REGENT ASSISTED LIVING, INC.

                            1995 STOCK INCENTIVE PLAN

     1. Purpose. The purpose of this Stock Incentive Plan (the "Plan") is to
enable Regent Assisted Living, Inc. (the "Company") to attract and retain the
services of (1) selected employees, officers and directors of the Company and
(2) selected nonemployee agents, consultants, advisors and independent
contractors of the Company.

     2. Shares Subject to the Plan. Subject to adjustment as provided below and
in Section 13, the shares to be offered under the Plan shall consist of Common
Stock of the Company, and the total number of shares of Common Stock that may be
issued under the Plan shall not exceed 600,000 shares (after giving effect to a
3,000 for 1 stock split). The shares issued under the Plan may be authorized and
unissued shares or reacquired shares. If an option, stock appreciation right or
performance unit granted under the Plan expires, terminates or is cancelled, the
unissued shares subject to such option, stock appreciation right or performance
unit shall again be available under the Plan. If shares sold or awarded as a
bonus under the Plan are forfeited to or repurchased by the Company, the number
of shares forfeited or repurchased shall again be available under the Plan.

     3. Effective Date and Duration of Plan.

          (a) Effective Date. The Plan shall become effective as of August 28,
1995. No option, stock appreciation right or performance unit granted under the
Plan to an officer (an "Officer") who is subject to Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or a director,
and no incentive stock option, shall become exercisable, however, until the Plan
is approved by the affirmative vote of the holders of a majority of the shares
of Common Stock represented at a shareholders meeting at which a quorum is
present, and any such awards under the Plan before such approval shall be
conditioned on and subject to such approval. Subject to this limitation,
options, stock appreciation rights and performance units may be granted and
shares may be awarded as bonuses or sold under the Plan at any time after the
effective date and before termination of the Plan.

          (b) Duration. The Plan shall continue in effect until all shares
available for issuance under the Plan have been issued and all restrictions on
such shares have lapsed. The Board of Directors may suspend or terminate the
Plan at any time except with respect to options, performance units and shares
subject to restrictions then outstanding under the Plan. Termination shall not
affect any outstanding options, any right of the Company to repurchase shares or
the forfeitability of shares issued under the Plan.
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     4. Administration.

          (a) Board of Directors. The Plan shall be administered by the Board of
Directors of the Company, which shall determine and designate from time to time
the individuals to whom awards shall be made, the amount of the awards and the
other terms and conditions of the awards. Subject to the provisions of the Plan,
the Board of Directors may from time to time adopt and amend rules and
regulations relating to administration of the Plan, advance the lapse of any
waiting period, accelerate any exercise date, waive or modify any restriction
applicable to shares (except those restrictions imposed by law) and make all
other determinations in the judgment of the Board of Directors necessary or
desirable for the administration of the Plan. The interpretation and
construction of the provisions of the Plan and related agreements by the Board
of Directors shall be final and conclusive. The Board of Directors may correct
any defect or supply any omission or reconcile any inconsistency in the Plan or
in any related agreement in the manner and to the extent it shall deem expedient
to carry the Plan into effect, and it shall be the sole and final judge of such
expediency.

          (b) Committee. The Board of Directors may delegate to the Compensation
Committee of the Board of Directors (the "Committee") any or all authority for
administration of the Plan. If authority is delegated to the Committee, all
references to the Board of Directors in the Plan shall mean and relate to the
Committee, except (i) as otherwise provided by the Board of Directors, (ii) that
only the Board of Directors may amend or terminate the Plan as provided in
Sections 3 and 13 and (iii) that if the Committee includes officers of the
Company, the Committee shall not be permitted to grant options to persons who
are officers of the Company. If awards are to be made under the Plan to Officers
or directors (in addition to the option grants to be awards made to non-employee
directors pursuant to Section 17 hereof), authority for selection of Officers
and directors for participation and decisions concerning the timing, pricing and
amount of a grant or award, if not determined under a formula meeting the
requirements of Rule 16b-3 under the Exchange Act, shall be delegated to another
committee consisting of two or more disinterested directors.

     5. Types of Awards; Eligibility. The Board of Directors may, from time to
time, take the following action, separately or in combination, under the Plan:
(i) grant Incentive Stock Options, as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), as provided in Sections 6(a) and
6(b); (ii) grant options other than Incentive Stock Options ("Non-Statutory
Stock Options") as provided in Sections 6(a) and 6(c); (iii) award stock bonuses
as provided in Section 7; (iv) sell shares subject to restrictions as provided
in Section 8; (v) grant stock appreciation rights as provided in Section 9; (vi)
grant cash bonus rights as provided in Section 10; and (vii) grant performance
units as provided in Section 11. Any such awards may be made to employees,
including employees who are officers or directors, and to other individuals
described in Section 1 who the Board of Directors believes have made or will
make an important contribution to the Company; provided, however, that only
employees of the

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Company shall be eligible to receive Incentive Stock Options under the Plan. The
Board of Directors shall select the individuals to whom awards shall be made and
shall specify the action taken with respect to each individual to whom an award
is made. At the discretion of the Board of Directors, an individual may be given
an election to surrender an award in exchange for the grant of a new award. No
employee may be granted options or stock appreciation rights under the Plan for
more than an aggregate of 100,000 shares of Common Stock in connection with the
hiring of the employee or 50,000 shares of Common Stock in any calendar year
otherwise.

     6. Option Grants.

          (a) General Rules Relating to Options.

               (i) Terms of Grant. The Board of Directors may grant options
     under the Plan. With respect to each option grant, the Board of Directors
     shall determine the number of shares subject to the option, the option
     price, the period of the option, the time or times at which the option may
     be exercised and whether the option is an Incentive Stock Option or a
     Non-Statutory Stock Option. At the time of the grant of an option or at any
     time thereafter, the Board of Directors may provide that an optionee who
     exercised an option with Common Stock of the Company shall automatically
     receive a new option to purchase additional shares equal to the number of
     shares surrendered and may specify the terms and conditions of such new
     options.

               (ii) Exercise of Options. Except as provided in Section 6(a)(iv)
     or as determined by the Board of Directors, no option granted under the
     Plan may be exercised unless at the time of such exercise the optionee is
     employed by or in the service of the Company and shall have been so
     employed or provided such service continuously since the date the option
     was granted. Absence on leave or on account of illness or disability under
     rules established by the Board of Directors shall not, however, be deemed
     an interruption of employment or service for this purpose. Unless otherwise
     determined by the Board of Directors, vesting of options shall not continue
     during an absence on leave (including an extended illness) or on account of
     disability. Except as provided in Sections 6(a)(iv) and 12, options granted
     under the Plan may be exercised from time to time over the period stated in
     each option in such amounts and at such times as shall be prescribed by the
     Board of Directors, provided that options shall not be exercised for
     fractional shares. Unless otherwise determined by the Board of Directors,
     if an optionee does not exercise an option in any one year with respect to
     the full number of shares to which the optionee is entitled in that year,
     the optionee's rights shall be cumulative and the optionee may purchase
     those shares in any subsequent year during the term of the option. Unless
     otherwise determined by the Board of Directors, if an Officer exercises an
     option within six months of the grant of the

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     option, the shares acquired upon exercise of the option may not be sold
     until six months after the date of grant of the option.

               (iii) Nontransferability. Each Incentive Stock Option and, unless
     otherwise determined by the Board of Directors with respect to an option
     granted to a person who is neither an Officer nor a director of the
     Company, each other option granted under the Plan by its terms shall be
     nonassignable and nontransferable by the optionee, either voluntarily or by
     operation of law, except by will or by the laws of descent and distribution
     of the state or country of the optionee's domicile at the time of death.

               (iv) Termination of Employment or Service.

                    (A) General Rule. Unless otherwise determined by the Board
          of Directors, in the event an optionee's employment or service with
          the Company terminates for any reason other than because of physical
          disability or death as provided in Sections 6(a)(iv)(B) and (C), his
          or her option may be exercised at any time before the expiration date
          of the option or the expiration of 30 days after the date of
          termination, whichever is the shorter period, but only if and to the
          extent the optionee was entitled to exercise the option at the date of
          termination.

                    (B) Termination Because of Total Disability. Unless
          otherwise determined by the Board of Directors, in the event an
          optionee's employment or service with the Company terminates because
          of total disability, his or her option may be exercised at any time
          before the expiration date of the option or the expiration of 12
          months after the date of termination, whichever is the shorter period,
          but only if and to the extent the optionee was entitled to exercise
          the option at the date of termination. The term "total disability"
          means a medically determinable mental or physical impairment that is
          expected to result in death or has lasted or is expected to last for a
          continuous period of 12 months or more and that causes the optionee to
          be unable, in the opinion of the Company and two independent
          physicians, to perform his or her duties as an employee, director,
          officer or consultant of the Company and to be engaged in any
          substantial gainful activity. Total disability shall be deemed to have
          occurred on the first day after the Company and the two independent
          physicians have furnished their opinion of total disability to the
          Company.

                    (C) Termination Because of Death. Unless otherwise
          determined by the Board of Directors, in the event of an optionee's
          death while employed by or providing service to the Company, his or
          her option may be exercised at any time before the expiration date of
          the option or the expiration of 12 months after the date of death,
          whichever is the shorter period, but only if and to the extent the
          optionee was entitled to exercise the

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          option at the date of death and only by the person or persons to whom
          the optionee's rights under the option shall pass by the optionee's
          will or by the laws of descent and distribution of the state or
          country of domicile at the time of death.

                    (D) Amendment of Exercise Period Applicable to Termination.
          The Board of Directors, at the time of grant or, with respect to an
          option that is not an Incentive Stock Option, at any time thereafter,
          may extend the 30-day and 12-month exercise periods any length of time
          not longer than the original expiration date of the option, and may
          increase the portion of an option that is exercisable, subject to such
          terms and conditions as the Board of Directors may determine.

                    (E) Failure to Exercise Option. To the extent that the
          option of any deceased optionee or any optionee whose employment or
          service terminates is not exercised within the applicable period, all
          further rights to purchase shares pursuant to the option shall cease
          and terminate.

               (v) Purchase of Shares. Unless the Board of Directors determines
     otherwise, shares may be acquired pursuant to an option granted under the
     Plan only upon the Company's receipt of written notice from the optionee of
     the optionee's intention to exercise, specifying the number of shares as to
     which the optionee desires to exercise the option and the date on which the
     optionee desires to complete the transaction, and if required in order to
     comply with the Securities Act of 1933, as amended, containing a
     representation that it is the optionee's present intention to acquire the
     shares for investment and not with a view to distribution. Unless the Board
     of Directors determines otherwise, on or before the date specified for
     completion of the purchase of shares pursuant to an option, the optionee
     must have paid the Company the full purchase price of those shares in cash
     (including, with the consent of the Board of Directors, cash that may be
     the proceeds of a loan from the Company (provided that, with respect to an
     Incentive Stock Option, such loan is approved at the time of option grant))
     or, with the consent of the Board of Directors, in whole or in part, in
     Common Stock of the Company valued at fair market value, restricted stock,
     performance units or other contingent awards denominated in either stock or
     cash, promissory notes and other forms of consideration. The fair market
     value of Common Stock provided in payment of the purchase price shall be
     the closing price of the Common Stock as reported in The Wall Street
     Journal on the last trading day before the date the option is exercised, or
     such other reported value of the Common Stock as shall be specified by the
     Board of Directors. No shares shall be issued until full payment for the
     shares has been made. With the consent of the Board of Directors (which, in
     the case of an Incentive Stock Option, shall be given only at the time of
     grant), an optionee may request the Company to apply automatically the
     shares to be received upon the exercise of a portion of a stock option
     (even though stock certificates have not yet been issued) to satisfy the
     purchase price for additional

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     portions of the option. Each optionee who has exercised an option shall,
     immediately upon notification of the amount due, if any, pay to the Company
     in cash amounts necessary to satisfy any applicable federal, state and
     local tax withholding requirements. If additional withholding is or becomes
     required beyond any amount deposited before delivery of the certificates,
     the optionee shall pay such amount to the Company on demand. If the
     optionee fails to pay the amount demanded, the Company may withhold that
     amount from other amounts payable by the Company to the optionee, including
     salary, subject to applicable law. With the consent of the Board of
     Directors an optionee may satisfy this obligation, in whole or in part, by
     having the Company withhold from the shares to be issued upon exercise that
     number of shares that would satisfy the withholding amount due or by
     delivering to the Company Common Stock to satisfy the withholding amount.
     Upon the exercise of an option, the number of shares reserved for issuance
     under the Plan shall be reduced by the number of shares issued upon
     exercise of the option.

          (b) Incentive Stock Options. Incentive Stock Options shall be subject
to the following additional terms and conditions:

               (i) Limitation on Amount of Grants. No employee may be granted
     Incentive Stock Options under the Plan if the aggregate fair market value,
     on the date of grant, of the Common Stock with respect to which Incentive
     Stock Options are exercisable for the first time by that employee during
     any calendar year under the Plan and under all incentive stock option plans
     (within the meaning of Section 422 of the Code) of the Company exceeds
     $100,000.

               (ii) Limitations on Grants to 10 Percent Shareholders. An
     Incentive Stock Option may be granted under the Plan to an employee
     possessing more than 10 percent of the total combined voting power of all
     classes of stock of the Company only if the option price is at least 110
     percent of the fair market value, as described in Section 6(b)(iv), of the
     Common Stock subject to the option on the date it is granted and the option
     by its terms is not exercisable after the expiration of five years from the
     date it is granted.

               (iii) Duration of Options. Subject to Sections 6(a)(ii) and
     6(b)(ii), Incentive Stock Options granted under the Plan shall continue in
     effect for the period fixed by the Board of Directors, except that no
     Incentive Stock Option shall be exercisable after the expiration of 10
     years from the date it is granted.

               (iv) Option Price. The option price per share shall be determined
     by the Board of Directors at the time of grant. Except as provided in
     Section 6(b)(ii), the option price shall not be less than 100 percent of
     the fair market value of the Common Stock covered by the Incentive Stock
     Option at the date the option is granted. The fair market value shall be
     deemed to be the closing price of the Common Stock as reported in The Wall
     Street Journal on the day before the date

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     the option is granted, or, if there has been no sale on that date, on the
     last preceding date on which a sale occurred, or such other value of the
     Common Stock as shall be specified by the Board of Directors.

               (v) Limitation on Time of Grant. No Incentive Stock Option shall
     be granted on or after the 10th anniversary of the effective date of the
     Plan.

               (vi) Conversion of Incentive Stock Options. The Board of
     Directors may at any time, without the optionee's consent, convert an
     Incentive Stock Option to a Non-Statutory Stock Option.

          (c) Non-Statutory Stock Options. Non-Statutory Stock Options shall be
subject to the following terms and conditions, in addition to those set forth in
Section 6(a) above:

               (i) Option Price. The option price for Non-Statutory Stock
     Options shall be determined by the Board of Directors at the time of grant
     and may be any amount determined by the Board of Directors.

               (ii) Duration of Options. Non-Statutory Stock Options granted
     under the Plan shall continue in effect for the period fixed by the Board
     of Directors.

     7. Stock Bonuses. The Board of Directors may award shares under the Plan as
stock bonuses. Shares awarded as a bonus shall be subject to the terms,
conditions and restrictions determined by the Board of Directors. The
restrictions may include restrictions concerning transferability and forfeiture
of the shares awarded, together with such other restrictions as may be
determined by the Board of Directors. If shares are subject to forfeiture, all
dividends or other distributions paid by the Company with respect to the shares
shall be retained by the Company until the shares are no longer subject to
forfeiture, at which time all accumulated amounts shall be paid to the
recipient. The Board of Directors may require the recipient to sign an agreement
as a condition of the award, but may not require the recipient to pay any
monetary consideration other than amounts necessary to satisfy tax withholding
requirements. The agreement may contain any terms, conditions, restrictions,
representations and warranties required by the Board of Directors. The
certificates representing the shares awarded shall bear any legends required by
the Board of Directors. Unless otherwise determined by the Board of Directors,
shares awarded as a stock bonus to an Officer may not be sold until six months
after the date of the award. The Company may require any recipient of a stock
bonus to pay to the Company in cash upon demand amounts necessary to satisfy any
applicable federal, state or local tax withholding requirements. If the
recipient fails to pay the amount demanded, the Company may withhold that amount
from other amounts payable by the Company to the recipient, including salary,
subject to applicable law. With the consent of the Board of Directors, a
recipient may deliver Common Stock to the Company to satisfy this withholding
obligation. Upon the issuance of a stock bonus, the number of

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shares reserved for issuance under the Plan shall be reduced by the number of
shares issued.

     8. Restricted Stock. The Board of Directors may issue shares under the Plan
for such consideration (including promissory notes and services) as determined
by the Board of Directors. Shares issued under the Plan shall be subject to the
terms, conditions and restrictions determined by the Board of Directors. The
restrictions may include restrictions concerning transferability, repurchase by
the Company and forfeiture of the shares issued, together with such other
restrictions as may be determined by the Board of Directors. If shares are
subject to forfeiture or repurchase by the Company, all dividends or other
distributions paid by the Company with respect to the shares shall be retained
by the Company until the shares are no longer subject to forfeiture or
repurchase, at which time all accumulated amounts shall be paid to the
recipient. All Common Stock issued pursuant to this Section 8 shall be subject
to a purchase agreement, which shall be executed by the Company and the
prospective recipient of the shares before the delivery of certificates
representing such shares to the recipient. The purchase agreement may contain
any terms, conditions, restrictions, representations and warranties required by
the Board of Directors. The certificates representing the shares shall bear any
legends required by the Board of Directors. Unless otherwise determined by the
Board of Directors, shares issued under this Section 8 to an Officer may not be
sold until six months after the date the shares are issued. The Company may
require any purchaser of restricted stock to pay to the Company in cash upon
demand amounts necessary to satisfy any applicable federal, state or local tax
withholding requirements. If the purchaser fails to pay the amount demanded, the
Company may withhold that amount from other amounts payable by the Company to
the purchaser, including salary, subject to applicable law. With the consent of
the Board of Directors, a purchaser may deliver Common Stock to the Company to
satisfy this withholding obligation. Upon the issuance of restricted stock, the
number of shares reserved for issuance under the Plan shall be reduced by the
number of shares issued.

     9. Stock Appreciation Rights.

          (a) Grant. Stock appreciation rights may be granted under the Plan by
the Board of Directors, subject to such rules, terms and conditions as the Board
of Directors may determine.

          (b) Exercise.

               (i) Each stock appreciation right shall entitle the holder, upon
     exercise, to receive from the Company in exchange therefor an amount equal
     in value to the excess of the fair market value on the date of exercise of
     one share of Common Stock of the Company over its fair market value on the
     date of grant (or, in the case of a stock appreciation right granted in
     connection with an option, the excess of the fair market value of one share
     of Common Stock of the Company over the option price per share under the
     option to which the stock appreciation

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     right relates), multiplied by the number of shares covered by the stock
     appreciation right or the option, or portion thereof, that is surrendered.
     No stock appreciation right shall be exercisable at a time that the amount
     determined under this Section 9(b) is negative. Payment by the Company upon
     exercise of a stock appreciation right may be made in Common Stock valued
     at fair market value, in cash or partly in Common Stock and partly in cash,
     all as determined by the Board of Directors.

               (ii) A stock appreciation right shall be exercisable only at the
     time or times established by the Board of Directors. If a stock
     appreciation right is granted in connection with an option, the following
     rules shall apply: (1) the stock appreciation right shall be exercisable
     only to the extent and on the same conditions that the related option may
     be exercised; (2) the stock appreciation right shall be exercisable only
     when the fair market value of the stock exceeds the option price of the
     related option; (3) the stock appreciation right shall be for no more than
     100 percent of the excess of the fair market value of the stock at the time
     of exercise over the option price; (4) upon exercise of the stock
     appreciation right, the option or portion thereof to which the stock
     appreciation right relates terminates; and (5) upon exercise of the option,
     the related stock appreciation right or portion thereof terminates. Unless
     otherwise determined by the Board of Directors, no stock appreciation right
     granted to an Officer or director may be exercised during the first six
     months following the date it is granted.

               (iii) The Board of Directors may withdraw any stock appreciation
     right granted under the Plan at any time and may impose any conditions upon
     the exercise of a stock appreciation right or adopt rules and regulations
     from time to time affecting the rights of holders of stock appreciation
     rights. Such rules and regulations may govern the right to exercise stock
     appreciation rights granted before adoption or amendment of such rules and
     regulations, as well as stock appreciation rights granted thereafter.

               (iv) For purposes of this Section 9, the fair market value of the
     Common Stock shall be determined as of the date the stock appreciation
     right is exercised, under the methods set forth in Section 6(b)(iv).

               (v) No fractional shares shall be issued upon exercise of a stock
     appreciation right. In lieu thereof, cash may be paid in an amount equal to
     the value of the fraction or, if the Board of Directors shall determine,
     the number of shares may be rounded downward to the next whole share.

               (vi) Each stock appreciation right granted in connection with an
     Incentive Stock Option, and unless otherwise determined by the Board of
     Directors with respect to a stock appreciation right granted to a person
     who is neither an Officer nor a director of the Company, each other stock
     appreciation right granted under the Plan by its terms shall be
     nonassignable and nontransferable by the holder, either voluntarily or by
     operation of law, except by will or by the laws of

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     descent and distribution of the state or country of the holder's domicile
     at the time of death, and each stock appreciation right by its terms shall
     be exercisable during the holder's lifetime only by the holder.

               (vii) Each participant who has exercised a stock appreciation
     right shall, upon notification of the amount due, pay to the Company in
     cash amounts necessary to satisfy any applicable federal, state and local
     tax withholding requirements. If the participant fails to pay the amount
     demanded, the Company may withhold that amount from other amounts payable
     by the Company to the participant, including salary, subject to applicable
     law. With the consent of the Board of Directors, a participant may satisfy
     this obligation, in whole or in part, by having the Company withhold from
     any shares to be issued upon exercise that number of shares that would
     satisfy the withholding amount due or by delivering Common Stock to the
     Company to satisfy the withholding amount.

               (viii) Upon the exercise of a stock appreciation right for
     shares, the number of shares reserved for issuance under the Plan shall be
     reduced by the number of shares issued. Cash payments of stock appreciation
     rights shall not reduce the number of shares of Common Stock reserved for
     issuance under the Plan.

     10. Cash Bonus Rights.

          (a) Grant. The Board of Directors may grant cash bonus rights under
the Plan in connection with (i) options granted or previously granted, (ii)
stock appreciation rights granted or previously granted, (iii) stock bonuses
awarded or previously awarded and (iv) shares sold or previously sold under the
Plan. Cash bonus rights will be subject to such rules, terms and conditions as
the Board of Directors may determine. Unless otherwise determined by the Board
of Directors with respect to a cash bonus right granted to a person who is
neither an Officer nor a director of the Company, each cash bonus right granted
under the Plan by its terms shall be nonassignable and nontransferable by the
holder, either voluntarily or by operation of law, except by will or by the laws
of descent and distribution of the state or country of the holder's domicile at
the time of death. The payment of a cash bonus shall not reduce the number of
shares of Common Stock reserved for issuance under the Plan.

          (b) Cash Bonus Rights in Connection With Options. A cash bonus right
granted in connection with an option will entitle an optionee to a cash bonus
when the related option is exercised (or terminates in connection with the
exercise of a stock appreciation right related to the option) in whole or in
part if, in the sole discretion of the Board of Directors, the bonus right will
result in a tax deduction that the Company has sufficient taxable income to use.
If an optionee purchases shares upon exercise of an option and does not exercise
a related stock appreciation right, the amount of the bonus, if any, shall be
determined by multiplying the excess of the total fair market value of the
shares to be acquired upon exercise over the total option price for the shares
by the

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applicable bonus percentage. If the optionee exercises a related stock
appreciation right in connection with the termination of an option, the amount
of the bonus, if any, shall be determined by multiplying the total fair market
value of the shares and cash received pursuant to the exercise of the stock
appreciation right by the applicable bonus percentage. The bonus percentage
applicable to a bonus right, including a previously granted bonus right, may be
changed from time to time at the sole discretion of the Board of Directors but
shall in no event exceed 75 percent.

          (c) Cash Bonus Rights in Connection With Stock Bonus. A cash bonus
right granted in connection with a stock bonus will entitle the recipient to a
cash bonus payable when the stock bonus is awarded or restrictions, if any, to
which the stock is subject lapse. If bonus stock awarded is subject to
restrictions and is repurchased by the Company or forfeited by the holder, the
cash bonus right granted in connection with the stock bonus shall terminate and
may not be exercised. The amount and timing of payment of a cash bonus shall be
determined by the Board of Directors.

          (d) Cash Bonus Rights in Connection With Stock Purchases. A cash bonus
right granted in connection with the purchase of stock pursuant to Section 8
will entitle the recipient to a cash bonus when the shares are purchased or
restrictions, if any, to which the stock is subject lapse. Any cash bonus right
granted in connection with shares purchased pursuant to Section 8 shall
terminate and may not be exercised in the event the shares are repurchased by
the Company or forfeited by the holder pursuant to applicable restrictions. The
amount of any cash bonus to be awarded and timing of payment of a cash bonus
shall be determined by the Board of Directors.

          (e) Taxes. The Company shall withhold from any cash bonus paid
pursuant to this Section 10 the amount necessary to satisfy any applicable
federal, state and local withholding requirements.

     11. Performance Units. The Board of Directors may grant performance units
consisting of monetary units which may be earned in whole or in part if the
Company achieves certain goals established by the Board of Directors over a
designated period of time, but not in any event more than 10 years. The goals
established by the Board of Directors may include earnings per share, return on
shareholders' equity, return on invested capital and such other goals as the
Board of Directors may establish. In the event that the minimum performance goal
established by the Board of Directors is not achieved at the conclusion of a
period, no payment shall be made to the participants. In the event the maximum
corporate goal is achieved, 100 percent of the monetary value of the performance
units shall be paid to or vested in the participants. Partial achievement of the
maximum goal may result in a payment or vesting corresponding to the degree of
achievement as determined by the Board of Directors. Payment of an award earned
may be in cash or in Common Stock or a combination of both, and may be made when
earned, or vested and deferred, as the Board of Directors determines. Deferred
awards shall earn interest on the terms and at a rate determined by the Board of
Directors. Unless otherwise determined by the Board of Directors with respect to
a performance unit granted

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to a person who is neither an Officer nor a director of the Company, each
performance unit granted under the Plan by its terms shall be nonassignable and
nontransferable by the holder, either voluntarily or by operation of law, except
by will or by the laws of descent and distribution of the state or country of
the holder's domicile at the time of death. Each participant who has been
awarded a performance unit shall, upon notification of the amount due, pay to
the Company in cash amounts necessary to satisfy any applicable federal, state
and local tax withholding requirements. If the participant fails to pay the
amount demanded, the Company may withhold that amount from other amounts payable
by the Company to the participant, including salary, subject to applicable law.
With the consent of the Board of Directors a participant may satisfy this
obligation, in whole or in part, by having the Company withhold from any shares
to be issued that number of shares that would satisfy the withholding amount due
or by delivering Common Stock to the Company to satisfy the withholding amount.
The payment of a performance unit in cash shall not reduce the number of shares
of Common Stock reserved for issuance under the Plan. The number of shares
reserved for issuance under the Plan shall be reduced by the number of shares
issued upon payment of an award.

     12. Changes in Capital Structure.

          (a) Stock Splits; Stock Dividends. If the outstanding Common Stock of
the Company is hereafter increased or decreased or changed into or exchanged for
a different number or kind of shares or other securities of the Company by
reason of any stock split, combination of shares, dividend payable in shares,
recapitalization or reclassification, appropriate adjustment shall be made by
the Board of Directors in the number and kind of shares available for grants
under the Plan. In addition, the Board of Directors shall make appropriate
adjustment in the number and kind of shares as to which outstanding options, or
portions thereof then unexercised, shall be exercisable, so that the optionee's
proportionate interest before and after the occurrence of the event is
maintained. Notwithstanding the foregoing, the Board of Directors shall have no
obligation to effect any adjustment that would or might result in the issuance
of fractional shares, and any fractional shares resulting from any adjustment
may be disregarded or provided for in any manner determined by the Board of
Directors. Any such adjustments made by the Board of Directors shall be
conclusive.

          (b) Mergers, Reorganizations, Etc. In the event of a merger,
consolidation, plan of exchange, acquisition of property or stock, separation,
reorganization or liquidation to which the Company is a party or a sale of all
or substantially all of the Company's assets (each, a "Transaction"), the Board
of Directors shall, in its sole discretion and to the extent possible under the
structure of the Transaction, select one of the following alternatives for
treating outstanding options under the Plan:

               (i) Outstanding options shall remain in effect in accordance with
     their terms. 

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               (ii) Outstanding options shall be converted into options to
     purchase stock in the corporation that is the surviving or acquiring
     corporation in the Transaction. The amount, type of securities subject
     thereto and exercise price of the converted options shall be determined by
     the Board of Directors of the Company, taking into account the relative
     values of the companies involved in the Transaction and the exchange rate,
     if any, used in determining shares of the surviving corporation to be
     issued to holders of shares of the Company. Unless otherwise determined by
     the Board of Directors, the converted options shall be vested only to the
     extent that the vesting requirements relating to options granted hereunder
     have been satisfied.

               (iii) The Board of Directors shall provide a 30-day period before
     the consummation of the Transaction during which outstanding options may be
     exercised to the extent then exercisable, and upon the expiration of that
     30-day period, all unexercised options shall immediately terminate. The
     Board of Directors may, in its sole discretion, accelerate the
     exercisability of options so that they are exercisable in full during that
     30-day period.

          (c) Dissolution of the Company. In the event of the dissolution of the
Company, options shall be treated in accordance with Section 12(b)(iii).

          (d) Rights Issued by Another Corporation. The Board of Directors may
also grant options, stock appreciation rights, performance units, stock bonuses
and cash bonuses and issue restricted stock under the Plan having terms,
conditions and provisions that vary from those specified in this Plan, provided
that any such awards are granted in substitution for, or in connection with the
assumption of, existing options, stock appreciation rights, stock bonuses, cash
bonuses, restricted stock and performance units granted, awarded or issued by
another corporation and assumed or otherwise agreed to be provided for by the
Company pursuant to or by reason of a Transaction.

     13. Amendment of Plan. The Board of Directors may at any time, and from
time to time, modify or amend the Plan in such respects as it shall deem
advisable because of changes in the law while the Plan is in effect or for any
other reason. Except as provided in Sections 6(a)(iv), 9, 10 and 12, however, no
change in an award already granted shall be made without the written consent of
the holder of such award.

     14. Approvals. The Company's obligations under the Plan are subject to the
approval of state and federal authorities or agencies with jurisdiction in the
matter. The Company will use its best efforts to take steps required by state or
federal law or applicable regulations, including rules and regulations of the
Securities and Exchange Commission and any stock exchange on which the Company's
shares may then be listed, in connection with the grants under the Plan. The
foregoing notwithstanding, the Company shall not be obligated to issue or
deliver Common Stock under the Plan if such issuance or delivery would violate
applicable state or federal securities laws.

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     15. Employment and Service Rights. Nothing in the Plan or any award
pursuant to the Plan shall (i) confer upon any employee any right to be
continued in the employment of the Company or interfere in any way with the
Company's right to terminate such employee's employment at any time, for any
reason, with or without cause, or to decrease such employee's compensation or
benefits, or (ii) confer upon any person engaged by the Company any right to be
retained or employed by the Company or to the continuation, extension, renewal
or modification of any compensation, contract or arrangement with or by the
Company.

     16. Rights as a Shareholder. The recipient of any award under the Plan
shall have no rights as a shareholder with respect to any Common Stock until the
date of issue to the recipient of a stock certificate for those shares. Except
as otherwise expressly provided in the Plan, no adjustment shall be made for
dividends or other rights for which the record date occurs before the date such
stock certificate is issued.

     17. Option Grants to Non-Employee Directors.

          (a) Initial Board Grants. Each person who is a Non-Employee Director
when the Plan is adopted or who becomes a Non-Employee Director thereafter shall
be automatically granted an option to purchase 2,000 shares of Common Stock on
the later of the date the Plan is approved by the shareholders of the Company or
when the person becomes a Non-Employee Director. A "Non-Employee Director" is a
director who is not an employee of the Company.

          (b) Additional Grants. Each Non-Employee Director shall be
automatically granted an option to purchase additional shares of Common Stock in
each calendar year subsequent to the year in which the Non-Employee Director was
granted an option pursuant to Section 17(a), such option to be granted as of the
date of the Company's annual shareholders meeting held in such calendar year,
provided that the Non-Employee Director continues to serve in that capacity as
of that date. The number of shares subject to each additional grant shall be
[2,000] shares for each Non-Employee Director.

          (c) Exercise Price. The exercise price of options for shares granted
pursuant to Section 17(a) as of the date the Plan is approved by the
shareholders of the Company shall be equal to the price per share to the public
in the Company's initial public offering, unless otherwise determined by the
Board. The exercise price of all other options granted pursuant to this Section
17 shall be equal to 100 percent of the fair market value of the Common Stock
determined pursuant to Section 6(b)(iv).

          (d) Term of Option. The term of each option granted pursuant to this
Section 17 shall be [10] years from the date of grant.

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          (e) Exercisability. Until an option expires or is terminated, an
option granted under this Section 17 shall be immediately exercisable for the
full number of shares subject to the option.

          (f) Termination As a Director. If an optionee ceases to be a director
of the Company for any reason, including death, his or her option may be
exercised at any time before the expiration date of the option or the expiration
of 30 days (or 12 months in the event of death) after the last day the optionee
served as a director, whichever is the shorter period, but only if and to the
extent the optionee was entitled to exercise the option as of the last day the
optionee served as a director.

          (g) Nontransferability. Each option by its terms shall be
nonassignable and nontransferable by the optionee, either voluntarily or by
operation of law, except by will or by the laws of descent and distribution of
the state or country of the optionee's domicile at the time of death, and each
option by its terms shall be exercisable during the optionee's lifetime only by
the optionee.

          (h) Exercise of Options. Options may be exercised upon payment of cash
or shares of Common Stock of the Company in accordance with Section 6(a)(v).

Adopted:   August 28, 1995
Amended:   May 6, 1997

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