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                                                                   EXHIBIT 4(ii)

                           RAMSAY YOUTH SERVICES, INC.
                          1996 LONG TERM INCENTIVE PLAN

                       (formerly, RAMSAY HEALTH CARE, INC.
                         1996 LONG TERM INCENTIVE PLAN)

                  SECTION 1. PURPOSE. The purposes of this Ramsay Health Care,
Inc. 1996 Long Term Incentive Plan (the "Plan") are to encourage selected
employees, officers, directors and consultants of, and other individuals
providing services to, Ramsay Health Care, Inc. (together with any successor
thereto, the "Company") and its Affiliates (as defined below) to acquire a
proprietary interest in the growth and performance of the Company, to generate
an increased incentive to contribute to the Company's future success and
prosperity thus enhancing the value of the Company for the benefit of its
stockholders, and to enhance the ability of the Company and its Affiliates to
attract and retain exceptionally qualified individuals upon whom, in large
measure, the sustained progress, growth and profitability of the Company depend.

                  SECTION 2. DEFINITIONS. As used in the Plan, the following
terms shall have the meanings set forth below:

                  "Affiliate" shall mean (i) any entity that, directly or
through one or more intermediaries, is controlled by the Company and (ii) any
entity in which the Company has a significant equity interest, as determined by
the Committee.

                  "Award" shall mean any Option, Stock Appreciation Right,
Restricted Security, Performance Award, or Other Stock-Based Award granted under
the Plan.

                  "Award Agreement" shall mean any written agreement, contract
or other instrument or document evidencing any Award granted under the Plan.

                  "Board" shall mean the Board of Directors of the Company.

                  "Cause", as used in connection with the termination of a
Participant's employment, shall mean (i) with respect to any Participant
employed under a written employment agreement with the Company or an Affiliate
of the Company which agreement includes a definition of "cause," "cause" as
defined in such agreement or, if such agreement contains no such definition, a
material breach by the Participant of such agreement, or (ii) with respect to
any other Participant, the failure to perform adequately in carrying out such
Participant's employment responsibilities, including any directives from the
Board, or engaging in such behavior in his personal or business life as to lead
the Committee in its reasonable judgment to determine that it is in the best
interests of the Company to terminate his employment.

                  "Common Stock" shall mean the common stock of the Company,
$.01 par value.

                  "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated thereunder.



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                  "Committee" shall mean the Compensation and Conflict of
Interest Committee or any other committee of the Board designated by the Board
to administer the Plan and composed of not less than three non-employee
directors.

                  "Common Shares" shall mean any or all, as applicable, of the
Common Stock and such other securities or property as may become the subject of
Awards, or become subject to Awards, pursuant to an adjustment made under
Section 4(b) of the Plan and any other securities of the Company or any
Affiliate or any successor that may be so designated by the Committee.

                  "Employee" shall mean any employee of the Company or of any
Affiliate.

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

                  "Fair Market Value" shall mean (A) with respect to any
property other than the Common Shares, the fair market value of such property
determined by such methods or procedures as shall be established from time to
time by the Committee; and (B) with respect to the Common Shares, the last sale
price regular way on the date of reference, or, in case no sale takes place on
such date, the average of the high bid and low asked prices, in either case on
the principal national securities exchange on which the Common Shares are listed
or admitted to trading, or if the Common Shares are not listed or admitted to
trading on any national securities exchange, the last sale price reported on the
National Market System of the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") on such date, or the average of the
closing high bid and low asked prices in the over-the-counter market reported on
NASDAQ on such date, whichever is applicable, or if there are no such prices
reported on NASDAQ on such date, as furnished to the Committee by any New York
Stock Exchange member selected from time to time by the Committee for such
purpose. If there is no bid or asked price reported on any such date, the Fair
Market Value shall be determined by the Committee in accordance with the
regulations promulgated under Section 2031 of the Code, or by any other
appropriate method selected by the Committee.

                  "Good Reason", as used in connection with the termination of a
Participant's employment, shall mean (i) with respect to any Participant
employed under a written employment agreement with the Company or an Affiliate
of the Company, "good reason" as defined in such written agreement or, if such
agreement contains no such definition, a material breach by the Company of such
agreement, or (ii) with respect to any other Participant, a failure by the
Company to pay such Participant any amount otherwise vested and due and a
continuation of such failure for 30 business days following notice to the
Company thereof.

                  "Incentive Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is intended to meet the requirements of Section
422 of the Code or any successor provision thereto.

                  "Non-Qualified Stock Option" shall mean an option granted
under Section 6(a) of the Plan that is not intended to be an Incentive Stock
Option. Any stock option granted by the Committee which is not designated an
Incentive Stock Option shall be deemed a Non-Qualified Stock Option.

                  "Option" shall mean an Incentive Stock Option or a
Non-Qualified Stock Option.




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                  "Other Stock-Based Award" shall mean any right granted under
Section 6(e) of the Plan.

                  "Participant" shall mean any individual granted an Award under
the Plan.

                  "Performance Award" shall mean any right granted under Section
6(d) of the Plan.

                  "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.

                  "Released Securities" shall mean securities that were
Restricted Securities but with respect to which all applicable restrictions have
expired, lapsed or been waived in accordance with the terms of the Plan or the
applicable Award Agreement.

                  "Restricted Securities" shall mean any Common Shares granted
under Section 6(c) of the Plan, any right granted under Section 6(c) of the Plan
that is denominated in Common Shares or any other Award under which issued and
outstanding Common Shares are held subject to certain restrictions.

                  "Rule 16a-1" and "Rule 16b-3" shall mean Rule 16a-1 and Rule
16b-3, respectively, promulgated by the Securities and Exchange Commission under
the Exchange Act, or any successor rule or regulation thereto as in effect from
time to time.

                  "Stock Appreciation Right" shall mean any right granted under
Section 6(b) of the Plan.

                  SECTION 3. ADMINISTRATION. The Plan shall be administered by
the Committee. Subject to the terms of the Plan and applicable law, and in
addition to other express powers and authorizations conferred on the Committee
by the Plan, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to an
eligible Employee or other individual under the Plan; (iii) determine the number
and classification of Common Shares to be covered by (or with respect to which
payments, rights or other matters are to be calculated in connection with)
Awards; (iv) determine the terms and conditions of any Award; (v) determine
whether, to what extent, and under what circumstances Awards may be settled or
exercised in cash, Common Shares, other securities, other Awards or other
property, or canceled, forfeited or suspended, and the method or methods by
which Awards may be settled, exercised, canceled, forfeited or suspended; (vi)
determine requirements for the vesting of Awards or performance criteria to be
achieved in order for Awards to vest; (vii) determine whether, to what extent
and under what circumstances cash, Common Shares other securities, other Awards,
other property and other amounts payable with respect to an Award under the Plan
shall be deferred either automatically or at the election of the holder thereof
or of the Committee; (viii) interpret and administer the Plan and any instrument
or agreement relating to, or Award made under, the Plan; (ix) establish, amend,



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suspend or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; and (x) make any
other determination and take any other action that the Committee deems necessary
or desirable for the administration of the Plan. Unless otherwise expressly
provided in the Plan, all designations, determinations, interpretations and
other decisions under or with respect to the Plan or any Award shall be within
the sole discretion of the Committee, may be made at any time and shall be
final, conclusive and binding upon all Persons, including the Company, any
Affiliate, any Participant, any holder or beneficiary of any Award, any
shareholder and any Employee. Notwithstanding the foregoing, the maximum number
of Awards which may be granted to any one Participant under this Plan shall not
exceed 250,000 Common Shares, subject to the adjustments provided in Section
4(b) hereof and no Awards under this Plan shall be granted after June 30, 2006.

                  SECTION 4. COMMON SHARES AVAILABLE FOR AWARDS.

                  (a) COMMON SHARES AVAILABLE. Subject to adjustment as provided
in Section 4(b):

                           (i) CALCULATION OF NUMBER OF COMMON SHARES AVAILABLE.
The number of Common Shares available for granting Awards under the Plan shall
be 750,000, any or all of which may be or may be based on Common Stock, any
other security which becomes the subject of Awards, or any combination thereof.
Initially 750,000 shares of Common Stock shall be reserved for Awards hereunder.
Further, if, after the effective date of the Plan, any Common Shares covered by
an Award granted under the Plan or to which such an Award relates, are
forfeited, or if an Award otherwise terminates or is canceled without the
delivery of Shares or of other consideration, then the Common Shares covered by
such Award or to which such Award relates, or the number of Common Shares
otherwise counted against the aggregate number of Common Shares available under
the Plan with respect to such Award, to the extent of any such forfeiture,
termination or cancellation, shall again be, or shall become, available for
granting Awards under the Plan.

                           (ii) ACCOUNTING FOR AWARDS. For purposes of this
Section 4.

                                    (A) if an Award is denominated in or based
upon Common Shares, the number of Common Shares covered by such Award or to
which such Award relates shall be counted on the date of grant of such Award
against the aggregate number of Common Shares available for granting Awards
under the Plan and against the maximum number of Awards available to any
Participant; and

                                    (B) Awards not denominated in Common Shares
may be counted against the aggregate number of Common Shares available for
granting Awards under the Plan and against the maximum number of Awards
available to any participant in such amount and at such time as the Committee
shall determine under procedures adopted by the Committee consistent with the
purposes of the Plan;

                  PROVIDED, HOWEVER, that Awards that operate in tandem with
(whether granted simultaneously with or at a different time from), or that are
substituted for, other Awards may be counted or not counted under procedures
adopted by the Committee in order to avoid double counting. Any Common Shares
that are delivered by the Company, and any Awards that are granted by, or become
obligations of, the Company, through the assumption by the Company or an



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Affiliate of, or in substitution for, outstanding awards previously granted by
an acquired company shall, in the case of Awards granted to Participants who are
officers or directors of the Company for purposes of Section 16 of the Exchange
Act, be counted against the Common Shares available for granting Awards under
the Plan.

                           (iii) SOURCES OF COMMON SHARES DELIVERABLE UNDER
AWARDS. Any Common Shares delivered pursuant to an Award may consist, in whole
or in part, of authorized and unissued Common Shares or of treasury Common
Shares.

                  (b) ADJUSTMENTS. In the event that the Committee shall
determine that any dividend or other distribution (whether in the form of cash,
Common Shares, other securities or other property), recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase or exchange of Common Shares or other
securities of the Company, issuance of warrants or other rights to purchase
Common Shares or other securities of the Company, or other similar corporate
transaction or event affects the Common Shares such that an adjustment is
determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
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 Common Shares (or
other securities or property) which thereafter may be made the subject of
Awards, (ii) the number and kind of Common Shares (or other securities or
property) subject to outstanding Awards, and (iii) the grant or exercise price
with respect to any Award or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding Award; provided, however, that the
number of Common Shares subject to any Award denominated in Common Shares shall
always be a whole number.

                  In connection with any merger or consolidation in which the
Company is not the surviving corporation and which results in the holders of the
outstanding voting securities of the Company (determined immediately prior to
such merger or consolidation) owning less than a majority of the outstanding
voting securities of the surviving corporation (determined immediately following
such merger or consolidation), or any sale or transfer by the Company of all or
substantially all its assets or any tender offer or exchange offer for or the
acquisition, directly or indirectly, by any person or group of all or a majority
of the then outstanding voting securities of the Company, all outstanding
Options under the Plan shall become exercisable in full, notwithstanding any
other provision of the Plan or of any outstanding options granted thereunder, on
and after (i) the fifteenth day prior to the effective date of such merger,
consolidation, sale, transfer or acquisition or (ii) the date of commencement of
such tender offer or exchange offer, as the case may be. The provisions of the
foregoing sentence shall apply to any outstanding Options which are Incentive
Stock Options to the extent permitted by Section 422(d) of the Code and such
outstanding Options in excess thereof shall, immediately upon the occurrence of
the event described in clause (i) or (ii) of the foregoing sentence, be treated
for all purposes of the Plan as NonQualified Stock Options and shall be
immediately exercisable as such as provided in the foregoing sentence.

                  SECTION 5. ELIGIBILITY. Any Employee, including any officer or
employee-director of the Company or of any Affiliate, and any consultant of, or
other individual providing services to, the Company or any Affiliate shall be
eligible to be designated a Participant. A non-employee director shall be
eligible to receive NonQualified Stock Options under the Plan.




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                  SECTION 6. AWARDS.

                  (a) OPTIONS. The Committee is hereby authorized to grant to
eligible individuals options to purchase Common Shares (each, an "Option") which
shall contain the following terms and conditions and with such additional terms
and conditions, in either case not inconsistent with the provisions of the Plan,
as the Committee shall determine:

                           (i) EXERCISE PRICE. The purchase price per Common
Share purchasable under an Option shall be determined by the Committee;
provided, however, that such purchase price shall not be less than the Fair
Market Value of a Common Share on the date of grant of such Option, or such
other price as required under Subsection 6(a)(iv) hereof.

                           (ii) TIME AND METHOD OF EXERCISE. Subject to the
terms of Section 6(a)(iii), the Committee shall determine the time or times at
which an Option may be exercised in whole or in part, and the method or methods
by which, and the form or forms (including, without limitation, cash, Common
Shares, outstanding Awards, or other property, or any combination thereof,
having a Fair Market Value on the exercise date equal to the relevant exercise
price) in which, payment of the exercise price with respect thereto may be made
or deemed to have been made.

                           (iii) EXERCISABILITY UPON DEATH, RETIREMENT AND
TERMINATION OF EMPLOYMENT. Subject to the condition that no Option may be
exercised in whole or in part after the expiration of the Option period
specified in the applicable Award Agreement:

                                    (A) Subject to the terms of paragraph (D)
below, upon the death of a Participant while employed or within 3 months of
retirement or disability as defined in paragraph (B) below, the person or
persons to whom such Participant's rights with respect to any Option held by
such Participant are transferred by will or the laws of descent and distribution
may, prior to the expiration of the earlier of: (1) the outside exercise date
determined by the Committee at the time of granting the Option, or (2) nine
months after such Participant's death, purchase any or all of the Common Shares
with respect to which such Participant was entitled to exercise such Option
immediately prior to such Participant's death, and any Options not so
exercisable will lapse on the date of such Participant's death;

                                    (B) Subject to the terms of paragraph (D)
below, upon termination of a Participant's employment with the Company (x) as a
result of retirement pursuant to a retirement plan of the Company or an
Affiliate or disability (as determined by the Committee) of such Participant,
(y) by the Company other than for Cause, or (z) by the Participant with Good
Reason, such Participant may, prior to the expiration of the earlier of: (1) the
outside exercise date determined by the Committee at the time of granting the
Option, or (2) three months after the date of such termination, purchase any or
all of the Common Shares with respect to which such Participant was entitled to
exercise any Options immediately prior to such termination, and any Options not
so exercisable will lapse on such date of termination;

                                    (C) Subject to the terms of paragraph (D)
below, upon termination of a Participant's employment with the Company under any
circumstances not described in paragraphs (A) or (B) above, such Participant's
Options shall be canceled to the extent not theretofore exercised;



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                                    (D) Upon (i) the death of the Participant,
or (ii) termination of the Participant's employment with the Company (x) by the
Company other than for Cause (y) by the Participant with Good Reason or (z) as a
result of retirement or disability as defined in paragraph (B) above, the
Company shall have the right to cancel all of the Options such Participant was
entitled to exercise at the time of such death or termination (subject to the
terms of paragraphs (A) or (B) above) for a payment in cash equal to the excess,
if any, of the Fair Market Value of one Common Share on the date of death or
termination over the exercise price of such Option for one Common Share times
the number of Common Shares subject to the Option and exercisable at the time of
such death or termination; and

                                    (E) Upon expiration of the respective
periods set forth in each of paragraphs (A) through (C) above, the Options of a
Participant who has died or whose employment has been terminated shall be
canceled to the extent not theretofore canceled or exercised.

                                    (F) For purposes of paragraphs (A) through
(D) above, the period of service of an individual as a director or consultant of
the Company or an Affiliate shall be deemed the period of employment.

                           (iv) INCENTIVE STOCK OPTIONS. The following
provisions shall apply only to Incentive Stock Options granted under the Plan:

                                    (A) No Incentive Stock Option shall be
granted to any eligible Employee who, at the time such Option is granted, owns
securities possessing more than ten percent (10%) of the total combined voting
power of all classes of securities of the Company or of any Affiliate, except
that such an Option may be granted to such an Employee if at the time the Option
is granted the option price is at least one hundred ten percent (110%) of the
Fair Market Value of the Common Shares (determined in accordance with Section 2)
subject to the Option, and the Option by its terms is not exercisable after the
expiration of five (5) years from the date the Option is granted; and

                                    (B) To the extent that the aggregate Fair
Market Value of the Common Shares with respect to which Incentive Stock Options
(without regard to this subsection) are exercisable for the first time by any
individual during any calendar year (under all plans of the Company and its
Affiliates) exceeds $100,000, such Options shall be treated as Non-Qualified
Stock Options. This subsection shall be applied by taking Options into account
in the order in which they were granted. If some but not all Options granted on
any one day are subject to this subsection, then such Options shall be
apportioned between Incentive Stock Option and Non-Qualified Stock Option
treatment in such manner as the Committee shall determine. For purposes of this
subsection, the Fair Market Value of any Common Shares shall be determined, in
accordance with Section 2, as of the date the Option with respect to such Common
Shares is granted.



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                           (v) OTHER TERMS AND CONDITIONS OF OPTIONS.
Notwithstanding any provision contained in the Plan to the contrary, during any
period when any member of the Committee shall not be a "nonemployee director" as
defined in Rule 16b-3, then, the terms and conditions of Options granted under
the Plan to any director or officer, as defined in Rule 16a-1, of the Company
during such period unless other terms and conditions are approved in advance by
the Board, shall be as follows:

                                    (A) The price at which each Common Share
subject to an option may be purchased shall, subject to any adjustments which
may be made pursuant to Section 4, in no event be less than the Fair Market
Value of a Common Share on the date of grant, and provided further that in the
event the option is intended to be an Incentive Stock Option and the optionee
owns on the date of grant securities possessing more than ten percent (10%) of
the total combined voting power of all classes of securities of the Company or
of any Affiliate, the price per share shall not be less than one hundred ten
percent (110%) of the Fair Market Value per Common Share on the date of grant.

                                    (B) The Option may be exercised to purchase
Common Shares covered by the Option not sooner than six (6) months following the
date of grant. The Option shall terminate and no Common Shares may be purchased
thereunder more than ten (10) years after the date of grant, provided that if
the Option is intended to be an Incentive Stock Option and the Optionee owns on
the date of grant securities possessing more than ten percent (10%) of the total
combined voting power of all classes of securities of the Company or of any
Affiliate, the Option shall terminate and no Common Shares may be purchased
thereunder more than five (5) years after the date of grant.

                                    (C) The maximum number of Common Shares
which may be subject to options granted to all directors pursuant to this
Section 5(j) shall be 750,000 shares in the aggregate. The maximum number of
Common Shares which may be subject to options granted to any director of the
Company shall be 250,000 shares.

                  (b) STOCK APPRECIATION RIGHTS. The Committee is hereby
authorized to grant to eligible Employees "Stock Appreciation Rights." Each
Stock Appreciation Right shall consist of a right to receive the excess of (i)
the Fair Market Value of one Common 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 (ii) the grant price of the right as
specified by the Committee, which shall not be less than one hundred percent
(100%) of the Fair Market Value of one Common Share on the date of grant of the
Stock Appreciation Right (or, if the Committee so determines, in the case of any
Stock Appreciation Right retroactively granted in tandem with or in substitution
for another Award, on the date of grant of such other Award). Subject to the
terms of the Plan and any applicable Award Agreement, the grant price, term,
methods of exercise, methods of settlement, and any other terms and conditions
of any Stock Appreciation Right granted under the Plan shall be as determined by
the Committee. The Committee may impose such conditions or restrictions on the
exercise of any Stock Appreciation Right as it may deem appropriate.

                  (c)  RESTRICTED SECURITIES.


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                           (i) ISSUANCE. The Committee is hereby authorized to
grant to eligible Employees "Restricted Securities" which shall consist of the
right to receive, by purchase or otherwise, Common Shares which are subject to
such restrictions as the Committee may impose (including, without limitation,
any limitation on the right to vote such Common Shares or the right to receive
any dividend or other right or property), which restrictions may lapse
separately or in combination at such time or times, in such installments or
otherwise, as the Committee may deem appropriate.

                           (ii) REGISTRATION. Restricted Securities granted
under the Plan may be evidenced in such manner as the Committee may deem
appropriate, including, without limitation, book-entry registration or issuance
of a stock certificate or certificates. In the event any stock certificate is
issued in respect of Restricted Securities granted under the Plan, such
certificate 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 Securities.

                           (iii) FORFEITURE. Except as otherwise determined by
the Committee, upon termination of a Participant's employment for any reason
during the applicable restriction period, all of such Participant's Restricted
Securities which had not become Released Securities by the date of termination
of employment shall be forfeited and reacquired by the Company; provided,
however, that the Committee may, when it finds that a waiver would be in the
best interests of the Company, waive in whole or in part any or all remaining
restrictions with respect to such Participant's Restricted Securities.
Unrestricted Common Shares, evidenced in such manner as the Committee shall deem
appropriate, shall be issued to the holder of Restricted Securities promptly
after such Restricted Securities become Released Securities.

                  (d) PERFORMANCE AWARDS. The Committee is hereby authorized to
grant to eligible Employees "Performance Awards." Each Performance Award shall
consist of a right, (i) denominated or payable in cash, Common Shares, other
securities or other property (including, without limitation, Restricted
Securities), and (ii) which shall confer on the holder thereof rights valued as
determined by the Committee and payable to, or exercisable by, the holder of the
Performance Award, in whole or in part, upon the achievement of such performance
goals during such performance periods as the Committee shall establish. Subject
to the terms of the Plan and any applicable Award Agreement, the performance
goals to be achieved during any performance period, the length of any
performance period, the amount of any Performance Award granted, the termination
of a Participant's employment and the amount of any payment or transfer to be
made pursuant to any Performance Award shall be determined by the Committee and
by the other terms and conditions of any Performance Award. The Committee shall
issue performance goals prior to the commencement of the performance period to
which such performance goals pertain.

                  (e) OTHER STOCK-BASED AWARDS. The Committee is hereby
authorized to grant to eligible Employees "Other Stock Based Awards." Each Other
Stock-Based Award shall consist of a right (i) which is other than an Award or
right described in Section 6(a), (b), (c) or (d) above and (ii) which is
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Common Shares (including, without limitation,
securities convertible into Common Shares) as are deemed by the Committee to be
consistent with the purposes of the Plan; provided, however, that such right
shall comply, to the extent deemed desirable by the Committee, with Rule 16b-3



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and applicable law. Subject to the terms of the Plan and any applicable Award
Agreement, the Committee shall determine the terms and conditions of Other
Stock-Based Awards. Common Shares or other securities delivered pursuant to a
purchase right granted under this Section 6(e) shall be purchased for such
consideration, which may be paid by such method or methods and in such form or
forms, including, without limitation, cash, Common Shares, other securities,
other Awards, other property, or any combination thereof, as the Committee shall
determine.

                  (f) GENERAL.

                           (i) NO CASH CONSIDERATION FOR AWARDS. Awards may be
granted for no cash consideration or for such minimal cash consideration as may
be required by applicable law.

                           (ii) AWARDS MAY BE GRANTED SEPARATELY OR TOGETHER.
Awards 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, except that
in no event shall an Incentive Stock Option be granted together with a
Non-Qualified Stock Option in such a manner that the exercise of one Option
affects the right to exercise the other.

                           Awards granted in addition to or in tandem with other
Awards may be granted either at the same time as or at a different time from the
grant of such other awards.

                           (iii) FORMS OF PAYMENT UNDER AWARDS. Subject to the
terms of the Plan and of any applicable Award Agreement, payments or transfers
to be made by the Company or an Affiliate upon the grant, exercise or payment of
an Award may be made in such form or forms as the Committee shall determine,
including, without limitation, cash, Common Shares, other securities, other
Awards, or other property, or any combination thereof, and may be made in a
single payment or transfer, in installments, or on a deferred basis, in each
case in accordance with rules and procedures established by the Committee. Such
rules and procedures may include, without limitation, provisions for the payment
or crediting of reasonable interest on installment or deferred payments. In
accordance with the above, the Committee may elect (i) to pay a Participant (or
such Participant's permitted transferee) upon the exercise of an Option in whole
or in part, in lieu of the exercise thereof and the delivery of Common Shares
thereunder, an amount of cash equal to the excess, if any, of the Fair Market
Value of one Common Share on the date of such exercise over the exercise price
of such Option for one Common Share times the number of Common Shares subject to
the Option or portion thereof so exercised or (ii) to settle other stock
denominated Awards in cash.

                           (iv) LIMITS ON TRANSFER OF AWARDS.

                           (A) No award (other than Released Securities), and no
right under any such Award, may be assigned, alienated, pledged, attached, sold
or otherwise transferred or encumbered by a Participant otherwise than by will
or by the laws of descent and distribution (or, in the case of Restricted
Securities, to the Company) and any such purported assignment, alienation,
pledge, attachment, sale or other transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate.



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                           (B) Each award, and each right under any Award, shall
be exercisable during the Participant's lifetime only by the Participant or, if
permissible under applicable law, by the Participant's guardian or legal
representative.

                           (v) TERMS 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 Option exceed a period of ten years from the
date of its grant.

                           (vi) RULE 16B-3 SIX-MONTH LIMITATIONS. To the extent
required in order to maintain the exemption provided under Rule 16b-3 only, any
equity security offered pursuant to the Plan must be held for at least six
months after the date of grant, and with respect to any derivative security
issued pursuant to the Plan, at least six months must elapse from the date of
acquisition of such derivative security to the date of disposition of the
derivative security (other than upon exercise or conversion) or its underlying
equity security. Terms used in the preceding sentence shall, for the purposes of
such sentence only, have the meanings, if any, assigned or attributed to them
under Rule 16b-3.

                           (vii) COMMON SHARE CERTIFICATES. All certificates for
Common Shares delivered under the Plan pursuant to any Award of the exercise
thereof shall be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the Plan or the rules, regulations, and
other requirements of the Securities and Exchange Commission, any stock exchange
upon which such Common Shares are then listed, and any applicable Federal or
state securities laws, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.

                           (viii) DELIVERY OF COMMON SHARES OR OTHER SECURITIES
AND PAYMENT BY PARTICIPANT OF CONSIDERATION. No Common Shares or other
securities shall be delivered pursuant to any Award until payment in full of any
amount required to be paid pursuant to the Plan or the applicable Award
Agreement is received by the Company. Such payment may be made by such method or
methods and in such form or forms as the Committee shall determine, including,
without limitation, cash, Common Shares, other securities, other Awards or other
property, or any combination thereof; provided that the combined value, as
determined by the Committee, of all cash and cash equivalents and the Fair
Market Value of any such Common Shares or other property so tendered to the
Company, as of the date of such tender, is at least equal to the full amount
required to be paid pursuant to the Plan or the applicable Award Agreement to
the Company.

                  SECTION 7. AMENDMENTS; ADJUSTMENTS AND TERMINATION. Except to
the extent prohibited by applicable law and unless otherwise expressly provided
in an Award Agreement or in the Plan:

                  (a) AMENDMENTS TO THE PLAN. The Board may amend, alter,
suspend, discontinue, or terminate the Plan without the consent of any
stockholder, Participant, other holder or beneficiary of an Award, or other
Person; provided, however, that, subject to the Company's rights to adjust
Awards under Sections 7(c) and (d), any amendment, alteration, suspension,
discontinuation, or termination that would impair the rights of any Participant,
or any other holder or beneficiary of any Award theretofore granted, shall not




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to that extent be effective without the consent of such Participant, other
holder or beneficiary of an Award, as the case may be; and provided further,
however, that notwithstanding any other provision of the Plan or any Award
Agreement, without the approval of the stockholders of the Company no such
amendment, alteration, suspension, discontinuation, or termination shall be made
that would:

                           (i) increase the total number of Common Shares
available for Awards under the Plan, except as provided in Section 4 hereof; or

                           (ii) otherwise cause the Plan to cease to comply with
any tax or regulatory requirement, including for these purposes any approval or
other requirement which is or would be a prerequisite for exemptive relief from
Section 16(b) of the Exchange Act.

                  (b) AMENDMENTS TO AWARDS. The Committee may waive any
conditions or rights under, amend any terms of, or alter, suspend, discontinue,
cancel or terminate, any Award theretofore granted, prospectively or
retroactively; provided, however, that, subject to the Company's rights to
adjust Awards under Sections 7(c) and (d), any amendment, alteration,
suspension, discontinuation, cancellation or termination that would impair the
rights of any Participant or holder or beneficiary of any Award theretofore
granted, shall not to that extent be effective without the consent of such
Participant or holder or beneficiary of an Award, as the case may be.

                  (c) ADJUSTMENT OF AWARDS UPON CERTAIN ACQUISITIONS. In the
event the Company or any Affiliate shall assume outstanding employee awards or
the right or obligation to make future such awards in connection with the
acquisition of another business or another corporation or business entity, the
Committee may make such adjustments, not inconsistent with the terms of the
Plan, in the terms of Awards as it shall deem appropriate in order to achieve
reasonable comparability or other equitable relationship between the assumed
awards and the Awards granted under the Plan as so adjusted.

                  (d) ADJUSTMENTS OF AWARDS UPON THE OCCURRENCE OF CERTAIN
UNUSUAL OR NON- RECURRING EVENTS. The Committee is hereby authorized to make
adjustments in the terms and conditions of, and the criteria included in, Awards
in recognition of unusual or non-recurring events (including, without
limitation, the events described in Section 4(b) hereof) affecting the Company,
any Affiliate, or the financial statements of the Company or any Affiliate, or
of changes in applicable laws, regulations, or accounting principles, whenever
the Committee determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan.

                  SECTION 8. GENERAL PROVISIONS.

                  (a) NO RIGHTS TO AWARDS. No Employee or other Person shall
have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Employees, or holders or beneficiaries
of Awards under the Plan. The terms and conditions of Awards need not be the
same with respect to each recipient.

                  (b) DELEGATION. Subject to the terms of the Plan and
applicable law, the Committee may delegate to one or more officers or managers
of the Company or any Affiliate, or to a committee of such officers or managers,
the authority, subject to such terms and limitations as the Committee shall



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determine, to grant Awards to, or to cancel, modify, waive rights with respect
to, alter, discontinue, suspend, or terminate Awards; provided, however, that,
no such delegation shall be permitted with respect to Awards held by Employees
who are officers or directors of the Company for purposes of Section 16 of the
Exchange Act, or any successor section thereto or who are otherwise subject to
such Section.

                  (c) CORRECTION OF DEFECTS, OMISSIONS, AND INCONSISTENCIES. The
Committee may correct any defect, supply any omission, or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Plan into effect.

                  (d) WITHHOLDING. The Company or any Affiliate shall be
authorized to withhold from any Award granted, from any payment due or transfer
made under any Award or under the Plan or from any compensation or other amount
owing to a Participant the amount (in cash, Common Shares, other securities,
other Awards, or other property) of withholding taxes due in respect of an
Award, its exercise, or any payment or transfer under such Award or under the
Plan and to take such other action as may be necessary in the opinion of the
Company or Affiliate to satisfy all obligations for the payment of such taxes.

                  (e) NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing
contained in the Plan shall prevent the Company or any Affiliate from adopting
or continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.

                  (f) NO RIGHT TO EMPLOYMENT. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate. Further, the Company or an Affiliate may at any time
dismiss a Participant from employment, free from any liability, or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.

                  (g) GOVERNING LAW. The validity, construction and effect of
the Plan and any rules and regulations relating to the Plan shall be determined
in accordance with the laws of the State of Delaware and applicable Federal law.

                  (h) SEVERABILITY. If any provision of the Plan or any Award is
or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any Person or 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
the Award, such provision shall be stricken as to such jurisdiction, Person or
Award and the remainder of the Plan and any such Award shall remain in full
force and effect.

                  (i) NO TRUST OR FUND CREATED. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.



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<PAGE>   14


                  (j) NO FRACTIONAL COMMON SHARES. No fractional Common Shares
shall be issued or delivered pursuant to the Plan or any Award, and the
Committee shall determine whether cash, other securities, or other property
shall be paid or transferred in lieu of any fractional Common Shares or whether
such fractional Common Shares or any rights thereto shall be canceled,
terminated, or otherwise eliminated.

                  (k) HEADINGS. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction
or interpretation of the Plan or any provision thereof.

                  SECTION 9. ADOPTION, APPROVAL AND EFFECTIVE DATE OF THE PLAN.
The Plan shall be considered adopted and shall become effective on the date the
Plan is approved by the Board; provided, however, that the Plan and any Awards
granted under the Plan shall be void, if the stockholders of the Company shall
not have approved the adoption of the Plan within twelve (12) months after the
effective date, by a majority of votes cast thereon at a meeting of stockholders
duly called and held for such purpose.



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