EMERITUS
CORPORATION




AMENDED
1998 EMPLOYEE STOCK PURCHASE PLAN




(as
amended and restated as of March 26, 2008)




SECTION 1.  PURPOSE




The
purposes of the Emeritus Corporation 1998 Employee Stock Purchase Plan (the
"Plan") are to (a) assist qualified employees of Emeritus Corporation, a
Washington corporation (the "Company"), and its designated subsidiary
corporations in acquiring a stock ownership interest in the Company pursuant to
a plan that is intended to qualify as an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"), and
(b) help employees provide for their future security and encourage them to
remain in the employ of the Company and its subsidiary
corporations.  Stock purchased under the Plan may be paid for by
regular payroll deductions.  Only employees of the Company and its
designated subsidiary corporations are eligible to participate in the Plan, and
participation is voluntary.




SECTION 2.  DEFINITIONS




For
purposes of the Plan, the following terms shall be defined as set forth
below.




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




"Code"
means the Internal Revenue Code of 1986, as amended.




"Committee"
means the Company's Compensation Committee or another committee appointed by the
Board and given authority by the Board to administer the Plan.




"Company"
means Emeritus Corporation, a Washington corporation.




"Designated
Subsidiary" includes all domestic Subsidiary Corporations and such other
Subsidiary Corporations as may be designated from time to time by the Board or
the Committee as eligible to participate in the Plan.




"Eligible
Compensation" means all regular cash compensation, including overtime, cash
bonuses and commissions.  Regular cash compensation does not include
severance pay, hiring and relocation bonuses, pay in lieu of vacation or sick
leave, or any other special payments, or any gain from stock option
exercises.


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"Eligible
Employee" means any employee of the Company or any Designated Subsidiary who is
in the employ of the Company or a Designated Subsidiary on one or more Offering
Dates and who meets the following criteria:




(a)           the
employee does not, immediately after the Option is granted, own stock (as
defined by the Code) possessing 5% or more of the total combined voting power or
value of all classes of stock of the Company or of its Parent or Subsidiary
Corporations;




(b)           the
employee has been employed for at least six months; provided, however, that the
Plan Administrator, in its sole discretion, may reduce or increase (to up to two
years) this minimum requirement for future Offering Periods;




(c)           the
employee's customary employment is for more than 20 hours per week; provided,
however, that the Plan Administrator, in its sole discretion, may reduce this
minimum hourly requirement for future Offering Periods; and




(d)           the
employee's customary employment is for more than five months in any calendar
year; provided, however, that the Plan Administrator, in its sole discretion,
may reduce this minimum requirement for future Offering Periods.




If the
Company permits any employee of a Designated Subsidiary to participate in the
Plan, then all employees of that Designated Subsidiary who meet the requirements
of this paragraph shall also be considered Eligible Employees.




"Enrollment
Period" has the meaning set forth in Section 6.1.




"ESPP
Broker" has the meaning set forth in Section 10.




"Offering"
has the meaning set forth in Section 5.1.




"Offering
Date" means the first day of an Offering.




"Offering
Period" has the meaning set forth in Section 5.1.




"Option"
means an option granted under the Plan to an Eligible Employee to purchase
shares of Stock.




"Parent
Corporation" means any corporation, other than the Company, in an unbroken chain
of corporations ending with the Company if, at the time of the granting of the
Option, each of the corporations, other than the Company, owns
stock


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possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.




"Participant"
means any Eligible Employee who has elected to participate in an Offering in
accordance with the procedures set forth in Section 6.1 and who has not
withdrawn from the Plan or whose participation in the Plan is not
terminated.




"Plan"
means the Emeritus Corporation 1998 Employee Stock Purchase Plan, as it may be
amended from time to time.




"Plan
Administrator" has the meaning set forth in Section 3.1.




"Purchase
Date" means the last day of each Purchase Period.




"Purchase
Period" has the meaning set forth in Section 5.2.




"Purchase
Price" has the meaning set forth in Section 8.




"Stock"
means the Common Stock, $.0001 par value per share, of the Company.




"Subscription"
has the meaning set forth in Section 6.1.




"Subsidiary
Corporation" means any corporation, other than the Company, in an unbroken chain
of corporations beginning with the Company if, at the time of the granting of
the Option, each of the corporations, other than the last corporation in the
unbroken chain, owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.




SECTION 3.  ADMINISTRATION




3.1
            Plan
      Administrator




The Plan
shall be administered by the Company's Office of Compensation and Benefits or
any other Company group or executive officer designated by the Board or the
Committee, except for those items expressly reserved to the Board or the
Committee under the Plan.  Any decisions made by the Board, the
Committee or the Plan Administrator shall be applicable equally to all Eligible
Employees.




3.2
            Administration
      and Interpretation by the Plan
Administrator




Subject
to the provisions of the Plan, the Plan Administrator shall have the authority,
in its sole discretion, to determine all matters relating to Options granted
under the Plan, including all terms, conditions, restrictions and limitations of
Options;


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provided,
however, that all Participants granted Options pursuant to the Plan shall have
the same rights and privileges within the meaning of Code Section
423.  The Plan Administrator shall also have exclusive authority to
interpret the Plan and may from time to time adopt, and change, rules and
regulations of general application for the Plan's administration.  The
Plan Administrator's interpretation of the Plan and its rules and regulations,
and all actions taken and determinations made by the Plan Administrator pursuant
to the Plan, unless reserved to the Board or the Committee, shall be conclusive
and binding on all parties involved or affected.  The Plan
Administrator may delegate administrative duties to such of the Company's other
officers or employees as the Plan Administrator so determines.




SECTION 4.  STOCK
SUBJECT TO PLAN




Subject
to adjustment from time to time as provided in Section 19, a maximum of 400,000
shares of Stock may be sold under the Plan.  Shares sold under the
Plan shall be drawn from authorized and unissued shares or shall be shares
acquired by the Company.  Any shares of Stock subject to an Option
that cease to be subject to the Option (other than by reason of exercise of the
Option), including, without limitation, in connection with the cancellation or
termination of the Option, shall again be available for sale in connection with
future grants of Options under the Plan.




SECTION 5.  OFFERING
DATES




5.1
            Offering
      Periods




(a)           The
Plan shall be implemented by a series of offerings (each, an
"Offering").  Except as otherwise set forth below, Offerings shall
commence on July 1, October 1, January 1 and April 1 of each
year and end on the next September 30, December 31, March 31 and
June 30, respectively, occurring thereafter.




(b)           Notwithstanding
the foregoing, the Board or the Committee may establish (i) a different
term for one or more future Offerings and (ii) different commencing and
ending dates for such Offerings; provided, however, that an Offering Period may
not exceed five years; and provided, further, that if the Purchase Price may be
less than 85% of the fair market value of the Stock on the Purchase Date, the
Offering Period may not exceed 27 months.




(c)           In
the event the first or the last day of an Offering Period is not a regular
business day, then the first day of the Offering Period shall be deemed to be
the next regular business day and the last day of the Offering Period shall be
deemed to be the last preceding regular business day.


4




(d)           An
employee who becomes eligible to participate in the Plan after an Offering
Period has commenced shall not be eligible to participate in such Offering but
may participate in any subsequent Offering, provided that such Eligible Employee
is still an Eligible Employee as of the commencement of any such subsequent
Offering.  Eligible Employees may not participate in more than one
Offering at a time.




5.2
            Purchase
      Periods




(a)           Each
Offering Period shall consist of one or more consecutive purchase periods (each,
a "Purchase Period").  Except as otherwise set forth below, Purchase
Periods shall continue for three calendar months and shall be coterminous with
an Offering Period.  Purchase Periods shall commence on July 1,
October 1, January 1 and April 1 of each year and end on the next
September 30, December 31, March 31 and June 30, respectively,
occurring thereafter.  The last day of each Purchase Period shall be
the Purchase Date for such Purchase Period.




(b)           Notwithstanding
the foregoing, the Board or the Committee may establish for any future Offering
(a) different terms for one or more Purchase Periods within the Offering Period
and (b) different commencing dates and Purchase Dates for any such Purchase
Periods.




(c)           In
the event the first or last day of a Purchase Period is not a regular business
day, then the first day of the Purchase Period shall be deemed to be the next
regular business day and the last day of the Purchase Period shall be deemed to
be the last preceding regular business day.




SECTION 6.  PARTICIPATION
IN THE PLAN




6.1
            Initial
      Participation




An
Eligible Employee shall become a Participant on the first Offering Date after
satisfying the eligibility requirements and delivering to the Plan Administrator
during the enrollment period established by the Plan Administrator (the
"Enrollment Period") a subscription (the "Subscription"):




(a)           indicating
the Eligible Employee's election to participate in the Plan;




(b)           authorizing
payroll deductions and stating the amount to be deducted regularly from the
Participant's pay; and


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(c)           authorizing
the purchase of Stock for the Participant in each Purchase Period.




An
Eligible Employee who does not deliver a Subscription to the Plan Administrator
during the Enrollment Period shall not participate in the Plan for that Offering
Period or any subsequent Offering Period unless such Eligible Employee
subsequently enrolls in the Plan by delivering a Subscription to the Plan
Administrator during the Enrollment Period for such subsequent Offering
Period.  The Plan Administrator may, from time to time, change the
Enrollment Period for any future Offering as deemed advisable by the Plan
Administrator in its sole discretion for the proper administration of the
Plan.




6.2
            Continued
      Participation




Unless
the Plan Administrator determines otherwise for any future Offering, a
Participant shall automatically participate in the next Offering Period until
such time as the Participant withdraws from the Plan pursuant to Section 11.2 or
terminates employment as provided in Section 12.




SECTION 7.  LIMITATIONS
ON RIGHT TO PURCHASE SHARES




7.1
            $25,000
      Limitation




On each
Offering Date, a Participant shall be deemed to have been granted an Option to
purchase a maximum number of shares of the Stock of the Company equal to an
amount determined as follows:  an amount equal to $25,000 divided by
the fair market value of the Stock of the Company on the applicable Offering
Date; provided, however, no Participant shall be entitled to purchase Stock
under the Plan (or any other employee stock purchase plan that is intended to
meet the requirements of Code Section 423 sponsored by the Company, any Parent
Corporation or any Subsidiary Corporation) at a rate that exceeds $25,000 in
fair market value, determined as of the Offering Date for each Offering Period
(or such other limit as may be imposed by the Code), for each calendar year in
which a Participant participates in the Plan (or any other employee stock
purchase plan described in this Section 7.1).




7.2
            Pro
      Rata Allocation




In the
event the number of shares of Stock that might be purchased by all Participants
in the Plan exceeds the number of shares of Stock available in the Plan, the
Plan Administrator shall make a pro rata allocation of the remaining shares
of


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Stock in
as uniform a manner as shall be practicable and as the Plan Administrator shall
determine to be equitable.  Fractional shares may be issued under the
Plan unless the Board or the Committee determines otherwise.




SECTION 8.  PURCHASE
PRICE




(a)            The
purchase price (the "Purchase Price") at which Stock may be acquired in an
Offering pursuant to the exercise of all or any portion of an Option granted
under the Plan shall be 85% of the lesser of (i) the fair market value of
the Stock on the Offering Date of such Offering and (ii) the fair market
value of the Stock on the Purchase Date.  Notwithstanding the
foregoing, the Board or the Committee may establish a different Purchase Price
for any future Offering, which shall not be less than the Purchase Price
previously stated.




(b)            The
fair market value of the Stock on the Offering Date or on the Purchase Date
shall be the closing price for the Stock as reported for such day by the
American Stock Exchange.  If no sales of the Stock were made on the
American Stock Exchange on the transaction date, fair market value shall mean
the closing price for the Stock as reported for the next preceding day on which
sales of the Stock were made on the American Stock Exchange.




(c)            Notwithstanding
the foregoing, if an increase in the number of shares authorized for issuance
under the Plan is approved and all or a portion of such additional shares are to
be issued during one or more Offerings that are underway at the time of
shareholder approval of such increase (the "Additional Shares"), then, if as of
the date of such shareholder approval, the fair market value of a share of Stock
is higher than the fair market value on the Offering Date for any such Offering,
the Purchase Price for the Additional Shares shall be 85% of the lesser of
(i) the Stock's fair market value on the date of such shareholder approval
and (ii) the fair market value of the Stock on the Purchase
Date.




SECTION 9.  PAYMENT
OF PURCHASE PRICE




9.1
            General
      Rules




Subject
to Section 9.12, Stock that is acquired pursuant to the exercise of all or any
portion of an Option may be paid for only by means of payroll deductions from
the Participant's Eligible Compensation.  Except as set forth in this
Section 9, the amount of compensation to be withheld from a Participant's
Eligible Compensation during each pay period shall be determined by the
Participant's Subscription.


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9.2           Change
Notices




(a)           Except
as set forth in Section 11.1 and unless the Plan Administrator determines
otherwise for an Offering, a Participant may not elect during an Offering Period
to increase or decrease the amount withheld from his or her compensation for
future pay periods within such Offering Period.  Unless otherwise
determined by the Plan Administrator for a future Offering, a Participant may
elect to increase or decrease the amount to be withheld from his or her
compensation for future Offerings; provided, however, that notice of such
election must be delivered to the Plan Administrator in such form and in
accordance with such terms as the Plan Administrator may establish for an
Offering.




(b)           Notwithstanding
the foregoing, to the extent necessary to comply with Code Section 423 and
Section 7.1, a Participant’s payroll deductions may be decreased during any
Purchase Period scheduled to end during the current calendar year to 0% at such
time that the aggregate of all payroll deductions accumulated with respect to
the Offering to which such Purchase Period applies and any other Offering ending
within the same calendar year exceed $21,250.  Payroll deductions
shall re-commence at the rate provided in such Participant’s Subscription at the
beginning of the first Purchase Period that is scheduled to end in the following
calendar year, unless the Participant terminates participation in the Plan as
provided in Section 11.1 or Section 11.2 below.




9.3
            Percent
      Withheld




The
amount of payroll withholding with respect to the Plan for any Participant
during any pay period shall be at least $5, but not more than 15%, of the
Participant's Eligible Compensation for such pay period, but in no event shall
the amount of a Participant's payroll withholding exceed the limits of
Section 7.1.  Amounts shall be withheld in whole dollar or
percentage amounts only.




9.4
            Payroll
      Deductions




Payroll
deductions shall commence on the first payday following the Offering Date and
shall continue through the last payday of the Offering Period unless sooner
altered or terminated as provided in the Plan.




9.5
            Memorandum
      Accounts




Individual
accounts shall be maintained for each Participant for memorandum purposes
only.  All payroll deductions from a Participant's compensation shall
be


8




credited
to such account but shall be deposited with the general funds of the
Company.  All payroll deductions received or held by the Company may
be used by the Company for any corporate purpose.




9.6
            No
      Interest




No
interest shall be paid on payroll deductions received or held by the
Company.




9.7
            Acquisition
      of Stock




On each
Purchase Date of an Offering Period, each Participant shall automatically
acquire, pursuant to the exercise of the Participant's Option, the number of
shares of Stock arrived at by dividing the total amount of the Participant's
accumulated payroll deductions for the Purchase Period by the Purchase Price;
provided, however, that the number of shares of Stock purchased by the
Participant shall not exceed the number of whole shares of Stock so determined,
if the Board or the Committee has determined for any future Offering that
fractional shares may not be issued under the Plan; and provided, further, that
the number of shares of Stock purchased by the Participant shall not exceed the
number of shares for which Options have been granted to the Participant pursuant
to Section 7.1.




9.8
            Carryover
      of Account




Any cash
balance remaining in the Participant's account at the termination of each
Offering shall be refunded to the Participant as soon as practical after the
Purchase Date without the payment of any interest; provided, however, that if
the Participant participates in the next Offering, any cash balance remaining in
the Participant's account shall be applied to the purchase of Stock in the new
Offering, provided such purchase complies with Section 7.1.




9.9
            Withholding
      Obligations




At the
time the Option is exercised, in whole or in part, or at the time some or all of
the Stock is disposed of, the Participant shall make adequate provision for
federal and state withholding obligations of the Company, if any, that arise
upon exercise of the Option or upon disposition of the Stock.  The
Company may withhold from the Participant's compensation the amount necessary to
meet such withholding obligations.


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9.10                      Termination
of Participation




No Stock
shall be purchased on behalf of a Participant on a Purchase Date if his or her
participation in the Plan has terminated prior to such Purchase
Date.




9.11
            Procedural
      Matters




The Plan
Administrator may, from time to time, establish (a) limitations on the
frequency and/or number of any permitted changes in the amount withheld during
an Offering, (b) an exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, (c) payroll withholding in excess of the
amount designated by a Participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, and
(d) such other limitations or procedures as deemed advisable by the Plan
Administrator, in its sole discretion, that are consistent with the Plan and in
accordance with the requirements of Code Section 423.




9.12
            Leaves
      of Absence




During
leaves of absence approved by the Company and meeting the requirements of the
applicable Treasury Regulations promulgated under the Code, a Participant may
continue participation in the Plan by delivering cash payments to the Plan
Administrator on the Participant's normal paydays equal to the amount of his or
her payroll deduction under the Plan had the Participant not taken a leave of
absence.




SECTION 10.  STOCK
PURCHASED UNDER THE PLAN




10.1
            ESPP
      Broker




If the
Plan Administrator designates or approves a stock brokerage or other financial
services firm (the "ESPP Broker") to hold shares purchased under the Plan for
the accounts of Participants, the following procedures shall
apply.  Promptly following each Purchase Date, the number of shares of
Stock purchased by each Participant shall be deposited into an account
established in the Participant's name with the ESPP Broker.  A
Participant shall be free to undertake a disposition of the shares of Stock in
his or her account at any time, but, in the absence of such a disposition, the
shares of Stock must remain in the Participant's account at the ESPP Broker
until the holding period set forth in Code Section 423 has been
satisfied.  With respect to shares of Stock for which the Code
Section 423 holding periods have been satisfied, the Participant may move
those shares of Stock to another brokerage account of the Participant' s
choosing or request that a stock certificate be issued and


10




delivered
to him or her.  A Participant who is not subject to payment of U.S.
income taxes may move his or her shares of Stock to another brokerage account of
his or her choosing or request that a stock certificate be delivered to him or
her at any time, without regard to the Code Section 423 holding
period.




10.2
            Notice
      of Disposition




By
entering the Plan, each Participant agrees to promptly give the Company notice
of any Stock disposed of within the later of one year from the Purchase Date and
two years from the Offering Date for such Stock, showing the number of such
shares disposed of and the Purchase Date and Offering Date for such
Stock.  This notice shall not be required if and so long as the
Company has a designated ESPP Broker.




SECTION 11.  VOLUNTARY
WITHDRAWAL




11.1
            Withdrawal
      From an Offering




A
Participant may withdraw from an Offering by delivering to the Plan
Administrator a notice of withdrawal in the form required by the Plan
Administrator for such purpose.  Such withdrawal must be elected at
least ten days prior to the end of the Purchase Period for which such withdrawal
is to be effective or by any other date specified by the Plan Administrator for
any future Offering.  If a Participant withdraws after the Purchase
Date for a Purchase Period of an Offering, the withdrawal shall not affect Stock
acquired by the Participant in that Purchase Period and any earlier Purchase
Periods.  Unless the Plan Administrator establishes a different rule
for any future Offering, withdrawal from an Offering shall not result in
withdrawal from the Plan and any succeeding Offering therein.  A
Participant is prohibited from again participating in the same Offering at any
time upon withdrawal from such Offering.




11.2
            Withdrawal
      From the Plan




A
Participant may withdraw from the Plan by delivering to the Plan Administrator a
notice of withdrawal in the form required by the Plan Administrator for such
purpose.  Such notice must be delivered at least ten days prior to the
end of the Purchase Period for which such withdrawal is to be effective or by
any other date specified by the Plan Administrator for any future
Offering.  If a Participant withdraws after the Purchase Date for a
Purchase Period of an Offering, the withdrawal shall not affect Stock acquired
by the Participant in that Purchase Period and any earlier Purchase
Periods.  In the event a Participant voluntarily elects to withdraw
from the Plan, the withdrawing Participant may not resume participation
in


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the Plan
during the same Offering Period but may participate in any subsequent Offering
under the Plan by again satisfying the definition of a Participant.




11.3
            Return
      of Payroll Deductions




Upon
withdrawal from an Offering pursuant to Section 11.1 or withdrawal from the Plan
pursuant to Section 11.2, the withdrawing Participant's accumulated payroll
deductions that have not been applied to the purchase of Stock shall be returned
as soon as practical after the withdrawal, without the payment of any interest
to the Participant and the Participant's interest in the Offering shall
terminate.  Such accumulated payroll deductions may not be applied to
any other Offering under the Plan.




SECTION 12.  TERMINATION
OF EMPLOYMENT




Termination
of a Participant's employment with the Company for any reason, including
retirement, disability or death, or the failure of a Participant to remain an
Eligible Employee, shall immediately terminate the Participant's participation
in the Plan.  The payroll deductions credited to the Participant's
account since the last Purchase Date shall, as soon as practical, be returned to
the Participant or, in the case of a Participant's death, to the Participant's
legal representative, and all the Participant's rights under the Plan shall
terminate.  Interest shall not be paid on sums returned to a
Participant pursuant to this Section 12.




SECTION 13.  RESTRICTIONS
UPON ASSIGNMENT




An Option
granted under the Plan shall not be transferable otherwise than by will or by
the applicable laws of descent and distribution and shall be exercisable during
the Participant's lifetime only by the Participant.  The Plan
Administrator will not recognize, and shall be under no duty to recognize, any
assignment or purported assignment by a Participant, other than by will or by
the applicable laws of descent and distribution, of the Participant's interest
in the Plan, of his or her Option, or of any rights under his or her
Option.




SECTION 14.  NO RIGHTS
OF SHAREHOLDER UNTIL SHARES ISSUED




With
respect to shares of Stock subject to an Option, a Participant shall not be
deemed to be a shareholder of the Company, and he or she shall not have any of
the rights or privileges of a shareholder.  A Participant shall have
the rights and privileges of a shareholder of the Company when, but not until,
the shares have been issued following exercise of the Participant's
Option.


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SECTION 15.  AMENDMENT
OF THE PLAN




The Board
or the Committee may amend the Plan in such respects as it shall deem advisable;
provided, however, that, to the extent required for compliance with Code
Section 423 or any applicable law or regulation, shareholder approval will
be required for any amendment that will (a) increase the total number of
shares as to which Options may be granted under the Plan, (b) modify the
class of employees eligible to receive Options, or (c) otherwise require
shareholder approval under any applicable law or regulation.




SECTION 16.  TERMINATION
OF THE PLAN




(a)           The
Board may suspend or terminate the Plan at any time.  Unless the Plan
shall theretofore have been terminated by the Board, the Plan shall terminate
on, and no Options shall be granted after, May 20, 2013.  Except as
provided in Section 19, no such termination may affect any Options granted prior
thereto.  No Options shall be granted during any period of suspension
of the Plan.




(b)           Notwithstanding
the foregoing, the Plan or an Offering may be terminated by the Board on a
Purchase Date or by the Board's setting a new Purchase Date with respect to an
Offering and a Purchase Period then in progress if the Board determines that
termination of the Plan and/or the Offering is in the best interests of the
Company and the shareholders or if continuation of the Plan and/or the Offering
would cause the Company to incur adverse accounting charges as a result of a
change after the effective date of the Plan in the generally accepted accounting
rules applicable to the Plan.




SECTION 17.  NO
RIGHTS AS AN EMPLOYEE




Nothing
in the Plan shall be construed to give any person (including any Eligible
Employee or Participant) the right to remain in the employ of the Company or a
Subsidiary Corporation or to affect the right of the Company and a Subsidiary
Corporation to terminate the employment of any person (including any Eligible
Employee or Participant) at any time with or without cause.




SECTION 18.  EFFECT
UPON OTHER PLANS




The
adoption of the Plan shall not affect any other compensation or incentive plans
in effect for the Company or any Subsidiary Corporation.  Nothing in
the Plan shall be construed to limit the right of the Company or any Subsidiary
Corporation to (a) establish any other forms of incentives or compensation
for employees of the


13




Company
or any Subsidiary Corporation or (b) grant or assume options otherwise than
under the Plan in connection with any proper corporate purpose, including, but
not by way of limitation, the grant or assumption of options in connection with
the acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or association.




SECTION 19.  ADJUSTMENTS




19.1
            Adjustment
      of Shares




In the
event that, at any time or from time to time, a stock dividend, stock split,
spin-off, combination or exchange of shares, recapitalization, merger,
consolidation, distribution to shareholders other than a normal cash dividend,
or other change in the Company's corporate or capital structure results in
(a) the outstanding shares, or any securities exchanged therefor or
received in their place, being exchanged for a different number or class of
securities of the Company or of any other corporation or (b) new, different or
additional securities of the Company or of any other corporation being received
by the holders of shares of Stock, then (subject to any required action by the
Company's shareholders), the Board or the Committee, in its sole discretion,
shall make such equitable adjustments as it shall deem appropriate in the
circumstances in (i) the maximum number and kind of securities subject to the
Plan as set forth in Section 4 and (ii) the number and kind of securities that
are subject to any outstanding Option and the per share price of such
securities.  The determination by the Board or the Committee as to the
terms of any of the foregoing adjustments shall be conclusive and
binding.




19.2
            Merger,
      Acquisition or Liquidation of the
Company




In the
event of the merger or consolidation of the Company into another corporation,
the acquisition by another corporation of all or substantially all of the
Company's assets, or the liquidation or dissolution of the Company, the Purchase
Date with respect to outstanding Options shall be the business day immediately
preceding the effective date of such merger, consolidation, acquisition,
liquidation or dissolution unless the Board or the Committee shall, in its sole
discretion, provide for the assumption or substitution of such Options in a
manner complying with Code Section 424(a).




19.3
            Limitations




The grant
of Options will in no way affect the Company's right to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to
merge,


14




consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.




SECTION 20.  REGISTRATION




The
Company shall be under no obligation to any Participant to register for offering
or resale under the Securities Act of 1933, as amended, or register or qualify
under state securities laws, any shares of Stock.  The Company may
issue certificates for shares with such legends and subject to such restrictions
on transfer and stop-transfer instructions as counsel for the Company deems
necessary or desirable for compliance by the Company with federal and state
securities laws.




SECTION 21.  EFFECTIVE
DATE




The
Plan's effective date is the date on which it is approved by the Company's
shareholders.


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