EXHIBIT 4


                       1998 STOCK PURCHASE AND OPTION PLAN
                              FOR KEY EMPLOYEES OF
                    KMC TELECOM HOLDINGS, INC. AND AFFILIATES

1.   PURPOSE OF PLAN

     The 1998 Stock  Purchase  and Option Plan for Key  Employees of KMC Telecom
Holdings, Inc. and Affiliates (the "Plan") is designed:

     (a) to promote the long term financial  interests and growth of KMC Telecom
Holdings,  Inc. (the  "Company")  and its affiliates by attracting and retaining
management personnel with the training, experience and ability to enable them to
make a substantial contribution to the success of the Company's business;

     (b) to motivate management personnel by means of growth-related  incentives
to achieve long range goals; and

     (c) to further the alignment of interests of participants with those of the
stockholders  of the Company  through  opportunities  for  increased  stock,  or
stock-based, ownership in the Company.

2.       DEFINITIONS

     As used in the Plan, the following words shall have the following meanings:

     (a)  "Affiliate"  means,  with respect to the Company,  any  corporation or
other entity directly or indirectly controlling,  controlled by, or under common
control  with,  the  Company  or any  other  entity  designated  by the Board of
Directors of the Company in which the Company or an Affiliate has an interest.

     (b) "Board of Directors" means the Board of Directors of the Company.

     (c) "Change of Control" shall mean (i) prior to a Public Offering:

          (A) (1) any person,  entity or group of persons  within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, or any comparable
successor  provisions,(other than Kamine, Nassau and their Affiliates) becoming,
directly or indirectly,  the beneficial holder of fifty percent (50%) or more of
the combined voting power of the Company's then  outstanding  voting  securities
entitled  to vote  generally  or (2) the  acquisition  by  purchase,  merger  or
otherwise of all or  substantially  all of the direct and indirect assets of the
Company; and


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          (B) a change in the  composition  of the Company's  Board of Directors
such that a majority of the designees  are not  designees of Nassau,  Kamine and
their affiliates.

          (ii) coincident with or subsequent to a Public Offering:

          (A)  the  acquisition  by  purchase,  merger  or  otherwise  of all or
substantially all of the direct and indirect assets of the Company; or

          (B) any  person,  entity or group of  persons  within  the  meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, or any comparable
successor  provisions (other than Kamine,  Nassau and their Affiliates) becoming
directly or indirectly the beneficial  holder of twenty percent (20%) or more of
the combined voting power of the Company's then  outstanding  voting  securities
entitled to vote generally by a  non-Affiliate  which gains majority  control of
the Board of Directors.

     (d) "Committee" means the Compensation Committee of the Board of Directors.

     (e) "Common  Stock" or "Share"  means common stock of the Company which may
be authorized but unissued, or issued and reacquired.

     (f)  "Employee"  means a  person,  including  an  officer,  in the  regular
full-time employment of the Company or one of its Affiliates who, in the opinion
of the  Committee,  is, or is  expected  to be,  primarily  responsible  for the
management,  growth or  protection  of some part or all of the  business  of the
Company.

     (g) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     (h) "Fair Market  Value" shall mean with respect to the Common Stock of the
Company,  if on the date as of which Fair Market Value is being  determined such
class of capital stock is listed on a national  securities exchange or is quoted
in the NASDAQ System or the  over-the-counter  market,  (A) the last sale price,
regular way, of such security on the principal national  securities  exchange on
which such security is at the time listed, or (B) if there have been no sales on
any such  exchange on any day,  the average of the highest bid and lowest  asked
prices  on  such  exchange  at the end of such  day,  or (C) if on any day  such
security  is not so  listed,  the  average of the  representative  bid and asked
prices quoted in the NASDAQ System as of 4:00 P.M.,  New York time, or (D) if on
any day such  security  is not quoted in the NASDAQ  System,  the average of the
highest bid and lowest asked prices on such day in the domestic over-the-counter
market as  reported  by the  National  Quotation  Bureau,  Incorporated,  or any
similar  successor  organization,  in each such case of clauses (A)-(D) averaged
over a period of 20 days  consisting of the day as of which Fair Market Value is
being  determined and the latest 19 consecutive  trading days prior to such day,
or (E) if the Common Stock is not  publicly  traded the fair market value of the
Common Stock as determined in good faith by the Board;  PROVIDED,  HOWEVER, that
the Board need not consider the purchase  price paid (after  taking into account
all other transactions  effected with the AT&T Capital Corporation  transaction)
for Common Stock by AT&T Capital Corporation on January 26, 1998.


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     (i) "Grant" means an award made to a  Participant  pursuant to the Plan and
described  in  Paragraph  5,  including,  without  limitation,  an  award  of an
Incentive  Stock  Option,  Stock  Option,  Stock  Appreciation  Right,  Dividend
Equivalent  Right,   Restricted  Stock,   Purchase  Stock,   Performance  Units,
Performance  Shares  or  Other  Stock  Based  Grant  or any  combination  of the
foregoing.

     (j)  "Grant  Agreement"  means  an  agreement  between  the  Company  and a
Participant that sets forth the terms,  conditions and limitations applicable to
a Grant.

     (k) "Kamine" means Harold M. Kamine and any entity, directly or indirectly,
controlled by Harold H. Kamine.

     (l) "Nassau  Affiliate" means,  with respect to Nassau Capital L.L.C.,  any
corporation directly or indirectly  controlling,  controlled by, or under common
control  with,   Nassau  Capital   L.L.C.,   other  than  the  Company  and  its
Subsidiaries.

     (m)  "Participant"  means an Employee,  director or other  person  having a
unique  relationship  with the Company or one of its Affiliates,  to whom one or
more  Grants  have  been made and such  Grants  have not all been  forfeited  or
terminated under the Plan.

     (n)  "Stock-Based  Grants" means the  collective  reference to the grant of
Stock  Appreciation  Rights,  Dividend  Equivalent  Rights,   Restricted  Stock,
Performance Units, Performance Shares and Other Stock Based Grants.

     (o) "Stock  Options"  means the  collective  reference to "Incentive  Stock
Options" and "Other Stock Options".

     (p)  "Subsidiary"  shall  mean  any  corporation  in an  unbroken  chain of
corporations beginning with the Company if each of the corporations, or group of
commonly  controlled  corporations,  other  than  the  last  corporation  in the
unbroken  chain then 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.

3     ADMINISTRATION OF PLAN

     (a) The Plan shall be administered by the Committee.  Except as provided in
Section 4, the members of the  Committee  shall be  eligible to be selected  for
Grants under the Plan.  The Committee may adopt its own rules of procedure,  and
action of a majority  of the  members of the  Committee  taken at a meeting,  or
action taken without a meeting by unanimous  written  consent,  shall constitute
action by the  Committee.  The  Committee  shall have the power and authority to
administer,  construe and  interpret the Plan, to make rules for carrying it out
and to  make  changes  in such  rules.  Any  such  interpretations,  rules,  and
administration shall be consistent with the basic purposes of the Plan.


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     (b) The Committee may delegate to the Chief Executive  Officer and to other
senior  officers  of the  Company  its  duties  under the Plan  subject  to such
conditions and limitations as the Committee shall prescribe;  provided, that the
Chief  Executive  Officer or other senior officers  ("Executives")  shall not be
delegated such duties with respect to Stock-Based Grants to such Executives.

     (c)  The  Committee  may  employ   attorneys,   consultants,   accountants,
appraisers,  brokers or other persons. In selecting such persons,  the Committee
may seek the advice of the Chief Executive  Officer and other senior officers of
the Company.  The Committee,  the Company, and the officers and directors of the
Company  shall be  entitled  to rely upon the  reasonable  advice,  opinions  or
valuations of any such persons.  All actions taken and all  interpretations  and
determinations  made by the  Committee  in good faith shall be final and binding
upon all Participants,  the Company and all other interested  persons. No member
of the Committee  shall be personally  liable for any action,  determination  or
interpretation  made in good faith with  respect to the Plan or the Grants,  and
all  members of the  Committee  shall be fully  protected  by the  Company  with
respect to any such action, determination or interpretation.

     (d) If, at any time,  the  Committee  has less than three members and it is
unable to reach a decision on a matter,  that matter shall be  determined by the
Board of Directors.

4    ELIGIBILITY

     The  Committee  may from  time to time make  Grants  under the Plan to such
Employees,  directors or other  persons  having a unique  relationship  with the
Company  or any of its  Affiliates,  and in such  form and  having  such  terms,
conditions and  limitations as the Committee may determine;  provided,  however,
that neither  Harold N. Kamine nor any person  employed by Nassau Capital L.L.C.
or any Nassau Affiliate shall be eligible for Grants under the Plan.  Grants may
be granted  singly,  in  combination  or in tandem.  The terms,  conditions  and
limitations  of  each  Grant  under  the  Plan  shall  be set  forth  in a Grant
Agreement,  in a form approved by the Committee,  consistent,  however, with the
terms of the  Plan;  provided,  however,  such  Grant  Agreement  shall  contain
provisions dealing with the treatment of Grants in the event of the termination,
death or disability of a Participant, and may also include provisions concerning
the treatment of Grants in the event of a Change of Control of Company.

5    GRANTS

     From time to time,  the Committee  will  determine the forms and amounts of
Grants  for  Participants.  Such  Grants  may  take the  following  forms in the
Committee's sole discretion:


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     (a) INCENTIVE STOCK OPTIONS - These are stock options within the meaning of
Section  422 of the  Internal  Revenue  Code of 1986,  as amended  ("Code"),  to
purchase Common Stock. In addition to other restrictions  contained in the Plan,
an option granted under this Paragraph  5(a), (i) may not be exercised more than
10 years  after the date it is granted,  (ii) may not have an option  price less
than the Fair  Market  Value of Common  Stock on the date the option is granted,
(iii) must  otherwise  comply with Code Section 422, and (iv) must be designated
as an "Incentive  Stock Option" by the  Committee.  The maximum  aggregate  Fair
Market Value of Common Stock (determined at the time of each Grant) with respect
to which  Incentive  Stock  Options are first  exercisable  with  respect to any
participant  under  this Plan and any  Incentive  Stock  Options  granted to the
Participant  for such year under any plans of the Company or any  Subsidiary  in
any calendar year is $100,000. Payment of the option price shall be made in cash
or in shares of Common Stock, or a combination  thereof,  in accordance with the
terms of the Plan, the Grant Agreement,  and of any applicable guidelines of the
Committee in effect at the time.

     (b) OTHER STOCK OPTIONS - These are options to purchase  Common Stock which
are not designated by the Committee as "Incentive Stock Options". At the time of
the  Grant  the  Committee  shall  determine,  and  shall  include  in the Grant
Agreement or other Plan rules, the option exercise period, the option price, and
such other  conditions or restrictions on the grant or exercise of the option as
the Committee  deems  appropriate,  which may include the  requirement  that the
grant of options is  predicated  on the  acquisition  of Purchase  Shares  under
Paragraph 5(e) by the Optionee.  In addition to other restrictions  contained in
the Plan, an option granted under this Paragraph  5(b), (i) may not be exercised
more than 10 years  after the date it is granted and (ii) may not have an option
exercise  price less than 50% of the Fair  Market  Value of Common  Stock on the
date the option is granted. Payment of the option price shall be made in cash or
in shares of Common Stock,  or a  combination  thereof,  in accordance  with the
terms of the Plan, the Grant  Agreement and of any applicable  guidelines of the
Committee  in effect at the time which the  Committee  reasonably  believes  are
desirable to impose.

     (c) STOCK  APPRECIATION  RIGHTS - These are rights that on exercise entitle
the holder to  receive  the  excess of (i) the Fair  Market  Value of a share of
Common Stock on the date of exercise over (ii) the Fair Market Value on the date
of Grant (the "base value")  multiplied by (iii) the number of rights  exercised
as determined by the Committee. Stock Appreciation Rights granted under the Plan
may, but need not be, granted in conjunction with an Option under Paragraph 5(a)
or 5(b).  The  Committee,  in the Grant  Agreement  or by other Plan rules,  may
impose such  conditions or  restrictions  on the exercise of Stock  Appreciation
Rights as it deems  appropriate.  No Stock Appreciation Right granted under this
Plan may be exercised less than 6 months or more than 10 years after the date it
is granted except in the event of death or disability of a  Participant.  To the
extent that any Stock Appreciation Right that shall have become exercisable, but
shall not have been  exercised or cancelled or, by reason of any  termination of
employment,  shall have become non-exercisable,  it shall be deemed to have been
exercised  automatically,  without  any notice of  exercise,  on the last day on
which it is  exercisable,  provided that any  conditions or  limitations  on its
exercise are  satisfied  (other than (i) notice of exercise and (ii) exercise or
election to exercise during the period  prescribed)  and the Stock  Appreciation
Right shall then have value.  Such exercise  shall be deemed to specify that the
holder  elects to receive  cash and that such  exercise of a Stock  Appreciation
Right shall be effective as of the time of automatic exercise.


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     (d)  RESTRICTED  STOCK - Restricted  Stock is Common  Stock  delivered to a
Participant  with or  without  payment of  consideration  with  restrictions  or
conditions on the Participant's right to a transfer or sell such stock; provided
that the price of any Restricted  Stock delivered for  consideration  and not as
bonus stock may not be less than 50% of the Fair Market Value of Common Stock on
the date such Restricted  Stock is granted or the price of such Restricted Stock
may be the par  value.  If a  Participant  irrevocably  elects in writing in the
calendar  year  preceding a Grant of  Restricted  Stock,  dividends  paid on the
Restricted  Stock granted may be paid in shares of Restricted Stock equal to the
cash dividend paid on Common Stock. The number of shares of Restricted Stock and
the  restrictions  or  conditions  on  such  shares  shall  be as the  Committee
determines,  in the Grant Agreement or by other Plan rules,  and the certificate
for the Restricted  Stock shall bear evidence of the restrictions or conditions.
No Restricted Stock may have a restriction  period of less than 6 months,  other
than in the case of death or disability.

     (e)  PURCHASE  STOCK -  Purchase  Stock  refers to  shares of Common  Stock
offered to a  Participant  at such price as  determined  by the  Committee,  the
acquisition  of  which  will  make him  eligible  to  receive  under  the  Plan,
including, but not limited to, Other Stock Options; provided,  however, that the
price of such Purchase  Shares may not be less than 50% of the Fair Market Value
of the Common Stock on the date such shares of Purchase Stock are offered.

     (f) DIVIDEND  EQUIVALENT RIGHTS - These are rights to receive cash payments
from the Company at the same time and in the same  amount as any cash  dividends
paid on an equal  number of shares of  Common  Stock to  shareholders  of record
during the  period  such  rights  are  effective.  The  Committee,  in the Grant
Agreement or by other Plan rules, may impose such restrictions and conditions on
the Dividend  Equivalent Rights,  including the date such rights will terminate,
as it deems appropriate.

     (g) PERFORMANCE  UNITS - These are rights to receive at a specified  future
date  payment  in cash of an amount  equal to all or a portion of the value of a
unit granted by the Committee.  At the time of the Grant, in the Grant Agreement
or by other Plan rules, the Committee must determine the base value of the unit,
the performance  factors applicable to the determination of the ultimate payment
value of the unit and the period over which the  Company's  performance  will be
measured.  These  factors  must include a minimum  performance  standard for the
Company  below  which no payment  will be made and a maximum  performance  level
above which no increased payment will be made. The term over which the Company's
performance will be measured shall be not less than six months.

     (h) PERFORMANCE  SHARES - These are rights to receive at a specified future
date payment in cash or Common  Stock,  as determined  by the  Committee,  of an
amount  equal to all or a portion of the average  Fair Market Value for all days
that the  Common  Stock is traded  during the last  forty-five  (45) days of the
specified  period of performance of a specified number of shares of Common Stock
at the end of a specified period based on the Company's  performance  during the
period.  At the time of the Grant,  the Committee,  in the Grant Agreement or by
Plan rules,  will  determine  the  factors  which will govern the portion of the
rights so payable and the period over which the  Company's  performance  will be
measured.  The  factors  will be based  on the  Company's  performance  and must
include a minimum  performance  standard for the Company  below which no payment
will be made and a maximum  performance  level above which no increased  payment
will be made.  The term over which the  Company's  performance  will be measured
shall be not less than six  months.  Performance  Shares  will be granted for no
consideration.

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     (i) OTHER  STOCK-BASED  GRANTS - The  Committee may make other Grants under
the Plan  pursuant to which  shares of Common Stock (which may, but need not, be
shares  of  Restricted  Stock  pursuant  to  Paragraph  5(d))  or  other  equity
securities  of the  Company  are or may in the  future  be  acquired,  or Grants
denominated  in stock units,  including  ones valued using  measures  other than
market  value.   Other  Stock-Based  Grants  may  be  granted  with  or  without
consideration;  provided,  however,  that the price of any such  Grant  made for
consideration  that  provides for the  acquisition  of shares of Common Stock or
other  equity  securities  of the  Company  may not be less than 50% of the Fair
Market Value of the Common Stock or such other equity  securities on the date of
grant of such  Grant.  Such  Other  Stock-Based  Grants  may be made  alone,  in
addition to or in tandem with any Grant of any type made under the Plan and must
be consistent with the purposes of the Plan.

6    LIMITATIONS AND CONDITIONS

     (a) The  number of Shares  available  for  Grants  under this Plan shall be
262,750  shares of the  authorized  Common Stock as of the effective date of the
Plan, subject to adjustment in accordance with Section 8 or 9 hereof. The number
of Shares subject to Grants under this Plan to any one Participant  shall not be
more than 75,000 shares, subject to adjustment in accordance with Section 8 or 9
hereof.  Unless  restricted by applicable law, Shares related to Grants that are
forfeited, terminated, cancelled or expire unexercised, shall immediately become
available for Grants.

     (b) No Grants  shall be made  under  the Plan  beyond  ten years  after the
effective  date of the  Plan,  but the terms of  Grants  made on or  before  the
expiration of the Plan may extend beyond such expiration. At the time a Grant is
made or amended or the terms or conditions of a Grant are changed, the Committee
may provide for limitations or conditions on such Grant.

     (c)  Nothing  contained  herein  shall  affect the right of the  Company to
terminate any Participant's employment at any time or for any reason.

     (d) Except as otherwise  prescribed  by the  Committee,  the amounts of the
Grants for any employee of an  Affiliate,  along with  interest,  dividend,  and
other expenses accrued on deferred Grants, shall be charged to the Participant's
employer  during the period for which the Grant is made. If the  Participant  is
employed by more than one  Affiliate  or by both the  Company  and an  Affiliate
during  the  period  for which the Grant is made,  the  Participant's  Grant and
related  expenses  will  be  allocated  between  the  companies   employing  the
Participant  in a  manner  prescribed  by  the  Committee  which  the  Committee
reasonably believes are desirable to impose.

     (e)  Other  than as  specifically  provided  with  regard to the death of a
Participant, no benefit, prior to the receipt thereof by the Participant,  under
the Plan  shall be  subject in any  manner to  anticipation,  alienation,  sale,
transfer,  assignment,  pledge, encumbrance, or charge, and any attempt to do so
shall  be  void.  No  such  benefit  shall,  prior  to  receipt  thereof  by the
Participant,  be in any manner  liable  for or subject to the debts,  contracts,
liabilities, engagements, or torts of the Participant.

     (f)  Participants  shall not be,  and  shall not have any of the  rights or
privileges of,  stockholders of the Company in respect of any Shares purchasable
in  connection  with any Grant unless and until full payment for such Shares has
been received from such Participants.


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     (g) No  election  as to  benefits  or  exercise  of  Stock  Options,  Stock
Appreciation Rights, or other rights may be made during a Participant's lifetime
by anyone other than the Participant except by a legal representative  appointed
for or by the Participant.

     (h) Absent  express  provisions to the contrary,  any grant under this Plan
shall  not  be  deemed  compensation  for  purposes  of  computing  benefits  or
contributions  under any retirement plan of the Company or its  Subsidiaries and
shall not affect any  benefits  under any other  benefit plan of any kind now or
subsequently  in effect  under which the  availability  or amount of benefits is
related  to level  of  compensation.  This  Plan is not a  "Retirement  Plan" or
"Welfare  Plan" under the Employee  Retirement  Income  Security Act of 1974, as
amended.

     (i) Unless the Committee determines otherwise,  no benefit or promise under
the Plan shall be secured by any  specific  assets of the  Company or any of its
Subsidiaries,  nor shall any assets of the Company or any of its Subsidiaries be
designated as  attributable  or allocated to the  satisfaction  of the Company's
obligations under the Plan.

7    TRANSFERS AND LEAVES OF ABSENCE

     For purposes of the Plan, unless the Committee  determines  otherwise at or
prior  to the  time of  transfer  or  leave  of  absence:  (a) a  transfer  of a
Participant's  employment  without an intervening period of separation among the
Company and any Affiliate  shall not be deemed a termination of employment,  and
(b) a  Participant  who is granted in writing a leave of absence shall be deemed
to have remained in the employ of the Company during such leave of absence.

8    ADJUSTMENTS

     In the event of any change in the  outstanding  Common Stock by reason of a
stock split, split-up, split-off, spin-off, stock dividend, stock combination or
reclassification,  reorganization, recapitalization or merger, Change of Control
or similar event, or as required under any Grant Agreement, the Committee shall,
in a manner  the  Committee  deems  equitable  after  taking  into  account  the
interests of all shareholders, adjust appropriately the number of Shares subject
to the Plan and available  for or covered by Grants and Share prices  related to
outstanding  Grants and make such other  revisions to  outstanding  Grants as it
deems, in its reasonable discretion, are equitably required.


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9     MERGER, CONSOLIDATION, EXCHANGE,
      ACQUISITION, LIQUIDATION OR DISSOLUTION

     In its absolute  discretion,  and on such terms and  conditions as it deems
appropriate,  coincident  with or after  the  grant of any  Stock  Option or any
Stock-Based  Grant,  the  Committee  may provide,  with respect to the merger or
consolidation  of the Company into another  corporation,  the exchange of all or
substantially  all of the assets of the  Company for the  securities  of another
corporation,  a Change of  Control  or the  recapitalization,  reclassification,
liquidation or  dissolution of the Company,  either a) that such Stock Option or
Stock-Based  Grant  cannot be  exercised  after  such  event,  in which case the
Committee  shall  also  provide,  either  by the terms of such  Stock  Option or
Stock-Based  Grant or by a resolution  adopted  prior to the  occurrence of such
event,  that for some reasonable  period of time prior to such event, such Stock
Option or  Stock-Based  Grant  shall be  exercisable  as to all  shares  subject
thereto which are  exercisable or, by virtue of the event,  become  exercisable,
notwithstanding  anything to the contrary  herein (but subject to the provisions
of  Paragraph  6(b)) and that,  upon the  occurrence  of such event,  such Stock
Option or  Stock-Based  Grant  shall  terminate  and be of no  further  force or
effect;  or b) that even if the Stock Option or  Stock-Based  Grant shall remain
exercisable  after such event,  from and after such event, any such Stock Option
or  Stock-Based  Grant  shall be  exercisable  only for the kind and  amount  of
securities and/or other property, or the cash equivalent thereof,  receivable as
a result  of such  event by the  holder of a number of shares of stock for which
such Stock Option or  Stock-Based  Grant could have been  exercised  immediately
prior to such event.

     In addition, in the event of a Change of Control, the Committee may, in its
absolute  discretion and on such terms and  conditions as it deems  appropriate,
provide,  either by the terms of such Stock Option or Stock-Based  Grant or by a
resolution  adopted prior to the occurrence of the Change of Control,  that such
Stock Option or Stock-Based  Grant shall be exercisable as to all or any portion
of the shares subject thereto,  notwithstanding  anything to the contrary herein
(but subject to the provisions of Paragraph 6(b)).

10   AMENDMENT AND TERMINATION

     The Committee shall have the authority to make such amendments to any terms
and conditions applicable to outstanding Grants as are consistent with this Plan
provided that,  except for adjustments  under  Paragraph 8 or 9 hereof,  no such
action shall modify such Grant in a manner  adverse to the  Participant  without
the  Participant's  consent  except  as such  modification  is  provided  for or
contemplated in the terms of the Grant.

     Subject  to  the  limitations   contained  in  the  immediately   preceding
subparagraph,  the Board of Directors  may amend,  suspend or terminate the Plan
except that no such action,  other than an action under Paragraph 8 or 9 hereof,
may be  taken  which  would,  without  shareholder  approval  (but  only if such
approval is necessary  for exemption  under Section 16(b) of the Exchange  Act),
increase the  aggregate  number of Shares  available  for Grants under the Plan,
decrease the price of outstanding Options or Stock Appreciation  Rights,  change
the requirements relating to the Committee or extend the term of the Plan.


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11   WITHHOLDING TAXES

     The Company shall have the right to deduct from any cash payment made under
the Plan any federal, state or local income or other taxes required by law to be
withheld with respect to such payment. It shall be a condition to the obligation
of the  Company  to  deliver  shares  upon the  exercise  of an  Option or Stock
Appreciation  Right, upon payment of Performance units or shares,  upon delivery
of  Restricted  Stock or upon  exercise,  settlement  or  payment  of any  Other
Stock-Based  Grant that the Participant pay to the Company such amount as may be
requested by the Company for the purpose of  satisfying  any  liability for such
withholding  taxes.  Any Grant  Agreement may provide that the  Participant  may
elect, in accordance with any conditions set forth in such Grant  Agreement,  to
pay a portion or all of such withholding taxes in shares of Common Stock.

12   CONFLICT

     In the event of any conflict  between the Plan and an employment  agreement
between the Company and an Optionee, the terms of the employment agreement shall
control;  provided, that such employment agreement,  and any amendments thereto,
has been approved by the Compensation Committee of the Company.

13   EFFECTIVE DATE AND TERMINATION DATES

     The Plan shall be  effective  on and as of the date of its  approval by the
stockholders  of the Company and shall  terminate  ten years  later,  subject to
earlier  termination  by the  Board  of  Directors  pursuant  to  Paragraph  10;
PROVIDED,  HOWEVER,  that any payment  under the Plan which would  constitute  a
"parachute payment" under section 280G of the Code must be approved by a vote of
75% of the  Company's  stockholders  to be  effective,  as  required  by Section
280G(b)(5)(B) of the Code;  provided,  further,  that if such vote is not given,
then the payment  would be reduced  only to the extent  necessary  to prevent if
from being a  "parachute  payment"  and the  portion  of the Option  that is not
accelerated shall remain in effect subject to the terms of the Plan.


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