360 COMMUNICATIONS COMPANY

                           1996 EQUITY INCENTIVE PLAN




           (As amended and restated effective as of December 10, 1996)




<PAGE>



                                TABLE OF CONTENTS

1.  Purpose. ...............................................................  1
2.  Definitions.............................................................  1
3.  Scope of the Plan.......................................................  6
4.  Administration..........................................................  6
5.  Eligibility.............................................................  8
6.  Conditions to Grants....................................................  8
7.  Non-transferability..................................................... 14
8.  Exercise ............................................................... 14
9.  Loans and Guarantees.................................................... 17
10.  Notification under Section 83(b)....................................... 18
11.  Mandatory Tax Withholding.............................................. 18
12.  Elective Share Withholding............................................. 18
13.  Termination of Employment.............................................. 19
14.  Plans of Foreign Subsidiaries.......................................... 22
15.  Substituted Awards..................................................... 22
16.  Securities Law Matters................................................. 23
17.  No Employment Rights................................................... 23
18.  No Rights as a Stockholder............................................. 23
19.  Nature of Payments..................................................... 23
20.  Non-uniform Determinations............................................. 23
21.  Adjustments............................................................ 24
22.  Amendment of the Plan.................................................. 24
23.  Termination of the Plan................................................ 25
24.  No Illegal Transactions................................................ 25
25.  Controlling Law........................................................ 25
26.  Severability........................................................... 25


                                       -i-


<PAGE>



        Introduction.  The 360 Communications Company Equity Incentive Plan (the
"Plan"),  as established by 360 Communications  Company, a Delaware  corporation
(the  "Company"),  effective  as of March  7,  1996,  as  amended  and  restated
effective  April 9, 1996,  is hereby  further  amended and restated as set forth
below, effective as of December 10, 1996.

        1.  Purpose.  The Plan is  intended  to allow  employees  to  acquire or
increase equity ownership in the Company, thereby strengthening their commitment
to the  success of the Company and  stimulating  their  efforts on behalf of the
Company,  and to assist the Company in  attracting  new  employees and retaining
existing employees.

        2.  Definitions.

        The terms set forth below have the following  meanings (such meanings to
be applicable to both the singular and plural forms):

        (a) "Award" means options,  including incentive stock options and reload
options,  Restricted Shares,  Bonus Shares,  stock  appreciation  rights (SARs),
LSARs, or performance shares granted under the Plan.

        (b) "Award  Agreement"  means the  written  agreement  by which an Award
shall be evidenced.

        (c)  "Board" means the Board of Directors of the Company.

        (d) "Bonus  Shares"  means Shares that are awarded to a Grantee  without
cost and  without  restrictions  in  recognition  of past  performance  (whether
determined  by  reference  to another  employee  benefit  plan of the Company or
otherwise)  or as an  incentive  to  become  an  employee  of the  Company  or a
Subsidiary.

        (e) "Cause" means (I) before the occurrence of a Change of Control,  any
one or more of the  following,  as determined by the Committee (in the case of a
Section 16 Grantee) or the Vice  President,  Human  Resources of the Company (in
the case of any other Grantee):

               (A) a Grantee's  commission  of a crime which is likely to result
        in injury to the Company or a Subsidiary;

               (B) the material  violation by the Grantee of written policies of
        the Company or a Subsidiary;

               (C) the habitual neglect by the Grantee in the performance of his
        or her duties to the Company or a Subsidiary; or

               (D) the action or inaction in  connection  with his or her duties
        to the Company or a  Subsidiary  resulting  in a material  injury to the
        Company or a Subsidiary; and


                                       -1-


<PAGE>



        (ii)  from  and  after  the  occurrence  of a  Change  of  Control,  the
occurrence of any one or more of the following,  as determined in the good faith
and  reasonable  judgment of the Committee (in the case of a Section 16 Grantee)
or the Vice President,  Human Resources of the Company (in the case of any other
Grantee):

               (A)  Grantee's   conviction  for  committing  an  act  of  fraud,
        embezzlement,  theft, or any other act  constituting a felony  involving
        moral turpitude or causing material harm, financial or otherwise, to the
        Company,

               (B) a  demonstrably  willful and deliberate act or failure to act
        which is committed  in bad faith,  without  reasonable  belief that such
        action or inaction is in the best interests of the Company, which causes
        material harm, financial or otherwise,  to the Company (but only if such
        act or inaction is not  remedied  within 15 business  days of  Grantee's
        receipt of written  notice from the Company  which  describes the act or
        inaction in reasonable detail), or

               (C) the consistent gross neglect of duties,  or wanton negligence
        by the Grantee in the performance of the Grantee's duties.

        (f)  "Change of Control" means any one or more of the following:

               (i) the  acquisition or holding by any person,  entity or "group"
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act), other than
by the Company or any Subsidiary or any employee  benefit plan of the Company or
a Subsidiary,  of beneficial  ownership  (within the meaning of Rule 13d-3 under
the  1934  Act) of 30% or  more  of the  then-outstanding  Common  Stock  or the
then-outstanding Voting Power of the Company; provided,  however, that no Change
of Control shall occur solely by reason of any such acquisition by a corporation
with  respect  to  which,  after  such  acquisition,  more  than 60% of both the
then-outstanding  common  shares and the  then-outstanding  Voting Power of such
corporation are then-beneficially owned, directly or indirectly,  by the persons
who were the  beneficial  owners of the Common  Stock  immediately  before  such
acquisition,   in  substantially   the  same  proportions  as  their  respective
ownership,  immediately before such acquisition,  of the then-outstanding Common
Stock and Voting Power of the Company; or

               (ii)  individuals  who, as of the Effective Date,  constitute the
Board (the  "Incumbent  Board")  cease for any reason to  constitute  at least a
majority of the Board; provided that any individual who becomes a director after
the Effective  Date whose  election or nomination  for election by the Company's
stockholders  was approved by at least a majority of the Incumbent  Board (other
than an election or  nomination of an  individual  whose  initial  assumption of
office is in connection with an actual or threatened  election  contest relating
to the election of the  directors of the Company (as such terms are used in Rule
14a-11  under the 1934  Act))  shall be  deemed to be a member of the  Incumbent
Board; or


                                       -2-


<PAGE>



               (iii) approval by the  stockholders  of the Company of any one or
more of the following:

                      (A)  a  merger,   reorganization   or  consolidation   (an
"Extraordinary  Transaction")  with  respect  to  which  persons  who  were  the
respective  beneficial  owners  of the  Common  Stock  immediately  before  such
Extraordinary  Transaction would not, if such Extraordinary  Transaction were to
be consummated  immediately  after such  stockholder  approval (but otherwise in
accordance  with the terms  presented  in  writing  to the  stockholders  of the
Company for their approval), beneficially own, directly or indirectly, more than
60% of both the then-outstanding  common shares and the then-outstanding  Voting
Power of the  corporation  resulting  from such  Extraordinary  Transaction,  in
substantially  the same proportions as their respective  ownership,  immediately
before such Extraordinary Transaction,  of the then-outstanding Common Stock and
Voting Power of the Company,

                      (B) a liquidation or dissolution of the Company or

                      (C) the sale or other  disposition of all or substantially
all of the  assets of the  Company  in one  transaction  or a series of  related
transactions.

Notwithstanding  the foregoing,  a Change in Control will not occur with respect
to any person who is, by agreement or  understanding  (written or otherwise),  a
participant on such person's own behalf in a transaction which causes the Change
in Control to occur.

        (g) "Change of Control  Value" means the Fair Market Value of a Share on
the date of a Change of Control.

        (h) "Code" means the  Internal  Revenue  Code of 1986,  as amended,  and
regulations and rulings  thereunder.  References to a particular  section of the
Code include references to successor provisions.

        (i) "Committee"  means the committee of the Board appointed  pursuant to
Section 4(a).

        (j)  "Common  Stock"  means the common  stock,  $.01 par  value,  of the
Company.

        (k)  "Company" -- see the introductory paragraph.

        (l)  "Disability"  means a mental or physical  condition which qualifies
for benefits under the 360  Communications  Company Basic  Long-Term  Disability
Plan and results in a duration of at least 24 months of  continuous  disability.
For purposes of this Plan, the Disability  shall be deemed to have been incurred
at the end of such 24-month period.

        (m)  "Disqualifying Disposition" -- see Section 6(c)(vi);


                                       -3-


<PAGE>



        (n)  "Effective Date" means March 7, 1996;

        (o) "Eligible  Employee"  means any employee  (including any officer) of
the Company or any Subsidiary, including any such employee who is on an approved
leave of absence or layoff,  or has been subject to a disability  which does not
qualify as a Disability;

        (p)  "Extraordinary Transaction" -- see Section 2(f)(iii).

        (q) "Fair Market  Value" of an equity  security as of any date means the
average of the high and low sales price of such security on such date (or, if no
sale of such security was reported for such date, on the next  preceding date on
which a sale  of such  security  was  reported)  as  reported  in the  principal
consolidated  transaction  reporting system for the New York Stock Exchange (or,
if such  security  is not listed on the New York Stock  Exchange,  on such other
national  exchange  or the  over-the-counter  market on which such  security  is
principally  traded);  provided  that if such Fair  Market  Value as of any date
cannot be so  determined,  such Fair  Market  Value shall be  determined  by the
Committee by whatever  means or method as it, in the good faith  exercise of its
discretion, shall at such time deem appropriate.

        (r) "Good  Reason"  means  shall mean the  occurrence  after a Change of
Control,  without a Grantee's prior written  consent,  of any one or more of the
following:

               (I) the assignment to the Grantee of any duties which result in a
        material  adverse change in the Grantee's  position  (including  status,
        offices,  titles,  and reporting require ments),  authority,  duties, or
        other  responsibilities  with the  Company,  or any other  action of the
        Company which  results in a material  adverse  change in such  position,
        authority, duties, or responsibilities,  other than an insubstantial and
        inadvertent  action  which is  remedied by the  Company  promptly  after
        receipt of notice thereof given by the Grantee,

               (ii) any relocation of the Grantee of more than 35 miles from the
        place  where  the  Grantee  was  located  at the time of the  Change  in
        Control, or

               (iii) a material reduction or elimination of any component of the
        Grantee's  rate of  compensation,  including  (x) base  salary,  (y) the
        annual  incentive  payment  or (z)  benefits  or  perquisites  which the
        Grantee was receiving immediately prior to a Change in Control.

        (s)  "Grant Date" -- see Section 6(a)(i).

        (t)  "Grantee" means an individual who has been granted an Award.

        (u) "Immediate Family" means, with respect to a particular Grantee, such
Grantee's spouse, children and grandchildren.


                                       -4-


<PAGE>



        (v) "including" or "includes" means "including,  without limitation," or
"includes, without limitation", respectively.

        (w)  "LSAR" means a limited stock appreciation right.

        (x) "Mature  Shares" means Shares for which the holder  thereof has good
title,  free and clear of all  liens and  encumbrances,  and which  such  holder
either  (I) has held for at least six months or (ii) has  purchased  on the open
market.

        (y)  "Minimum  Consideration"  means $.01 per Share or such other amount
that is from time to time  considered  to be capital for purposes of Section 154
of the Delaware General Corporation Law.

        (z) "1934 Act" means the Securities Exchange Act of 1934.  References to
a  particular  section of, or rule under,  the 1934 Act  include  references  to
successor provisions.

        (aa)  "Option Price" means the per share exercise price of an option.

        (bb)  "Option  Term" means the period  beginning on the Grant Date of an
option and ending on the  expiration  date of such  option,  as specified in the
Award  Agreement for such option and as may, in the  discretion of the Committee
and consistently  with the provisions of the Plan, be extended from time to time
prior to the expiration date of such stock option then in effect.

        (cc)  "Performance Percentage" -- see Section 6(g)(i)(C).

        (dd)  "Performance Period" -- see Section 6(g)(i)(B).

        (ee)  "Plan" -- see the introductory paragraph.

        (ff)  "Reload Option" -- see Section 6(d).

        (gg)  "Required Withholding" -- see Section 11(a);

        (hh)  "Restricted  Shares"  means  Shares  that are that are  subject to
forfeiture if the Grantee does not satisfy the conditions specified in the Award
Agreement applicable to such Shares.

        (ii) "Rule  16b-3"  means  Rule 16b-3 of the SEC under the 1934 Act,  as
amended from time to time, together with any successor rule.

        (jj)  "Retirement"  means a termination  of employment by a Grantee upon
attaining  either  (I) age 55 with 10 years of  service  as an  employee  of the
Company or a Subsidiary or (ii) age 65 with at least five years of service as an
employee of the Company or a Subsidiary.


                                       -5-


<PAGE>



        (kk)  "SAR" means stock appreciation right.

        (ll)  "SEC" means the Securities and Exchange Commission.

        (mm)  "Section  16 Person"  means a person  who is subject to  potential
liability  under  Section  16(b) of the 1934 Act with  respect  to  transactions
involving equity securities of the Company.

        (nn)  "Share" means a share of Common Stock.

        (oo)  "Strike Price" -- see Section 6(e)(ii).

        (pp)  "Subsidiary"  means,  for  purposes of grants of  incentive  stock
options,  a  corporation  as  defined  in  Section  424(f) of the Code (with the
Company  being  treated  as  the  employer  corporation  for  purposes  of  this
definition) and, for all other purposes,  a United States or foreign corporation
with respect to which the Company owns,  directly or indirectly,  50% or more of
the then-outstanding common stock.

        (qq) "10% Owner" means a person who owns capital stock  (including stock
treated as owned under Section 424(d) of the Code)  possessing  more than 10% of
the total  combined  voting power of all classes of capital stock of the Company
or any Subsidiary.

        (rr)   "Voting   Power"   means  the   combined   voting  power  of  the
then-outstanding  securities of a corporation  entitled to vote generally in the
election of directors

        3. Scope of the Plan.  Subject to  adjustment as provided in Section 21,
the total number of Shares  available  for grant under the Plan in each calendar
year for which the Plan is in effect  shall be one  percent  (1.0%) of the total
outstanding  Shares as of the first day of such year;  provided that such number
shall be  increased  in any year by the  number  of Shares  available  for grant
hereunder in previous years but not covered by Awards granted  hereunder in such
years; and provided further,  that, subject to adjustment as provided in Section
21), (I) no more than 1,500,000  Shares shall be cumulatively  available for the
grant of Incentive  Stock  Options  under the Plan and (ii) the number of Shares
for which  Awards may be granted to any Grantee in any  calendar  year shall not
exceed 500,000.

        If any Shares  subject to any Award  granted  hereunder are forfeited or
such Award otherwise  terminates without the issuance of such Shares or of other
consideration  in lieu of such Shares,  the Shares subject to such Award, to the
extent of any such forfeiture or termination, shall again be available for grant
under the Plan. If any  outstanding  Incentive  Stock Options under the Plan for
any reason expire or are  terminated,  the Shares  allocable to the  unexercised
portion  of all of such  Incentive  Stock  Options  may again be  subject  to an
Incentive  Stock Option  under the Plan.  Shares  awarded  under the Plan may be
treasury shares or newly-issued shares.


                                       -6-


<PAGE>



        4.  Administration.

        (a)  Subject  to  Section  4(b),  the Plan  shall be  administered  by a
committee (the "Committee")  which shall consist of two or more directors of the
Company,  all of whom qualify as "outside  directors" as defined for purposes of
the  regulations  under Code Section 162(m) and satisfy one of the conditions of
Rule  16b-3 in  respect of the  exemption  of grants to Section 16 Persons  from
potential  liability  under Section 16(b) of the 1934 Act. The number of members
of the Committee shall from time to time be increased or decreased, and shall be
subject  to such  conditions,  in each case as the Board  deems  appropriate  to
permit transactions in Shares pursuant to the Plan to satisfy such conditions of
Rule 16b-3 and Section 162(m) as then in effect.

        (b) The Board may reserve to itself or delegate to another  committee of
the Board any or all of the  authority of the  Committee  with respect to Awards
except, in the case of such other committee,  with respect to Awards to Grantees
who are  Section  16  Persons  at the  time  any  such  delegated  authority  is
exercised.  Such other committee (the "Management Committee") may consist of one
(or such  greater  number as may from time to time be  required by the bylaws of
the Company) or more  directors who may, but need not be,  officers or employees
of the Company or a  Subsidiary.  To the extent  that the Board has  reserved to
itself or delegated to such Management Committee the authority of the Committee,
all  references  to the  Committee  in the Plan  shall  be to the  Board or such
Management Committee.  The Management Committee may not grant Awards relating to
an  aggregate of more than 50,000  Shares in any calendar  year unless the Board
gives its prior approval of a larger number of Shares.

        (c) Subject to the express  provisions  of the Plan,  the  Committee has
full and final authority and sole discretion as follows:

               (i) to  determine  when and to whom Awards  should be granted and
the terms and conditions applicable to each Award, including the benefit payable
under any SAR or performance  share, and whether or not specific Awards shall be
identified  with  other  specific  Awards,  and  if so  whether  they  shall  be
exercisable cumulatively with, or alternatively to, such other specific Awards;;

               (ii) to determine  the amount,  if any,  that a Grantee shall pay
for  Restricted  Shares,  whether  to  permit or  require  the  payment  of cash
dividends thereon to be deferred and the terms related thereto,  when Restricted
Shares  (including  Restricted  Shares  acquired upon the exercise of an option)
shall be forfeited and whether such shares shall be held in escrow;

               (iii)  to  interpret  the  Plan  and to make  all  determinations
necessary or advisable for the administration of the Plan;

               (iv) to make,  amend,  and  rescind  rules  relating to the Plan,
including  rules with respect to the  exercisability  and  nonforfeitability  of
Awards upon the termination of employment of a Grantee;

                                       -7-


<PAGE>



               (v) to determine the terms and conditions of all Award Agreements
(which need not be identical) and, with the consent of the Grantee, to amend any
such Award  Agreement at any time,  among other things,  to permit  transfers of
such Awards to the extent  permitted by the Plan;  provided  that the consent of
the Grantee shall not be required for any amendment which (A) does not adversely
affect  the  rights  of the  Grantee,  or  (B) is  necessary  or  advisable  (as
determined  by the  Committee) to carry out the purpose of the Award as a result
of any new or change in existing applicable law;

               (vi) to  cancel,  with the  consent of the  Grantee,  outstanding
Awards and to grant new Awards in substitution therefor;

               (vii) to accelerate the exercisability  (including exercisability
within a period  of less  than  one  year  after  the  Grant  Date)  of,  and to
accelerate or waive any or all of the terms and  conditions  applicable  to, any
Award or any group of  Awards  for any  reason  and at any  time,  including  in
connection with a termination of employment (other than for Cause);

               (viii)  subject to Section  6(a)(ii) and 6(c)(ii),  to extend the
time during which any Award or group of Awards may be exercised;

               (ix) to make  such  adjustments  or  modifications  to  Awards to
Grantees  working  outside  the United  States as are  advisable  to fulfill the
purposes of the Plan;

               (x) to  impose  such  additional  terms and  conditions  upon the
grant,  exercise  or  retention  of  Awards  as the  Committee  may,  before  or
concurrently with the grant thereof,  deem appropriate,  including  limiting the
percentage of Awards which may from time to time be exercised by a Grantee; and

               (xi) to  take  any  other  action  with  respect  to any  matters
relating to the Plan for which it is responsible.

        The  determination  of the Committee on all matters relating to the Plan
or any Award  Agreement  shall be final.  No  member of the  Committee  shall be
liable for any action or  determination  made in good faith with  respect to the
Plan or any Award.

        5. Eligibility.  The Committee may in its discretion grant Awards to any
Eligible Employee, whether or not he or she has previously received an Award.

        6.  Conditions to Grants.

        (a)  General Conditions.

               (i) The  Grant  Date of an Award  shall be the date on which  the
Committee  grants the Award or such later  date as  specified  in advance by the
Committee.

                                       -8-


<PAGE>



               (ii) Any  provision of the Plan to the contrary  notwithstanding,
the Option Term shall under no circumstances extend more than 10 years after the
Grant Date, and shall be subject to earlier termination as herein provided.

               (iii) To the  extent  not set  forth in the  Plan,  the terms and
conditions of each Award shall be set forth in an Award Agreement.

        (b)  Grant of Options.

               (i) No later than the Grant  Date of any  option,  the  Committee
shall  determine the Option Price of such option.  The Option Price of an option
shall  not be less than  100% of the Fair  Market  Value of a Share on the Grant
Date. An option shall be exercisable  for  unrestricted  Shares unless the Award
Agreement provides that it is exercisable for Restricted Shares.

               (ii) The Committee may, in its discretion,  permit an employee to
elect, before earning compensation,  to be granted an Award in lieu of receiving
such compensation; provided that, in the judgment of the Committee, the value of
such Award on the Grant Date equals the amount of compensation  foregone by such
employee.

        (c) Grant of Incentive  Stock  Options.  At the time of the grant of any
option, the Committee may in its discretion  designate that such option shall be
made subject to additional restrictions to permit it to qualify as an "incentive
stock  option"  under the  requirements  of Section 422 of the Code.  Any option
designated as an incentive stock option:

               (i) shall,  if granted to a 10% Owner,  have an Option  Price not
less than 110% of the Fair Market Value of a Share on the Grant Date;

               (ii) shall be for a period of not more than 10 years  (five years
in the case of an incentive  stock option granted to a 10% Owner) from the Grant
Date, and shall be subject to earlier  termination as provided  herein or in the
applicable Award Agreement;

               (iii) shall not have an aggregate  Fair Market Value  (determined
for each incentive stock option at its Grant Date) of the Shares with respect to
which incentive stock options are exercisable for the first time by such Grantee
during any  calendar  year (under the Plan and any other  employee  stock option
plan of the  Grantee's  employer  or any parent or  Subsidiary  thereof  ("Other
Plans")),  determined  in accordance  with the  provisions of Section 422 of the
Code, which exceeds $100,000 (the "$100,000 Limit");

               (iv) shall,  if the  aggregate  Fair  Market  Value of the Shares
(determined  on the Grant Date) with  respect to the portion of such grant which
is exercisable for the first time during any calendar year ("Current Grant") and
all  incentive  stock  options  previously  granted under the Plan and any Other
Plans which are  exercisable  for the first time during a calendar  year ("Prior
Grants") would exceed the $100,000 Limit, be exercisable as follows:

                                       -9-


<PAGE>



                      (A) the portion of the Current  Grant  which  would,  when
added to any Prior  Grants,  be  exercisable  with respect to Shares which would
have an aggregate Fair Market Value  (determined as of the respective Grant Date
for such  options) in excess of the $100,000  Limit shall,  notwithstanding  the
terms of the Current Grant,  be exercisable for the first time by the Grantee in
the first subsequent calendar year or years in which it could be exercisable for
the first time by the Grantee when added to all Prior Grants  without  exceeding
the $100,000 Limit; and

                      (B) if,  viewed as of the date of the Current  Grant,  any
portion of a Current Grant could not be exercised under the preceding provisions
of this Section  during any calendar year  commencing  with the calendar year in
which it is first  exercisable  through and  including the last calendar year in
which it may by its terms be exercised,  such portion of the Current Grant shall
not be an incentive stock option,  but shall be exercisable as a separate option
at such date or dates as are provided in the Current Grant;

               (v) shall be granted within 10 years from the earlier of the date
the Plan is adopted or the date the Plan is approved by the  stockholders of the
Company;

               (vi) shall  require  the Grantee to notify the  Committee  of any
disposition of any Shares issued pursuant to the exercise of the incentive stock
option under the circumstances described in Section 421(b) of the Code (relating
to certain disqualifying dispositions) (any such circumstance,  a "Disqualifying
Disposition"), within 10 days of such Disqualifying Disposition; and

               (vii) shall by its terms not be assignable or transferable  other
than by will or the  laws of  descent  and  distribution  and may be  exercised,
during the Grantee's lifetime, only by the Grantee; provided,  however, that the
Grantee may, to the extent  provided in the Plan in any manner  specified by the
Committee,  designate in writing a beneficiary  to exercise his or her incentive
stock option after the Grantee's death;

        Notwithstanding  the foregoing and Section  4(c)(v),  the Committee may,
without the consent of the Grantee, at any time before the exercise of an option
(whether or not an incentive stock option), take any action necessary to prevent
such option from being treated as an incentive stock option.

        (d) Grant of Reload  Options.  The Committee may in connection  with the
grant of an option or  thereafter  provide that a Grantee who (I) is an employee
of the Company or a Subsidiary when he or she exercise an Option, (ii) exercises
such  option for Shares  which have a Fair  Market  Value equal to not less than
120% of the  Option  Price  for  such  option  ("Exercised  Option")  and  (iii)
satisfies  the Option  Price or Required  Withholding  applicable  thereto  with
Shares  shall  automatically  be  granted,  subject to Article 3, an  additional
option ("Reload  Option") in an amount equal to the sum ("Reload Number") of the
number of Shares tendered to exercise the Exercised  Option plus, if so provided
by the  Committee,  the number of Shares,  if any,  retained  by the  Company in
connection with the exercise of the Exercised Option to satisfy any federal,

                                      -10-


<PAGE>



state or local tax  withholding  requirements;  provided  that no Reload  Option
shall be granted in  connection  with the  exercise  of an Option  that has been
transferred by the initial Grantee thereof.

        Reload Options shall be subject to the following terms and conditions:

               (i) the Grant Date for each  Reload  Option  shall be the date of
exercise of the Exercised Option to which it relates;

               (ii)  subject to  Section  6(d)(iii),  the  Reload  Option may be
exercised at any time during the Option Term of the Exercised Option (subject to
earlier  termination  thereof as provided in the Plan or in the applicable Award
Agreement); and

               (iii) the  terms of the  Reload  Option  shall be the same as the
terms of the  Exercised  Option to which it relates,  except that (A) the Option
Price shall be 100% of the Fair Market Value of a Share on the Grant Date of the
Reload  Option,  (B)  subject  to  Section  4(c)(vii),  no Reload  Option may be
exercised  within one year  after its Grant  Date,  and (C) in no event  shall a
second Reload Option be granted in connection  with the exercise of such initial
Reload Option.

        (e)  Grant of SARs.

               (i) When granted,  SARs may, but need not, be  identified  with a
specific option,  specific Restricted Shares, or specific  performance shares of
the Grantee  (including any option,  Restricted  Shares,  or performance  shares
granted  on or  before  the  Grant  Date of the  SARs) in a  number  equal to or
different from the number of SARs so granted. If SARs are identified with Shares
subject to an option, with Restricted Shares, or with performance shares,  then,
unless  otherwise  provided in the  applicable  Award  Agreement,  the Grantee's
associated SARs shall terminate upon (x) the expiration, termination, forfeiture
or cancellation of such option,  Restricted  Shares, or performance  shares, (y)
the  exercise  of  such  option  or  performance  shares  or (z) the  date  such
Restricted Shares become nonforfeitable.

               (ii) The strike  price  ("Strike  Price") of any SAR shall equal,
for any SAR that is identified with an option,  the Option Price of such option,
or for any other SAR, 100% of the Fair Market Value of a Share on the Grant Date
of such SAR;  provided  that the Committee may (x) specify a higher Strike Price
in the Award Agreement, or (y) provide that the benefit payable upon exercise of
any SAR shall not exceed such  percentage of the Fair Market Value of a Share on
such Grant Date as the Committee shall specify.

        (f) Grant of LSARs.  LSARs may in the  discretion  of the  Committee  be
granted to any Grantee upon the grant of any option or SAR under the Plan.  Each
LSAR  shall be  identified  with a Share  subject  to an  option or a SAR of the
Grantee. The number of LSARs granted to a Grantee in respect of an option or SAR
shall equal the number of Shares  subject to such option or SAR.  The  Committee
may also  grant an LSAR with  respect  to any Share  subject to an option or SAR
previously granted under this Plan. Upon the exercise, expiration,  termination,
forfeiture, or

                                      -11-


<PAGE>



cancellation  of a Grantee's  option or SARs,  as the case may be, the Grantee's
associated LSARs shall terminate.

        (g)  Grant of Performance Shares.

               (i)  Before the grant of any  performance  share,  the  Committee
shall:

                      (A)  determine  objective  performance  goals  (which  may
consist of any one or more of the following:  earnings  (either in the aggregate
or  on a  per-share  basis),  operating  income,  cash  flow,  including  EBITDA
(earnings before interest,  taxes,  depreciation  and  amortization),  return on
equity,  indices related to EVA (economic value added), per share rate of return
on the Common Stock (including dividends), general indices relative to levels of
general   customer   service   satisfaction,   as   measured   through   various
randomly-generated  customer  service  surveys,  market  share  (in  one or more
markets),   customer  retention  rates,  market  penetration  rates,   revenues,
reductions  in expense  levels,  and the  attainment  by the  Common  Stock of a
specified  market  value  for a  specified  period of time,  in each case  where
applicable to be determined either on a Company-wide  basis or in respect of any
one or more  business  units)  and the  amount of  compensation  under the goals
applicable to such grant;

                      (B) designate a period, of not less than one year nor more
than five years,  for the measurement of the extent to which  performance  goals
are attained,  which period may begin prior to the Grant Date (the  "Performance
Period"); and

                      (C)  assign a  "Performance  Percentage"  to each level of
attainment  of perfor  mance  goals  during  the  Performance  Period,  with the
percentage  applicable  to minimum  attainment  being zero  percent (0%) and the
percentage  applicable  to maximum  attainment to be determined by the Committee
from time to time, but not in excess of 200%.

               (ii) If a  Grantee  is  promoted,  demoted  or  transferred  to a
different business unit of the Company during a Performance Period, then, to the
extent the Committee  determines the performance goals or Performance Period are
no longer  appropriate,  the  Committee  may  adjust,  change or  eliminate  the
performance goals or the applicable  Performance  Period as it deems appropriate
in order to make them  appropriate  and  comparable  to the initial  performance
goals or Performance Period.

               (iii) When  granted,  performance  shares  may,  but need not, be
identified with Shares subject to a specific option,  specific Restricted Shares
or specific  SARs of the Grantee  granted under the Plan in a number equal to or
different from the number of the performance  shares so granted.  If performance
shares are so  identified,  then,  unless  otherwise  provided in the applicable
Award Agreement,  the Grantee's  associated  performance  shares shall terminate
upon (A) the expiration,  termination, forfeiture or cancellation of the option,
Restricted Shares or SARs with which the performance shares are identified,  (B)
the  exercise of such option or SARs or (C) the date  Restricted  Shares  become
nonforfeitable.

                                      -12-


<PAGE>



               (iv) The Shares related to the performance  shares awarded to any
Grantee for any Performance  Period shall not have a Fair Market Value in excess
of 100% of the  Grantee's  base annual salary in effect at the time of the grant
of the Award multiplied by the number of years in the Performance Period.

        (h)  Grant of Restricted Shares.

               (i) The  Committee  shall  determine  the amount,  if any, that a
Grantee shall pay for  Restricted  Shares,  subject to the  following  sentence.
Except with respect to Restricted Shares that are treasury shares,  for which no
payment  need be required,  the  Committee  shall  require the Grantee to pay at
least the Minimum Consideration for each Restricted Share. Such payment shall be
made in full by the Grantee  before the  delivery of the shares and in any event
no later than 10 days after the Grant Date for such shares. In the discretion of
the  Committee and to the extent  permitted by law,  payment may also be made in
accordance with Section 9.

               (ii) The  Committee  may,  but need not,  provide that all or any
portion of a Grantee's  Restricted  Shares,  or Restricted  Shares acquired upon
exercise of an option shall be forfeited:

                      (A) except as otherwise specified in the Plan or the Award
Agreement,  upon the Grantee's termination of employment within a specified time
period after the Grant Date, or

                      (B) if  the  Company  or  the  Grantee  does  not  achieve
specified  performance  goals (if any) within a specified  time period after the
Grant Date and before the Grantee's termination of employment, or

                      (C) upon failure to satisfy such other restrictions as the
Committee may specify in the Award Agreement.

               (iii) If Restricted Shares are forfeited, then if the Grantee was
required  to pay for such  shares or acquired  such  Restricted  Shares upon the
exercise  of an  option,  the  Grantee  shall  be  deemed  to have  resold  such
Restricted  Shares  to the  Company  at a price  equal to the  lesser of (x) the
amount paid by the Grantee for such  Restricted  Shares,  or (y) the Fair Market
Value of a Share on the date of such  forfeiture.  The Company  shall pay to the
Grantee  the  required  amount as soon as is  administratively  practical.  Such
Restricted  Shares shall cease to be outstanding,  and shall no longer confer on
the Grantee  thereof any rights as a stockholder of the Company,  from and after
the date the event causing the  forfeiture,  whether or not the Grantee  accepts
the Company's tender of payment for such Restricted Shares.

               (iv) The  Committee  may provide  that the  certificates  for any
Restricted  Shares (x) shall be held  (together  with a stock power  executed in
blank by the  Grantee)  in escrow by the  Secretary  of the  Company  until such
Restricted  Shares become  nonforfeitable or are forfeited or (ii) shall bear an
appropriate legend restricting the transfer of such Restricted Shares. If any

                                      -13-


<PAGE>



Restricted Shares become  nonforfeitable,  the Company shall cause  certificates
for such shares to be issued without such legend.

        (i) Grant of Stock Bonuses.  The Committee may grant Bonus Shares to any
Eligible Employee.

        7.  Non-transferability.  Each  Award  granted  hereunder  shall  not be
assignable  or  transferable  other  than  by will or the  laws of  descent  and
distribution and may be exercised,  during the Grantee's  lifetime,  only by the
Grantee or his or her guardian or legal representative,  except that, subject to
Section  6(c)(vi)  in respect of  incentive  stock  options,  a Grantee may in a
manner and to the extent  permitted  by the  Committee  in its  discretion,  (I)
designate in writing a  beneficiary  to exercise an Award after his or her death
(provided,  however, that no such designation shall be effective unless received
by the office of the Company  designated for that purpose prior to the Grantee's
death) and (ii) transfer the Award to a member of his or her immediate family.

        8.  Exercise.

        (a)  Exercise of Options.

               (i) Subject to Section 4(c)(vii) and except as otherwise provided
in the applicable Award Agreement,  each option shall become exercisable at such
time or times as may be specified by the Committee from time to time.

               (ii) An option  shall be exercised by the delivery to the Company
during the Option  Term of (x)  written  notice of intent to purchase a specific
number of Shares  subject to the  option  and (y)  payment in full of the Option
Price of such specific number of Shares.

               (iii)  Payment of the Option Price may be made by any one or more
of the following means:

                      (A)  cash, personal check or wire transfer;

                      (B) Mature  Shares,  valued at their Fair Market  Value on
        the date of exercise;

                      (C) with the approval of the Committee,  Restricted Shares
        held by the Grantee for at least six months prior to the exercise of the
        option,  each such share  valued at the Fair Market  Value of a Share on
        the date of exercise;

                      (D)  pursuant  to  procedures  previously  approved by the
        Company,  through  the sale of the Shares  acquired  on  exercise of the
        Option  through a  broker-dealer  to whom the Grantee has  submitted  an
        irrevocable  notice of exercise and irrevocable  instructions to deliver
        promptly to the Company the amount of sale or loan  proceeds  sufficient
        to pay for

                                      -14-


<PAGE>



        such Shares,  together with, if requested by the Company,  the amount of
        federal, state, local or foreign withholding taxes payable by Grantee by
        reason of such exercise; or

                      (E) in the discretion of the  Committee,  payment may also
        be made in accordance with Section 9.

The Committee may in its  discretion  specify  that,  if any  Restricted  Shares
("Tendered  Restricted  Shares") are used to pay the Option  Price,  (x) all the
Shares  acquired  on  exercise  of the  option  shall  be  subject  to the  same
restrictions  as the Tendered  Restricted  Shares,  determined as of the date of
exercise  of the option,  or (y) a number of Shares  acquired on exercise of the
option equal to the number of Tendered Restricted Shares shall be subject to the
same restrictions as the Tendered  Restricted Shares,  determined as of the date
of exercise of the option.

        (b)  Exercise of SARs.

               (i)  Subject  to  Sections  4(c)(vii)  and  8(f),  and  except as
otherwise  provided  in  the  applicable  Award  Agreement,  (x)  each  SAR  not
identified with any other Award shall become  exercisable with respect to 25% of
the shares subject thereto on each of the first four  anniversaries of the Grant
Date of such SAR unless the Committee  provides otherwise in the Award Agreement
and (y)  each  SAR  which  is  identified  with any  other  Award  shall  become
exercisable  as and to extent  that the option or  Restricted  Shares with which
such SAR is identified may be exercised or becomes  nonforfeitable,  as the case
may be.

               (ii) SARs  shall be  exercised  by  delivery  to the  Company  of
written notice of intent to exercise a specific number of SARs. Unless otherwise
provided  in the  applicable  Award  Agreement,  the  exercise of SARs which are
identified with Shares subject to an option or Restricted Shares shall result in
the cancellation or forfeiture of such option or Restricted  Shares, as the case
may be, to the extent of such exercise.

               (iii) The  benefit for each SAR  exercised  shall be equal to (x)
the Fair  Market  Value of a Share on the date of such  exercise,  minus (y) the
Strike Price of such SAR. Such benefit shall be payable in cash, except that the
Committee may provide in the Award Agreement that benefits may be paid wholly or
partly in Shares.

        (c)  Exercise of LSARs.

               (i)  Notwithstanding  Section 9, each LSAR shall automatically be
exercised upon a Change of Control unless:

                      (A)  otherwise provided in Sections 8(f), 13 or 21(b),

                      (B) at the time of such Change of Control,  the Grantee is
not a Section 16 Person, or

                                      -15-


<PAGE>



                      (C) the Change of Control  relates to the  approval by the
shareholders  of  the  Company  of  an  Extraordinary   Transaction   which,  if
consummated  as  proposed,  would  result  in  persons  who were the  respective
beneficial  owners of the Common  Stock  immediately  before such  Extraordinary
Transaction,   if  such   Extraordinary   Transaction  were  to  be  consummated
immediately  after such  stockholder  approval (but otherwise in accordance with
the terms  presented  in writing to the  stockholders  of the  Company for their
approval), beneficially owning, directly or indirectly, at least 60% of both the
then-outstanding  common  shares and the  then-outstanding  Voting  Power of the
corporation resulting from such Extraordinary Transaction,  in substantially the
same  proportions  as  their  respective  ownership,   immediately  before  such
Extraordinary Transaction, of the then-outstanding Common Stock and Voting Power
of the Company.

        The exercise of LSARs shall result in the  cancellation of the option or
SARs with which such LSARs are identified, to the extent of such exercise.

               (ii) Within 10 business days after the exercise of any LSAR,  the
Company  shall  pay the  Grantee,  in cash,  an amount  equal to the  difference
between  (x)  the  Change  of  Control  Value  and  (y) in the  case  of an LSAR
identified with an option,  the Option Price of such option,  or, in the case of
an LSAR identified  with a SAR, the Strike Price of such SAR;  provided that the
amount  determined  under this  Section  shall not exceed  any  maximum  benefit
provided in the applicable Award Agreement.

        (d) Payment of  Performance  Shares.  Unless  otherwise  provided in the
Award Agreement with respect to an Award of performance  shares,  if the minimum
performance  goals  applicable  to such  performance  shares have been  achieved
during the  applicable  Performance  Period,  then the Company  shall pay to the
Grantee of such Award that number of Shares equal to the product of:

               (I) the sum of (x) number of performance  shares specified in the
applicable  Award  Agreement  and (y) the number of Shares  that would have been
issuable if such performance shares had been Shares  outstanding  throughout the
Performance Period and the stock dividends,  cash dividends (except as otherwise
provided in the Award  Agreement),  and other  property  paid in respect of such
shares had been  reinvested  in additional  Shares as of each  dividend  payment
date,

multiplied by

               (ii) the Performance  Percentage achieved during such Performance
Period.

The Committee may in its discretion determines that cash be paid in lieu of some
or all of such  Shares.  The amount of cash  payable in lieu of a Share shall be
determined  by valuing  such share at its Fair Market  Value on the business day
next  preceding  the date such  cash is to be paid.  Payments  pursuant  to this
Section shall be made as soon as administratively practical after the end of the
applicable Performance Period. Any performance shares with respect to which the

                                      -16-


<PAGE>



performance  goals  shall not have been  achieved  by the end of the  applicable
Performance Period shall expire.

        (e) Change of Control.  If,  within 12 months after a Change of Control,
the employment of a Grantee shall be terminated by the Company  without Cause or
by the Grantee for Good Reason,  then (I) all unvested Awards shall  immediately
become fully exercisable or payable, as applicable, except as otherwise provided
in  Section  8(f);  provided  that  the  benefit  payable  with  respect  to any
performance share with respect to which the Performance  Period has not ended as
of the date of such  termination of employment  shall be equal to the product of
the Change of Control Value multiplied successively by each of the following:

               (i) a fraction, the numerator of which is the number of whole and
partial  months that have  elapsed  between the  beginning  of such  Performance
Period and the date of such  Change of Control and the  denominator  of which is
the number of whole and partial months in the Performance Period; and

               (ii)  a  percentage  equal  to the  greater  of  (x)  the  target
percentage,  if any,  specified  in the  applicable  Award  Agreement or (y) the
maximum  percentage,  if any,  that  would  be  earned  under  the  terms of the
applicable Award Agreement assuming that the rate at which the performance goals
have been achieved as of the date of such Change of Control would continue until
the end of the Performance Period.

        (f) Pooling  Considerations.  Any  provision of the Plan to the contrary
notwithstanding,  if the Committee determines, in its discretion exercised prior
to a sale  or  merger  of  the  Company  that  in the  Committee's  judgment  is
reasonably  likely to occur,  that the exercise of SARs or LSARs would  preclude
the use of  pooling-of-interests  accounting ("pooling") after the consumma tion
of such sale or merger and that such preclusion of pooling would have a material
adverse  effect on such sale or merger,  the Committee  may either  unilaterally
cancel  such SARs and LSARs  prior to the Change of Control or cause the Company
to pay the benefit  attributable  to such SARs or LSARs in the form of Shares if
the Committee  determines  that such payment would not cause the  transaction to
become ineligible for pooling.

        9. Loans and  Guarantees.  The Committee may in its  discretion  allow a
Grantee to defer  payment to the Company of all or any portion of (I) the Option
Price of an option,  (ii) the purchase price of Restricted  Shares, or (iii) any
taxes associated with the exercise, nonforfeitability of, or payment of benefits
in connection  with,  an Award,  or cause the Company to guarantee a loan from a
third  party to the  Grantee,  in an amount  equal to all or any portion of such
Option Price,  or any related taxes.  Any such payment  deferral or guarantee by
the  Company  shall  be on  such  terms  and  conditions  as the  Committee  may
determine;  provided  that the  interest  rate  applicable  to any such  payment
deferral shall not be more favorable to the Grantee than the terms applicable to
funds borrowed by the Company from time to time.  Notwithstanding the foregoing,
a Grantee  shall not be  entitled  to defer the  payment of such  Option  Price,
purchase price or any related taxes unless the Grantee (I) enters into a binding
obligation to pay the deferred

                                      -17-


<PAGE>



amount and (ii) except with respect to treasury shares, pays upon exercise of an
option or grant of Restricted Shares, as applicable, an amount at least equal to
the Minimum  Consideration  therefor.  If the  Committee has permitted a payment
deferral or caused the Company to  guarantee  a loan  pursuant to this  Section,
then the Committee may require the immediate  payment of such deferred amount or
the  immediate  release of such  guarantee  upon the  Grantee's  termination  of
employment  or if the Grantee  sells or  otherwise  transfers  his or her Shares
purchased pursuant to such deferral or guarantee.  The Committee may at any time
in its  discretion  forgive the  repayment of any or all of the principal of, or
interest on, any such deferred payment obligation.

        10. Notification under Section 83(b). If the Grantee, in connection with
the  exercise  of any  option,  or the  grant of  Restricted  Shares,  makes the
election  permitted under Section 83(b) of the Code to include in such Grantee's
gross income in the year of transfer the amounts  specified in Section  83(b) of
the Code,  then such Grantee shall notify the Company of such election within 10
days of filing the notice of the election with the Internal Revenue Service,  in
addition to any filing and notification  required pursuant to regulations issued
under Section 83(b) of the Code. The Committee may, in connection with the grant
of an Award or at any time  thereafter,  prohibit  a  Grantee  from  making  the
election described above.

        11.  Mandatory Tax Withholding.

        (a) Whenever under the Plan, Shares are to be delivered upon exercise or
payment of an Award or upon Restricted  Shares becoming  nonforfeitable,  or any
other event with respect to rights and benefits hereunder,  the Company shall be
entitled  to require  (I) that the  Grantee  remit an amount in cash,  or in the
Company's discretion,  Mature Shares,  sufficient to satisfy all federal, state,
and local tax withholding requirements related thereto ("Required Withholding"),
(ii) the withholding of such Required  Withholding from  compensation  otherwise
due to the Grantee or from any Shares due to the Grantee under the Plan or (iii)
any combination of the foregoing.

        (b) Any Grantee  who makes a  Disqualifying  Disposition  or an election
under Section 83(b) of the Code shall remit to the Company an amount  sufficient
to satisfy all resulting Required  Withholding;  provided that, in lieu of or in
addition to the  foregoing,  the Company  shall have the right to withhold  such
Required Withholding from compensation  otherwise due to the Grantee or from any
Shares or other payment due to the Grantee under the Plan.

        12.  Elective Share Withholding.

        (a)  Subject  to the  following  subsection,  a  Grantee  may  elect the
withholding  ("Share  Withholding")  by the  Company  of a portion of the Shares
otherwise  deliverable  to such  Grantee  upon the  exercise of an Award or upon
Restricted  Shares becoming  non-forfeitable  (each, a "Taxable Event") having a
Fair Market Value equal to (i) the minimum amount  necessary to satisfy Required
Withholding  liability  attributable  to the  Taxable  Event;  or (ii)  with the
Committee's prior approval,  a greater amount, not to exceed the estimated total
amount of such Grantee's tax liability with respect to the Taxable Event.

                                      -18-


<PAGE>



        (b) Each Share  Withholding  election  shall be subject to the following
conditions:

               (i) any Grantee's  election  shall be subject to the  Committee's
discretion to revoke the Grantee's right to elect Share  Withholding at any time
before the  Grantee's  election if the Committee has reserved the right to do so
in the Award Agreement;

               (ii) the  Grantee's  election  must be made  before the date (the
"Tax Date") on which the amount of tax to be withheld is determined; and

               (iii)  the Grantee's election shall be irrevocable.

        13.  Termination of Employment.

        (a) For Cause.  If a Grantee's  employment is terminated for Cause,  (I)
the  Grantee's  Restricted  Shares  that  are  forfeitable  shall  thereupon  be
forfeited,  subject to the provisions of Sec tion 6(h)(iii)  regarding repayment
of certain amounts to the Grantee;  and (ii) any unexercised  option, SAR, LSAR,
or performance share shall terminate effective immediately upon such termination
of employment.

        (b) On  Account  of  Retirement.  Except as  otherwise  provided  by the
Committee  in the Award  Agreement,  if a  Grantee's  employment  terminates  on
account of Retirement, then:

               (i) the Grantee's  Restricted  Shares that were forfeitable shall
thereupon become nonforfeitable;

               (ii) any unexercised option or SAR, whether or not exercisable on
the date of such  termination  of employment,  may be exercised,  in whole or in
part, within the first three (3) years after such termination of employment (but
only during the Option Term) by the Grantee; and

               (iii) any unexercised performance share may be exercised in whole
or in part, at any time within six months after such  termination  of employment
on account of Retirement by the Grantee;  provided that the benefit payable with
respect to any performance  share with respect to which the  Performance  Period
has not ended as of the date of such  termination  of  employment  on account of
Retirement  shall be equal to the  product of the Fair  Market  Value of a Share
Value multiplied successively by each of the following:

                      (1) a fraction,  the  numerator  of which is the number of
months  (including  as a whole month any partial  month) that have elapsed since
the beginning of such  Performance  Period until the date of such termination of
employment and the denominator of which is the number of months  (including as a
whole month any partial month) in the Performance Period; and

                      (2) a  percentage  determined  in  the  discretion  of the
Committee that would be earned under the terms of the applicable Award Agreement
assuming that the rate at which the

                                      -19-


<PAGE>



performance  goals  have been  achieved  as of the date of such  termination  of
employment  would continue until the end of the Performance  Period,  or, if the
Committee elects to compute the benefit after the end of the Performance Period,
the Performance Percentage, as determined by the Committee,  attained during the
Performance Period for the performance share.

        (c) On Account of Death.  Except as otherwise  provided by the Committee
in the Award  Agreement,  if a  Grantee's  employment  terminates  on account of
death, then:

               (i) the Grantee's  Restricted  Shares that were forfeitable shall
thereupon become nonforfeitable;

               (ii) any unexercised option or SAR, whether or not exercisable on
the date of such  termination  of employment,  may be exercised,  in whole or in
part,  within the first 12 months after such termination of employment (but only
during the Option Term) by the Grantee or, after his or her death, by (A) his or
her  personal  representative  or by the  person to whom the  option or SAR,  as
applicable,  is  transferred  by will or the  applicable  laws  of  descent  and
distribution,  or (B) the Grantee's  beneficiary  designated in accordance  with
Sections 6(c)(vii) or 7; and

               (iii) any unexercised performance share may be exercised in whole
or in part, at any time within six months after such  termination  of employment
on account of death by the Grantee or,  after the  Grantee's  death,  by (A) his
personal  representative  or by the  person  to whom  the  performance  share is
transferred by will or the applicable laws of descent and  distribution,  or (B)
the Grantee's beneficiary designated in accordance with Section 7; provided that
the benefit payable with respect to any performance  share with respect to which
the  Performance  Period  has not  ended as of the date of such  termination  of
employment  on account of death shall be equal to the product of the Fair Market
Value of a Share Value multiplied successively by each of the following:

                      (1) a fraction,  the  numerator  of which is the number of
months  (including  as a whole month any partial  month) that have elapsed since
the beginning of such  Performance  Period until the date of such termination of
employment and the denominator of which is the number of months  (including as a
whole month any partial month) in the Performance Period; and

                      (2) a  percentage  determined  in  the  discretion  of the
Committee that would be earned under the terms of the applicable Award Agreement
assuming that the rate at which the  performance  goals have been achieved as of
the date of such  termination of employment  would continue until the end of the
Performance Period, or, if the Committee elects to compute the benefit after the
end of the Performance Period, the Performance Percentage,  as determined by the
Committee, attained during the Performance Period for the performance share.

        (d) On  Account  of  Disability.  Except as  otherwise  provided  by the
Committee  in the Award  Agreement,  if a  Grantee's  employment  terminates  on
account of Disability, then:


                                      -20-


<PAGE>



               (i) the Grantee's  Restricted  Shares that were forfeitable shall
thereupon become nonforfeitable;

               (ii) any unexercised option or SAR, whether or not exercisable on
the date of such  termination  of employment,  may be exercised,  in whole or in
part,  within the first 12 months after such termination of employment (but only
during the Option Term) by the Grantee or, after his or her death, by (A) his or
her  personal  representative  or by the  person to whom the  option or SAR,  as
applicable,  is  transferred  by will or the  applicable  laws  of  descent  and
distribution,  or (B) the Grantee's  beneficiary  designated in accordance  with
Sections 6(c)(vii) or 7; and

               (iii) any unexercised performance share may be exercised in whole
or in part, at any time within six months after such  termination  of employment
on account of Disability by the Grantee or, after the  Grantee's  death,  by (A)
his personal  representative  or by the person to whom the performance  share is
transferred by will or the applicable laws of descent and  distribution,  or (B)
the Grantee's beneficiary designated in accordance with Section 7; provided that
the benefit payable with respect to any performance  share with respect to which
the  Performance  Period  has not  ended as of the date of such  termination  of
employment  on account of  Disability  shall be equal to the product of the Fair
Market Value of a Share Value multiplied successively by each of the following:

                      (1) a fraction,  the  numerator  of which is the number of
months  (including  as a whole month any partial  month) that have elapsed since
the beginning of such  Performance  Period until the date of such termination of
employment and the denominator of which is the number of months  (including as a
whole month any partial month) in the Performance Period; and

                      (2) a  percentage  determined  in  the  discretion  of the
Committee that would be earned under the terms of the applicable Award Agreement
assuming that the rate at which the  performance  goals have been achieved as of
the date of such  termination of employment  would continue until the end of the
Performance Period, or, if the Committee elects to compute the benefit after the
end of the Performance Period, the Performance Percentage,  as determined by the
Committee, attained during the Performance Period for the performance share.

        (e) Any Other Reason.  Except as otherwise  provided by the Committee in
the Award Agreement,  if a Grantee's employment  terminates for any reason other
than for Cause, Retirement, death, or Disability, then:

               (i) the  Grantee's  Restricted  Shares  (and any SARs  identified
therewith),  to the extent forfeitable on the date of the Grantee's  termination
of employment), shall be forfeited on such date;

               (ii) any  unexercised  option or SAR (other than a SAR identified
with a  Restricted  Share  or  performance  share),  to the  extent  exercisable
immediately   before  the  Grantee's   termination  of   employment,   Grantee's
termination of employment) may be exercised in whole or

                                      -21-


<PAGE>



in part, not later than three months after such  termination of employment  (but
only during the Option Term); and

               (iii) the Grantee's  performance  shares (and any SARs identified
therewith)  shall  become  non-forfeitable  and may be  exercised in whole or in
part, but only if and to the extent determined by the Committee.

        (f)  Extended  Exercisability.  If  the  Grantee  has  entered  into  an
agreement  with the Company  not to sell any Shares (or the  capital  stock of a
successor  to the Company) for a specified  period after the  consummation  of a
business  combination between the Company and another corporation or entity (the
"Specified Period"),  such option may be exercised in whole or in part until the
later of the end of the  post-termination  period specified in subparagraph (b),
(C) or (d) of this Section, as applicable,  or 10 business days after the end of
the Specified Period.

        (g) Extension of Term.  In the event of a  termination  of the Grantee's
employment  other  than  for  Cause,  the  term  of any  Award  (whether  or not
exercisable  immediately  before such termination)  which would otherwise expire
after the Grantee's  termination  of employment but before the end of the period
following such termination of employment  described in  subparagraphs  (b), (c),
and  (d) of  this  Section  for  exercise  of  Awards  may,  in the  Committee's
discretion,  be extended so as to permit any  unexercised  portion thereof to be
exercised at any time within such period.  The Committee may further  extend the
period of  exercisability  to  permit  any  unexercised  portion  thereof  to be
exercised within a specified period provided by the Committee.

        14. Plans of Foreign  Subsidiaries.  The  Committee  may  authorize  any
foreign  Subsidiary to adopt a plan for granting Awards  ("Foreign  Plan").  All
Awards  granted  under such  Foreign  Plan shall be treated as grants  under the
Plan. Such Foreign Plans shall have such provisions as the Committee permits not
inconsistent  with the  provisions of the Plan.  Awards  granted under a Foreign
Equity Incentive Plans shall be governed by the terms of the Plan, except to the
extent that the  provisions  of the Foreign Plan are more  restrictive  than the
provisions of the Plan, in which case the Foreign Plan shall control.

        15.  Substituted  Awards.  If the Committee  cancels any Award  (whether
granted  under this Plan or any plan of any entity  acquired by the Company or a
Subsidiary), the Committee may in its discretion substitute a new Award therefor
upon such terms and  conditions  consistent  with the Plan as the  Committee may
determine; provided, that (a) the Option Price of any new option, and the Strike
Price  of any new  SAR,  shall  not be less  than  100%  (110% in the case of an
incentive  stock  option  granted to a 10% Owner) of the Fair Market  Value of a
Share on the date of grant of the new  Award;  and (b) the Grant Date of the new
Award shall be the date on which such new Award is granted.

        16.  Securities Law Matters.  If the Committee deems necessary to comply
with any  applicable  securities  law,  the  Committee  may  require  a  written
investment  intent  representation  by  the  Grantee  and  may  require  that  a
restrictive legend be affixed to certificates for Shares. If,

                                      -22-


<PAGE>



based upon the advice of counsel for the Company,  the Committee determines that
the exercise or  nonforfeitability  of, or delivery of benefits pursuant to, any
Award would violate any applicable  provision of (I) federal or state securities
laws or (ii) the listing  requirements  of any national  securities  exchange or
national  market  system  on  which  are  listed  any  of the  Company's  equity
securities, then the Committee may postpone any such exercise, nonforfeitability
or delivery, as applicable,  but the Company shall use all reasonable efforts to
cause such  exercise,  nonforfeitability  or  delivery  to comply  with all such
provisions at the earliest practicable date.

        17. No Employment Rights. Neither the establishment of the Plan, nor the
grant of any Award shall (a) give any  Grantee  the right to remain  employed by
the Company or any  Subsidiary or to any benefits not  specifically  provided by
the Plan or (b) modify the right of the  Company  or any  Subsidiary  to modify,
amend, or terminate any employee benefit plan.

        18. No Rights as a Stockholder. A Grantee shall not have any rights as a
stockholder  of the Company  with respect to the Shares  (other than  Restricted
Shares)  which may be  deliverable  upon exercise or payment of such Award until
such shares have been delivered to him or her.  Restricted Shares,  whether held
by a Grantee or in escrow by the  Secretary of the Company,  shall confer on the
Grantee all rights of a stockholder of the Company, except as otherwise provided
in the Plan.  At the time of a grant of  Restricted  Shares,  the  Committee may
require  the  payment of cash  dividends  thereon  to be  deferred  and,  if the
Committee so  determines,  reinvested in  additional  Restricted  Shares.  Stock
dividends and deferred cash dividends  issued with respect to Restricted  Shares
shall  be  subject  to the same  restrictions  and  other  terms as apply to the
Restricted Shares with respect to which such dividends are issued. The Committee
may in  its  discretion  provide  for  payment  of  interest  on  deferred  cash
dividends.

        19. Nature of Payments.  Awards shall be special  incentive  payments to
the  Grantee  and shall not be taken  into  account in  computing  the amount of
salary or  compensation  of the Grantee for purposes of determining any pension,
retirement,   death  or  other  benefit  under  (a)  any  pension,   retirement,
profit-sharing,  bonus,  insurance or other employee benefit plan of the Company
or any Subsidiary or (b) any agreement between (I) the Company or any Subsidiary
and (ii) the Grantee, except as such plan or agreement shall otherwise expressly
provide.

        20. Non-uniform Determinations. The Committee's determinations under the
Plan need not be  uniform  and may be made by the  Committee  selectively  among
persons who  receive,  or are eligible to receive,  Awards,  whether or not such
persons  are  similarly  situated.   Without  limiting  the  generality  of  the
foregoing,  the  Committee  shall be  entitled,  to enter into  non-uniform  and
selective Award Agreements as to (a) the identity of the Grantees, (b) the terms
and provisions of Awards, and (C) the treatment of terminations of employment.


                                      -23-


<PAGE>



        21.  Adjustments.

        (a)  The Committee shall make equitable adjustment of:

               (i) the aggregate  numbers and kind of Shares available under the
Plan for Awards in general and for the grant of incentive stock options,

               (ii) the number and kind of Shares,  SARs, or performance  shares
covered by an Award, and

               (iii) the Option Price of all outstanding  options and the Strike
Price of all outstanding SARs,

to  reflect  a  stock  dividend,   stock  split,   reverse  stock  split,  share
combination,   recapitalization,  merger,  consolidation,  spin-off,  split-off,
reorganization,  rights  offering,  liquidation or similar  event,  of or by the
Company.

        (b)  Notwithstanding  any provision in this Plan or any Award Agreement,
in the event of a Change in Control  within the meaning of Section  2(f)(iii) in
connection with which the holders of Common Stock receive shares of common stock
of the surviving or successor  corporation  that are registered under Section 12
of the 1934 Act:

               (I)  there  shall  be   substituted   for  each  option  and  SAR
outstanding on the date of the consummation of corporate transaction relating to
such Change of Control,  a new option or SAR, as the case may be, reflecting the
number and class of shares into which each outstanding  Share shall be converted
pursuant to such Change in Control and  providing  each Grantee with rights that
are substantially  identical to those under this Plan in all material  respects;
and

               (ii) no LSAR  shall be  exercised  if the  constituent  documents
relating to the Change of Control  provide for such a substitution of the option
or SAR with which such LSAR is identified.

In the event of any such substitution,  the purchase price per share in the case
of an option and the Strike  Price in the case of an SAR shall be  appropriately
adjusted  by  the  Committee,  such  adjustments  to be  made  in  the  case  of
outstanding options and SARs without a change in the aggregate purchase price or
Strike Price.

        22.  Amendment  of the  Plan.  The  Board  may from  time to time in its
discretion  amend the Plan without the approval of the  Company's  stockholders,
except  (I) as such  stockholder  approval  may be  required  under the  listing
requirements  of any securities  exchange or national market system on which are
listed the Company's  equity  securities  and (ii) that to Board may not without
the approval of the  Company's  stockholders  amend the Plan to (x) increase the
total

                                      -24-


<PAGE>



number  of  shares  reserved  for the  purposes  of the Plan or (y)  change  the
employees or class of employees eligible to participate in the Plan.

        23.  Termination  of the Plan.  The Plan  shall  terminate  on the tenth
(10th)  anniversary  of the Effective  Date or at such earlier time as the Board
may determine.  No termination shall affect any Award then outstanding under the
Plan.

        24. No Illegal Transactions. The Plan and all Awards granted pursuant to
it are  subject to all  applicable  laws and  regulations.  Notwithstanding  any
provision of the Plan or any Award,  Grantees shall not be entitled to exercise,
or receive  benefits under, any Award, and the Company shall not be obligated to
deliver  any  Shares or  deliver  benefits  to a Grantee,  if such  exercise  or
delivery  would  constitute  a  violation  by the  Grantee or the Company of any
applicable law or regulation.

        25.  Controlling  Law. The law of the State of Delaware,  except its law
with respect to choice of law, shall control all matters relating to the Plan.

        26.  Severability.  If any part of the Plan is  declared by any court or
governmental   authority  to  be  unlawful  or  invalid,  such  unlawfulness  or
invalidity  shall not invalidate any other part of the Plan. Any Section or part
of a Section so  declared  to be  unlawful or invalid  shall,  if  possible,  be
construed  in a manner  which will give  effect to the terms of such  Section or
part of a Section to the fullest  extent  possible  while  remaining  lawful and
valid.

                                      -25-