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                                                                   EXHIBIT (4)-3


                     HERITAGE FINANCIAL HOLDING CORPORATION

                        INCENTIVE STOCK COMPENSATION PLAN
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                                TABLE OF CONTENTS

                     HERITAGE FINANCIAL HOLDING CORPORATION
                        INCENTIVE STOCK COMPENSATION PLAN

<TABLE>
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ARTICLE I    PURPOSE, SCOPE AND ADMINISTRATION OF THE PLAN.......................................................     1
         1.1      Successor......................................................................................     1
         1.2      Purpose........................................................................................     1
         1.3      Definitions....................................................................................     1
         1.4      Shares Available Under the Plan................................................................     4
         1.5      Administration of the Plan.....................................................................     4
         1.6      Eligibility for Awards.........................................................................     5
         1.7      Effective Date of Plan.........................................................................     6

ARTICLE II   STOCK OPTIONS.......................................................................................     6
         2.1      Grant of Options...............................................................................     6
         2.2      Option Requirements............................................................................     6
         2.3      Incentive Stock Option Requirements............................................................     8

ARTICLE III  RESTRICTED STOCK AWARDS.............................................................................     9
         3.1      Grant of Awards................................................................................     9
         3.2      Award Requirements.............................................................................     9

ARTICLE IV   GENERAL PROVISIONS..................................................................................    11
         4.1      Adjustment Provisions..........................................................................    11
         4.2      Additional Conditions..........................................................................    11
         4.3      No Rights as Shareholder or to Employment......................................................    12
         4.4      General Restrictions...........................................................................    12
         4.5      Rights Unaffected..............................................................................    12
         4.6      Choice of Law..................................................................................    13
         4.7      Amendment, Suspension and Termination of Plan..................................................    13
</TABLE>

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                     HERITAGE FINANCIAL HOLDING CORPORATION
                        INCENTIVE STOCK COMPENSATION PLAN

                                    ARTICLE I
                  PURPOSE, SCOPE AND ADMINISTRATION OF THE PLAN


1.1      SUCCESSOR

         The Company is the successor to Heritage Bank and the Company is vested
         with the rights and privileges under the Plan pursuant to the Plan of
         Reorganization and Agreement of Merger entered into as of March 14,
         2000, by and among Heritage Financial Holding Corporation, Heritage
         Interim Corporation and Heritage Bank.

1.2      PURPOSE

         The purpose of the Plan is to promote the long-term success of the
         Company by providing financial incentives to key employees and
         directors of the Company who are in positions to make significant
         contributions toward such success. The Plan is designed to attract
         individuals of outstanding ability to employment with the Company and
         to encourage key employees and directors to acquire a proprietary
         interest in the Company, to continue employment with the Company and to
         render superior performance during such employment.

1.3      DEFINITIONS

         Unless the context clearly indicates otherwise, for purposes of this
         Plan the following terms have the respective meanings set forth below:

         (a)      "Board of Directors" or "Board" means the Board of Directors
                  of the Company.

         (b)      "Change in Control" means (A) the acquisition at any time by a
                  "person" or "group" (as such terms are used in Sections 13(d)
                  and 14(d)(2) of the Securities Exchange Act of 1934 (the
                  "Exchange Act")) who or which are the beneficial owners (as
                  defined in Rule 13(d)-3 under the Exchange Act), directly or
                  indirectly, of securities representing more than 35% of the
                  combined voting power in the election of directors of the then
                  outstanding securities of the Company or any successor of the
                  Company unless the acquisition of securities resulting in such
                  ownership by such person or group had been approved by the
                  Board of Directors of the Company; (B) the termination of
                  service of directors, for any reason other than death,
                  disability or retirement from the Board of Directors, during
                  any period of two consecutive years or less, of individuals
                  who at the beginning of such period constituted a majority of
                  the Board of Directors, unless the election of or nomination
                  for election of each new director during such period was
                  approved by a vote of at least a majority of the directors
                  still in office who were directors at the beginning of the
                  period; (C) approval by the shareholders of the


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                  Company of any sale or disposition of substantially all of the
                  assets or earning power of the Company; or (D) approval by the
                  shareholders of the Company of any merger, consolidation, or
                  statutory share exchange to which the Company is a party as a
                  result of which the persons who were shareholders immediately
                  prior to the effective date of the merger, consolidation or
                  share exchange shall have beneficial ownership of less than
                  35% of the combined voting power in the election of directors
                  of the surviving corporation. Each determination concerning
                  whether an event constitutes a Change in Control under an
                  Award Agreement shall be made in a consistent manner as to the
                  particular event with respect to all Award Agreements of all
                  Participants in effect at the time of the event.

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

         (d)      "Committee" means the Compensation Committee of the Board of
                  Directors (or any successor committee thereto), which
                  committee shall be composed of not less than two members of
                  the Board of Directors who are "Non-Employee Directors" within
                  the meaning of Rule 16b-3 of the Securities Exchange Act of
                  1934, or any successor rule thereto.

         (e)      "Common Stock" means the common stock of the Company, par
                  value $.01 per share, or such other class of shares or other
                  securities to which the provisions of the Plan may be
                  applicable by reason of the operation of Section 4.1 hereof.

         (f)      "Company" means Heritage Financial Holding Corporation, a
                  Delaware corporation, and such of its majority owned
                  subsidiaries as the Committee shall designate.

         (g)      "Fair Market Value" of a share of Common Stock on any
                  particular date means the average between the bid and ask
                  prices quoted on such date by the National Daily Quotation
                  Service, or on the National Association of Securities Dealers
                  Automated Quotation ("NASDAQ") System or a registered
                  securities exchange, if listed thereon. In the event that both
                  bid and ask prices are not so quoted, then the Fair Market
                  Value shall be the bid price determined by the National
                  Association of Securities Dealers, Inc. ("NASD") local
                  quotations committee as most recently published in a daily
                  newspaper of general circulation in Morgan County, Alabama. In
                  the event that no such bid price is published, then Fair
                  Market Value shall be the fair market value as determined by
                  the Board of Directors.

         (h)      "Grant Date," as used with respect to a particular Option or
                  Restricted Stock Award, means the date as of which such Option
                  or Award is granted by the Committee pursuant to the Plan.

         (i)      "Grantee" means the employee or director to whom an Option or
                  Restricted Stock Award is granted by the Committee pursuant to
                  the Plan.


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         (j)      "Incentive Stock Option" means an Option that qualifies as an
                  incentive stock option as described in Section 422A of the
                  Code.

         (k)      "Option" means an Option granted by the Committee pursuant to
                  Article II to purchase shares of Common Stock, which shall be
                  designated at the time of grant as either an Incentive Stock
                  Option or a Supplemental Stock Option, as provided in Section
                  2.1 hereof.

         (l)      "Option Agreement" means the agreement between the Company and
                  a Grantee under which the Grantee is granted an Option
                  pursuant to the Plan.

         (m)      "Option Period" means the period fixed by the Committee during
                  which an Option may be exercised, which period may, by the
                  Committee in its sole discretion, be lengthened to any extent
                  or shortened by as much as one calendar month, provided that
                  no Incentive Stock Option shall, under any circumstances, be
                  exercisable more than ten years after the Grant Date.

         (n)      "Plan" means the Heritage Financial Holding Corporation
                  Incentive Stock Compensation Plan as set forth herein and as
                  amended from time to time.

         (o)      "Restricted Stock Agreement" means the agreement between the
                  Company and a Grantee under which the Grantee is granted a
                  Restricted Stock Award pursuant to the Plan.

         (p)      "Restricted Stock Award" means an award of Common Stock which
                  is granted by the Committee pursuant to Article III hereof and
                  which is restricted against sale or other transfer in a manner
                  and for a specified period of time determined by the
                  Committee.

         (q)      "Restriction Period" means, with respect to any Restricted
                  Stock Award granted hereunder, the period beginning on the
                  Grant Date and ending at such time as the Committee, in its
                  sole discretion, shall determine and during which the shares
                  of Restricted Stock are subject to forfeiture, provided that
                  after the period is determined by the Committee, it may, in
                  its sole discretion, lengthen the period by as much as one
                  calendar month or shorten it to any extent.

         (r)      "Retirement," as applied to a Grantee, means the Grantee's
                  termination of employment in a manner which qualifies the
                  Grantee to receive immediately payable retirement benefits
                  under any retirement plan hereafter adopted by the Company, or
                  which in the absence of any such retirement plan is determined
                  by the Committee to constitute retirement.

         (s)      "Supplemental Stock Option" means any Option granted under
                  this Plan, other than an Incentive Stock Option.


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         (t)      "Total and Permanent Disability," as applied to a Grantee,
                  means that the Grantee (1) has established to the satisfaction
                  of the Committee that the Grantee 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 (2) has satisfied any requirement imposed by the
                  Committee in regard to evidence of such disability.

1.4      SHARES AVAILABLE UNDER THE PLAN

         (a)      The number of shares of Common Stock with respect to which
                  Options and Restricted Stock Awards may be granted shall be
                  Six Million (6,000,000) shares of Common Stock, subject to
                  adjustment in accordance with the remaining provisions of this
                  Section 1.4 and the provisions of Section 4.1 hereof.

         (b)      In the event that any Option expires or otherwise terminates
                  prior to being fully exercised, or any Restricted Stock Award
                  is forfeited, the Committee may, without decreasing the number
                  of shares authorized in this Section 1.4, grant new Options
                  and Restricted Stock Awards hereunder to any eligible Grantee
                  for the shares with respect to which the expired or terminated
                  Option was not exercised or which were forfeited when the
                  terms and conditions of the Restricted Stock Award were not
                  satisfied.

         (c)      Any shares of Common Stock to be delivered by the Company upon
                  the grant of Restricted Stock Awards or the exercise of
                  Options shall, at the discretion of the Board of Directors, be
                  issued from the Company's authorized but unissued shares of
                  Common Stock or be transferred from any available treasury
                  stock.

1.5      ADMINISTRATION OF THE PLAN

         (a)      The Plan shall be administered by the Committee which shall
                  have the authority:

                  (1)      To determine those employees or directors of the
                           Company to whom, and the times at which, Options
                           and/or Restricted Stock Awards shall be granted and
                           the number of shares of Common Stock to be subject to
                           each such Option and/or Award, taking into
                           consideration the nature of the services rendered by
                           the particular employee or director, the employee's
                           or director's potential contribution to the long term
                           success of the Company and such other factors as the
                           Committee in its discretion shall deem relevant;

                  (2)      To interpret and construe the provisions of the Plan
                           and to establish rules and regulations relating to
                           it;


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                  (3)      To prescribe the terms and conditions of the Option
                           Agreements for the grant of Options (which need not
                           be identical) in accordance and consistent with the
                           requirements of the Plan including the provision in
                           Section 1.2(l) hereof allowing adjustments to the
                           duration of the Option Period after the Option
                           Agreement has been entered into;

                  (4)      To prescribe the terms and conditions of the
                           Restricted Stock Agreements (which need not be
                           identical) in accordance and consistent with the
                           requirements of the Plan including the provision in
                           Section 1.2(o) hereof allowing adjustments to the
                           duration of the Restriction Period after the
                           Restricted Stock Agreement has been entered into; and

                  (5)      To make all other determinations necessary or
                           advisable to administer the Plan in a proper and
                           effective manner.

         (b)      All decisions and determinations of the Committee in the
                  administration of the Plan and in response to questions or in
                  connection with other matters concerning the Plan or any
                  Option or Restricted Stock Award shall (whether or not so
                  stated in the particular instance in the Plan) be final,
                  conclusive and binding on all persons, including, without
                  limitation, the Company, the shareholders and directors of the
                  Company and any person having any interest in any Options or
                  Restricted Stock Awards which may be granted under the Plan.

1.6      ELIGIBILITY FOR AWARDS

         The Committee shall designate from time to time the key employees and
         directors of the Company who are to be granted Options and/or
         Restricted Stock Awards. However, Incentive Stock Options may only be
         granted to employees (including officers of the Company or any
         subsidiary).

1.7      EFFECTIVE DATE OF PLAN

         The Plan shall become effective upon the date of its adoption and
         ratification by the Board of Directors.


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                                   ARTICLE II
                                  STOCK OPTIONS

2.1      GRANT OF OPTIONS

         (a)      The Committee may from time to time, subject to the provisions
                  of the Plan, grant Options to key employees and directors
                  under appropriate Option Agreements, to purchase shares of
                  Common Stock.

         (b)      The Committee may designate any Option which satisfies the
                  requirements of Section 2.3 hereof as an Incentive Stock
                  Option and may designate any Option granted hereunder as a
                  Supplemental Stock Option, or the Committee may designate a
                  portion of an Option as an Incentive Stock Option (so long as
                  that portion satisfies the requirements of Section 2.3 hereof)
                  and the remaining portion as a Supplemental Stock Option. Any
                  portion of an Option that is not designated as an Incentive
                  Stock Option shall be a Supplemental Stock Option. A
                  Supplemental Stock Option must satisfy the requirements of
                  Section 2.2 hereof, but shall not be subject to the
                  requirements of Section 2.3 hereof.

2.2      OPTION REQUIREMENTS

         (a)      An Option shall be evidenced by an Option Agreement specifying
                  the number of shares of Common Stock that may be purchased
                  upon its exercise and containing such terms and conditions not
                  inconsistent with the Plan and based on such factors as the
                  Committee shall determine, in its sole discretion, to be
                  applicable to that particular Option.

         (b)      An Option shall be exercisable at such time or times and
                  subject to such terms and conditions as shall be determined by
                  the Committee and communicated in writing to the Grantee at or
                  after the Option is granted; provided, however, that an Option
                  shall become immediately and fully exercisable (1) upon the
                  death of the Grantee , (2) upon employment with the Company
                  ceasing because of Total and Permanent Disability, or (3) upon
                  the occurrence of any Change in Control. If the Committee
                  provides that any Option is exercisable only in installments
                  or provides other vesting requirements, the Committee may
                  waive such provisions at any time, in whole or in part, based
                  on such factors as the Committee shall, in its sole
                  discretion, determine.

         (c)      An Option shall expire by its terms at the expiration of the
                  Option Period and shall not be exercisable thereafter;
                  provided, however, that an Option may be exercised immediately
                  upon the death of the Grantee and for a period of one year
                  after the death of the Grantee despite the expiration during
                  that time of the Option Period, except that an Incentive Stock
                  Option can never be exercised more than 10 years after its
                  Grant Date.


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         (d)      The Committee may provide in the Option Agreement for the
                  expiration or termination of the Option prior to the
                  expiration of the Option Period, upon the occurrence of any
                  event specified by the Committee.

         (e)      The option price per share of Common Stock shall be determined
                  by the Committee at the time of grant but shall be not less
                  than 100% of the Fair Market Value of a share of Common Stock
                  on the Grant Date.

         (f)      An Option shall not be transferable other than by will or the
                  laws of descent and distribution or as set forth in the Option
                  Agreement. Unless lawfully transferred during the Grantee's
                  lifetime, an Option shall be exercisable only by the Grantee,
                  or if the Grantee is disabled and the Option remains
                  exercisable, by his or her duly appointed guardian or other
                  legal representative.

         (g)      Notwithstanding the Option Period applicable to a Supplemental
                  Stock Option granted hereunder, such Supplemental Stock
                  Option, to the extent that it has not previously been
                  exercised, shall terminate upon the earliest to occur of (1)
                  the expiration of the applicable Option Period as set forth in
                  the Option Agreement granting such Supplemental Stock Option,
                  (2) the expiration of one year after the Grantee's Retirement,
                  (3) the expiration of one year after the Grantee ceases to be
                  an employee or director of the Company due to Total and
                  Permanent Disability, (4) subject to the application of the
                  provisions of subsection (c) above, the expiration of one year
                  after the Grantee ceases to be an employee or director of the
                  Company due to the death of the Grantee, (5) the expiration of
                  the original Option Period in the event of a Change in
                  Control, or (6) 90 days after the date on which a Grantee
                  ceases to be an employee or director of the Company for any
                  reason other than Retirement, Total and Permanent Disability,
                  death or a Change in Control.

         (h)      A person electing to exercise an Option shall give written
                  notice of such election to the Company, in such form as the
                  Committee may require, accompanied by payment in cash or check
                  payable to the Company for the full purchase price of the
                  shares of Common Stock for which the election is made. Except
                  as otherwise provided by the Committee before the option is
                  exercised (1) all or a portion of the exercise price may be
                  paid by the Grantee by delivery of shares of the Common Stock
                  already owned by the Grantee and acceptable to the Committee
                  having an aggregate Fair Market Value (valued at the date of
                  exercise) that is equal to the amount of cash that would
                  otherwise be required; and (2) the Grantee may pay the
                  exercise price by authorizing a third party to sell shares of
                  the Common Stock (or a sufficient portion thereof) acquired
                  upon the exercise of the Option and remit to the Company a
                  sufficient portion of the sale proceeds to pay the entire
                  exercise price and any tax withholding from such exercise. The
                  Option shall not be exercisable if and to the extent the
                  Company determines that such exercise would violate applicable
                  state or federal securities laws or the rules and regulations
                  of any securities exchange on which the


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                  Common Stock is traded. If the Company makes such a
                  determination, it shall use all reasonable efforts to obtain
                  compliance with such laws, rules or regulations. In making any
                  determination hereunder, the Company shall rely on the
                  opinions of counsel for the Company.

2.3      INCENTIVE STOCK OPTION REQUIREMENTS

         (a)      An Option designated by the Committee as an Incentive Stock
                  Option is intended to qualify as an "incentive stock option"
                  within the meaning of Subsection (b) of Section 422A of the
                  Code and shall satisfy, in addition to the conditions of
                  Section 2.2 hereof, the conditions set forth in this Section
                  2.3; provided, however, that at any time after the granting of
                  an Incentive Stock Option, the Committee may, in its sole
                  discretion, and without the consent of, and even if to the
                  personal detriment of, a Grantee, take any action or actions
                  to disqualify the Option as an Incentive Stock Option thereby
                  converting said Option into a Supplemental Stock Option.

         (b)      An Incentive Stock Option shall not be granted to an
                  individual who, on the Grant Date, owns stock possessing more
                  than ten percent of the total combined voting power of all
                  classes of stock of the Company, unless the Committee provides
                  in the Option Agreement with any such individual that the
                  option price per share of Common Stock will not be less than
                  110% of the Fair Market Value of a share of Common Stock on
                  the Grant Date and that the Option Period will not extend
                  beyond five years from the Grant Date.

         (c)      The aggregate Fair Market Value, determined on the Grant Date,
                  of the shares of Common Stock as to which Incentive Stock
                  Options are exercisable for the first time by any Grantee with
                  respect to the Plan and Incentive Stock Options (within the
                  meaning of Subsection (b) of Section 422A of the Code) under
                  any other plan of the Company or any parent or subsidiary
                  thereof, in any calendar year shall not exceed $100,000.00.

         (d)      Notwithstanding the Option Period applicable to an Incentive
                  Stock Option granted hereunder, such Incentive Stock Option,
                  to the extent that it has not been previously exercised, shall
                  terminate upon the earliest to occur of (1) the expiration of
                  the applicable Option Period as set forth in the Option
                  Agreement granting such Incentive Stock Option, (2) the
                  expiration of twelve months after the Grantee's Retirement,
                  (3) the expiration of twelve months after the Grantee ceases
                  to be an employee or director of the Company due to Total and
                  Permanent Disability, (4) subject to the provisions of Section
                  2.2(c) hereof, the expiration of twelve months after the
                  Grantee ceases to be an employee or director of the Company
                  due to the death of the Grantee, (5) the expiration of the
                  original Option Period in the event of a Change in Control or
                  (6) ninety days after the date on which the Grantee ceases to
                  be an employee or


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                  director of the Company for any reason other than Retirement,
                  Total and Permanent Disability , death or a Change in Control.

                                   ARTICLE III
                             RESTRICTED STOCK AWARDS

3.1      GRANT OF AWARDS

         The Committee may, from time to time, subject to the provisions of the
         Plan, grant Restricted Stock Awards to key employees and directors
         under appropriate Restricted Stock Agreements.

3.2      AWARD REQUIREMENTS

         (a)      An award shall be evidenced by a Restricted Stock Agreement
                  specifying the number of shares of Common Stock that are
                  awarded and containing such terms and conditions not
                  inconsistent with the Plan as the Committee shall determine to
                  be applicable to that particular award, which agreement shall
                  contain in substance at least the following terms and
                  conditions:

                  (1)      Shares awarded pursuant to Restricted Stock Awards
                           shall be subject to such conditions, terms and
                           restrictions (including, for example, continuation of
                           employment in the same or in a higher level position)
                           and for such Restriction Period or Periods (including
                           the lapse of restrictions in installments) as may be
                           determined by the Committee.

                  (2)      Shares awarded, and the right to vote such shares and
                           to receive dividends thereon, may not be sold,
                           assigned, transferred, exchanged, pledged,
                           hypothecated, or otherwise encumbered, during the
                           Restriction Period applicable to such shares;
                           provided, that the Grantee awarded Restricted Stock
                           shall have the right to execute a proxy to vote the
                           Restricted Stock. Notwithstanding the foregoing, and
                           except as otherwise provided in the Plan, a Grantee
                           awarded Restricted Stock shall have all the other
                           rights of a stockholder, including the right to
                           receive dividends and the right to vote such shares.

                  (3)      Each certificate issued in respect of Common Stock
                           awarded to a Grantee shall be deposited with the
                           Company, or its designee, or in the Committee's
                           discretion delivered to the Grantee, and shall bear
                           an appropriate legend noting the existence of
                           restrictions upon the transfer of such Common Stock.


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                  (4)      The Restricted Stock Agreement shall specify the
                           terms and conditions upon which any restrictions upon
                           shares awarded under the Plan shall lapse, as
                           determined by the Committee (including, for example,
                           employment in the same or a higher level position at
                           the end of the Restriction Period or the occurrence
                           of a Change in Control. Upon lapse of such
                           restrictions, certificates representing shares of
                           Common Stock free of any restrictive legend, other
                           than as may be required under Article III hereof,
                           shall be issued and delivered to the Grantee or his
                           legal representative.

         (b)      If a Grantee's employment terminates during a Restriction
                  Period as a result of death of the Grantee, all restrictions
                  upon shares awarded under the Plan shall lapse and the
                  certificates representing shares awarded as a Restricted Stock
                  Award, free of any restrictive legend other than as may be
                  required under Article IV hereof, shall be issued and
                  delivered to the Grantee's legal representative. If a
                  Grantee's employment terminates during a Restriction Period as
                  a result of death, Retirement, Total and Permanent Disability,
                  or a Change in Control, the Committee shall in its sole
                  discretion determine the extent to which restrictions shall be
                  deemed to have lapsed, which may include the determination
                  that all restrictions shall have lapsed, but in no event shall
                  the Committee determine that the restrictions have lapsed to a
                  lesser extent than is determined by multiplying the amount of
                  the Restricted Stock Award by a fraction, the numerator of
                  which is the full number of calendar months such Grantee was
                  employed during the Restriction Period and the denominator of
                  which is the total number of full calendar months in the
                  Restriction Period. If a Grantee's employment terminates for
                  any reason other than as described in the preceding two
                  sentences, the Grantee shall be deemed not to have satisfied
                  the restrictions associated with the Restricted Stock Award
                  unless the Committee determines otherwise in its sole
                  discretion (in which event the extent to which restrictions
                  will be deemed to have lapsed shall not exceed the amount
                  determined pursuant to the formula set forth in the preceding
                  sentence).

                                   ARTICLE IV
                               GENERAL PROVISIONS

4.1      ADJUSTMENT PROVISIONS

         (a)      In the event of (1) any dividend payable in shares of Common
                  Stock; (2) any recapitalization, reclassification, split-up or
                  consolidation of, or other change in, the Common Stock; or (3)
                  an exchange of the outstanding shares of Common Stock, in
                  connection with a merger, consolidation or other
                  reorganization of or involving the Company or a sale by the
                  Company of all or a portion of its assets, for a different
                  number or class of shares of stock or other securities of the
                  Company or for shares of the stock or other securities of any
                  other corporation (whether issued to the Company


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                  or to its shareholders); the number of shares of Common Stock
                  available under the Plan pursuant to Section 1.3 hereof shall
                  be adjusted to appropriately reflect the occurrence of the
                  event specified in (1), (2) or (3) above and the Committee
                  shall, in such manner as it shall determine in its sole
                  discretion, appropriately adjust the number and class of
                  shares or other securities which shall be subject to Options
                  and Restricted Stock Awards and/or the purchase price per
                  share which must be paid thereafter upon exercise of any
                  Option. Any such adjustments made by the Committee shall be
                  final, conclusive and binding upon all persons, including,
                  without limitation, the Company, the shareholders and
                  directors of the Company and any persons having any interest
                  in any Options or Restricted Stock Awards which may be granted
                  under the Plan.

         (b)      Except as provided in Section 4.1(a) hereof, issuance by the
                  Company of shares of stock of any class or securities
                  convertible into shares of stock of any class shall not affect
                  the Options or Restricted Stock Awards.

4.2      ADDITIONAL CONDITIONS

         (a)      Any shares of Common Stock issued or transferred under any
                  provision of the Plan may be issued or transferred subject to
                  such conditions, in addition to those specifically provided in
                  the Plan, as the Committee or the Company may impose.

         (b)      If prior to the time a Grantee has exercised all Options, the
                  Committee or the Corporate Secretary of the Company receives
                  from the Company notice of suspected dishonesty of the
                  Grantee, or of suspected conduct by the Grantee which causes
                  or reasonably may be expected to cause substantial damage to
                  the Company or one or more of its subsidiaries, each Option,
                  to the extent not previously exercised, shall terminate
                  immediately and neither the Grantee nor any one claiming under
                  him shall have any rights thereto.

4.3      NO RIGHTS AS SHAREHOLDER OR TO EMPLOYMENT

         No Grantee or any other person authorized to purchase Common Stock upon
         exercise of an Option shall have any interest in or shareholder rights
         with respect to any shares of Common Stock which are subject to any
         Option until such shares have been issued and delivered to the Grantee
         or any such person pursuant to the exercise of such Option.
         Furthermore, the Plan shall not confer upon any Grantee any rights of
         employment with the Company, including without limitation any right to
         continue in the employ of the Company, or affect the right of the
         Company to terminate the employment of a Grantee at any time, with or
         without cause.


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4.4      GENERAL RESTRICTIONS

         Each award under the Plan shall be subject to the requirement that, if
         at any time the Committee shall determine that (a) the listing,
         registration or qualification of the shares of Common Stock subject or
         related thereto upon any securities exchange or under any state or
         federal law, or (b) the consent or approval of any government
         regulatory body, or (c) an agreement by the recipient of an award with
         respect to the disposition of shares of Common Stock, is necessary or
         desirable as a condition of, or in connection with, the granting of
         such award or the issue or purchase of shares of Common Stock
         thereunder, such award may not be consummated in whole or in part
         unless such listing, registration, qualification, consent, approval or
         agreement shall have been effected or obtained free of any conditions
         not acceptable to the Committee. A participant shall agree, as a
         condition of receiving any award under the Plan, to execute any
         documents, make any representations, agree to restrictions on stock
         transferability and take any actions which in the opinion of legal
         counsel to the Company are required by any applicable law, ruling or
         regulation.

4.5      RIGHTS UNAFFECTED

         The existence of the Options and Restricted Stock Awards shall not
         affect the right or power of the Company or its shareholders to make
         adjustments, recapitalizations, reorganizations or other changes in the
         Company's capital structure or its business; any issue of bonds,
         debentures, preferred or prior preference stocks affecting the Common
         Stock or the rights thereof; the dissolution or liquidation of the
         Company, or sale or transfer of any part of its assets or business; or
         any other corporate act, whether of a similar character or otherwise.

         (a)      As a condition of grant, exercise or lapse of restrictions on
                  any Option or Restricted Stock Award, the Company may, in its
                  sole discretion, withhold or require the Grantee to pay or
                  reimburse the Company for any taxes which the Company
                  determines are required to be withheld (including, without
                  limitation, any required FICA payments), in connection with
                  the grant of or lapse of restrictions on a Restricted Stock
                  Award or the grant of or any exercise of an Option. Whenever
                  payment or withholding of such taxes is required, the Grantee
                  may satisfy the obligation, in whole or in part, by electing
                  to deliver to the Company shares of Common Stock already owned
                  by the Grantee or to which the Grantee is otherwise entitled
                  under the Plan, in each case having a value equal to the
                  amount required to be withheld. For these purposes, the value
                  of the shares to be withheld is the Fair Market Value on the
                  date that the amount of tax to be withheld is to be determined
                  (the "Tax Date").

         (b)      An election by a Grantee to deliver shares of Common Stock
                  already owned by the Grantee or to have shares withheld for
                  purposes of subsection (a) of this section (an "Election")
                  must meet the following requirements in order to be effective:


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                  (1)      the Election must be made prior to the Tax Date;

                  (2)      the Election is irrevocable; and

                  (3)      the Election may be disapproved by the Committee in
                           its sole discretion;

4.6      CHOICE OF LAW

         The validity, interpretation and administration of the Plan and of any
         rules, regulations, determination or decisions made thereunder, and the
         rights of any and all persons having or claiming to have any interest
         therein or thereunder, shall be determined exclusively in accordance
         with the laws of the State of Delaware.

         Without limiting the generality of the foregoing, the period within
         which any action in connection with the Plan must be commenced shall be
         governed by the Laws of the State of Delaware, without regard to the
         place where the act or omission complained of took place, the residence
         of any party to such action or the place where the action may be
         brought or maintained.

4.7      AMENDMENT, SUSPENSION AND TERMINATION OF PLAN

         (a)      The Plan may be terminated, suspended or amended, from time to
                  time, by the Board of Directors or the Committee in such
                  respects as it shall deem advisable; provided, however, that
                  any amendment that would change the maximum aggregate number
                  of shares for which Options and Restricted Stock Awards may be
                  granted under the Plan (except as required under any
                  adjustments pursuant to Sections 1.4 and 4.1 hereof) shall be
                  subject to approval of the shareholders of the Company.

         (b)      Notwithstanding any other provision herein contained, no
                  Incentive Stock Options shall be granted on or after the tenth
                  anniversary of the approval of the Plan by the Board of
                  Directors or the Committee and the Plan shall terminate and
                  all Options and Restricted Stock Awards previously granted
                  shall terminate, in the event and on the date of liquidation
                  or dissolution of the Company.

         (c)      Whether before or after termination of the Plan, the Board of
                  Directors or the Committee has full authority in accordance
                  with Section 4.7(a) hereof to amend the Plan, effective for
                  Options and Restricted Stock Awards which remain outstanding
                  under the Plan.


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