course for them is to resell restricted shares or shares
obtained upon the exercise of options only in accordance with the provisions of
Rule 144 (excluding the one year holding period) of the Securities Act of 1933.
Officers should notify the Corporate Secretary when selling such shares so that
the Form 144 filing requirements will be met.



                                       4
<PAGE>   30


         No sale of the Company's common stock should be made by officers within
six (6) months before or after any open market purchase of the Company's common
stock. Otherwise, any profit gained from such a sale would have to be disgorged
to the Company in accordance with the provisions of Section 16(b) of the
Securities Exchange Act of 1934.

         No officer of the Company or other employee determined by the Company
to be subject to Section 16 of the Securities Exchange Act of 1934 may sell
stock received through the exercise of a stock option until six (6) months have
elapsed from the date of the grant of the option. In addition, no such person
may sell any stock granted through any other award until six (6) months have
elapsed from the date of grant.

6.       CHANGE OF CONTROL

         Upon the occurrence of certain specified events, all outstanding awards
shall become fully exercisable and all outstanding awards shall be surrendered
to the Company in exchange for a cash payment in accordance with a formula
specified under the Plan. The specified events are: the acquisition of 20
percent of the voting power in Equitable's stock by any unaffiliated party; the
existence of any Equitable Board of Directors less than 51 percent of whom were
Equitable Directors on January 21, 1994 or successors elected by at least
two-thirds of such Directors or by such elected successors; a merger or
reorganization of the Company or other transaction under which Equitable
shareholders would own less than 50 percent of a stock of the surviving
corporation; the shareholders approve a complete liquidation of the Company; or
the sale or disposal to an unrelated party other than in the ordinary course of
the business, of at least 50 percent of the book value of the Company.

7.       APPLICABILITY OF ERISA PROVISIONS

         The Plan is not a "qualified pension, profit-sharing or stock bonus
plan" within the meaning of Section 401(a) of the Internal Revenue Code and is
not subject to any provisions of the Employment Retirement Income Security Act
of 1974 ("ERISA").

8.       FEDERAL INCOME TAX CONSEQUENCES

         Participants should consult their personal tax advisers with specific
reference to their own tax situation and potential changes in the applicable law
as to all Federal, state,



                                       5
<PAGE>   31


local, foreign and other tax matters in connection with the grant, exercise,
cancellation or expiration of a stock option or the grant of restricted stock
under the Plan and the disposition of shares of Equitable common stock acquired
under the Plan. The following is only a summary of some of the principal Federal
income tax considerations under present law:

                  a.   GRANT OF STOCK OPTIONS - A Participant does not realize
                       any taxable income upon the grant of a stock option.

                  b.   EXERCISE OF STOCK OPTIONS - In general, a Participant to
                       whom shares of common stock are issued upon exercise of a
                       nonstatutory stock option recognizes taxable income for
                       Federal income tax purposes in an amount equal to the
                       difference between the fair market value of the common
                       stock at the time the stock is exercised and the option
                       price paid for the common stock. In addition, no taxable
                       income is recognized during any six-month period in which
                       any profit from the sale of shares is subject to
                       disgorgement under Section 16(b) of the Securities
                       Exchange Act of 1934.

                                If the option price is paid in whole or in part
                       in shares of common stock, no income, gain or loss is
                       recognized to the Participant on the receipt of shares
                       equal in value on the date of exercise to the shares
                       delivered in payment of the option price. The fair market
                       value of the remainder of the shares received upon
                       exercise of the Stock Option (the "Additional Shares"),
                       less the amount of cash, if any, paid upon exercise, is
                       included in the optionee's taxable income when reportable
                       under the preceding paragraph.

                                If the option price is paid in cash, the
                       Participant's tax basis in the shares of common stock
                       received is the option price plus the amount included in
                       the Participant's taxable income. If the option price is
                       paid in whole or in part in shares of common stock,
                       shares of common stock received upon exercise equal in
                       value to the shares of common stock delivered in payment
                       of the option price have the same



                                       6
<PAGE>   32






                       tax basis as the shares delivered. The tax basis of the
                       Additional Shares is the amount of cash, if any, paid
                       upon exercise of the Stock Option plus the amount
                       included in the Participant's taxable income.

                                 The Company or one of its subsidiaries is
                       entitled to a Federal income tax deduction in an amount
                       equal to the taxable income recognized by the Participant
                       in each instance described above.

                                 In general, a Participant will not recognize
                       taxable income at the time an incentive stock option is
                       exercised except that the excess of the fair market value
                       of the common stock acquired upon exercise of an
                       incentive stock option over the exercise price is
                       potentially subject to the alternative minimum tax. If
                       the Participant holds the shares acquired pursuant to an
                       incentive stock option for at least two years from the
                       date of grant and for at least one year from the date of
                       exercise, the Participant's gain will be taxed as a
                       long-term capital gain. The amount of the gain shall be
                       equal to the difference between the exercise price and
                       the sales price. In that case, the Company is not
                       entitled to a tax deduction. If the Participant disposes
                       of the stock before the end of these holding periods, he
                       will recognize ordinary income upon sale of the stock and
                       the Company will be entitled to a corresponding tax
                       deduction.

                  c.   RESTRICTED STOCK - Absent making an election under
                       Section 83(b) of the Internal Revenue Code within thirty
                       (30) days of the grant, in general, a Participant who
                       receives a grant of restricted stock does not recognize
                       taxable income for federal income tax purposes until the
                       shares are released from escrow. At that time, the tax is
                       based on the then current market value of the stock. If a
                       Participant makes a Section 83(b) election, the market
                       value of the restricted stock at the time it is granted
                       (i.e., the mean of the high and low trading prices) is
                       included in the Participant's taxable income in the year
                       of such grant.



                                       7
<PAGE>   33




                  d.   DIVIDENDS ON ESCROWED SHARES - Cash dividends paid to an
                       optionee with respect to the shares of Equitable common
                       stock subject to escrow, prior to the lapse of the
                       escrow, constitute taxable income when paid.

                  e.   SALE OF EQUITABLE COMMON STOCK - The difference between
                       the amount realized on any sale of the common stock and
                       the optionee's tax basis in the shares sold is taxable
                       income of the optionee. The taxable income will be
                       subject to a tax at capital gains rates, generally not in
                       excess of 20 percent if held for twelve months or more.

                  f.   EXCESS PARACHUTE PAYMENTS - In certain circumstances the
                       exercise of an option upon a "Change in Control", as
                       defined in the Plan, may result in (1) a 20 percent
                       Federal excise tax to the Participant on certain payments
                       of stock resulting from the exercise of such options and
                       (2) the loss of a compensation deduction which would
                       otherwise be allowable to the Company or one of its
                       subsidiaries.




                                       8