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                                                                   EXHIBIT 10.31



                         1993 LONG-TERM INCENTIVE PLAN,
                                   AS AMENDED





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                                                                    EXHBIT 10.31

                           SOFAMOR DANEK GROUP, INC.
                   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, 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 (other than the Director Program); to determine the type of
awards to be made under the Plan (other than the Director Program) and the
amount, size and terms and conditions of each such award under the Plan (other
than the Director Program); 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 (other than the Director Program).

3.       STOCK SUBJECT TO THE PLAN.

The Company may grant awards under the Plan with respect to not more than a
total of 6,000,000 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 to be paid by the
                 optionee to the Company for each Share purchased upon the
                 exercise of an option shall be determined by the Committee, but
                 shall in no event be less than the par value of a Share.

         (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





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                 shall become immediately exercisable, in whole or in part, 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, 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





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                 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 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)     Non-Transferability. Options granted under the Plan shall not
                 be sold, assigned, transferred, exchanged, pledged,
                 hypothecated, or otherwise encumbered, other than by will, by
                 the laws of descent and distribution or pursuant to a qualified
                 domestic relations order. During the lifetime of the optionee
                 the option is exercisable only by the optionee.

         (g)     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)      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.


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                 (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.

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.





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         (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.

         (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.  The
                 Committee, in its






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                 discretion, 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, and, notwithstanding the foregoing,
                 may accelerate the expiration of the restriction period imposed
                 on any Shares at any time.

         (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.





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         (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 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 corporationsG 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






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                 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.

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;







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                 (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

                 (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.





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         (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.

                  (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)     Nontransferability.  Director Option shall not be sold,
                 assigned, transferred, exchanged, pledged, hypothecated, or
                 otherwise encumbered, otherwise than by will, by the laws of
                 descent and distribution or





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                 pursuant to a qualified domestic relations order. During the
                 lifetime of the optionee, a Director Option shall be
                 exercisable only by the optionee.

         (g)     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.

         (h)     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.

         (i)     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 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





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<PAGE>   14




                 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.

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





                                       14
<PAGE>   15




                 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 OTax DateO). 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 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, during the life of the recipient, such award shall
be exercisable only by such person or by such person's guardian or legal
representative.

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.





                                       15
<PAGE>   16




                 (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 OChange in ControlO means the
                 happening of any of the following:

                 (i)      Any person or entity, including a OgroupO 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 (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





                                       16
<PAGE>   17




                          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 OPotential Change in ControlO 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 OChange in Control PriceO 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 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





                                       17
<PAGE>   18




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 Rule 16b-3
under the 1934 Act or to comply with any other 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.

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.



                                       18
<PAGE>   19


24.      EFFECTIVE DATE AND DURATION OF THE PLAN.

The Plan shall become effective when adopted by the Board of Directors, provided
that the Plan is approved by the holders of a majority of the outstanding Shares
on the date of its adoption by the Board or before the first anniversary of that
date. 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 more than ten years after the earlier
of the date the Plan is adopted by the Board of Directors or is approved by the
Company's shareholders.

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 October 11, 1996, the Board of Directors approved an amendment to the Long
Term Incentive Plan that increased the Shares available for grant thereunder
from 3,500,000 to 6,000,000. In addition, the Board of Directors has approved
certain technical amendments in response to Section 162(m) of the Internal
Revenue Code and recent amendments to Section 16 of the Securities and Exchange
Act of 1934, as amended. 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 April 29, 1997.





                                       19