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                                                                    EXHIBIT 10.2


                            BEVERLY ENTERPRISES, INC.
                          1997 LONG-TERM INCENTIVE PLAN
                  (As Amended and Restated as of June 1, 2001)

Section 1.  Purpose

         Beverly Enterprises, Inc. (hereinafter referred to as the "Company"), a
Delaware corporation, hereby establishes the 1997 Long-Term Incentive Plan (the
"Plan") to promote the interests of the Company and its stockholders through the
(i) attraction and retention of executive officers and other key employees
essential to the success of the Company; (ii) motivation of executive officers
and other key employees using performance-related incentives linked to
longer-range performance goals and the interests of Company stockholders; and
(iii) enabling of such employees to share in the long-term growth and success of
the Company. The Plan permits the grant of Nonqualified Stock Options, Incentive
Stock Options (intended to qualify under Section 422 of the Internal Revenue
Code of 1986, as amended), Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, Performance Shares, Performance Units, Bonus Stock, and
any other Stock Unit Awards or stock-based forms of awards as the Committee may
determine in its sole and complete discretion at the time of grant.

Section 2.  Definitions

         Except as otherwise defined in the Plan, the following terms shall have
the meanings set forth below:

         2.1 "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 under the Exchange Act.

         2.2 "Agreement" means a written agreement implementing the grant of
each Award signed by an authorized officer of the Company and by the
Participant.

         2.3 "Award" means, individually or collectively, a grant under this
Plan of any one of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
Shares, Performance Units, Bonus Stock or Other Stock Unit Awards.

         2.4 "Award Date" or "Grant Date" means the date on which an Award is
made by the Committee under this Plan.

         2.5 "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 under the Exchange Act.

         2.6 "Board" or "Board of Directors" means the Board of Directors of the
Company.



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         2.7 "Bonus Stock" means an Award granted pursuant to Section 10
of the Plan expressed as a Share which may or may not be subject to
restrictions.

         2.8 "Cashless Exercise" means the exercise of an Option by the
Participant through the use of a brokerage firm to make payment to the Company
of the Exercise Price, either from the proceeds of a loan to the Participant
from the brokerage firm or from the proceeds of the sale of Stock issued
pursuant to the exercise of the Option, following which, upon receipt of such
payment, the Company delivers the exercised Shares to the brokerage firm.

         2.9 "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:

                  (a) Any person, corporation or other entity or group,
         including any "group" as defined in Section 13(d)(3) of the Exchange
         Act, becomes the beneficial owner of Shares having 30% or more of the
         total number of votes that may be cast for the election of directors of
         the Company; or

                  (b) As the result of', or in connection with, any
         tender or exchange offer, merger or other business combination, sale of
         assets or contested election, or any combination of the foregoing (a
         "Transaction"), the persons who were directors of the Company before
         the Transaction shall cease to constitute a majority of the Board of
         Directors of the Company or any successor to the Company or its assets;
         or

                  (c) If at any time (i) the Company shall consolidate
         with, or merge with, any other Person and the Company shall not be the
         continuing or surviving corporation, (ii) any Person shall consolidate
         with, or merge with, the Company, and the Company shall be the
         continuing or surviving corporation and in connection therewith, all or
         part of the outstanding stock shall be changed into or exchanged for
         stock or other securities of any other Person or cash or any other
         property, (iii) the Company shall be a party to a statutory share
         exchange with any other Person after which the Company is a Subsidiary
         of any other Person, or (iv) the Company shall sell or otherwise
         transfer 50% or more of the assets or earnings power of the Company and
         its Subsidiaries (taken as a whole) to any Person or Persons; provided,
         however, that notwithstanding anything to the contrary set forth in
         such plan, a Change in Control shall not include either (a) the
         Distribution or Merger, or (b) any transfer to a consolidated
         subsidiary, reorganization, spin-off, split-up, distribution, or other
         similar or related transaction(s) or any combination of the foregoing
         in which the core business and assets of the Company and its
         subsidiaries (taken as a whole) are transferred to another entity
         ("Controlled") with respect to which (1) the majority of the Board of
         Directors of the Company (as constituted immediately prior to such
         transaction(s)) also serve as directors of Controlled and immediately
         after such transaction(s) constitute a majority of Controlled's board
         of directors, and (2) more than 70% of the shareholders of the Company
         (immediately prior to such transaction(s)) become shareholders or other
         owners of Controlled and immediately after the transaction(s) control
         more than 70% of the ownership and voting rights of Controlled.

         2.10 "Code" means the Internal Revenue Code of 1986, as amended from
time to time.


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         2.11 "Committee" means the Compensation Committee of the Board which
will administer the Plan pursuant to Section 3 herein, provided however, any
member who is not both a "Non-Employee director" within the meaning of Rule
16b-3 and an "outside director" within the meaning of Section 162(m) shall not
serve as a Committee member for the purpose of this Plan unless there would
otherwise be less than two members of the Committee.

         2.12 "Common Stock" or "Stock" means the Common Stock of the Company,
with a par value of $.10 per share, or such other security or right or
instrument into which such Common Stock may be changed or converted in the
future.

         2.13 "Company" means Beverly Enterprises, Inc., including all
Affiliates and wholly owned Subsidiaries, or any successor thereto.

         2.14 "Covered Participant" means a Participant who is a "covered
employee" as identified in Section 162(m)(3) of the Code, and the regulations
promulgated thereunder, or who the Committee believes will be such a covered
employee for a Performance Period.

         2.15 "Department" means the Compensation and Benefits Department of the
Company.

         2.16 "Designated Beneficiary" means the beneficiary designated by the
Participant, pursuant to procedures established by the Department, to receive
amounts due to the Participant in the event of the Participant's death. If the
Participant does not make an effective designation, then the Designated
Beneficiary will be deemed to be the Participant's estate.

         2.17 "Disability" means (i) the mental or physical disability, either
occupational or non-occupational in origin, of the Participant defined as "Total
Disability" in the Disability Plan of the Company currently in effect and as
amended from time to time; or (ii) a determination by the Committee of "Total
Disability" based on medical evidence that precludes the Participant from
engaging in any occupation or employment for wage or profit for at least twelve
months and appears to be permanent.

         2.18 "Divestiture" means the sale of, outsourcing of', or closing by,
the Company of the business operations in which the Participant is employed, or
the elimination of the Participant's position at the Company's discretion.

         2.19 "Early Retirement" means retirement of a Participant from
employment with the Company after age 55, but prior to age 65, as approved by
the Committee.

         2.20 "Exchange Act" means the Securities Exchange Act of 1934, as in
effect and amended from time to time, or any successor statute thereto, together
with any rules, regulations, and interpretations promulgated thereunder or with
respect thereto.

         2.21  "Executive Officer" means any employee designated by the
Company as an officer or any employee covered by Rule 16b-3 of the Exchange Act.

         2.22 "Exercise Price" means the price per share determined on the Grant
Date by the Committee, provided that the Exercise Price shall not be less than
100% of Fair Market Value on



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the Grant Date; except that the Committee in its sole discretion may waive the
preceding limitation with respect to Awards granted upon the assumption of', or
in substitution for, similar awards of another company with which the Company
participates in an acquisition, separation or similar corporate transaction.

         2.23 "Fair Market Value" means, on a given date, the closing price of
Stock as reported on the New York Stock Exchange composite tape on such day or,
if no Shares were traded on the New York Stock Exchange on such day, then on the
next preceding day that Stock was traded on such exchange, all as reported by
such source as the Committee may select.

         2.24 "Full-time Employee" means an employee designated by the Company's
Department as being a "permanent, full-time employee" who is eligible for all
plans and programs of the Company provided for such employees. This designation
excludes all part-time, temporary, or contract employees or consultants to the
Company.

         2.25 "Incentive Stock Option" or "ISO" means an option to purchase
Stock, granted under Section 6 herein, which is designated as an incentive stock
option and is intended to meet the requirements of Section 422 of the Code.

         2.26 "Key Employee" means an officer or other key employee of the
Company or its Subsidiaries, who, in the opinion of the Committee, can
contribute significantly to the growth and profitability of, or perform services
of major importance to, the Company and its Subsidiaries.

         2.27 "Nonqualified Stock Option" or "NQSO" means an option to purchase
Stock, granted under Section 6 herein, which is not intended to be an Incentive
Stock Option.

         2.28 "Normal Retirement" means the retirement of any Participant at age
65 or at some earlier date if approved by the Committee.

         2.29 "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.

         2.30 "Other Stock Unit Award" means awards, granted pursuant to Section
11, of Stock or other securities that are valued in whole or in part by
reference to, or are otherwise based on, Shares or other securities of the
Company.

         2.31 "Participant" means a Key Employee or consultant, or service
provider to the Company who has been granted an Award under the Plan, or as the
context requires, a Permitted Transferee.

         2.32 "Performance Award" means a performance-based Award, which may be
in the form of either Performance Shares or Performance Units.

         2.33 "Performance Criteria" or "Performance Goals" or "Performance
Measures" means the objectives established by the Committee for a Performance
Period, for the purpose of determining when an Award subject to such objectives
is earned, which shall consist of any one or more of the following business or
financial goals of the Company: absolute or relative increases in total
stockholder return, economic value added, return on capital employed,



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revenues, sales, net income, earnings per share, return on equity, cash flow,
operating margin, or net worth of the Company, any of its Subsidiaries,
divisions or other areas of the Company.

         2.34 "Performance Period" means the time period designated by the
Committee during which performance goals must be met.

         2.35 "Performance Share" means an Award, designated as a Performance
Share, granted to a Participant pursuant to Section 9 herein, the value of which
is determined, in whole or in part, by the value of Company Stock in a manner
deemed appropriate by the Committee and described in the Agreement.

         2.36 "Performance Unit" means an Award, designated as Performance Unit,
granted to a Participant pursuant to Section 9 herein, the value of which is
determined, in whole or in part, by the attainment of pre-established goals
relating to the Company's financial or operating performance as deemed
appropriate by the Committee and described in the Agreement.

         2.37 "Permitted Transferee" means any transferee of a Nonqualified
Stock Option pursuant to a transfer that is approved by the Committee in
accordance with Section 14.4 and the Plan.

         2.38 "Period of Restriction" means the period during which the transfer
of Shares of Restricted Stock is restricted, pursuant to Section 8 herein.

         2.39 "Person" shall have the meaning ascribed to such term in Section
3(a) (9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof',
including a "group" as defined in Section 13(d).

         2.40 "Plan" means the Beverly Enterprises, Inc. 1997 Long-Term
Incentive Plan as herein described and as hereafter from time to time amended.

         2.41 "Restricted Stock" means an Award of Stock granted to a
Participant pursuant to Section 8 herein.

         2.42 "Restricted Stock Unit" means a fixed or variable right to acquire
Stock, which may or may not be subject to restrictions, contingently awarded
under Section 8 of the Plan.

         2.43 "Rule 16b-3" means Rule 16b-3 of the General Rules and Regulations
under the Exchange Act, as amended from time to time, or any successor thereto.

         2.44 "Section 16" means Section 16 of the Exchange Act, or any
successor section under the Exchange Act, as amended from time to time and as
interpreted by regulations and rules promulgated thereunder from time to time.

         2.45 "Section 162(m)" means Section 162(m) of the Code, or any
successor section under the Code, as amended from time to time and as
interpreted by final or proposed regulations promulgated thereunder from time to
time.



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         2.46 "Securities Act" means the Securities Act of 1933 and the rules
and regulations promulgated thereunder, or any successor law, as amended from
time to time.

         2.47 "Shares" means shares of the Common Stock of the Company.

         2.48 "Stock Appreciation Right" means the right to receive an amount
equal to the excess of the Fair Market Value of a share of Stock (as determined
on the date of exercise) over the Exercise Price of a related Option or the Fair
Market Value of the Stock on the Date of Grant of the Stock Appreciation Right.

         2.49 "Subsidiary" means a corporation in which the Company owns, either
directly or through one or more of its Subsidiaries, at least 50% of the total
combined voting power of all classes of stock.

Section 3.  Administration

         3.1 The Committee. The Plan shall be administered and interpreted by
the Committee which shall have full authority and all powers necessary or
desirable for such administration. The express grant in this Plan of any
specific power to the Committee shall not be construed as limiting any power or
authority of the Committee. In its sole and complete discretion the Committee
may adopt, alter, suspend and repeal such administrative rules, regulations,
guidelines, and practices governing the operation of the Plan as it shall from
time to time deem advisable. In addition to any other powers and subject to the
provisions of the Plan, the Committee shall have the following specific powers:
(i) to determine the terms and conditions upon which the Awards may be made and
exercised; (ii) to determine all terms and provisions of each Agreement, which
need not be identical for all types of Awards nor for the same type of Award to
different participants; (iii) to construe and interpret the Agreements and the
Plan; (iv) to establish, amend, or waive rules or regulations for the Plan's
administration; (v) to accelerate the exercisability of any Award, the length of
a Performance Period or the termination of any Period of Restriction; (vi) to
provide for the grant of Awards upon the assumption of, or in substitution for,
similar awards granted by an acquired or other company with which the Company
participates in an acquisition, separation, or similar corporate transaction;
and (vii) to make all other determinations and take all other actions necessary
or advisable for the administration of the Plan. The Committee may take action
by a meeting in person, by unanimous written consent, or by meeting with the
assistance of communications equipment which allows all Committee members
participating in the meeting to communicate in either oral or written form. The
Committee may seek the assistance or advice of any persons it deems necessary to
the proper administration of the Plan.

         3.2 Selection of Participants. The Committee shall have sole and
complete discretion in determining those Key Employees or other persons who
shall participate in the Plan. The Committee may request recommendations for
individual Awards from the Chief Executive Officer of the Company and may
delegate to the Chief Executive Officer of the Company the authority to make
Awards to Participants who are not Executive Officers of the Company or Covered
Participants, subject to a fixed maximum Award amount for such a group and a
maximum Award amount for any one Participant, as determined by the Committee.
Awards made to the Executive Officers or Covered Participants shall be
determined by the Committee.



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         3.3 Committee Decisions. All determinations and decisions made
by the Committee pursuant to the provisions of the Plan shall be final,
conclusive, and binding upon all persons, including the Company, its
stockholders, employees, Participants, and Designated Beneficiaries, except when
the terms of any sale or award of shares of Stock or any grant of rights or
Options under the Plan are required by law or by the Articles of Incorporation
or Bylaws of the Company to be approved by the Company's Board of Directors or
stockholders prior to any such sale, award or grant.

         3.4 Rule 16b-3 Requirements. Notwithstanding any other provision
of the Plan, the Committee may impose such conditions on any Award, and the
Board may amend the Plan in any such respects, as may be required to satisfy the
requirements of Rule 16b-3 or Section 162(m).

         3.5 Indemnification of Committee. In addition to such other
rights of indemnification as they may have as directors or as members of the
Committee, the members of the Committee shall be indemnified by the Company
against reasonable expenses incurred from their administration of the Plan. Such
reasonable expenses include, but are not limited to, attorneys' fees actually
and reasonably incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan or any Award granted or made hereunder, and against all
reasonable amounts paid by them in settlement thereof or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, if such
members acted in good faith and in a manner which they believed to be in, and
not opposed to, the best interests of the Company and its Subsidiaries.

Section 4.  Eligibility

         The Committee in its sole and complete discretion shall determine the
Key Employees, including officers, or other persons who shall be eligible for
participation under the Plan, subject to the following limitations:

         (i) no Non-Employee director of the Company shall be eligible to
         participate under the Plan; (ii) no member of the Committee shall be
         eligible to participate under the Plan; (iii) no person owning,
         directly or indirectly, more than 5% of the total combined voting power
         of all classes of stock of the Company shall be eligible to participate
         under the Plan; and (iv) only Full-Time Employees shall be eligible to
         receive Incentive Stock Options under the Plan; provided, however, that
         Incentive Stock Options may be granted for ISOs assumed pursuant to the
         Employee Benefits Agreement, without regard to whether the grantee is a
         Full-Time Employee.

Section 5.  Shares Subject to the Plan

         5.1 Number of Shares. The maximum aggregate number of Shares
that may be issued pursuant to Awards made under the Plan shall not exceed
fifteen million (15,000,000) Shares, which may be in any combination of Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
Shares, Performance Units, Bonus Stock, or Other Stock




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Unit Awards. No more than seven million, five hundred thousand (7,500,000)
Shares may be issued pursuant to Awards of Restricted Stock, Restricted Stock
Units, Performance Shares, Performance Units, Bonus Stock or Other Stock Unit
Awards. Shares of Common Stock may be available from the authorized but unissued
Shares or Shares acquired by the Company, including Shares purchased in the open
market. Except as provided in this Section 5, the issuance of Shares in
connection with the exercise of', or as other payment for, Awards under the Plan
shall reduce the number of Shares available for future Awards under the Plan.

         5.2 Additional Limitations. Notwithstanding the foregoing provisions of
this Section 5, (a) the maximum number of shares of Common Stock in respect of
which Incentive Stock Options may be granted shall be seven million, five
hundred thousand (7,500,000) Shares, and (b) no individual Participant may
receive in any calendar year Stock Options and Stock Appreciation Rights
relating, in the aggregate, to more than 1.1 million shares of Common Stock plus
any Unused Carryover (as defined below). In the event of a change in the shares
of Common Stock of the Company that is limited to a change in the designation
thereof to "Capital Stock" or other similar designation, or to a change in the
par value thereof', or from par value to no value, without increase or decrease
in the number of issued shares, the shares resulting from any such change shall
be deemed to be shares of Common Stock for purposes of the Plan. No fractional
shares of Common Stock shall be issued under the Plan unless the Committee
determines otherwise.

         5.3 Lapsed Awards of Forfeited Shares. Except as provided below, in the
event that (i) any Option or other Award granted under the Plan terminates,
expires, or lapses for any reason other than exercise of the Award, or is
settled in cash in lieu of Common Stock, or (ii) if Shares issued pursuant to
the Awards are canceled or forfeited for any reason, such Shares subject to such
Award shall thereafter be again available for grant of an Award under the Plan;
provided further that if', after grant, the Exercise Price of an Option (or the
base price of a Stock Appreciation Right) is reduced, the transaction shall be
treated as a cancellation of the Option (or the Stock Appreciation Right) and a
grant of a new Option (or Stock Appreciation Right) for purposes of Section 5.2.
Notwithstanding the above, with respect to Covered Participants, Options may not
be granted that exceed the maximum number of Shares for which Options may be
issued to the Participants hereunder, and canceled Shares shall continue to be
counted against the maximum aggregate number of Shares that may be granted
pursuant to Awards.

         5.4 Unused Carryover. For purposes of this Plan, "Unused Carryover"
means, for any calendar year, the maximum number of shares of Common Stock with
respect to which Options and/or Stock Appreciation Rights could have been
granted to the Participant under the Plan in the previous calendar year in
accordance with this Section 5 (taking into account any Unused Carryover
available in such previous calendar year), reduced by the number of shares of
Common Stock with respect to which Options and/or Stock Appreciation Rights
actually were granted to the Participant in such previous calendar year. If the
Participant is not eligible for an Award in a calendar year in accordance with
the terms and conditions of the Plan, that calendar year shall be disregarded
for purposes of this Section 5.4, and an Unused Carryover shall not be created
or increased in that calendar year.

         5.5 Delivery of Shares as Payment. In the event a Participant pays for
any Option or other Award granted under the Plan through the delivery of
previously acquired Shares, the



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number of Shares available for Awards under the Plan shall be increased by the
number of shares surrendered by the Participant.

         5.6 Capital Adjustments. The number and class of Shares subject to each
outstanding Award, the Exercise Price and the aggregate number, type and class
of Shares for which Awards thereafter may be made shall be subject to
adjustment, if any, as the Committee deems appropriate, based on the occurrence
of a number of specified and non-specified events. Such specified events are
discussed in this Section 5.6, but such discussion is not intended to provide an
exhaustive list of such events which may necessitate such adjustments. In
addition, the Committee may treat different Participants and different Awards
differently, and may condition any adjustment on the execution of an appropriate
waiver and release agreement.

                  (a) If the outstanding Shares are increased, decreased
         or exchanged through merger, consolidation, sale of all or
         substantially all of the property of the Company, reorganization,
         recapitalization, reclassification, stock dividend, stock split or
         other distribution in respect to such Shares, for a different number of
         Shares or type of securities, or if additional Shares or new or
         different Shares or other securities are distributed with respect to
         such Shares, an appropriate and proportionate adjustment shall be made
         in: (i) the maximum number of Shares available for the Plan as provided
         in Section 5.1 herein, (ii) the type of shares or other securities
         available for the Plan, (iii) the number of shares of Stock subject to
         any then outstanding Awards under the Plan, and (iv) the price
         (including Exercise Price) for each Share (or other kind of shares or
         securities) subject to then outstanding Awards, but without change in
         the aggregate purchase price as to which such Options remain
         exercisable or Restricted Stock releasable.

                  (b) In the event other events not specified above in
         this Section 5.6, such as any extraordinary cash dividend, split-up,
         spin-off, combination, exchange of shares, warrants or rights offering
         to purchase Common Stock, or other similar corporate event, affect the
         Common Stock such that an adjustment is necessary to maintain the
         benefits or potential benefits intended to be provided under this Plan,
         then the Committee in its discretion may make adjustments to any or all
         of (i) the number and type of shares which thereafter may be optioned
         and sold or awarded or made subject to Stock Appreciation Rights under
         the Plan, (ii) the Exercise Price of any Award made under the Plan
         thereafter, and (iii) the number and Exercise Price of each Share (or
         other kind of shares or securities) subject to the then outstanding
         awards, but without change in the aggregate purchase price as to which
         such Options remain exercisable or Restricted Stock releasable.

                  (c) Any adjustment made by the Committee pursuant to
         the provisions of this Section 5.6, subject to approval by the Board of
         Directors, shall be final, binding and conclusive. A notice of such
         adjustment, including identification of the event causing such an
         adjustment, the calculation method of such adjustment, and the change
         in price and the number of shares of Stock, or securities, cash or
         property purchasable subject to each Award shall be sent to each
         Participant. No fractional interests shall be issued under the Plan
         based on such adjustments.



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Section 6.  Stock Options

         6.1 Grant of Stock Options. Subject to the terms and provisions of the
Plan and applicable law, the Committee, at any time and from time to time, may
grant Options to such Key Employees and other persons as it shall determine. The
Committee shall have sole and complete discretion in determining the type of
Option granted, the Exercise Price, the duration of the Option, the number of
Shares to which the Option pertains, any conditions imposed upon the
exercisability of the Options, the conditions under which the Option may be
terminated and such other provisions as may be warranted to comply with the law
or rules of any securities trading system or stock exchange. Each Option grant
shall have such specified terms and conditions detailed in an Agreement. The
Agreement shall specify whether the Option is intended to be an Incentive Stock
Option within the meaning of Section 422 of the Code, or a Nonqualified Stock
Option not intended to be within the provisions of Section 422 of the Code.

         6.2 Exercise Price. The Exercise Price per Share covered by an Option
shall be determined at the time of grant by the Committee, subject to the
limitation that the Exercise Price shall not be less than 100% of Fair Market
Value on the Grant Date. However, Options granted upon the assumption of, or in
substitution for, options of another company with which the Company participates
in an acquisition, separation or similar corporate transaction may be issued at
an Exercise Price less than 100% of the Fair Market Value.

         6.3 Exercisability. Options granted under the Plan shall be exercisable
at such times and be subject to such restrictions and conditions as the
Committee shall determine, which will be specified in the Agreement and need not
be the same for each Participant. However, no Option granted under the Plan may
be exercisable after the expiration of ten years from the Grant Date.

         6.4 Method of Exercise. Options shall be exercised by the delivery of a
written notice from the Participant to the Company in the form prescribed by the
Committee setting forth the number of Shares with respect to which the Option is
to be exercised, accompanied by full payment of the Exercise Price for the
Shares. The Exercise Price shall be payable to the Company in full in cash, or
its equivalent, or, to the extent permitted by applicable law and not in
violation of any instrument or agreement to which the Company is a party, by
delivery of Shares (not subject to any security interest or pledge) valued at
Fair Market Value at the time of exercise, or by a combination of the foregoing,
or in any other form of payment acceptable to the Committee. The Committee
reserves the right to require any Shares delivered by the Participant in full or
partial payment of the Exercise Price to be limited to those Shares already
owned by the Participant for at least six (6) months. In addition, at the
request of the Participant, and subject to applicable laws and regulations, the
Company may (but shall not be required to) cooperate in a Cashless Exercise of
the Option. In addition, the Committee may, in its sole discretion, also permit
other forms of "cashless exercise," including withholding from the Shares to be
otherwise issued that number of Shares needed to pay the Exercise Price. As soon
as practicable, after receipt of written notice and payment, the Company shall
deliver to the Participant stock certificates in an appropriate amount based
upon the number of Shares with respect to which the Option is exercised, issued
in the Participant's name.



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Section 7.  Stock Appreciation Rights

         7.1 Grant of Stock Appreciation Rights. Subject to the terms and
provisions of the Plan and applicable law, the Committee, at any time and from
time to time, may grant freestanding Stock Appreciation Rights, Stock
Appreciation Rights in tandem with an Option, or Stock Appreciation Rights in
addition to an Option. Stock Appreciation Rights granted in tandem with an
Option or in addition to an Option may be granted at the time the Option is
granted or at a later time. No Stock Appreciation Rights granted under the Plan
may be exercisable after the expiration of ten years from the Grant Date.

         7.2 Exercise Price. The Exercise Price of each Stock Appreciation Right
shall be determined on the Grant Date by the Committee, subject to the
limitation that the Exercise Price shall not be less than 100% of Fair Market
Value on the Grant Date. However, Stock Appreciation Rights issued upon
assumption of, or in substitution for, stock appreciation rights of a company
with which the Company participates in an acquisition, separation or similar
corporate transaction may be issued at an Exercise Price less than 100% of the
Fair Market Value.

         7.3 Exercise. The Participant is entitled to receive an amount equal to
the excess of the Fair Market Value over the Exercise Price thereof on the date
of exercise of the Stock Appreciation Right.

         7.4 Payment. Payment upon exercise of the Stock Appreciation Right
shall be made in the form of cash, Shares, or a combination thereof', as
determined in the sole and complete discretion of the Committee. However, if any
payment in the form of Shares results in a fractional share, the payment for the
fractional share shall be made in cash.

Section 8.  Restricted Stock and Restricted Stock Units

         8.1 Grant of Restricted Stock. Subject to the terms and provisions of
the Plan and applicable law, the Committee, at any time and from time to time,
may grant Shares of Restricted Stock and Restricted Stock Units under the Plan
to such Participants, and in such amounts and for such duration of the Period of
Restriction and/or conditions of removal of restrictions as it shall determine.
Participants receiving Restricted Stock and Restricted Stock Units are not
required to pay the Company therefor (except for applicable tax withholding).

         8.2 Restricted Stock Agreement. Each Restricted Stock and Restricted
Stock Unit grant shall be evidenced by an Agreement that shall specify the
Period of Restriction; the conditions which must be satisfied prior to removal
of the restriction; the number of Shares of Restricted Stock granted; and such
other provisions as the Committee shall determine. The Committee may specify,
but is not limited to, the following types of restrictions in the Agreement: (i)
restrictions on acceleration or achievement of terms of vesting based on any
business or financial goals of the Company, including, but not limited to,
absolute or relative increases in total stockholder return, revenues, sales, net
income, earnings per share, return on equity, cash flow, operating margin or net
worth of the Company, any of its Subsidiaries, divisions or other areas of the
Company; and (ii) any other further restrictions that may be




                                       11
<PAGE>

advisable under the law, including requirements set forth by the Exchange Act,
the Securities Act, any securities trading system or stock exchange upon which
such Shares are listed.

         8.3 Nontransferability. Except as provided in this Section 8 and
subject to applicable law, the Shares of Restricted Stock or Restricted Stock
Units granted under the Plan may not be sold, transferred, pledged, assigned,
exchanged, encumbered or otherwise alienated or hypothecated until the
termination of the applicable Period of Restriction or upon earlier satisfaction
of other conditions as specified by the Committee in its sole discretion and set
forth in the Agreement. All rights with respect to the Restricted Stock and
Restricted Stock Units granted to a Participant under the Plan shall be
exercisable only by such Participant or his or her guardian or legal
representative.

         8.4 Removal of Restrictions. Except as otherwise noted in this Section
8, Restricted Stock and Restricted Stock Units covered by each Award shall be
provided to and become freely transferable by the Participant after the last day
of the Period of Restriction and/or upon the satisfaction of other conditions as
determined by the Committee. Except as specifically provided in this Section 8,
the Committee shall have no authority to reduce or remove the restrictions or to
reduce or remove the Period of Restriction without the express consent of the
stockholders of the Company. Except where performance-based conditions or
restrictions are placed on the grant, or except in the event of the death or
disability of the Participant, or a Change in Control of the Company, the
minimum Period of Restriction shall be three (3) years, which Period of
Restriction would permit the removal of restrictions on no more than one-third
(1/3) of the Restricted Stock or Restricted Stock Units at the end of the first
year following the Grant Date, and the removal of the restrictions on an
additional one-third (1/3) at the end of each subsequent year. Except in the
event of the death or disability of the Participant, or a Change in Control of
the Company, no restrictions may be removed from Restricted Stock or Restricted
Stock Units during the first year following the Grant Date. If there are
performance-based conditions placed on the grant of Restricted Stock or
Restricted Stock Units, the total Period of Restriction shall be no less than
one (1) year from the Grant Date. The foregoing limitations notwithstanding, the
Committee in its sole discretion may reduce or remove the restrictions or reduce
or remove the Period of Restriction with respect to Restricted Stock or
Restricted Stock Units upon assumption of, or in substitution for, restricted
stock or restricted stock units of a company with which the Company participates
in an acquisition, separation, or similar corporate transaction.

         8.5 Voting Rights. During the Period of Restriction, Participants in
whose name Restricted Stock is granted under the Plan may exercise full voting
rights with respect to those Shares.

         8.6 Dividends and Other Distributions. During the Period of
Restriction, Participants in whose name Restricted Stock is granted shall be
entitled to receive all dividends and other distributions paid with respect to
those Shares. If any such dividends or distributions are paid in Shares, the
Shares shall be subject to the same restrictions on transferability as the
Restricted Stock with respect to which they were distributed.



                                       12
<PAGE>

Section 9.  Performance Awards

         9.1 Grant of Performance Awards. Subject to the terms and provisions of
the Plan and applicable law, the Committee, at any time and from time to time,
may grant Performance Awards in the form of either Performance Units or
Performance Shares to Participants subject to such Performance Goals and
Performance Period as it shall determine. The Committee shall have complete
discretion in determining the number and value of Performance Units or
Performance Shares granted to each Participant. Participants receiving
Performance Awards are not required to pay the Company therefor (except for
applicable tax withholding) other than the rendering of services.

         9.2 Value of Performance Awards. The Committee shall determine the
number and value of Performance Units or Performance Shares granted to each
Participant as a Performance Award. The Committee shall set Performance Goals in
its discretion for each Participant who is granted a Performance Award. The
extent to which such Performance Goals are met will determine the value of the
Performance Unit or Performance Share to the Participant. Such Performance Goals
may be particular to a Participant, may relate to the performance of the
Subsidiary which employs him or her, may be based on the division which employs
him or her, may be based on the performance of the Company generally, or a
combination of the foregoing. The Performance Goals may be based on achievement
of balance sheet or income statement objectives, or any other objectives
established by the Committee. The Performance Goals may be absolute in their
terms or measured against or in relationship to other companies comparably,
similarly or otherwise situated. The terms and conditions of each Performance
Award will be set forth in an Agreement. Except as specifically provided herein,
including, without limitation, Section 14.13, the Committee shall have no
authority to reduce or remove the Performance Goals or Performance Period
without the express consent of the stockholders of the Company. Furthermore,
except in the case of the Participant's death or disability, or a Change of
Control of the Company, no Performance Unit or Performance Award shall become
vested or payable less than one (1) year after its grant.

         9.3 Settlement of Performance Awards. After a Performance Period has
ended, the holder of a Performance Unit or Performance Share shall be entitled
to receive the value thereof based on the degree to which the Performance Goals
established by the Committee and set forth in the Agreement have been satisfied.

         9.4 Form of Payment. Payment of the amount to which a Participant shall
be entitled upon the settlement of a Performance Award shall be made in cash,
Stock, or a combination thereof as determined by the Committee. Payment may be
made as prescribed by the Committee.

Section 10.  Bonus Stock

         Subject to the terms and provisions of the Plan and applicable law, the
Committee, at any time and from time to time, may award Shares of Bonus Stock to
Participants without cash consideration. The Committee shall determine and
indicate in the relevant Agreement restrictions which shall apply to such Bonus
Stock, which shall provide for vesting periods and/or periods of restriction
which shall be not less stringent than those as contained in Section



                                       13
<PAGE>

8.4 with respect to awards of Restricted Stock and Restricted Stock Units. In
addition, such Shares shall be subject to at least the following restrictions:

                  (a) No Shares of Bonus Stock may be sold, transferred,
         pledged, assigned, exchanged, encumbered or otherwise alienated or
         hypothecated if such Shares are subject to restrictions which have not
         lapsed or have not been vested.

                  (b) If any condition of vesting of the Shares of Bonus
         Stock are not met, all such Shares subject to such vesting shall be
         delivered to the Company and canceled (in a manner determined by the
         Committee) within 60 days of the failure to meet such condition without
         any payment from the Company.

         Except as specifically provided herein, including, without limitation,
Section 14.13, the Committee shall have no authority to reduce or remove any
restrictions or limitations on Bonus Stock without the express consent of the
stockholders of the Company.

Section 11.  Other Stock Unit Awards

         11.1  Grant of Other Stock Unit Awards. Subject to the terms and
provisions of the Plan and applicable law, the Committee, at any time and from
time to time, may issue to Participants, either alone or in addition to other
Awards made under the Plan, Other Stock Unit Awards which may be in the form of
Common Stock or other securities. The value of each such Award shall be based,
in whole or in part, on the value of the underlying Common Stock or other
securities. The Committee, in its sole and complete discretion, may determine
that an Award, either in the form of an Other Stock Unit Award under this
Section 11 or as an Award granted pursuant to Sections 6 through 10, may provide
to the Participant (i) dividends or dividend equivalents (payable on a current
or deferred basis) and (ii) cash payments in lieu of or in addition to an Award.
Subject to the provisions of the Plan, the Committee in its sole and complete
discretion shall determine the terms, restrictions, conditions, vesting
requirements, and payment rules (all of which are sometimes hereinafter
collectively referred to as "Rules") of the Award. The Agreement shall specify
the Rules of each Award as determined by the Committee. However, each Other
Stock Unit Award need not be subject to identical Rules.

         11.2 Rules. The Committee, in its sole and complete discretion, may
grant an Other Stock Unit Award subject to the following Rules:

                  (a) Common Stock or other securities issued pursuant to
         Other Stock Unit Awards may not be sold, transferred, pledged,
         assigned, exchanged, encumbered or otherwise alienated or hypothecated
         by a Participant until the expiration of at least six months from the
         Award Date, except that such limitation shall not apply in the case of
         death or disability of the Participant or a Change in Control of the
         Company. All rights with respect to such Other Stock Unit Awards
         granted to a Participant shall be exercisable during his or her
         lifetime only by such Participant or his or her guardian or legal
         representative.

                  (b) Other Stock Unit Awards may require the payment of
         cash consideration by the Participant upon receipt of the Award or
         provide that the Award, and any Common


                                       14
<PAGE>

         Stock or other securities issued in conjunction with the Award be
         delivered without the payment of cash consideration.

                  (c) The Committee, in its sole and complete discretion,
         may establish certain Performance Criteria that may relate in whole or
         in part to receipt of the Other Stock Unit Awards.

                  (d) Other Stock Unit Awards may be subject to a
         deferred payment schedule. Furthermore, all Other Stock Unit Awards
         granted under the Plan shall be subject to vesting periods and/or
         periods of restriction which are not less stringent than those as
         specified in Section 8.4 with respect to awards of Restricted Stock and
         Restricted Stock Units.

                  (e) The Committee, in its sole and complete discretion,
         as a result of certain circumstances, including, without limitation,
         the assumption of', or substitution of stock unit awards of a company
         with which the Company participates in an acquisition, separation, or
         similar corporate transaction, may waive or otherwise remove, in whole
         or in part, any restriction or condition imposed on an Other Stock Unit
         Award at the time of grant.

                  (f) Except as specifically provided herein, including,
         without limitation, Sections 11(e) and 14.13, the Committee shall have
         no authority to reduce or remove any Performance Criteria, vesting
         schedule, or other restriction or condition imposed on or Other Stock
         Unit Award without the express consent of the stockholders of the
         Company.

Section 12.  Special Provisions Applicable to Covered Participants

         Awards subject to Performance Criteria paid to Covered Participants
under this Plan shall be governed by the conditions of this Section 12 in
addition to the requirements of Sections 8, 9, 10 and 11 above. Should
conditions set forth under this Section 12 conflict with the requirements of
Sections 8, 9, 10 and I 1, the conditions of this Section 12 shall prevail.

                  (a) All Performance Measures relating to Covered
         Participants for a relevant Performance Period shall be established by
         the Committee in writing prior to the beginning of the Performance
         Period, or by such other later date for the Performance Period as may
         be permitted under Section 162(m). Performance Measures may include
         alternative and multiple Performance Measures and may be based on one
         or more business criteria. In establishing Performance Measures, the
         Committee shall consider one or more of the following business or
         financial goals of the Company: absolute or relative increases in total
         stockholder return, economic value added, return on capital employed,
         revenues, sales, net income, return on equity, cash flow, operating
         margin or net worth of the Company, any of its Subsidiaries, divisions
         or other areas of the Company.

                  (b) The Performance Measures must be substantially
         uncertain of attainment at the time established, must be objective and
         must satisfy third party "objectivity" standards under Section 162(m).



                                       15
<PAGE>

                  (c) The Performance Measures shall not allow for any
         discretion by the Committee as to an increase in any Award, but
         discretion to lower an Award is permissible.

                  (d) The Award and payment of any Award under this Plan
         to a Covered Participant with respect to a relevant Performance Period
         shall be contingent upon the attainment of the Performance Measures
         that are applicable to such Covered Participant. The Committee shall
         certify in writing prior to payment of any such Award that such
         applicable Performance Measures relating to the Award are satisfied.
         Approved minutes of the Committee may be used for this purpose.

                  (e) The maximum Award that may be paid to any Covered
         Participant under the Plan pursuant to Sections 9, 10 and 11 for any
         Performance Period is the lesser of $1 Million or 100 percent of the
         Covered Participant's annual base salary as of the first day of that
         Performance Period. The maximum number of Shares subject to Options,
         Stock Appreciation Rights or Restricted Stock granted to any Covered
         Participant for any fiscal year shall be the number of shares
         determined pursuant to Section 5.2(b).

                  (f) All Awards to Covered Participants under this Plan
         shall be further subject to such other conditions, restrictions, and
         requirements as the Committee may determine to be necessary to carry
         out the purpose of this Section 12.

Section 13.  Deferred Elections/Tax Reimbursements

         The Committee may permit a Participant to elect to defer receipt of any
payment of cash or any delivery of shares of Common Stock that would otherwise
be due to such Participant by virtue of the exercise, earn-out, or settlement of
any Award made under the Plan. If such election is permitted, the Committee
shall establish rules and procedures for such deferrals, including, without
limitation, the payment or crediting of dividend equivalents in respect of
deferrals credited in units of Common Stock. The Committee may also provide in
the relevant Agreement for a tax reimbursement cash payment to be made by the
Company in favor of any Participant in connection with the tax consequences
resulting from the grant, exercise, settlement or earn-out of any Award made
under the Plan.

Section 14.  General Provisions

         14.1 Plan Term. The Plan was adopted by the Board of Directors of the
Company on May 29, 1997. The Plan was adopted and approved by the BEI Board of
Directors on May 29, 1997, and recommended for consideration by the BEI
stockholders. Subject to approval by the stockholders of BEI, the Plan shall be
effective as of the effective time of the Distribution of the Stock of the
Company to the stockholders of BEI, pursuant to the Agreement and Plan of
Distribution by and between BEI and the Company dated as of April 15, 1997;
provided, however, no Stock, rights or Options may be sold, awarded or granted
under the Plan until the Company is in receipt of a Registration Statement under
the Securities Act covering the Shares to be issued under the Plan. Any Stock,
rights, or Options granted under this Plan prior to approval of the Plan by the
stockholders of BEI shall be granted subject to such approval.



                                       16
<PAGE>

         The Plan terminates December 31, 2006; however, all Awards made prior
to, and outstanding on such date, shall remain valid in accordance with their
terms and conditions.

         14.2 Withholding. The Company shall have the right to deduct or
withhold, or require a Participant or Permitted Transferee to remit to the
Company, any taxes required by law to be withheld from Awards. In the event an
Award is paid in the form of Common Stock, the Committee may require the
Participant or Permitted Transferee to remit to the Company the amount of any
taxes required to be withheld from such payment in Common Stock, or, in lieu
thereof, the Company may withhold from the number of Shares otherwise to be
issued (or the Participant or Permitted Transferee, with respect to Stock
already owned by such Participant or Permitted Transferee (which the Committee
may require to have been held for at least six (6) months), may be provided the
opportunity to elect to tender) the number of shares of Common Stock equal in
Fair Market Value to the amount required to be withheld.

         14.3 Awards. Each Award shall be evidenced in a corresponding Agreement
provided in writing to the Participant, which shall specify the terms,
conditions and any Rules applicable to the Award, including but not limited to
the effect of a Change in Control, or death, Disability, Divestiture, Early
Retirement, Normal Retirement or other termination of employment of the
Participant on the Award. Each Permitted Transferee, along with the transferor,
of a Non-Qualified Stock Option transferred in accordance with the provisions of
Section 14.4 shall enter into a Stock Option Transfer Agreement with the Company
in a form specified by the Committee.

         14.4 Nontransferability. No Award and no rights or interests therein
may be sold, transferred, pledged, assigned, exchanged, encumbered or otherwise
alienated or hypothecated, except (i) by testamentary disposition by the
Participant or the laws of descent and distribution or, except in the case of an
ISO, by a qualified domestic relations order; and (ii) in the case of
Nonqualified Stock Options, transfers made with the prior approval of the
Committee and on such terms and conditions as the Committee in its sole
discretion shall approve, to (a) the spouse, child, step-child, grandchild or
step-grandchild of the Participant (an "Immediate Family Member"), (b) a trust
the beneficiaries of which do not include persons other than the Participant and
Immediate Family Members; (c) a partnership (either general or limited) the
partners of which do not include persons other than the Participant and
Immediate Family Members (or a corporation the shareholders of which do not
include persons other than the Participant and Immediate Family Members); (d) a
corporation the shareholders of which do not include persons other than the
Participant and Immediate Family Members; or (e) any other transferee that is
approved by the Committee in its sole discretion (each a Permitted Transferee);
provided, however, that, without the prior approval of the Committee, no
Permitted Transferee shall further transfer a Nonqualified Stock Option, other
than by testamentary disposition or the laws of descent and distribution, either
directly or indirectly, including, without limitation, by reason of the
dissolution of, or a change in the beneficiaries of, a Permitted Transferee that
is a trust, the sale, merger, consolidation, dissolution, or liquidation of a
Permitted Transferee that is a partnership (or the sale of all or any portion of
the partnership interests therein), or the sale, merger, consolidation,
dissolution or liquidation of a Permitted Transferee that is a corporation (or
the sale of all or any portion of the stock thereof). Further, no right or
interest of any Participant in an Award may be assigned in satisfaction of any
lien, obligation, or liability of the Participant.



                                       17
<PAGE>

         14.5 No Right to Employment. No granting of an Award shall be
constituted as a right to employment with the Company.

         14.6  Rights as Stockholder. Subject to the Award provisions, no
Participant or Designated Beneficiary shall be deemed a stockholder of the
Company nor have any rights as such with respect to any Shares to be provided
under the Plan until he or she has become the holder of such Shares.
Notwithstanding the aforementioned, with respect to Stock granted as Restricted
Stock, Performance Shares, Bonus Stock or Other Stock Unit Awards under this
Plan, the Participant or Designated Beneficiary of such Award shall be deemed
the owner of such Shares provided herein. As such, unless contrary to the
provisions herein or in any such related Agreement, such stockholder shall be
entitled to full voting, dividend and distribution rights as provided any other
Company stockholder for as long as the Participant continues to be deemed the
owner of such stock.

         14.7 Construction of the Plan. The Plan, and its rules, rights,
agreements and regulations, shall be governed, construed, interpreted and
administered solely in accordance with the laws of the state of Delaware. In the
event any provision of the Plan shall be held invalid, illegal or unenforceable,
in whole or in part, for any reason, such determination shall not affect the
validity, legality or enforceability of any remaining provision, portion of
provision or the Plan overall, which shall remain in full force and effect as if
the Plan had been absent the invalid, illegal or unenforceable provision or
portion thereof.

         14.8 Amendment of the Plan. The Committee or Board of Directors may
amend, suspend, or terminate the Plan or any portion thereof at any time,
provided such amendment is made with stockholder approval if such approval is
necessary to comply with any tax or regulatory requirement, including for these
purposes any approval which is a requirement for exemptive relief under Section
16(b) of the Exchange Act or which is a requirement for the performance-based
compensation exception under Section 162(m). The Committee in its sole
discretion may amend the Plan so as to conform with local rules and regulations
subject to any provisions to the contrary specified herein.

         14.9 Amendment of Award. In its sole and complete discretion, the
Committee may at any time amend any Award for the following reasons: (i)
additions and/or changes to the Code, any federal or state securities law, or
other law or regulations applicable to the Award, are made, and such additions
and/or changes have some effect on the Award; or (ii) any other event not
described in clause (i) occurs and the Participant gives his or her consent to
such amendment, provided however, except for capital adjustments described in
Section 5.8, the Committee may not reduce the Exercise Price of an Award.

         14.10 Exemption from Computation of Compensation for Other Purposes. By
acceptance of an applicable Award, subject to the conditions of such Award, each
Participant shall be considered in agreement that all Shares sold or awarded and
all Options granted under this Plan shall be considered special incentive
compensation and will be exempt from inclusion as "wages" or "salary" in
pension, retirement, life insurance, and other employee benefits arrangements of
the Company, except as determined otherwise by the Company. In addition, each
Designated Beneficiary of a deceased Participant shall be in agreement that all
such Awards



                                       18
<PAGE>

will be exempt from inclusion in "wages" or "salary" for purposes of calculating
benefits of any life insurance coverage sponsored by the Company.

         14.11 Legend. In its sole and complete discretion, the Committee may
elect to legend certificates representing Shares sold or awarded under the Plan,
to make appropriate references to the restrictions imposed on such shares.

         14.12 Certain Participants. All Agreements for Participants subject to
Section 16(b) of the Exchange Act shall be deemed to include any such additional
terms, conditions, limitations and provisions as Rule 16b-3 requires, unless the
Committee in its discretion determines that any such Award should not be
governed by Rule 16b-3. All performance-based Awards shall be deemed to include
any such additional terms, conditions, limitations and provisions as are
necessary to comply with the performance-based compensation exemption of Section
162(m) unless the Committee in its discretion determines that any such Award to
a Covered Participant is not intended to qualify for the exemption for
performance-based compensation under Section 162(m).

         14.13 Change in Control. In the event of a Change in Control, the
Committee is permitted to accelerate the payment or vesting and release any
restrictions on any Awards.

         14.14 Listing, Registration and Other Legal Compliance. No Awards or
shares of the Common Stock shall be required to be issued or granted under the
Plan unless legal counsel to the Company shall be satisfied that such issuance
or grant will be in compliance with all applicable federal and state securities
laws and regulations and any other applicable laws or regulations. The Committee
may require, as a condition of any payment or share issuance, that certain
agreements, undertakings, representations, certificates, and/or information, as
the Committee may deem necessary or advisable, be executed or provided to the
Company to assure compliance with all such applicable laws or regulations. Any
certificates for shares of the Restricted Stock and/or Common Stock delivered
under the Plan may be subject to such stock-transfer orders and such other
restrictions as the Committee may deem advisable under the rules, regulations,
or other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed, and any applicable federal
or state securities law. In addition, if, at any time specified herein (or in
any Agreement or otherwise) for (a) the making of any Award, or the making of
any determination, (b) the issuance or other distribution of Restricted Stock
and/or other Common Stock, or (c) the payment of amounts to or through a
Participant with respect to any Award, any law, rule, regulation, or other
requirement of any governmental authority or agency shall require the Company,
any Affiliate, or any Participant (or any estate, designated beneficiary, or
other legal representative thereof) to take any action in connection with any
such determination, any such shares to be issued or distributed, any such
payment, or the making of any such determination, as the case may be, shall be
deferred until such required action is taken. With respect to persons subject to
Section 16 of the Exchange Act, transactions under the Plan are intended to
comply with all applicable conditions of Rule 16b-3. To the extent any provision
of the Plan or any action by the administrators of the Plan fails to so comply
with such rule, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Committee.



                                       19