<PAGE>
                                                                               .
                                                                               .
                                                                               .
                                                                  Exhibit 10.2


  [VALOR LOGO]

                                 2005 INCENTIVE
                                COMPENSATION PLAN

<TABLE>
<S>                       <C>              <C>
Version                   4.0
Effective Date            March 22, 2005   __________________
</TABLE>

<PAGE>

<TABLE>
<S>                                                                     <C>
1     ADMINISTRATIVE RULES...........................................    3

   1.1      PURPOSE..................................................    3
   1.2      DEFINITIONS..............................................    3
   1.3      ADMINISTRATION...........................................    3
   1.4      ELIGIBLE PARTICIPANTS....................................    4
   1.5      AWARDS...................................................    4
   1.6      PAYMENT OF AWARDS........................................    4
   1.7      AMENDMENT OR TERMINATION.................................    5
   1.8      OTHER CONDITIONS.........................................    5
   1.9      EFFECTIVE DATE...........................................    5

2     OPERATING RULES................................................    6

   2.1      PLAN PRINCIPLES..........................................    6
   2.2      PLAN STRUCTURE...........................................    6
   2.3      INCENTIVE FACTORS........................................    7
      2.3.1       Company Performance (as measured by EBITDA)........    8
      2.3.2       Individual Performance Evaluation and Objectives...    8
   2.4      ASSIGNING INCENTIVE FACTORS TO GROUPS....................   10
   2.5      ALLOCATING INCENTIVE FACTORS AND WEIGHTS TO GROUPS.......   11
   2.6      INCENTIVE POTENTIAL......................................   11
   2.7      REVENUE BONUS............................................   12
   2.8      AWARD CALCULATION METHOD.................................   12
      2.8.1       The Performance Potential Factor (PPF).............   13
      2.8.2       Incentive Potential Factor (IPF)...................   13
      2.8.3       The Final Incentive Award (FIA)....................   13
      2.8.4       The Revenue Bonus Award (RBA)......................   14
      2.8.5       The Total Incentive Payment (TIP)..................   14
</TABLE>

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<PAGE>

1 ADMINISTRATIVE RULES

      1.1 PURPOSE

The purpose of the Incentive Compensation Plan (the "Plan") is to enhance and
reinforce the goals and strategic objectives of VALOR Communications Group, Inc.
(the "Company") for company and individual performance. This will be
accomplished by providing eligible employees with financial awards for
attainment of revenue and operational objectives. The accomplishment of these
goals will be measured through the attainment of the following elements as
defined in Part II:

      -     Company Performance (as measured by EBITDA)

      -     Individual Performance Evaluation and Objectives

      -     Revenue Attainment.

The Plan sets forth the guidelines and formulas for the computation of incentive
compensation awards for participating employees.

      1.2 DEFINITIONS

Definitions of terms as used throughout the Plan document are as follows:

      -     "Award Year" means the twelve-month period coinciding with the
            Company's annual accounting period.

      -     "Committee" means the Compensation Committee of the Company's Board
            of Directors.

      -     "Participant" means an employee designated by management and
            approved by the Committee to participate in the Plan.

      1.3 ADMINISTRATION

The Committee has delegated to the Chief Executive Officer and the senior
executive team ("Executive Management") the responsibility to develop and
administer the Plan. The Vice President - Human Resources of the Company shall
administer the Plan in accord with direction provided by Executive Management.
The Committee shall approve the Plan prior to its implementation.

Executive Management shall have full power and authority to select Participants
from among those eligible, to determine the size and timing of individual
awards, and to adopt and revise such rules and procedures as it shall deem
necessary for the administration of the Plan. The decision of the Executive
Management with respect to the individuals selected for awards, and the
interpretation of the Plan shall be final and conclusive. All incentive
compensation awards computed under the Plan are subject to final approval and
modification of Executive Management. The Plan may be modified or withdrawn at
any time without prior notification at the discretion of Executive Management.

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<PAGE>

      1.4 ELIGIBLE PARTICIPANTS

Participation in the Plan shall be limited to regular salaried employees of the
Company, including officers as recommended by management and approved by the
Committee. In selecting Participants, Executive Management shall consider an
individual's job, individual performance objectives, and potential impact on the
Company's business results and performance. Participants will be members of the
participant groups as defined in Part II of the Plan. Participants should not be
eligible to participate in any other incentive or bonus plan(s). The selection
of Participants and their respective incentive awards, shall be determined
annually by Executive Management and communicated to Participants as soon as
possible. In actual practice, decisions on participation will be made at or near
the beginning of the Award Year. Executive Management has the right to change or
modify the participant list with or without notice.

Eligible employees are full-time employees who are selected to participate in
the Plan (as defined above), and are employed by the Company during the entire
Award Year for which the incentive is being paid. If an employee becomes
eligible during the Award Year and would otherwise be eligible to participate in
the incentive compensation plan, at the discretion of the department Senior
Vice-President and the Chief Executive Officer, the individual may be allowed to
participate. This Participant would receive pro-rated incentive award based on
the full months that he or she is eligible and the End of the Year. Employees
who become eligible during the fourth quarter of the Award Year will not be
eligible to participate until the following Award Year.

      1.5 AWARDS

Individual Participant awards are determined based on quantitative and
qualitative performance measurements as described by the Incentive Factors in
Part II. All award payments are subject to Executive Management approval. The
Committee shall review Awards payable under the Plan to the Chief Executive
Officer and other senior officers. Awards will be made in the form of cash.

      1.6 PAYMENT OF AWARDS

NORMAL PAYMENT. Incentive awards shall be earned as of the payment of incentive
award date. Payment of awards shall be made in cash within ninety (90) days
following the end of the Award Year, upon completion of audited financials.
Participants must be full-time employees on the Company's payroll at the time
the award is paid to receive the payment.

The Company may choose to make mid-year awards to eligible participants if the
Company is meeting or exceeding financial objectives and the outlook for the
remaining half of the year is favorable. If mid-year awards are made, they will
occur between July 1 and September 1. Final incentive awards will be adjusted by
any mid-year award. Participants in Groups AA, A, and B as defined in Part II
shall not be eligible for mid-year award. Mid-year awards will be discontinued
in the 2006 Award Year.

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<PAGE>

PAYMENT UNDER CONDITIONS OF TERMINATION. If termination of employment occurs
during an Award Year because of death, total disability, or approved leave of
absence, such Participant terminating employment shall be deemed to have earned
a proportionate share of what would have otherwise been the Award Year's actual
incentive. The amount paid will be prorated to the number of full months worked,
and based on the Total Incentive Payment calculations.

If termination of employment occurs for any reason other than death, total
disability, or approved leave of absence, no incentive shall be deemed earned
for the Award Year in which such termination occurs.

PARTICIPANT TRANSFER. If a Participant is transferred to another
unit/department, etc. within or affiliated with the Company during the Award
Year, and is determined to be eligible for payments under one or both of the
units' plans, partial awards will be made under each unit's plan, using the
respective job and salary and prorated as describe in Section 1.4.

      1.7 AMENDMENT OR TERMINATION

Executive Management may, at any time, terminate, modify, or amend the Plan. No
awards may be made under the Plan at any time, if the overall financial
condition of the Company is not sound.

      1.8 OTHER CONDITIONS

RIGHT OF ASSIGNMENT. No right or interest of any Participant in the Plan shall
be assignable or transferable, or subject to any lien, directly, by operation of
law, or otherwise including levy, garnishment, attachment, pledge, and
bankruptcy. In the event of the Participant's death, payment shall be made to
the Participant's designated beneficiary or in the absence of such designation,
to the Participant's estate.

RIGHT OF EMPLOYMENT. The receipt of an award under the Plan shall not give any
employee the right to continue employment with the Company, and the right to
dismiss any employee is specifically reserved by the Company. The receipt of an
award in any year shall not give an employee the right to receive an award in
any subsequent year.

WITHHOLDING OF TAXES. The Company shall have the right and obligation to deduct
from all payments under the Plan any federal or state taxes required by law to
be withheld with respect to such payments.

WITHHOLDING OF 401(K). Savings Plan (401(k)) deductions shall be made from all
payments under the Plan, if a Participant is enrolled in 401(k) plan.

      1.9 EFFECTIVE DATE

The effective date of the Plan shall be January 1 of the Award Year of adoption
by the Committee.

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<PAGE>

2. OPERATING RULES

      2.1 PLAN PRINCIPLES

The purpose of the Plan as defined in Part I is to provide Participants with
annual incentive awards for their contributions to the Company's growth and
achievement of strategic goals. The Plan will be operated on the following
principles:

      -     SETTING OF GOALS

            The Company will set the Participant's incentive factors on an
            annual basis and revise them during the Award Year as needed.

      -     MEASUREMENT OF PERFORMANCE

            The Company, through its managers, will review performance of
            Participants at mid-year, and measure performance according to the
            Plan specifications at the end of the Award Year. The measurement
            may be either quantitative or qualitative.

      -     PAYMENT OF AWARDS

            The Company will award the Participants, according to the measured
            results, within ninety (90) days of the end of the Award Year upon
            completion of audited financials. The Company may choose to make
            mid-year awards if the Company is meeting or exceeding financial
            objectives and the outlook for the remainder of the year is
            favorable. End of the Year Awards will be adjusted by any mid-year
            award. Participants in Groups AA, A, and B shall not be eligible for
            mid-year awards. Mid-year awards will be discontinued in the 2006
            Award Year.

      2.2 PLAN STRUCTURE

The Plan is based on incentive factors important to the Company's success in
achieving its strategic objectives that have been adopted by resolution of the
Company's Board of Directors . Plan Participants are divided into groups with
similar job responsibilities and/or job functions. Executive Management will
make a determination as to which group a Participant will be assigned, using the
criteria below as a guideline:

                                          PARTICIPANT GROUPS

GROUP AA                Participants in this group are responsible for the
                        long-range planning and growth of the Company. Will be
                        responsible for all business functions and Senior
                        Vice-Presidents in their reporting structure. Common
                        titles in this category will be President and Chief
                        Executive Officer.

GROUP A                 Participants in this group are responsible for the
                        long-range planning and growth of the Company. They are
                        usually responsible for multiple business functions and
                        will most often have Vice-President(s) in their
                        reporting structure. Common titles in this category will
                        be Senior Vice-President.

GROUP B                 Participants in this group are responsible for
                        assisting in developing and implementing long-range
                        plans for the Company. They will usually be responsible
                        for a specific business function and have Directors
                        and/or

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<PAGE>

                        Managers in their reporting structure. Common titles in
                        this group will be Vice-President.

GROUP C                 Participants in this group are responsible for the
                        implementation of both short- and long range plans as
                        well as overseeing the day-to-day operations for the
                        Company in a specific business region (Division). Common
                        titles in this group will be Division Manager.

GROUP D                 Participants in this group are responsible for
                        intermediate business goals. They will usually be
                        responsible for multiple disciplines within a business
                        function and will usually have Managers and/or
                        professionals in their reporting structure. Common
                        titles in this group will be Directors.

GROUP E                 Participants in this group are responsible for short
                        to intermediate range business goals. They will usually
                        be responsible for one or a few disciplines within a
                        business function and may have administrative staff,
                        supervisors, and/or professionals in their reporting
                        structure. Common titles in this group will be Managers.

GROUP F                 Participants in this group are responsible for immediate
                        to short-term business goals. They will usually be
                        responsible for one discipline or sub-discipline within
                        a business function. This responsibility may be defined
                        through the supervision of at least 3 subordinate
                        (exempt or nonexempt) employees, and individual
                        contributor manager who supervise less than 3 employees.
                        Common titles in this group will be Supervisor and
                        Manager.

The groups are assigned incentive factors for which they have responsibility,
control, or influence. Factor weights will be assigned to the incentive factors
for the groups. The total factor weight allocated to each should equal 100
percent. Factor weights are allocated only to the incentive factors that have
been assigned to the groups and not all factors may have weights.

      2.3 INCENTIVE FACTORS

Incentive factors are elements through which the organization achieves strategic
goals and will be used by the Plan to measure the success of Participants to
help the Company reach its goals. The Committee has selected several incentive
factors for measurement in the Plan. These factors are as follows:

      -     Company Performance (as measured by EBITDA)

      -     Individual Performance Evaluation and Objectives

      -     Revenue Attainment.

Senior management, department management, and eligible Participants will
establish goals for each of these incentive factors. Participants receiving
"Improvement Desired" or "Unsatisfactory" on individual performance evaluations
will not be eligible for any payout under the Plan.

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<PAGE>

            2.3.1  COMPANY PERFORMANCE (AS MEASURED BY EBITDA)

Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) is a
measure of financial performance that is used to measure the Company's
performance. At the beginning of each year, the Company's Board of Directors
shall adopt a resolution setting the EBITDA goals. At the end of the year,
actual EBITDA achievement will be compared to the EBITDA goal and the percentage
of achievement will be determined. Executive Management reserves the right to
consider extraordinary expenses and revenues in consideration for End of Year
Award.

            2.3.1.1  EBITDA EVALUATION SCORE TABLE

The score table defines the achievement level expected by the Company. The
incentive level represents the percent of the incentive that the Participant
will receive depending on the level of EBITDA attained by the Company. Higher
levels of achievement will yield higher incentive levels and consequently
increase incentive award.

                 TABLE 2.3.1.1.1  EBITDA EVALUATION SCORE TABLE

<TABLE>
<CAPTION>
LEVEL OF EBITDA ACHIEVEMENT   INCENTIVE LEVEL
---------------------------  -----------------
<S>                          <C>
         >103.00%                 150.00%
     101.00% - 102.99%       125.00% - 149.00%
     100.00% - 100.99%       100.00% - 124.00%
      99.00% - 99.99%         80.00% - 99.00%
      98.00% - 98.99%         75.00% - 79.00%
      97.00% - 97.99%         50.00% - 74.00%
          <97.00%                  0.00%
</TABLE>

            2.3.1.2  EBITDA END OF AWARD YEAR

At the end of the Award Year, senior management will compare actual EBITDA
results with EBITDA goals and determine incentive level based on attainment.
Executive Management reserves the right to adjust the incentive level, either
increasing or decreasing, based on unusual or extenuating circumstances.

            2.3.2  INDIVIDUAL PERFORMANCE EVALUATION AND OBJECTIVES

Participants, who will be assessed using the performance evaluation incentive
factor, will be evaluated using the performance evaluation that is approved by
management. The performance evaluation will be conducted according to the
guidelines in the performance evaluation process.

As a component of the performance evaluation, participants will be assigned
individual performance objectives at the beginning of the evaluation cycle.
Managers will be responsible for creating performance objectives.

Managers will ensure each objective is described in enough detail so the
Participant can understand clearly what is to be accomplished. Managers will
assign at least four (4) objectives to a Participant. Objectives should be
substantial and challenging in nature.

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<PAGE>

      -     The manager will specify the "deliverables" that will be obtained by
            the Participant at the completion of the task. Deliverables may be
            reports, prototypes, certifications, etc.

      -     Each objective is allocated a weight. The weight determines the
            relative importance of the task in relation to the other tasks
            assigned for the same period. The total weight assigned to all the
            objectives must equal 100 percent.

         TABLE 2.3.2.1.1  INDIVIDUAL PARTICIPANT PERFORMANCE OBJECTIVES

<TABLE>
<CAPTION>
   Name       Jane Doe    Employee Number    10101
----------   ----------   ---------------   -------
<S>          <C>          <C>               <C>
Department   Operations   Job Title         Manager
Manager      John Doe
</TABLE>

<TABLE>
<CAPTION>
                                                     MEASUREMENT
              OBJECTIVE                             OF ACHIEVEMENT                WEIGHTING
-----------------------------------    ---------------------------------------    ---------
<S>                                    <C>                                        <C>
Establish a departmental policy and    Published and distributed policy and         40.00%
practices manual.                      practice manual by July 1.

Establish departmental callback        Documented callback procedures,              20.00%
procedures.                            training of all department members, and
                                       reduction by 20% in the number of
                                       complaints for failure to call back by
                                       April 1.

Recommended new customer tracking      Documented recommendation must include       40.00%
software.                              samples and description of software
                                       evaluated by December 1.
                                                                                   ------
Totals                                                                             100.00%
                                                                                   ------
</TABLE>

             2.3.2.2 PERFORMANCE EVALUATION SCORE TABLE

The score table defines the achievement level that can be attained by the
Participant. The incentive level represents the percent of the incentive that
the Participant will receive depending on their achievement level. Higher levels
of achievement will yield higher incentive levels and consequently increase
incentive award.

               TABLE 2.3.2.2.1 PERFORMANCE EVALUATION SCORE TABLE

<TABLE>
<CAPTION>
         ACHIEVEMENT LEVEL        INCENTIVE LEVEL
--------------------------------  ---------------
<S>                               <C>
Exceptional                           200.00%
Exceeds Expectations                  150.00%
Fully Satisfactory (3.55 - 2.90)      100.00%
Fully Satisfactory (2.89 - 2.76)       50.00%
Improvement Desired                     0.00%
Unsatisfactory                          0.00%
</TABLE>

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<PAGE>

             2.3.2.3 PERFORMANCE RATING DISTRIBUTION

The overall performance ratings for each organization should generally resemble
a bell shaped curve. As a guideline, the majority of employees should receive a
"Fully Satisfactory" performance ratings. These will be employees who
consistently meet and occasionally exceed requirements. A smaller percentage of
employees should receive ratings of "Exceeds Expectations". These will be
employees who consistently exceed the requirements of the job. Still a smaller
percentage of employees should receive ratings of "Exceptional Performance".
These will be employees that always exceed job requirements and should be
reserved for the top performers at VALOR. A small percentage of employees should
receive "Improvement Desired" or "Unsatisfactory". These will be employees that
consistently do not meet job requirements. The distribution for each Senior
Vice-President's organization should follow the recommended distribution as
illustrated in the table below:

           Table 2.3.2.3.1 Performance Evaluation Rating Distribution

<TABLE>
<CAPTION>
           RATING LEVEL               DISTRIBUTION
--------------------------------   -------------------
<S>                                <C>
Exceptional                        No More than 5.00%
Exceeds Expectations               No More than 25.00%
Fully Satisfactory (3.55 - 2.90)   No More than 65.00%
Fully Satisfactory (2.89 - 2.76)
Improvement Desired                No More than 5.00%
Unsatisfactory
</TABLE>

If a Senior Vice-President's organization exceeds the recommended distribution
(5%) in the Exceptional rating level, or a combined 30% in the Exceptional and
Exceeds Expectations rating levels, review and approval of the Chief Executive
Officer is required.

             2.3.2.4 END OF THE AWARD YEAR

During the annual performance evaluation, managers will meet with the
Participant to review performance and accomplishment of objectives. The
performance evaluation rating will be used to measure the achievement level for
this incentive factor.

      2.4 ASSIGNING INCENTIVE FACTORS TO GROUPS

Incentive factors are assigned to the groups that have responsibility, control,
and influence over them. Plan participants should constantly review these
factors and their goals, monitoring their progress and adjusting their priority
to meet their goals. Incentive factor goals serve as constant reminders as to
which areas Participants should focus their efforts.

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<PAGE>

        TABLE 2.4.1.1.1  INCENTIVE FACTORS ASSIGNED TO PARTICIPANT GROUPS

<TABLE>
<CAPTION>
                                                              PARTICIPANT GROUPS
                                                      ----------------------------------
                INCENTIVE FACTORS                     AA     A    B    C    D    E    F
------------------------------------------------      ---   ---  ---  ---  ---  ---  ---
<S>                                                   <C>   <C>  <C>  <C>  <C>  <C>  <C>
Individual Performance Evaluation and Objectives                 X    X    X    X    X

Company Performance (as measured by EBITDA)            X    X    X    X    X    X    X
</TABLE>

      2.5 ALLOCATING INCENTIVE FACTORS AND WEIGHTS TO GROUPS

The incentive factors assigned to each participant group were examined carefully
to determine which factors should be allocated to the group level. Participant
groups were allocated the incentive factors they have the most control over.
These will be the focal point of the groups' efforts.

Next, a weight is distributed among the factors assigned to each group based on
the importance each factor plays in relation to reaching the set goals. The
factor weight is the percentage of the factor allocated to a specific group. The
total factor weight for each group should equal 100 percent.

        TABLE 2.5.1.1.1  INCENTIVE FACTORS ALLOCATED TO PARTICIPANT GROUPS

<TABLE>
<CAPTION>
                                                  PARTICIPANT GROUPS
                             -------------------------------------------------------------
    INCENTIVE FACTORS           AA       A        B        C        D        E        F
-------------------------    -------  -------  -------  -------  -------  -------  -------
<S>                          <C>      <C>      <C>      <C>      <C>      <C>      <C>
Individual Performance         0.00%    0.00%   30.00%   30.00%   30.00%   40.00%   40.00%
Evaluation and Objectives

Company Performance (as      100.00%  100.00%   70.00%   70.00%   70.00%   60.00%   60.00%
measured by EBITDA)
                             ------   ------   ------   ------   ------   ------   ------
Total                        100.00%  100.00%  100.00%  100.00%  100.00%  100.00%  100.00%
                             ======   ======   ======   ======   ======   ======   ======
</TABLE>

      2.6 INCENTIVE POTENTIAL

Incentive potential is defined as the percentage of the annual salary designated
to each participant group. This equals to the annual salary multiplied by the
assigned percentage. The assigned percentage increases with the responsibility
level of the group.

        TABLE 2.6.1.1.1  INCENTIVE PERCENTAGE POTENTIAL ASSIGNED TO GROUPS

<TABLE>
<CAPTION>
PARTICIPANT GROUP  PERCENTAGE
-----------------  ----------
<S>                <C>
       AA           100.00%
        A            50.00%
        B            40.00%
</TABLE>

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<PAGE>

<TABLE>
<S>   <C>
C     30.00%
D     25.00%
E     15.00%
F     10.00%
</TABLE>

Information for individual plan Participants is confidential and will be
disclosed to each plan Participant in a private manner. Group directors and
managers will only have access to the incentive compensation source data
pertaining to their department or work group.

      2.7 REVENUE BONUS

The Revenue Bonus will give Participants an opportunity to earn an extra 10.00%
of their Final Incentive Award. At the beginning of each year, the Company's
Board of Directors shall adopt a resolution setting the Revenue goal. At the end
of the year, actual Revenue achievement will be compared to the Revenue goal and
the percentage of achievement will be determined. Executive Management reserves
the right to consider extraordinary circumstances in consideration for the End
of Award Year calculations. Revenue target Revenue Attainment is an additional
measure of Company performance. After the Final Incentive Awards have been
calculated as described in 2.8.3, the Revenue Bonus will be calculated and used
to determine the Total Incentive Payment.

             2.7.1.1  REVENUE EVALUATION SCORE TABLE

The score table defines the achievement level expected by the Company. The
incentive level represents the percent of the incentive that the Participant
will receive depending on the level of Revenue attained by the Company. Higher
levels of achievement will yield higher incentive levels and consequently
increase incentive awards.

                 TABLE 2.7.1.1.1  REVENUE EVALUATION SCORE TABLE

<TABLE>
<CAPTION>
                                INCENTIVE LEVEL (AS A
                              PERCENT OF FINAL INCENTIVE
LEVEL OF REVENUE ACHIEVEMENT           AWARD)
----------------------------  --------------------------
<S>                           <C>
          >100.50%                       +10.00%
      99.50% - 100.49%                    0.00%
           <99.50%                       -10.00%
</TABLE>

            2.7.1.2  REVENUE END OF AWARD YEAR

At the end of the Award Year, Executive Management will compare actual Revenue
results with Revenue goals and determine the incentive level based on
attainment. Executive Management reserves the right to adjust the incentive
level, either increasing or decreasing, based on unusual or extenuating
circumstances.

      2.8 AWARD CALCULATION METHOD

All award calculations will be performed by the Human Resources Department based
on EBITDA and Revenue results as communicated by the Committee and Performance
Evaluation

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<PAGE>

Ratings as communicated by department management. The formulas for calculations
are outlined in this section.

            2.8.1 THE PERFORMANCE POTENTIAL FACTOR (PPF)

The Participant's performance in each incentive factor allocated is measured in
or according to the Plan guidelines. A score is assigned for each factor based
on the actual results achieved for that Award Year. The Participant's score in
each factor category is multiplied by the factor weight allocated to it and
divided by 100. Adding all factor category scores times their weights yields the
Performance Potential Factor (PPF).

The Performance Potential Factor is a cumulative index that represents the
overall Participant performance in achieving the assigned goals. The Performance
Potential Index reflects how well Participants have achieved their goals in
their respective incentive factors

     The performance index is derived using the following formula:

          PPF =         S1* x F1** / 100  +  S2* x F2** / 100
       (Performance
    Potential Factor)

            2.8.2 INCENTIVE POTENTIAL FACTOR (IPF)

Each Participant in the Plan is designated an Incentive Potential Factor. The
value of this factor is determined by a percentage of the Participant's annual
income as defined in section 2.6.

             IPF=          Annual Salary  X  Incentive Potential Percentage (#)
(Incentive Potential Factor)

            2.8.3 THE FINAL INCENTIVE AWARD (FIA)

The Final Incentive Award is calculated as follows:

          FIA           =               PPF              X          IPF
(Final Incentive Award)   (Performance Potential Factor)   (Incentive Potential
                                                                  Factor)

-------------------

* S1, S2, S3, S4 are the Participant's score for each incentive factor as
defined in the Plan.

** F1,F1,F3,F4 are the weights allocated to each incentive factor. These
allocations are designated in Table 2.5.1.1.1 and the sum is 100.00%.

(#) Incentive Potential Percentage is defined in Table 2.6.1.1.1

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<PAGE>

            2.8.4 THE REVENUE BONUS AWARD (RBA)

The Revenue Bonus Award is calculated as follows:

         RBA           =             FIA             X           RBL
(Revenue Bonus Award)      (Final Incentive Award)      (Revenue Bonus Level)

            2.8.5 THE TOTAL INCENTIVE PAYMENT (TIP)

The Total Incentive Payment is calculated as follows:

             TIP              =           FIA           +           RBA
(The Total Incentive Payment)   (Final Incentive Award)    (Revenue Bonus Award)

The Total Incentive Payment will be adjusted by any mid-year payments.

Participants receiving "Improvement Desired" or "Unsatisfactory" will not be
eligible for any payout under the plan.

The Company reserves the right to make adjustments to incentive awards paid.

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