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                                                                   EXHIBIT 10.32

                    1993 LONG-TERM INCENTIVE PLAN, AS AMENDED

1. PURPOSE.

The purpose of the SOFAMOR DANEK GROUP, INC. 1993 LONG-TERM INCENTIVE PLAN, AS
AMENDED (the "Plan") is to further the earnings of SOFAMOR DANEK GROUP, INC., an
Indiana corporation, and its subsidiaries (collectively, the "Company") by
assisting the Company in attracting, retaining and motivating management
employees and directors of high caliber and potential. The Plan provides for the
award of long-term incentives to those officers, other key executives and
directors who make substantial contributions to the Company by their loyalty,
industry and invention. In addition, the Plan contains a program (the "Director
Program") which provides for the non-discretionary periodic grant of
Non-Qualified Stock Options (as hereinafter defined) to non-employee directors
of the Company (the "Director Options").

2. ADMINISTRATION.

The Plan (other than the Director Program) shall be administered by a committee
(the "Committee"). The Board of Directors of the Company (the "Board of
Directors") may act as the Committee, or it may delegate such responsibility to
one or more of its members. The Committee shall have full and final authority in
its discretion to interpret the provisions of the Plan (other than the Director
Program) and to decide all questions of fact arising in its application. Subject
to the provisions hereof and other than with respect to the Director Program,
the Committee shall have full and final authority in its discretion to determine
the employees and directors to whom awards shall be made under the Plan; to
determine the type of awards to be made under the Plan and the amount, size and
terms and conditions of each such award under the Plan; to determine the time
when awards shall be granted; to determine the provisions of each agreement
evidencing an award; and to make all other determinations necessary or advisable
for the administration of the Plan.

3. STOCK SUBJECT TO THE PLAN.

The Company may grant awards under the Plan with respect to not more than a
total of 7,500,000 shares of no par value common stock of the Company (the
"Shares") (subject, however, to adjustment as provided in paragraph 21 below).
Such Shares may be authorized and un-issued Shares or treasury Shares. In any
calendar year, no participant may be granted awards relating to more than
500,000 shares. Except as otherwise provided herein, any Shares subject to an
option or right which for any reason is surrendered before exercise or expires
or is terminated unexercised as to such Shares shall again be available for the
granting of awards under the Plan. Similarly, if any Shares granted pursuant to
restricted stock awards are forfeited, such forfeited 




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Shares shall again be available for the granting of awards under the Plan,
unless the dividends were paid to the holders of such Shares.

4. ELIGIBILITY TO RECEIVE AWARDS.

Persons eligible to receive awards under the Plan (other than the Director
Program) shall be limited to those officers, other key executive employees and
directors of the Company who are in positions in which their decisions, actions
and counsel have a significant impact upon the profitability and success of the
Company.

5. FORM OF AWARDS.

Awards may be made from time to time by the Committee (other than the Director
Program) in the form of stock options to purchase Shares, stock appreciation
rights, performance units, restricted stock, or any combination of the above.
Stock options may be options which are intended to qualify as incentive stock
options ("Incentive Stock Options") within the meaning of Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code"), or options which are not
intended to so qualify ("Non-Qualified Stock Options").

6. EMPLOYEE STOCK OPTIONS.

Stock options for the purchase of Shares granted other than under the Director
Program shall be evidenced by written agreements in such form not inconsistent
with the Plan as the Committee shall approve from time to time. Such agreement
shall contain the terms and conditions applicable to the options, including in
substance the following terms and conditions:

         (a)      Type of Option. Each option agreement shall identify the
                  options represented thereby as Incentive Stock Options or
                  Non-Qualified Stock Options, as the case may be, and shall set
                  forth the number of Shares subject to the options.

         (b)      Option Price. The option exercise price applicable to a
                  Non-Qualified Stock Option to be paid by the optionee to the
                  Company for each Share purchased upon the exercise of an
                  option shall not be less than 100 percent of the fair market
                  value of such Share on the date the Option is granted as
                  determined by the Committee.

         (c)      Exercise Term. Each option agreement shall state the period or
                  periods of time within which the option may be exercised, in
                  whole or in part, as determined by the Committee and subject
                  to such terms and conditions as are prescribed for such
                  purpose by the Committee, provided that no Incentive Stock
                  Option shall be exercisable after ten years, and no
                  Non-Qualified Stock Option shall be exercisable after ten
                  years and one day, from the date of grant thereof. The
                  Committee, in its discretion, may provide in the option
                  agreement circumstances under which the option shall become
                  immediately exercisable, in whole or in part, 




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                  and, notwithstanding, the foregoing may accelerate the
                  exercisability of any option, in whole or in part, at any
                  time.

         (d)      Payment for Shares. The purchase price of the Shares with
                  respect to which an option is exercised shall be payable in
                  full at the time of exercise in cash, Shares at fair market
                  value owned by the Participant for a period of at least six
                  months, or a combination thereof, as the Committee may
                  determine and subject to such terms and conditions as may be
                  prescribed by the Committee for such purpose. If the purchase
                  price is paid by tendering Shares, the Committee in its
                  discretion, may grant the optionee a new stock option for the
                  number of Shares used to pay the purchase price.

         (e)      Rights Upon Termination of Employment. In the event that an
                  optionee ceases to be an employee or director of the Company
                  for any cause other than Retirement (as defined below), death
                  or Disability (as defined below), the optionee shall have the
                  right to exercise the option during its term within a period
                  of three months after such termination to the extent that the
                  option was exercisable at the time of termination, or within
                  such other period, and subject to such terms and conditions,
                  as may be specified by the Committee. (As used herein, the
                  term "Retirement" means retirement from active employment with
                  the Company on or after age 65, or such earlier age with the
                  express written consent for purposes of the Plan of the
                  Company at or before the time of such retirement, and the term
                  "Retires" has the corresponding meaning. As used herein, the
                  term "Disability" means a condition that, in the judgment of
                  the Committee, has rendered a grantee completely and
                  presumably permanently unable to perform any and every duty of
                  his regular occupation, and the term "Disabled" has the
                  corresponding meaning). In the event that an optionee Retires,
                  dies or becomes Disabled prior to the expiration of his option
                  and without having fully exercised his option, the optionee or
                  his Beneficiary (as defined below) shall have the right to
                  exercise the option during its term within a period of (i) one
                  year after termination of employment due to Retirement, death
                  or Disability, or (ii) one year after death if death occurs
                  either within one year after termination of employment due to
                  Retirement or Disability or within three months after
                  termination of employment for other reasons, to the extent
                  that the option was exercisable at the time of death or
                  termination, or within such other period, and subject to such
                  terms and conditions, as may be specified by the Committee.
                  (As used herein, the term "Beneficiary" means the person or
                  persons designated in writing by the grantee as his
                  Beneficiary with respect to an award under the Plan; or, in
                  the absence of an effective designation or if the designated
                  person or persons predecease the grantee, the grantee's
                  Beneficiary shall be the person or persons who acquire by
                  bequest or inheritance the grantee's rights in respect of an
                  award). In order to be effective, a grantee's designation of a
                  Beneficiary must be on file with the Committee before the





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                  grantee's death, but any such designation may be revoked and a
                  new designation substituted therefor at any time before the
                  grantee's death.

         (f)      Incentive Stock Options. In the case of an Incentive Stock
                  Option, each option shall be subject to such other terms
                  conditions and provisions as the Committee determines
                  necessary or desirable in order to qualify such option as an
                  incentive stock option within the meaning of Section 422(b) of
                  the Code (or any amendment or substitute or successor thereto
                  or regulation thereunder), including in substance, without
                  limitation, the following:

                  (i)      Subject to clause (iii) below, the purchase price of
                           stock subject to an Incentive Stock Option shall not
                           be less than 100 percent of the fair market value of
                           such stock on the date the option is granted, as
                           determined by the Committee.

                  (ii)     The aggregate fair market value (determined as of the
                           time the option is granted) of the stock with respect
                           to which incentive stock options are exercisable for
                           the first time by an optionee in any calendar year
                           (under all plans of the Company and its subsidiary
                           corporations (which term, as used hereinafter, shall
                           have the meaning ascribed thereto in Section 425(f)
                           of the Code (or successor provision of similar
                           import))) shall not exceed $100,000.

                  (iii)    No Incentive Stock Option shall be granted to any
                           employee if at the time the option is granted the
                           individual owns stock possessing more than 10 percent
                           of the total combined voting power of all classes of
                           stock of the Company or of a subsidiary corporation
                           of the Company, unless at the time such option is
                           granted the option price is at least 110 percent of
                           the fair market value (as determined by the
                           Committee) of the stock subject to the option and
                           such option by its terms is not exercisable after the
                           expiration of five years from the date of grant.

                  (iv)     Directors who are not employees of the Company shall
                           not be eligible to receive Incentive Stock Options.

                  (v)      In the event of termination of employment by reason
                           of Retirement, if an Incentive Stock Option is
                           exercised after the expiration of the exercise
                           periods that apply for purposes of Section 422 of the
                           Code, the option will thereafter be treated as a
                           Non-Qualified Stock Option.





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7. STOCK APPRECIATION RIGHTS.

Stock appreciation rights (SARs) shall be evidenced by written SAR agreements in
such form not inconsistent with the Plan as the Committee shall approve from
time to time. Such SAR agreements shall contain the terms and conditions
applicable to the SARs, including in substance the following terms and
conditions:

         (a)      Award. SARs may be granted in connection with a previously or
                  contemporaneously granted stock option (other than an option
                  granted pursuant to the Director Program), or independently of
                  a stock option. SARs shall entitle the grantee, subject to
                  such terms and conditions as may be determined by the
                  Committee, to receive upon exercise thereof all or a portion
                  of the excess of (i) the fair market value at the time of
                  exercise, as determined by the Committee, of a specified
                  number of Shares with respect to which the SAR is exercised,
                  over (ii) a specified price which shall not be less than 100
                  percent of the fair market value of the Shares at the time the
                  SAR is granted, or, if the SAR is granted in connection with a
                  previously issued stock option, not less than 100 percent of
                  the fair market value of the Shares at the time such option
                  was granted. Upon exercise of an SAR, the number of Shares
                  reserved for issuance hereunder shall be reduced by the number
                  of Shares covered by the SAR. Shares covered by an SAR shall
                  not be used more than once to calculate the amount to be
                  received pursuant to the exercise of the SAR.

         (b)      SARs Related to Stock Options. If an SAR is granted in
                  relation to a stock option, (i) the SAR shall be exercisable
                  only at such times, and by such persons, as the related option
                  is exercisable; (ii) the grantee's right to exercise the
                  related option shall be canceled if and to the extent that the
                  Shares subject to the option are used to calculate the amount
                  to be received upon the exercise of the related SAR; (iii) the
                  grantee's right to exercise the related SAR shall be canceled
                  if and to the extent that the Shares subject to the SAR are
                  purchased upon the exercise of the related option; and (iv)
                  the SAR shall not be transferable other than by will or by the
                  laws of descent and distribution, and shall be exercisable
                  during the lifetime of the grantee only by him.

         (c)      Term. Each SAR agreement shall state the period or periods of
                  time within which the SAR may be exercised, in whole or in
                  part, as determined by the Committee and subject to such terms
                  and conditions as are prescribed for such purpose by the
                  Committee, provided that no SAR shall be exercisable later
                  than ten years after the date of grant. The Committee may, in
                  its discretion, provide in the SAR agreement circumstances
                  under which the SARs shall become immediately exercisable, in
                  whole or in part, and may, notwithstanding the foregoing,
                  accelerate the exercisability of any SAR, in whole or in part,
                  at any time.






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         (d)      Termination of Employment. SARs shall be exercisable only
                  during the grantee's employment by the Company (or, in the
                  case of a grantee who is a non-employee director, only during
                  his service as a director of the Company), except that, in the
                  discretion of the Committee, an SAR may be made exercisable
                  for up to three months after the grantee's employment (or
                  tenure as a director) is terminated for any reason other than
                  Retirement, death or Disability, and for up to one year after
                  the grantee's employment (or tenure as a director) is
                  terminated because of Retirement, death or Disability.

         (e)      Payment. Upon exercise of an SAR, payment shall be made in
                  cash, in Shares at fair market value on the date of exercise,
                  or in a combination thereof, as the Committee may determine at
                  the time of exercise.

         (f)      Other Terms. SARs shall be granted in such manner and such
                  form, and subject to such additional terms and conditions, as
                  the Committee in its sole discretion deems necessary or
                  desirable, including without limitation: (i) if granted in
                  connection with an Incentive Stock Option, in order to satisfy
                  any requirements set forth under Section 422 of the Code; or,
                  (ii) in order to avoid any liability in connection with an SAR
                  under Section 16(b) of the Securities Exchange Act of 1934, as
                  amended (the "1934 Act").

8. RESTRICTED STOCK AWARDS.

Restricted stock awards under the Plan shall consist of Shares free of any
purchase price or for such purchase price as may be established by the Committee
restricted against transfer, subject to forfeiture, and subject to such other
terms and conditions (including attainment of performance objectives) as may be
determined by the Committee. Restricted stock shall be evidenced by written
restricted stock agreements in such form not inconsistent with the Plan as the
Committee shall approve from time to time, which agreement shall contain the
terms and conditions applicable to such awards, including in substance the
following terms and conditions:

         (a)      Restriction Period. Restrictions shall be imposed for such
                  period or periods as may be determined by the Committee;
                  provided, however, that in no event (other than upon the
                  occurrence of a Change in Control or Potential Change in
                  Control) will the restrictions on such Shares lapse in full
                  earlier than three years from the date of grant; provided
                  further, however, that if such restrictions lapse as a result
                  of the attainment of performance objectives, then the
                  restrictions may not lapse earlier than one year from the date
                  of grant. The Committee, in its discretion but subject to the
                  provisos in the preceding sentence, may provide in the
                  agreement circumstances under which the restricted stock shall
                  become immediately transferable and non-forfeitable, or under
                  which the restricted stock shall be forfeited.





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         (b)      Restrictions Upon Transfer. Restricted stock and the right to
                  vote such Shares and to receive dividends thereon, may not be
                  sold, assigned, transferred, exchanged, pledged, hypothecated,
                  or otherwise encumbered, except as herein provided, during the
                  restriction period applicable to such Shares. Notwithstanding
                  the foregoing, and except as otherwise provided in the Plan,
                  the grantee shall have all of the other rights of a
                  stockholder, including, but not limited to, the right to
                  receive dividends and the right to vote such Shares.

         (c)      Certificates. A certificate or certificates representing the
                  number of restricted Shares granted shall be registered in the
                  name of the grantee. The Committee, in its sole discretion,
                  shall determine when the certificate or certificates shall be
                  delivered to the grantee (or, in the event of the grantee's
                  death, to his Beneficiary), may provide for the holding of
                  such certificate or certificates in escrow or in custody by
                  the Company or its designee pending their delivery to the
                  grantee or Beneficiary, and may provide for any appropriate
                  legend to be borne by the certificate or certificates.

         (d)      Lapse of Restrictions. The restricted stock agreement shall
                  specify the terms and conditions upon which any restriction
                  upon restricted stock awarded under the Plan shall expire,
                  lapse, or be removed, as determined by the Committee. Upon the
                  expiration, lapse, or removal of such restrictions, Shares
                  free of the restrictive legend shall be issued to the grantee
                  of his legal representative.

9. PERFORMANCE UNITS.

Performance unit awards under the Plan shall entitle grantees to future payments
based upon the achievements of pre-established long-term performance objectives
and shall be evidenced by written performance unit agreements in such form not
inconsistent with this Plan as the Committee shall approve from time to time.
Such agreements shall contain the terms and conditions applicable to the
performance unit awards, including in substance the following terms and
conditions:

         (a)      Performance Period. The Committee shall establish with respect
                  to each unit award a performance period of not fewer than two
                  years.

         (b)      Unit Value. The Committee shall establish with respect to each
                  unit award value for each unit which shall not thereafter
                  change, or which may vary thereafter pursuant to criteria
                  specified by the Committee.

         (c)      Performance Targets. The Committee shall establish with
                  respect to each unit award maximum and minimum performance
                  targets to be achieved during the applicable performance
                  period. Achievement of maximum targets shall entitle grantees
                  to payment with respect to the full value of a unit award.
                  Grantees shall 





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                  be entitled to payment with respect to a portion of a unit
                  award according to the level of achievement of targets as
                  specified by the Committee for performance which achieves or
                  exceeds the minimum target but fails to achieve the maximum
                  target.

         (d)      Performance Measures. Performance targets established by the
                  Committee shall relate to corporate, subsidiary, division, or
                  unit performance and may be established in terms of growth in
                  gross revenue, earnings per share, ratios of earnings to
                  equity or assets, or such other measures or standards as may
                  be determined by the Committee in its discretion. Multiple
                  targets may be used and may have the same or different
                  weighting, and they may relate to absolute performance or
                  relative performance measured against other companies or
                  businesses.

         (e)      Adjustments. At any time prior to the payment of a unit award,
                  the Committee may adjust previously established performance
                  targets or other terms and conditions, including the Company's
                  or other corporations' financial performance for Plan
                  purposes, to reflect major unforeseen events such as changes
                  in laws, regulations or accounting practices, mergers,
                  acquisitions or divestitures or other extraordinary unusual or
                  nonrecurring items or events.

         (f)      Payment of Unit Awards. Following the conclusion of each
                  performance period, the Committee shall determine the extent
                  to which performance targets have been attained and any other
                  terms and conditions satisfied for such period. The Committee
                  shall determine what, if any, payment is due on the unit award
                  and whether such payment shall be made in cash, Shares, or a
                  combination thereof. Payment shall be made in a lump sum or
                  installments, as determined by the Committee, commencing as
                  promptly as practicable following the end of the performance
                  period unless deferred subject to such terms and conditions
                  and in such form as may be prescribed by the Committee.

         (g)      Termination of Employment. In the event that a grantee ceases
                  to be employed by the Company prior to the end of the
                  performance period by reason of death, Disability, or
                  Retirement with the consent of the Company, any unit award, to
                  the extent earned under the applicable performance targets,
                  shall be payable at the end of the performance period
                  according to the portion of the performance period during
                  which the grantee was employed by the Company, provided that
                  the Committee shall have the power to provide for an
                  appropriate settlement of a unit award before the end of the
                  performance period. Upon any other termination of employment,
                  participation shall terminate forthwith and all outstanding
                  unit awards shall be canceled.





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10. LOANS AND SUPPLEMENTAL CASH.

The Committee, in its sole discretion to further the purpose of the Plan, may
provide for supplemental cash payments or loans to individuals in connection
with all or any part of an award under the Plan. Supplemental cash payments
shall be subject to such terms and conditions as shall be prescribed by the
Committee at the time of grant, provided that in no event shall the amount of
payment exceed:

         (a)      In the case of an option, the excess fair market value of a
                  Share on the date of exercise over the option price multiplied
                  by the number of Shares for which such option is exercised, or

         (b)      In the case of an SAR, performance unit, or restricted stock
                  award, the value of the Shares and other consideration issued
                  in payment of such award.

Any loan shall be evidenced by a written loan agreement or other instrument in
such form and containing such terms and conditions (including, without
limitation, provisions for interest, payment schedules, collateral, forgiveness
or acceleration) as the Committee may prescribe from time to time.

11. DIRECTOR PROGRAM.

         (a)      Eligible Directors. Each member of the Board of Directors who
                  is not a full-time employee of the Company is an "Eligible
                  Director."

         (b)      Administration. The Director Program shall be administered by
                  the Board of Directors. Subject to the provisions of the
                  Director Program, the Board shall be authorized to:

                  (i)      adopt, revise and repeal such administrative rules,
                           guidelines and practices governing the Director
                           Program as it shall from time to time deem advisable;

                  (ii)     interpret the terms and provisions of the Director
                           Program and any option issued under the Director
                           Program (and any agreements relating thereto), and
                           otherwise settle all claims and disputes arising
                           under the Director Program;

                  (iii)    delegate responsibility and authority for the
                           operation and administration of the Director Program,
                           appoint employees and officers of the Company to act
                           on its behalf, and employ persons to assist in the
                           fulfilling of its responsibilities under the Director
                           Program; and






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                  (iv)     otherwise supervise the administration of the
                           Director Program; provided, however, that the Board
                           of Directors shall have no discretion with respect to
                           the selection of Eligible Directors to receive
                           options hereunder, the number of Shares covered by
                           such option or the price or timing of any options
                           granted hereunder; provided, further, that any action
                           by the Board of Directors relating to the Director
                           Program will be taken only if approved by the
                           affirmative vote of a majority of the directors who
                           are not then eligible to participate under the
                           Director Program.

         (c)      Option Grants.

                  (i)      Number of Options Granted. The following number of
                           Director Options are hereby granted to each Eligible
                           Director under the Director Program:

                           (A)      As of the date of Board approval of the
                                    Director Program, a Director Option to
                                    purchase 5,000 Shares is granted to each
                                    person who on that date is an incumbent
                                    Eligible Director.

                           (B)      With respect to each person who first
                                    becomes an Eligible Director after the date
                                    of Board approval of the Director Program, a
                                    Director Option to purchase 5,000 Shares is
                                    granted as of the date such person first
                                    becomes an Eligible Director.

                           (C)      As of the date of every third annual meeting
                                    of the Company's shareholders following the
                                    grant of a Director Option to an Eligible
                                    Director pursuant to section (A) or (B)
                                    above, and provided that such Eligible
                                    Director remains an incumbent on such date,
                                    a Director Option to purchase 5,000 Shares
                                    is granted to such Eligible Director.

         (d)      Terms and Conditions of Director Options Under the Director
                  Program.

                  (i)      Option Agreement. Each Director Option granted under
                           the Director Program shall be evidenced by an option
                           agreement.

                  (ii)     Option Price. The option exercise price per Share of
                           a Director Option shall be the fair market value of a
                           Share as of the date of grant. The Director Options
                           granted as of the date of Board approval of the
                           Director Program have an exercise price of $11.875.

                  (iii)    Option Term. The term of each Director Option shall
                           be ten years. No Director Option shall be exercised
                           by any person after expiration of the term of the
                           Director Option.





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                  (iv)     Exercisability. A Director Option shall be
                           exercisable during its term, 33.33% on the first
                           anniversary of the date of grant, an additional
                           33.33% on the second anniversary of the date of
                           grant, and the remaining 33.33% on the third
                           anniversary of the date of grant. The Director
                           Options granted on the date the Director Program was
                           approved by the Board vest 33.33% on December 19,
                           1995, 1996, and 1997.

         (e)      Method of Exercise. Director Options may be exercised, in
                  whole or in part, at any time and from time to time during the
                  relevant exercise period, by giving written notice of exercise
                  to the Company specifying the number of Shares to be
                  purchased. Such notice shall be accompanied by payment in full
                  of the purchase price, either in cash or by certified or bank
                  check, or such other instrument as the Board of Directors may
                  accept. Payment in full or in part may also be made in the
                  form of unrestricted Shares already owned by the Director (and
                  based upon the fair market value of the Shares so tendered as
                  of the date the Director Option is exercised, as determined by
                  the Board of Directors). No Shares shall be issued until full
                  payment therefor has been made. Eligible Directors shall
                  generally have the rights to dividends or other rights of a
                  stockholder with respect to Shares subject to the Director
                  Option when the Eligible Director has given notice as to
                  exercise, has paid in full for such shares and, if requested,
                  has given any representations required by the Board of
                  Directors.

         (f)      Termination by Reason of Death. If an optionee ceases to be an
                  Eligible Director by reason of death, any Director Option held
                  by such optionee may thereafter be exercised to the extent
                  then exercisable, by the legal representative of the estate or
                  by the legatee of the Eligible Director under the will of the
                  Eligible Director, for a period of one year from the date of
                  such death or until the expiration of the stated term of such
                  Director Option, whichever period is shorter.

         (g)      Termination by Reason of Disability. If an optionee ceases to
                  be an Eligible Director by reason of disability, any Director
                  Option held by such optionee may thereafter be exercised by
                  the optionee, to the extent it was exercisable at the time of
                  termination, for a period of one year from the date of such
                  termination or until the expiration of the stated term of such
                  Director Option, whichever period is shorter, provided,
                  however, that if the optionee dies within such one-year
                  period, any unexercised Director Option held by such optionee
                  shall thereafter be exercisable to the extent it was
                  exercisable at the time of death for a period of one year from
                  the date of such death or until the expiration of the stated
                  term of such Director Option, whichever period is shorter.

         (h)      Other Termination. If an optionee ceases to be an Eligible
                  Director for any reason other than death or disability (except
                  as a result of becoming an employee of the 





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                  Company), any Director Option held by such optionee may
                  thereafter be exercised by the optionee, to the extent it was
                  exercisable at the time of such termination, for a period of
                  three months from the date of such termination or the
                  expiration of the stated term of such Director Option,
                  whichever period is shorter; provided, however, that if the
                  optionee dies within such three-month period, any unexercised
                  Director Option held by such optionee shall thereafter be
                  exercisable, to the extent to which it was exercisable at the
                  time of death, for a period of one year from the date of such
                  death or until the expiration of the stated term of the
                  Director Option, whichever period is shorter. If an optionee
                  ceases to be an Eligible Director by reason of his becoming an
                  employee of the Company and his employment with the Company is
                  subsequently terminated, any Director Option held by such
                  optionee may thereafter be exercised by the optionee, to the
                  extent that it was exercisable at the time of such
                  termination, for a period of three months from the date of
                  such termination or the expiration of the stated term of the
                  Director Option, whichever period is shorter; provided,
                  however, that if the optionee dies within such three-month
                  period, any unexercised Option held by such optionee shall
                  thereafter be exercisable, to the extent to which it was
                  exercisable at the time of death, for a period of one year
                  from the date of such death or until the expiration of the
                  stated term of the Director Option, whichever period is
                  shorter.

12. GENERAL RESTRICTIONS.

Each award under the Plan shall be subject to the requirement that if at any
time the Company shall determine that (i) the listing, registration or
qualification of the Shares subject or related thereto upon any securities
exchange or under any state or federal law, or (ii) the consent or approval of
any regulatory body, or (iii) an agreement by the recipient of an award with
respect to the disposition of Shares, or (iv) the satisfaction of withholding
tax or other withholding liabilities is necessary or desirable as a condition of
or in connection with the granting of such award or the issuance or purchase of
Shares thereunder, such award shall not be consummated in whole or in part
unless such listing, registration, qualification, consent, approval, agreement,
or withholding shall have been effected or obtained free of any conditions not
acceptable to the Company. Any such restriction affecting an award shall not
extend the time within which the award may be exercised; and neither the Company
nor its directors or officers nor the Committee shall have any obligation or
liability to the grantee or to a Beneficiary with respect to any Shares with
respect to which an award shall lapse or with respect to which the grant,
issuance or purchase of Shares shall not be effected, because of any such
restriction.

13. SINGLE OR MULTIPLE AGREEMENTS.

Multiple awards, multiple forms of awards, or combinations thereof may be
evidenced by a single agreement or multiple agreements, as determined by the
Committee.






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<PAGE>   13

14. RIGHTS OF THE SHAREHOLDER.

The recipient of any award under the Plan, shall have no rights as a shareholder
with respect thereto unless and until certificates for Shares are issued to him,
and the issuance of Shares shall confer no retroactive right to dividends.

15. RIGHTS TO TERMINATE EMPLOYMENT.

Nothing in the Plan or in any agreement entered into pursuant to the Plan shall
confer upon any person the right to continue in the employment of the Company or
affect any right which the Company may have to terminate the employment of such
person.

16. WITHHOLDING.

         (a)      Prior to the issuance or transfer of Shares under the Plan,
                  the recipient shall remit to the Company an amount sufficient
                  to satisfy any federal, state or local withholding tax
                  requirements. Other than with respect to awards under the
                  Director Program, the recipient may satisfy the withholding
                  requirement in whole or in part by electing to have the
                  Company withhold Shares having a value equal to the amount
                  required to be withheld. The value of the Shares to be
                  withheld shall be the fair market value, as determined by the
                  Committee, of the stock on the date that the amount of tax to
                  be withheld is determined (the "Tax Date"). Such election must
                  be made prior to the Tax Date, must comply with all applicable
                  securities law and other legal requirements, as interpreted by
                  the Committee, and may not be made unless approved by the
                  Committee, in its discretion.

         (b)      Whenever payments to a grantee in respect of an award under
                  the Plan to be made in cash, such payments shall be net of the
                  amount necessary to satisfy any federal, state or local
                  withholding tax requirements.

17. NON-ASSIGNABILITY.

No award under the Plan shall be sold, assigned, transferred, exchanged,
pledged, hypothecated, or otherwise encumbered, other than by will or by the
laws of descent and distribution, or, with respect to Awards other than
Incentive Stock Options, by such other means as the Committee (or the Board of
Directors, in the case of the Director Program) may approve. Except as otherwise
provided herein or a permitted transferee approved by the Committee (or the
Board of Directors, in the case of the Director Program) during the life of the
recipient, such Award shall be exercisable only by such person or by such
person's guardian or legal representative.






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<PAGE>   14

18. NON-UNIFORM DETERMINATIONS.

The Committee's determinations under the Plan (including without limitation
determinations of the persons to receive awards, the form, amount and timing of
such awards, the terms and provisions of such awards and the agreements
evidencing same, and the establishment of values and performance targets) need
not be uniform and may be made selectively among persons who receive, or are
eligible to receive, awards under the Plan, whether or not such persons are
similarly situated.

19. CHANGE IN CONTROL PROVISIONS.

         (a)      In the event of (1) a Change in Control (as defined) or (2) a
                  Potential Change in Control (as defined) the following
                  acceleration and valuation provisions shall apply unless the
                  Board of Directors otherwise determines by resolution:

                  (i)      Any SARs and any stock options awarded under the Plan
                           not previously exercisable and vested shall become
                           fully exercisable and vested.

                  (ii)     Any restrictions and deferral limitations applicable
                           to any restricted stock, performance units or other
                           Stock-based awards, in each case to the extent not
                           already vested under the Plan, shall lapse and such
                           shares, performance units or other stock-based awards
                           shall be deemed fully vested.

                  (iii)    The value of all outstanding stock options, SARs,
                           restricted stock, performance units and other
                           stock-based awards, in each case to the extent
                           vested, shall, unless otherwise determined by the
                           Committee (or the Board of Directors with respect to
                           the Director Program) in its sole discretion at or
                           after grant but prior to any Change in Control, be
                           cashed out on the basis of the Change in Control
                           Price (as defined) as of the date such Change in
                           Control or such Potential Change in Control is
                           determined to have occurred or such other date as the
                           Committee may determine prior to the Change in
                           Control.

         (b)      As used herein, the term "Change in Control" means the
                  happening of any of the following:

                  (i)      Any person or entity, including a "group" as defined
                           in Section 13(d)(3) of the 1934 Act, other than the
                           Company, a subsidiary of the Company, or any employee
                           benefit plan of the Company or its subsidiaries,
                           becomes the beneficial owner of the Company's
                           securities having 25 percent or more of the combined
                           voting power of the then outstanding securities of
                           the Company that may be cast for the election for
                           directors of the Company 





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<PAGE>   15

                           (other than as a result of an issuance of securities
                           initiated by the Company in the ordinary course of
                           business), or

                  (ii)     As the result of, or in connection with, any cash
                           tender or exchange offer, merger or other business
                           combination, sale of assets or contested election, or
                           any combination of the foregoing transactions, less
                           than a majority of the combined voting power of the
                           then outstanding securities of the Company or any
                           successor corporation or entity entitled to vote
                           generally in the election of directors of the Company
                           or such other corporation or entity after such
                           transaction, are held in the aggregate by holders of
                           the Company's securities entitled to vote generally
                           in the election of directors of the Company
                           immediately prior to such transactions; or

                  (iii)    During any period of two consecutive years,
                           individuals who at the beginning of any such period
                           constitute the Board of Directors cease for any
                           reason to constitute at least a majority thereof,
                           unless the election, or the nomination for election
                           by the Company's stockholders, of each director of
                           the Company first elected during such period was
                           approved by a vote of at least two-thirds of the
                           directors of the Company then still in office who
                           were directors of the Company at the beginning of an
                           such period.

         (c)      As used herein, the term "Potential Change in Control" means
                  the happening of any of the following:

                  (i)      The approval by stockholders of an agreement by the
                           Company, the consummation of which would result in a
                           Change in Control of the Company; or

                  (ii)     The acquisition of beneficial ownership, directly or
                           indirectly, by any entity, person or group (other
                           than the Company, a wholly-owned subsidiary thereof
                           or any employee benefit plan of the Company or its
                           subsidiaries (including any trustee of such plan
                           acting as such trustee)) of securities of the Company
                           representing 5 percent or more of the combined voting
                           power of the Company's outstanding securities and the
                           adoption by the Board of Directors of a resolution to
                           the effect that a Potential Change in Control of the
                           Company has occurred for purposes of this Plan.

         (d)      As used herein, the term "Change in Control Price" means the
                  highest price per share paid in any transaction reported on
                  the New York Stock Exchange, or paid or offered in any
                  bonafide transaction related to a Potential or actual Change
                  in Control of the Company at any time during the 60 day period
                  immediately preceding the occurrence of the Change in Control
                  (or, where applicable, the 




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<PAGE>   16

                  occurrence of the Potential Change in Control event), in each
                  case determined by the Committee except that, in the case of
                  Incentive Stock Options and SARs relating to Incentive Stock
                  Options, such price shall be based only on transactions
                  reported for the date on which the optionee exercises such
                  SARs or, where applicable, the date on which a cash out occurs
                  under Section 19(a)(iii).

20. NON-COMPETITION PROVISION.

Unless the award agreement relating to a stock option, SAR, restricted stock or
performance unit specifies otherwise, a grantee shall forfeit all un-exercised,
unearned and/or unpaid awards, including, but not by way of limitation, awards
earned but not yet paid, all unpaid dividends and dividend equivalents, and all
interest, if any, accrued on the foregoing if, (i) in the opinion of the
Committee, the grantee without the written consent of the Company, engages
directly or indirectly in any manner or capacity as principal, agent, partner,
officer, director, employee or otherwise, in any business or activity
competitive with the business conducted by the Company or any of its
subsidiaries; or (ii) the grantee performs any act or engages in any activity
which in the opinion of the Chief Executive Officer of the Company is inimical
to the best interests of the Company.

21. ADJUSTMENTS.

In the event of any change in the outstanding common stock of the Company, by
reason of a stock dividend or distribution, recapitalization, merger,
consolidation, reorganization, split-up, combination, exchange or Shares or the
like, the Board of Directors, in its discretion, may adjust proportionately the
number of Shares which may be issued under the Plan, the number of Shares
subject to outstanding awards, and the option exercise price of each outstanding
option, and may make such other changes in outstanding, options, SARs,
performance units and restricted stock awards, as it deems equitable in its
absolute discretion to prevent dilution or enlargement of the rights of
grantees, provided that any fractional Shares resulting from such adjustments
shall be eliminated.

22. AMENDMENT.

The Board of Directors may terminate, amend, modify or suspend the Plan at any
time, except that no termination, amendment, modification or suspension shall be
effective without the authorization of the holders of a majority of Company's
outstanding Shares, if such authorization is required to comply with any law,
regulation or stock exchange rule. No termination, modification, amendment or
suspension of the Plan shall adversely affect the rights of any grantee or
Beneficiary under an award previously granted, unless the grantee or Beneficiary
shall consent; but it shall be conclusively presumed that any adjustment
pursuant to paragraph 21 hereof does not adversely affect any such right.






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23. EFFECT ON OTHER PLANS.

Participation in this Plan shall not affect a grantee's eligibility to
participate in any other benefit or incentive plan of the Company. Any awards
made pursuant to this Plan shall not be used in determining the benefits
provided under any other plan of the Company unless specifically provided
therein.

24. EFFECTIVE DATE AND DURATION OF THE PLAN.

The initial effective date of the Plan was December 16, 1992. Unless it is
sooner terminated in accordance with paragraph 22 hereof, the Plan shall remain
in effect until all awards under the Plan have been satisfied by the issuance of
Shares or payment of cash or have expired or otherwise terminated, but no award
shall be granted after December 16, 2002.

25. UNFUNDED PLAN.

The Plan shall be unfunded, except to the extent otherwise provided in
accordance with Section 8 hereof. Neither the Company nor any affiliate shall be
required to segregate any assets that may be represented by stock options, SARs,
or performance units, and neither the Company nor any affiliate shall be deemed
to be a trustee of any amounts to be paid under any stock option, SAR or
performance unit. Any liability of the Company or any affiliate to pay any
grantee or Beneficiary with respect to an option, SAR or performance unit shall
be based solely upon any contractual obligations created pursuant to the
provisions of the Plan; no such obligations will be deemed to be secured by a
pledge or encumbrance on any property of the Company or an affiliate.

26. GOVERNING LAW.

The Plan shall be construed and its provisions enforced and administered in
accordance with the laws of the State of Tennessee, except to the extent that
such laws may be superseded by any federal law.

On December 12, 1997, the Board of Directors approved an amendment to the Long
Term Incentive Plan that increased the Shares available for grant thereunder
from 6,000,000 to 7,500,000. In addition, the Board of Directors has approved
certain other technical amendments. The proposal to approve the Company's 1993
Long Term Incentive Plan, as amended, will be acted upon by the Company's
Shareholders at the annual meeting on May 20, 1998.





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