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                                                                EXHIBIT (10)-18



                                MEDPARTNERS, INC.

                   1997 LONG TERM INCENTIVE COMPENSATION PLAN



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                                    CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----

<S>               <C>                                                       <C>
Article 1.        Establishment, Objectives and Duration....................  5
         1.1      Establishment of the Plan.................................  5
         1.2      Objectives of the Plan....................................  5
         1.3      Duration of the Plan......................................  5

Article 2.        Definitions...............................................  5
         2.1      "Affiliate"...............................................  5
         2.2      "Award"...................................................  6
         2.3      "Award Agreement".........................................  6
         2.4      "Beneficial Owner" or "Beneficial Ownership"..............  6
         2.5      "Board" or "Board of Directors"...........................  6
         2.6      "Cause"...................................................  6
         2.7      "Change in Control".......................................  6
         2.8      "Code"....................................................  7
         2.9      "Committee"...............................................  7
         2.10     "Company".................................................  8
         2.11     "Director"................................................  8
         2.12     "Disability"..............................................  8
         2.13     "Effective Date"..........................................  8
         2.14     "Eligible Person".........................................  8
         2.15     "Employee"................................................  8
         2.16     "Exchange Act"............................................  8
         2.17     "Fair Market Value".......................................  8
         2.18     "Immediate Family Members"................................  8
         2.19     "Incentive Stock Option" or "ISO".........................  9
         2.20     "Insider".................................................  9
         2.21     "Nonemployee Director"....................................  9
         2.22     "Nonqualified Stock Option" or "NQSO".....................  9
         2.23     "Option"..................................................  9
         2.24     "Option Price"............................................  9
         2.25     "Participant".............................................  9
         2.26     "Period of Restriction"...................................  9
         2.27     "Person"..................................................  9
         2.28     "Plan"....................................................  9
         2.29     "Restricted Stock"........................................  9
         2.30     "Retirement"..............................................  9
         2.31     "Shares".................................................. 10
         2.32     "Subsidiary".............................................. 10

Article 3.        Administration............................................ 10
</TABLE>


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<TABLE>
<S>      <C>      <C>                                                        <C>
         3.1      The Committee............................................. 10
         3.2      Authority of the Committee................................ 10
         3.3      Decisions Binding......................................... 10
         3.4      Costs of Plan............................................. 10

Article  4.       Shares Subject to the Plan and Maximum Awards............. 11
         4.1      Number of Shares Available for Grants..................... 11
         4.2      Adjustments in Authorized Shares.......................... 11

Article  5.       Eligibility and Participation............................. 12
         5.1      Eligibility............................................... 12
         5.2      Actual Participation...................................... 12

Article  6.       Stock Options............................................. 12
         6.1      Grant of Options.......................................... 12
         6.2      Award Agreement........................................... 12
         6.3      Option Price.............................................. 12
         6.4      Duration of Options....................................... 12
         6.5      Exercise of Options....................................... 12
         6.6      Payment................................................... 13
         6.7      Restrictions on Share Transferability..................... 13
         6.8      Termination of Employment................................. 13
         6.9      Nontransferability of Options............................. 13
                  (a)      Incentive Stock Options.......................... 13
                  (b)      Nonqualified Stock Options....................... 14

Article  7.       Restricted Stock.......................................... 14
         7.1      Grant of Restricted Stock................................. 14
         7.2      Restricted Stock Agreement................................ 14
         7.3      Transferability........................................... 14
         7.4      Other Restrictions........................................ 15
         7.5      Voting Rights............................................. 15
         7.6      Dividends and Other Distributions......................... 15
         7.7      Termination of Employment................................. 15

Article  8.       Beneficiary Designation................................... 16

Article  9.       Deferrals................................................. 16

Article  10.      Rights of Employees....................................... 16
         10.1     Employment................................................ 16
         10.2     Participation............................................. 16

Article  11.      Change in Control......................................... 16
         11.1     Treatment of Outstanding Awards........................... 16
</TABLE>


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<TABLE>
<S>      <C>      <C>                                                        <C>
         11.2     Termination, Amendment, and Modifications of
                  Change-in-Control Provisions.............................. 17

Article  12.      Amendment, Modification, and Termination.................. 17
         12.1     Amendment, Modification, and Termination.................. 17
         12.2     Adjustment of Awards Upon the Occurrence of Certain
                  Unusual or Nonrecurring Events............................ 17
         12.3     Awards Previously Granted................................. 17

Article  13.      Withholding............................................... 17
         13.1     Tax Withholding........................................... 17
         13.2     Share Withholding......................................... 18

Article  14.      Indemnification........................................... 18

Article  15.      Successors................................................ 18

Article  16.      Legal Construction........................................ 18
         16.1     Gender and Number......................................... 18
         16.2     Severability.............................................. 18
         16.3     Requirements of Law....................................... 19
         16.4     Securities Law Compliance................................. 19
         16.5     Governing Law............................................. 19
</TABLE>



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                                MEDPARTNERS, INC.
                   1997 LONG TERM INCENTIVE COMPENSATION PLAN


ARTICLE 1.        ESTABLISHMENT, OBJECTIVES AND DURATION

1.1      ESTABLISHMENT OF THE PLAN. MedPartners, Inc., a Delaware corporation
(hereinafter referred to as the "Company"), hereby establishes an incentive
compensation plan to be known as the "MedPartners, Inc. 1997 Long Term Incentive
Compensation Plan" (hereinafter referred to as the "Plan"), as set forth in this
document. The Plan permits the grant of Incentive Stock Options, Nonqualified
Stock Options and Restricted Stock.

The Plan shall become effective as of February 25, 1997 (the "Effective Date")
and shall remain in effect as provided in Section 1.3 hereof.

1.2      OBJECTIVES OF THE PLAN. The objectives of the Plan are to optimize the
profitability and growth of the Company through the use of incentives which are
consistent with the Company's objectives and which link the interests of
Participants to those of the Company's stockholders; to provide Participants
with an incentive for excellence in individual performance; and to promote
teamwork among Participants.

The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants who make
significant contributions to the Company's success and to allow Participants to
share in the success of the Company.

1.3      DURATION OF THE PLAN. The Plan shall commence on the Effective Date, as
described in Section 1.1 hereof, and shall remain in effect, subject to the
right of the Board of Directors or the Committee to amend or terminate the Plan
at any time pursuant to Article 12 hereof, until all Shares subject to it shall
have been purchased or acquired according to the Plan's provisions. However, in
no event may an Incentive Stock Option be granted under the Plan on or after
February 25, 2007.


ARTICLE 2.        DEFINITIONS

Whenever used in the Plan, the following terms shall have the meanings set forth
below, and when the meaning is intended, the initial letter of the word shall be
capitalized:

2.1      "AFFILIATE" means a "parent corporation" or "subsidiary corporation" as
defined in Section 424 of the Code.


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2.2      "AWARD" means, individually or collectively, a grant under this Plan of
Incentive Stock Options, Nonqualified Stock Options or Restricted Stock.

2.3      "AWARD AGREEMENT" means an agreement entered into by the Company and
each Participant setting forth the terms and provisions applicable to Awards
granted under this Plan.

2.4      "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.

2.5      "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company.

2.6      "CAUSE" shall be determined by the Committee, exercising good faith and
reasonable judgment, and shall mean the occurrence of any one or more of the
following:

         (a)      The willful and continued failure by the Participant to
substantially perform his duties (other than any such failure resulting from the
Participant's Disability) after a written demand for substantial performance is
delivered by the Committee to the Participant that specifically identifies the
manner in which the Committee believes that the Participant has not
substantially performed his duties, and the Participant has failed to remedy the
situation within 30 calendar days of receiving such notice; or

         (b)      The Participant's conviction for committing an act of fraud,
embezzlement, theft or another act constituting a felony; or

         (c)      The willful engaging by the Participant in gross misconduct
materially and demonstrably injurious to the Company, as determined by the
Committee. However, no act or failure to act on the Participant's part shall be
considered "willful" unless done, or omitted to be done, by the Participant not
in good faith and without reasonable belief that his action or omission was in
the best interest of the Company.

2.7 "CHANGE IN CONTROL" of the Company shall be deemed to have occurred as of
the first day that any one or more of the following conditions shall have been
satisfied:

         (a)      The acquisition by any Person of Beneficial Ownership of 20%
or more of either (i) the then outstanding shares of Common Stock of the
Company, or (ii) the combined voting power of the outstanding voting securities
of the Company entitled to vote generally in the selection of Directors;
provided, however, that for purposes of this subsection, the following
transactions shall not constitute a Change of Control: (A) any acquisition
directly from the Company through a public offering of shares of Common Stock of
the Company, (B) any acquisition by the Company, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, or (D) any acquisition by any
corporation pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of subsection (C) below;

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         (b)      The cessation, for any reason, of the individuals who
constitute the Company's Board of Directors as of the date hereof ("Incumbent
Board") to constitute at least a majority of the Company's Board of Directors;
provided, however, that any individual becoming a Director following the date
hereof whose election, or nomination for election by the Company's stockholders,
was approved by a vote of at least a majority of the Directors then comprising
the Incumbent Board shall be considered as though such individual was a member
of the Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs because of an actual or threatened
election contest with respect to the election or removal of Directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Company's Board of Directors;

         (c)      The consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of the
Company ("Business Combination") unless, following such Business Combination,
(i) all or substantially all of the individuals and entities who were the
Beneficial Owners, respectively, of the outstanding shares of Common Stock of
the Company and the outstanding voting securities of the Company immediately
before such Business Combination beneficially own, directly or indirectly, more
than 50% of, respectively, the then outstanding shares of Common Stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of Directors, as the case may be, of the Company
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately before such Business Combination of the outstanding shares of Common
Stock and the outstanding voting securities of the Company, as the case may be;
(ii) no party (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
before the Business Combination; and (iii) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Company's Board of Directors at the time of the
execution of the initial agreement, or of the action of the Company's Board of
Directors, providing for such Business Combination; or

         (d)      The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.

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

2.9      "COMMITTEE" means the Compensation Committee of the Board, as specified
in Article 3 herein, or such other Committee appointed by the Board to
administer the Plan with respect to grants of Awards.

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2.10     "COMPANY" means MedPartners, Inc., and also means any corporation of
which a majority of the voting capital stock is owned directly or indirectly by
MedPartners, Inc. or by any of its Subsidiaries, and any other corporation
designated by the Committee as being a Company hereunder (but only during the
period of such ownership or designation).

2.11     "DIRECTOR" means any individual who is a member of the Board of
Directors of the Company.

2.12     "DISABILITY", as applied to a Participant, means that the Participant
(a) has established to the satisfaction of the Committee that the Participant is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to last for a
continuous period of not less than 12 months (all within the meaning of Section
22(e)(3) of the Code), and (b) has satisfied any requirement imposed by the
Committee in regard to evidence of such disability.

2.13     "EFFECTIVE DATE" shall have the meaning ascribed to such term in
Section 1.1 hereof.

2.14     "ELIGIBLE PERSON" shall mean all Employees, Directors or consultants of
the Company or any Affiliate; provided, however, that no Award may be granted to
anyone who is not an "employee" as that term is defined in General Instruction
A.(1)(a) of Form S-8, as such definition may be amended from time to time,
without first receiving advice and guidance from the Company's outside counsel
as to the effect of such grant.

2.15     "EMPLOYEE" means any officer or employee of the Company.

2.16     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.

2.17     "FAIR MARKET VALUE" Except as otherwise determined by the Committee,
the "Fair Market Value" of a share of Common Stock as of any date shall be equal
to the closing sale price of a share of Common Stock as reported on The National
Association of Securities Dealers' New York Stock Exchange Composite Reporting
Tape (or if the Common Stock is not traded on The New York Stock Exchange, the
closing sale price on the exchange on which it is traded or as reported by an
applicable automated quotation system) (the "Composite Tape"), on the applicable
date or, if no sales of Common Stock are reported on such date, the closing sale
price of a share of Common Stock on the date the Common Stock was last reported
on the Composite Tape (or such other exchange or automated quotation system, if
applicable).

2.18     "IMMEDIATE FAMILY MEMBERS" means the spouse, children and grandchildren
of a Participant.


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2.19     "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.

2.20     "INSIDER" shall mean an individual who is, on the relevant date, a
Director, a 10% Beneficial Owner of any class of the Company's equity securities
that is registered pursuant to Section 12 of the Exchange Act or an officer of
the Company, as defined under Section 16 of the Exchange Act and as determined
by the Board of Directors from time to time.

2.21     "NONEMPLOYEE DIRECTOR" means an individual who is a member of the Board
of Directors of the Company but who is not an Employee of the Company.

2.22     "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to purchase
Shares granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.

2.23     "OPTION" means an Incentive Stock Option or a Nonqualified Stock
Option, as described in Article 6 herein.

2.24     "OPTION PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option.

2.25     "PARTICIPANT" means an Eligible Person who has outstanding an Award
granted under the Plan.

2.26     "PERIOD OF RESTRICTION" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance objectives, or upon the occurrence of other
events as determined by the Committee, at its discretion), and the Shares of
Restricted Stock are subject to a substantial risk of forfeiture, as provided in
Article 7 herein.

2.27     "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) thereof.

2.28     "PLAN" means the MedPartners, Inc. 1997 Long Term Incentive
Compensation Plan.

2.29     "RESTRICTED STOCK" means an Award granted to a Participant pursuant to
Article 7 herein.

2.30     "RETIREMENT" as applied to a Participant, means the Participant's
termination of employment in a manner which qualifies the Participant to receive
immediately payable retirement benefits under the applicable retirement plan
maintained by the Company (the "Retirement Plan"), under the successor or
replacement of such Retirement Plan if it is then no longer in effect, or under
any other retirement plan maintained or adopted by the Company which is
determined by

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the Committee to be the functional equivalent of such Retirement Plan; or, with
respect to a Participant who may not or has not participated in a retirement
plan maintained by the Company or an Affiliate, "Retirement" shall have the
meaning determined by the Committee from time to time.

2.31     "SHARES" means Common Stock of MedPartners, Inc., par value $.001 per
share.

2.32     "SUBSIDIARY" means any corporation, partnership, joint venture or other
entity in which the Company has a majority voting interest.


ARTICLE 3.        ADMINISTRATION

3.1      THE COMMITTEE. The Plan shall be administered by the Committee, or by
any other committee appointed by the Board, which Committee shall consist solely
of two or more "Nonemployee Directors" within the meaning of Rule 16b-3 under
the Exchange Act, or any successor provision. The members of the Committee shall
be appointed from time to time by, and shall serve at the discretion of, the
Board of Directors.

3.2      AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees who
shall participate in the Plan; determine the sizes and types of Awards;
determine the terms and conditions of Awards in a manner consistent with the
Plan; construe and interpret the Plan and any agreement or instrument entered
into under the Plan as they apply to Employees; establish, amend, or waive rules
and regulations for the Plan's administration as they apply to Employees; alter,
amend, suspend or terminate the Plan in whole or in part; and (subject to the
provisions of Article 12 herein) amend the terms and conditions of any
outstanding Award to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan. Further, the Committee
shall make all other determinations which may be necessary or advisable for the
administration of the Plan, as the Plan applies to Employees. As permitted by
law, the Committee may delegate its authority as identified herein.

3.3      DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its stockholders, Employees, Participants and their
estates and beneficiaries.

3.4      COSTS OF PLAN. The costs and expenses incurred in the operation and
administration of the Plan shall be borne by the Company.



                                       10

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ARTICLE 4.        SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS

4.1      NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to adjustment as
provided in Section 4.2 herein, the number of Shares hereby reserved for
issuance to Participants under the Plan shall be 6,725,000.

The number of Shares reserved for issuance under the Plan shall automatically
increase on the first day of each calendar year during the term of this Plan,
beginning with the 1998 calendar year, by an amount equal to 1% of the Shares
outstanding on December 31 of the immediately preceding year. However, such
additional Shares shall not be available for grants of Incentive Stock Options,
unless and until the increase in the number of Shares provided for herein is
subsequently approved by the stockholders of the Company in accordance with
Section 422 of the Code.

Shares issued upon exercise of Options or Awards of Restricted Stock under the
Plan may be either authorized but unissued Shares or Shares re-acquired by the
Company. If, on or prior to the termination of the Plan, an Award granted
thereunder expires or is terminated for any reason without having been exercised
or vested in full, the unpurchased or unvested Shares covered thereby will again
become available for the grant of Awards under the Plan. Shares of Common Stock
covered by Options surrendered in connection with the exercise of other Options
shall not be deemed to have been exercised and shall again become available for
the grant of awards under the Plan.

Notwithstanding the foregoing, the maximum number of Shares of Restricted Stock
granted pursuant to Article 7 herein shall be an amount equal to one-fifth of
the total number of Shares reserved for issuance under the Plan.

4.2      ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether or
not such reorganization comes within the definition of such term in Code Section
368) or any partial or complete liquidation of the Company, such adjustment
shall be made in the number and class of Shares which may be delivered under
Section 4.1, in the number and class of and/or price of Shares subject to
outstanding Awards granted under the Plan, and in the Award limits set forth in
Section 4.1, as may be determined to be appropriate and equitable by the
Committee, in its sole discretion, to prevent dilution or enlargement of rights;
provided, however, that the number of Shares subject to any Award shall always
be a whole number.



                                       11

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ARTICLE 5.        ELIGIBILITY AND PARTICIPATION

5.1      ELIGIBILITY. All Eligible Persons are eligible to participate in this
Plan.

5.2      ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all Eligible Persons, those to
whom Awards shall be granted and shall determine the nature and amount of each
Award.


ARTICLE 6.        STOCK OPTIONS

6.1      GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to Participants in such number, and upon such terms, and
at any time and from time to time as shall be determined by the Committee.

6.2      AWARD AGREEMENT. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO within the meaning of Code Section 422, or an
NQSO whose grant is intended not to fall under the provisions of Code Section
422.

6.3      OPTION PRICE. The Option Price for each grant of an Option under this
Plan shall be at least equal to 100% of the Fair Market Value of a Share on the
date the Option is granted; provided, however, that the exercise price of an ISO
granted to any person who owns, directly or indirectly, (or is treated as owning
by reason of attribution rules, currently set forth in Code Section 424), stock
of the Company constituting more than 10% of the total combined voting power of
the Company's outstanding stock, or the stock of any of its corporate
subsidiaries, shall in no event be less than 110% of the Fair Market Value of
such shares.

6.4      DURATION OF OPTIONS. Each Option granted to an Employee shall expire at
such time as the Committee shall determine at the time of grant; provided,
however, that no Incentive Stock Option shall be exercisable later than the
tenth anniversary date of its grant. Furthermore, each Stock Option granted to
any person who owns, directly or indirectly (or is treated as owning by reason
of attribution rules, currently set forth in Internal Revenue Code Section 424),
stock of the Company constituting more than 10% of the total combined voting
power of the Company's outstanding stock, or the stock of any of its corporate
subsidiaries, is not exerciseable after the expiration of five years from the
date such option is granted.

6.5      EXERCISE OF OPTIONS. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant. Notwithstanding any contrary provisions
contained in this Plan, the aggregate Fair Market Value (determined as of the

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time each ISO is granted) of the shares of Common Stock with respect to which
ISO's issued to any one person thereunder are exercisable for the first time
during any calendar year shall not exceed $100,000.

6.6      PAYMENT. Options granted under this Article 6 shall be exercised by the
delivery of a proper notice of exercise to the Company, setting forth the number
of Shares with respect to which the Option is to be exercised.

No shares of Common Stock shall be issued on the exercise of an Option unless
the Option Price is paid for in full at the time of exercise. Payment shall be
made in cash, which may be paid by check or other instrument acceptable to the
Company. In addition, subject to compliance with applicable laws and regulations
and such conditions as the Committee may impose, the Committee may elect to
accept payment in shares of Common Stock of the Company which are already owned
by the Participant, valued at the Fair Market Value thereof on the date of
exercise. The Committee may also allow a Participant to exercise an Option by
use of proceeds to be received from the sale of Common Stock issuable pursuant
to the Option being exercised.

As soon as practicable after receipt of proper notification of exercise and full
payment, the Company shall deliver to the Participant, in the Participant's
name, Share certificates in an appropriate amount based upon the number of
Shares purchased under the Option(s).

6.7      RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.

6.8      TERMINATION OF EMPLOYMENT. Each Option, to the extent it has not been
previously exercised, shall terminate upon the earliest to occur of: (a) the
expiration of the Option period set forth in the Option Award Agreement; (b) for
ISOs, the expiration of three months following the Participant's Retirement
(following the Participant's Retirement, NQSOs shall terminate upon the
expiration of the Option period set forth in the Option Award Agreement); (c)
the expiration of 12 months following the Participant's death or Disability; (d)
immediately upon termination for Cause; or (e) the expiration of 90 days
following the Participant's termination of employment for any reason other than
Cause, Change in Control, death, Disability, or Retirement. Upon a termination
of employment related to a Change in Control, Options shall be treated in the
manner set forth in Article 11.

6.9      NONTRANSFERABILITY OF OPTIONS.

         (a)      INCENTIVE STOCK OPTIONS. No ISO granted under the Plan may be
sold, transferred, pledged, assigned or otherwise alienated or hypothecated,
other than by will or by the laws of

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descent and distribution. Further, all ISOs granted to a Participant under the
Plan shall be exercisable during his or her lifetime only by such Participant.

         (b)      NONQUALIFIED STOCK OPTIONS. The Committee may, in its
discretion, authorize all or a portion of NQSOs granted to a Participant to be
on terms which permit transfer by such Participant to (i) Immediate Family
Members, (ii) a trust or trusts for the exclusive benefit of such Immediate
Family Members, or (iii) a partnership in which such Immediate Family Members
are the only partners, provided that (A) there may be no consideration for any
such transfer, (B) the Award Agreement pursuant to which such Options are
granted must be approved by the Committee, and must expressly provide for
transferability in a manner consistent with this Section, and (C) subsequent
transfers of transferred Options shall be prohibited except those by will or the
laws of descent and distribution. Following transfer, any such Options shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that for purposes of this Plan, the term
"Participant" shall be deemed to refer to the transferee. The events of
termination of employment shall continue to be applied with respect to the
original Participant, following which the Options shall be exercisable by the
transferee only to the extent, and for the periods specified in this Section
6.9. Notwithstanding the foregoing, should the Committee provide that Options
granted be transferable, the Company by such action incurs no obligation to
notify or otherwise provide notice to a transferee of early termination of the
Option. In the event of a transfer, as set forth above, the original Participant
is and will remain subject to and responsible for any applicable withholding
taxes upon the exercise of such Options.


ARTICLE 7.        RESTRICTED STOCK

7.1      GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Participants in such amounts as the Committee shall
determine. Without limiting the generality of the foregoing, Restricted Shares
may be granted in connection with payouts under other compensation programs of
the Company.

7.2      RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify the Period(s)
of Restriction, the number of Shares of Restricted Stock granted, and such other
provisions as the Committee shall determine.

7.3      TRANSFERABILITY. Except as provided in this Article 7, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged, assigned
or otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Restricted Stock
Award Agreement, or upon earlier satisfaction of any other conditions, as
specified by the Committee in its sole discretion and set forth in the
Restricted Stock Award Agreement. All rights with respect to the Restricted
Stock granted to a Participant under the Plan shall be available during his or
her lifetime only to such Participant.


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7.4      OTHER RESTRICTIONS. Subject to Article 8 herein, the Committee shall
impose such other conditions and/or restrictions on any Shares of Restricted
Stock granted pursuant to the Plan as it may deem advisable including, without
limitation, a requirement that Participants pay a stipulated purchase price for
each Share of Restricted Stock, restrictions based upon the achievement of
specific performance objectives (Company-wide, business unit, and/or
individual), time-based restrictions on vesting following the attainment of the
performance objectives, and/or restrictions under applicable federal or state
securities laws.

At the discretion of the Committee, the Company may retain the certificates
representing Shares of Restricted Stock in the Company's possession until such
time as all conditions and/or restrictions applicable to such Shares have been
satisfied.

Except as otherwise provided in this Article 7, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Plan shall become freely
transferable by the Participant after the last day of the applicable Period of
Restriction.

7.5      VOTING RIGHTS. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares.

7.6      DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may be
credited with regular cash dividends paid with respect to the underlying Shares
while they are so held. Such dividends may be paid currently, accrued as
contingent cash obligations, or converted into additional shares of Restricted
Stock, upon such terms as the Committee establishes.

The Committee may apply any restrictions to the dividends that the Committee
deems appropriate.

In the event that any dividend constitutes a "derivative security" or an "equity
security" pursuant to Rule 16(a) under the Exchange Act, such dividend shall be
subject to a vesting period equal to the remaining vesting period of the Shares
of Restricted Stock with respect to which the dividend is paid.

7.7      TERMINATION OF EMPLOYMENT. Upon a Participant's death, Disability, or
Retirement, all Restricted Shares shall vest immediately. Each Restricted Stock
Award Agreement shall set forth the extent to which the Participant shall have
the right to retain unvested Restricted Shares following termination of the
Participant's employment with the Company in all other circumstances. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each Participant, need not be
uniform among all Shares of Restricted Stock issued pursuant to the Plan, and
may reflect distinctions based on the reasons for termination of employment.



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ARTICLE 8.        BENEFICIARY DESIGNATION

A Participant under the Plan may make written designation of a beneficiary on
forms prescribed by and filed with the Corporate Secretary of the Company. Such
beneficiary, or if no such designation of any beneficiary has been made, the
legal representative of such Participant or such other person entitled thereto
as determined by a court of competent jurisdiction, may exercise, in accordance
with and subject to the provisions of Article 6, any unterminated and unexpired
Option granted to such Participant to the same extent that the Participant
himself could have exercised such Option were he alive or able; provided,
however, that no Option granted under the Plan shall be exercisable for more
Shares than the Participant could have purchased thereunder on the date his
employment by, or other relationship with, the Company and its Subsidiaries was
terminated.


ARTICLE 9.        DEFERRALS

The Committee may permit or require a Participant to defer such Participant's
receipt of the payment of cash or the delivery of Shares that would otherwise be
due to such Participant by virtue of the exercise of an Option, the lapse or
waiver of restrictions with respect to Restricted Stock, or the satisfaction of
any requirements or objectives with respect to performance measures, if any. If
any such deferral election is required or permitted, the Committee shall, in its
sole discretion, establish rules and procedures for such payment deferrals.


ARTICLE 10.       RIGHTS OF EMPLOYEES

10.1     EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of the
Company.

10.2     PARTICIPATION. No Employee shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.


ARTICLE 11.       CHANGE IN CONTROL

11.1     TREATMENT OF OUTSTANDING AWARDS. Upon the occurrence of a Change in
Control, unless otherwise specifically prohibited under applicable laws, or by
the rules and regulations of any governing governmental agencies or national
securities exchanges:

         (a)      Any and all Options granted hereunder shall become immediately
exercisable, and shall remain exercisable throughout their entire term; and


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         (b)      Any restriction periods and restrictions imposed on Shares of
Restricted Stock shall lapse; provided, however, that the degree of vesting
associated with Restricted Stock which has been conditioned upon the achievement
of performance conditions pursuant to Section 7.4 herein shall be determined in
the manner set forth in Section 7.7 herein.

11.2     TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE-IN-CONTROL
PROVISIONS. Notwithstanding any other provision of this Plan or any Award
Agreement provision, the provisions of this Article 11 may not be terminated,
amended, or modified on or after the date of a Change in Control to affect
adversely any Award theretofore granted under the Plan without the prior written
consent of the Participant with respect to said Participant's outstanding
Awards.


ARTICLE 12.       AMENDMENT, MODIFICATION, AND TERMINATION

12.1     AMENDMENT, MODIFICATION, AND TERMINATION. Subject to Section 11.2
herein, the Board or the Committee may at any time and from time to time, alter,
amend, suspend or terminate the Plan in whole or in part, except that, without
approval of the stockholders of the Company, no such revision or amendment shall
increase the number of shares available for grants of ISOs under the Plan or
alter the class of participants in the Plan.

Notwithstanding the foregoing, neither the Company nor the Board or Committee on
its behalf may cancel outstanding Awards and issue substitute Awards in
replacement thereof or reduce the exercise price of any outstanding Options
without stockholder approval.

12.2     ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.2 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan.

12.3     AWARDS PREVIOUSLY GRANTED. No termination, amendment, or modification
of the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant holding
such Award.


ARTICLE 13.       WITHHOLDING

13.1     TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, and

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<PAGE>   18



local taxes, domestic or foreign, required by law or regulation to be withheld
with respect to any taxable event arising as a result of this Plan.

13.2     SHARE WITHHOLDING. To the extent provided by the Committee, a
Participant may elect to have any distribution to be made under this Plan to be
withheld or to surrender to the Company shares of Common Stock already owned by
the Participant to fulfill any tax withholding obligation.


ARTICLE 14.       INDEMNIFICATION

Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgment in any such action, suit, or proceeding against him or her, provided he
or she shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled under
the Company's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.


ARTICLE 15.       SUCCESSORS

All obligations of the Company under the Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase, of
all or substantially all of the business and/or assets of the Company, or a
merger, consolidation or otherwise.


ARTICLE 16.       LEGAL CONSTRUCTION

16.1     GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular; and, the singular shall include the plural.

16.2     SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

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16.3     REQUIREMENTS OF LAW. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.

16.4     SECURITIES LAW COMPLIANCE. With respect to Insiders, transactions under
this Plan are intended to comply with all applicable conditions of Rule 16b-3 or
its successors under the Exchange Act. To the extent any provision of the Plan
or action by the Committee fails to so comply, it shall be deemed null and void,
to the extent permitted by law and deemed advisable by the Committee.

16.5     GOVERNING LAW. To the extent not preempted by federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with and governed
by the laws of the state of Delaware.


















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