Exhibit 10.10

AMENDED AND RESTATED
APRIA HEALTHCARE GROUP INC.1997 STOCK INCENTIVE PLAN

Includes Amendment 1998-1 Made by the Board of
Directors

As of June 30, 1998

---

TABLE OF CONTENTS

ARTICLE I  -  THE PLAN.

| |                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                  
| | ------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Section 1.1.
 Section 1.2.
 Section 1.3.
 Section 1.4.
 Section 1.5.
 Section 1.6.
 Section 1.7.
 Section 1.8.
 Section 1.9.
 Section 1.10. | Purpose
Administration and Authorization; Power and Procedure
Participation
Shares Available for Awards; Share Limits
Grant of Awards
Award Period
Limitations on Exercise and Vesting of Awards
No Transferability; Limited Exception to Transfer Restrictions
Acceptance of Notes to Finance Exercise
Limitations on Grants of Awards to Non-Employee Directors

ARTICLE II  -  OPTIONS.

| |                                                                                    |                                                                                                                                                                                                                                       
| | ---------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Section 2.1.
 Section 2.2.
 Section 2.3.
 Section 2.4.
 Section 2.5.
 Section 2.6. | Grants
Option Price
Limitations on Grant and Terms of Incentive Stock Options
Limits on 10% Holders
Cancellation and Regrant/Waiver of Restrictions
Options and Rights in Substitution for Stock Options Granted by Other Corporations

ARTICLE III -  STOCK APPRECIATION
RIGHTS.

| |                                        |                                                     
| | -------------------------------------- | ----------------------------------------------------
| | Section 3.1.
Section 3.2.
Section 3.3. | Grants
Exercise of Stock Appreciation Rights
Payment

ARTICLE IV 
-  RESTRICTED STOCK AWARDS.

| |                                        |                                              
| | -------------------------------------- | ---------------------------------------------
| | Section 4.1.
Section 4.2.
Section 4.3. | Grants
Restrictions
Return to the Corporation

ARTICLE V  -  PERFORMANCE SHARE AWARDS
AND STOCK BONUSES.

| |                                                      |                                                                                                                    
| | ---------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------
| | Section 5.1.
Section 5.2.
Section 5.3. 
Section 5.4. | Grants of Performance Share Awards
Special Performance-Based Share Awards
Grants of Stock Bonuses
Deferred Payments

ARTICLE VI 
-  OTHER PROVISIONS.

| |                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Section 6.1.
Section 6.2.
Section 6.3.
Section 6.4.
Section 6.5.
Section 6.6.
Section 6.7.
Section 6.8.
Section 6.9.
Section 6.10.
Section 6.11.
Section 6.12.
Section 6.13. | Rights of Eligible Persons, Participants and Beneficiaries
Adjustments; Acceleration
Effect of Termination of Employment
Compliance with Laws
Tax Withholding
Plan Amendment, Termination and Suspension
Privileges of Stock Ownership
Effective Date of the Plan
Term of the Plan
Governing Law/Construction/Severability
Captions
Effect of Change of Subsidiary Status
Non-Exclusivity of Plan

ARTICLE VII -  DEFINITIONS.

| |                            |                                      
| | -------------------------- | -------------------------------------
| | Section 7.1.
 Section 7.2. | Definitions
Changes in Applicable Law

---

APRIA HEALTHCARE GROUP
INC.1997 STOCK INCENTIVE PLAN

ARTICLE I.   THE PLAN.

Section 1.1.   Purpose.

The purpose of this Plan
is to promote the success of the Company by providing an additional means through the
grant of Awards to attract, motivate, retain and reward key employees, including officers,
whether or not directors, of the Company with awards and incentives for high levels of
individual performance and improved financial performance of the Company and to attract,
motivate and retain experienced and knowledgeable independent directors.
Corporation means Apria Healthcare Group Inc., a Delaware corporation, and
Company means the Corporation and its Subsidiaries, collectively. These terms
and other capitalized terms are defined in Article VII.

Section 1.2.  
Administration and Authorization; Power and Procedure.

| | (a)     Committee. This Plan shall be administered by
          and all Awards to Eligible
          Persons shall be authorized by the Committee. Subject to the bylaws of this
          Corporation, action of the Committee with respect to the administration of this
          Plan shall be taken pursuant to a majority vote or by unanimous written consent
          of its members.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)     Plan Awards; Interpretation; Powers of Committee.
          Subject to the express
          provisions of this Plan, the Committee shall have the authority:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i)     to determine from among those persons eligible the particular Eligible Persons
          who will receive any Awards;
| | -----------------------------------------------------------------------------------------------------------------------------

| | (ii)     
          to grant Awards to Eligible Persons, determine the price at which securities
          will be offered or awarded and the amount of securities to be offered or awarded
          to any of such persons, determine the other specific terms and conditions of
          such Awards consistent with the express limits of this Plan, establish the
          installments (if any) in which such Awards shall become exercisable or shall
          vest, or determine that no delayed exercisability or vesting is required, and
          establish the events of termination or reversion of such Awards;
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)     
          to approve the forms of Award Agreements (which need not be identical either as
          to type of award or among Participants);
| | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iv)     
          to construe and interpret this Plan and any agreements defining the rights and
          obligations of the Company and Participants, further define the terms used in
          this Plan, and prescribe, amend and rescind rules and regulations relating to
          the administration of this Plan;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (v)     
          to cancel, modify, or waive the Corporations rights with respect to, or
          modify, discontinue, suspend, or terminate any or all outstanding Awards held by
          Eligible Persons, subject to any required consent under Section 6.6;
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (vi)     
          to accelerate or extend the exercisability or extend the term of any or all such
          outstanding Awards within the maximum ten-year term of Awards under Section 1.6;
          and
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (vii)     
          to make all other determinations and take such other action as contemplated by
          this Plan or as may be necessary or advisable for the administration of this
          Plan and the effectuation of its purposes.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)     
          Binding Determinations. Any action taken by, or inaction of, the
          Corporation, any Subsidiary, the Board or the Committee relating or pursuant to
          this Plan shall be within the absolute discretion of that entity or body and
          shall be conclusive and binding upon all persons. No member of the Board or
          Committee, or officer of the Corporation or any Subsidiary, shall be liable for
          any such action or inaction of the entity or body, of another person or, except
          in circumstances involving bad faith, of himself or herself. Subject only to
          compliance with the express provisions hereof, the Board and Committee may act
          in their absolute discretion in matters within their authority related to this
          Plan.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)     
          Reliance on Experts. In making any determination or in taking or not
          taking any action under this Plan, the Committee or the Board, as the case may
          be, may obtain and may rely upon the advice of experts, including professional
          advisors to the Corporation. No director, officer or agent of the Company shall
          be liable for any such action or determination taken or made or omitted in good
          faith.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e)     
          Delegation. The Committee may delegate ministerial, non-discretionary
          functions to a third-party administrator or to individuals who are officers or
          employees of the Company.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Section 1.3.
  Participation.

Awards may be granted by
the Committee only to those persons that the Committee determines to be Eligible Persons.
An Eligible Person who has been granted an Award may, if otherwise eligible, be granted
additional Awards if the Committee shall so determine.

Section 1.4.  
Shares Available for Awards; Share Limits.

| | (a)     
          Shares Available. Subject to the provisions of Section 6.2, the capital
          stock that may be delivered under this Plan shall be shares of the
          Corporations authorized but unissued Common Stock and any shares of its
          Common Stock held as treasury shares. The shares may be delivered for any lawful
          consideration.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)     
          Share Limits. The aggregate maximum number of shares of Common Stock that
          may be delivered pursuant to Awards (including Incentive Stock Options) granted
          under this Plan and which are required to be charged or reserved by provisions
          of Section 1.4(c) (the Maximum Aggregate Limit) shall be
          2,500,000 shares, plus in each calendar year, commencing in 1998, occurring
          during the term of this Plan, 1% of the issued and outstanding shares of the
          Corporations Common Stock as of December 31 of the preceding calendar
          year. The maximum number of shares of Common Stock that may be delivered
          pursuant to Options qualified as Incentive Stock Options granted under Article
          II of this Plan is 7,500,000 shares. The maximum number of shares subject to
          Options and Stock Appreciation Rights that are granted during any calendar year
          to any individual shall be limited to 100,000 shares. Each of the three
          foregoing numerical limits shall be subject to adjustment as contemplated by
          this Section 1.4 and Section 6.2.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)     
          Share Reservation; Replenishment and Reissue of Unvested Awards. No Award
          may be granted under this Plan unless, on the date of grant, the sum of (i) the
          maximum number of shares issuable at any time pursuant to such Award, plus (ii)
          the number of shares that have previously been issued pursuant to Awards granted
          under this Plan, other than reacquired shares available for reissue consistent
          with any applicable legal limitations, plus (iii) the maximum number of shares
          that may be issued at any time after such date of grant pursuant to Awards that
          are outstanding on such date, does not exceed the Maximum Aggregate Limit.
          Shares that are subject to or underlie Awards which expire or for any reason are
          cancelled or terminated, are forfeited, fail to vest, or for any other reason
          are not paid or delivered under this Plan, as well as reacquired shares, shall
          again, except to the extent prohibited by law, be available for subsequent
          Awards under the Plan. Except as limited by law, if an Award is or may be
          settled only in cash, such Award need not be counted against any of the limits
          under this Section 1.4.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Section 1.5.
   Grant of Awards.

Subject to the express
provisions of this Plan, the Committee shall determine the number of shares of Common
Stock subject to each Award, the price (if any) to be paid for the shares or the Award
and, in the case of Performance Share Awards, in addition to matters addressed in Section
1.2(b), the specific objectives, goals and performance criteria (such as an increase in
sales, market value, earnings or book value over a base period, the years of service
before vesting, the relevant job classification or level of responsibility or other
factors) that further define the terms of the Performance Share Award. Each Award shall be
evidenced by an Award Agreement signed on behalf of the Corporation and, if required by
the Committee, by the Participant. The Award Agreement shall set forth the material terms
and conditions of the Award established by the Committee consistent with the specific
provisions of this Plan. The Award Agreement may be executed on behalf of the Corporation
by a duly authorized officer by manual or facsimile signature.

Section 1.6.
  Award Period.

Each Award and all
executory rights or obligations under the related Award Agreement shall expire on such
date (if any) as shall be determined by the Committee, but in the case of Options or other
rights to acquire Common Stock not later than ten (10) years after the Award Date.

Section 1.7.
   Limitations on Exercise and Vesting of Awards.

| | (a)     
          Provisions for Exercise. Unless the Committee otherwise expressly
          provides, no Award shall be exercisable or shall vest until at least six months
          after the initial Award Date, and once exercisable an Award shall remain
          exercisable until the expiration or earlier termination of the Award.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)     
          Procedure. Any exercisable Award shall be deemed to be exercised when the
          Secretary of the Corporation or his designee receives written notice of such
          exercise from the Participant, together with any required payment made in
          accordance with Section 2.2(a).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)     
          Fractional Shares/Minimum Issue. Fractional share interests shall be
          disregarded, but may be accumulated. The Committee, however, may determine in
          the case of Eligible Persons that cash, other securities, or other property will
          be paid or transferred in lieu of any fractional share interests. No fewer than
          100 shares may be purchased on exercise of any Award at one time unless the
          number purchased is the total number at the time available for purchase under
          the Award.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Section 1.8.
   No Transferability; Limited Exception to Transfer Restrictions.

| | (a)     
          Limit on Exercise and Transfer. Unless otherwise expressly provided in
          (or pursuant to) this Section 1.8, by applicable law and by the Award Agreement,
          as the same may be amended, (i) all Awards are non-transferable and shall not be
          subject in any manner to sale, transfer, anticipation, alienation, assignment,
          pledge, encumbrance or charge; (ii) Awards shall be exercised only by the
          Participant; and (iii) amounts payable or shares issuable pursuant to an Award
          shall be delivered only to (or for the account of) the Participant.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)     
          Exceptions. The Committee may permit Awards to be exercised by and paid
          to certain persons or entities related to the Participant pursuant to such
          conditions and procedures as the Committee may establish. Any permitted transfer
          shall be subject to the condition that the Committee receive evidence
          satisfactory to it that the transfer is being made for estate and/or tax
          planning purposes or a gratuitous or donative basis and without consideration
          (other than nominal consideration). Notwithstanding the foregoing, Incentive
          Stock Options and Restricted Stock Awards shall be subject to any and all
          applicable transfer restrictions under the Code.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)     
          Further Exceptions to Limits On Transfer. The exercise and transfer
          restrictions in Section 1.8(a) shall not apply to:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------

| | (i)     transfers to the Corporation,
| | -------------------------------------

| | (ii)     
          the designation of a beneficiary to receive benefits in the event of the
          Participants death or, if the Participant has died, transfers to or
          exercise by the Participants beneficiary, or, in the absence of a validly
          designated beneficiary, transfers by will or the laws of descent and
          distribution,
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)     transfers pursuant to a QDRO order,
| | ---------------------------------------------

| | (iv)     
          if the Participant has suffered a disability, permitted transfers or exercises
          on behalf of the Participant by his or her legal representative, or
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (v)     
           the authorization by the Committee of cashless exercise procedures
          with third parties who provide financing for the purpose of (or who otherwise
          facilitate) the exercise of Awards consistent with applicable laws and the
          express authorization of the Committee.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Notwithstanding the foregoing, Incentive Stock Options
and Restricted Stock Awards shall be subject to all applicable transfer restrictions under
the Code.

Section 1.9.
   Acceptance of Notes to Finance Exercise.

The Corporation may, with
the Committees approval, accept one or more notes from any Eligible Person in
connection with the exercise or receipt of any outstanding Award; provided that any such
note shall be subject to the following terms and conditions:

| | (a)    
          The principal of the note shall not exceed the amount required to be paid to the
          Corporation upon the exercise or receipt of one or more Awards under the Plan
          and the note shall be delivered directly to the Corporation in consideration of
          such exercise or receipt.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)    
          The initial term of the note shall be determined by the Committee;
          provided that the term of the note, including extensions, shall not
          exceed a period of five years.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)    
          The note shall provide for full recourse to the Participant and shall bear
          interest at a rate determined by the Committee but not less than the interest
          rate necessary to avoid the imputation of interest under the Code.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)    
          If the employment of the Participant terminates, the unpaid principal balance of
          the note shall become due and payable on the 10th business day after such
          termination; provided, however, that if a sale of such shares would cause such
          Participant to incur liability under Section 16(b) of the Exchange Act, the
          unpaid balance shall become due and payable on the 10th business day after the
          first day on which a sale of such shares could have been made without incurring
          such liability assuming for these purposes that there are no other transactions
          (or deemed transactions in securities of this Corporation) by the Participant
          subsequent to such termination.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e)    
          If required by the Committee or by applicable law, the note shall be secured by
          a pledge of any shares or rights financed thereby in compliance with applicable
          law.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f)    
          The terms, repayment provisions, and collateral release provisions of the note
          and the pledge securing the note shall conform with applicable rules and
          regulations of the Federal Reserve Board as then in effect.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Section 1.10.
   Limitations on Grants of Awards to Non-Employee Directors.

Notwithstanding anything
else contained herein to the contrary, the maximum number of shares subject to
Nonqualified Stock Options granted to a Non-Employee Director in any calendar year shall
not exceed 30,000 shares.

ARTICLE II.    OPTIONS.

Section 2.1.   
Grants.

One or more Options may be
granted under this Article to any Eligible Person. Each Option granted shall be designated
in the applicable Award Agreement by the Committee as either an Incentive Stock Option
subject to Section 2.3, or a Non-Qualified Stock Option.

Section 2.2.
  Option Price.

| | (a)    
          Pricing Limits. The purchase price per share of the Common Stock covered
          by each Option shall be determined by the Committee at the time of the Award,
          but in the case of Incentive Stock Options shall not be less than 100% (110% in
          the case of a Participant described in Section 2.4) of the Fair Market Value of
          the Common Stock on the date of grant.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)    
          Payment Provisions. The purchase price of any shares purchased on
          exercise of an Option granted under this Article shall be paid in full at the
          time of each purchase in one or a combination of the following methods: (i) in
          cash or by electronic funds transfer; (ii) by check payable to the order of the
          Corporation; (iii) if authorized by the Committee or specified in the applicable
          Award Agreement, by a promissory note of the Participant consistent with the
          requirements of Section 1.9; (iv) by notice and third party payment in such
          manner as may be authorized by the Committee; or (iv) by the delivery of shares
          of Common Stock of the Corporation already owned by the Participant,
          provided, however, that the Committee may in its absolute
          discretion limit the Participants ability to exercise an Award by
          delivering such shares, and provided further that any shares delivered which
          were initially acquired upon exercise of an Option must have been owned by the
          Participant for at least six months as of the date of delivery. Shares of Common
          Stock used to satisfy the exercise price of an Option shall be valued at their
          Fair Market Value on the date of exercise.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Section 2.3.
  Limitations on Grant and Terms of Incentive Stock Options.

| | (a)    
          $100,000 Limit. To the extent that the aggregate Fair Market Value of
          stock with respect to which incentive stock options first become exercisable by
          a Participant in any calendar year exceeds $100,000, taking into account both
          Common Stock subject to Incentive Stock Options under this Plan and stock
          subject to incentive stock options under all other plans of the Company or any
          parent corporation, such options shall be treated as Nonqualified Stock Options.
          For this purpose, the Fair Market Value of the stock subject to options shall be
          determined as of the date the options were awarded. In reducing the number of
          options treated as incentive stock options to meet the $100,000 limit, the most
          recently granted options shall be reduced first. To the extent a reduction of
          simultaneously granted options is necessary to meet the $100,000 limit, the
          Committee may, in the manner and to the extent permitted by law, designate which
          shares of Common Stock are to be treated as shares acquired pursuant to the
          exercise of an Incentive Stock Option.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)    
          Option Period. Each Option and all rights thereunder shall expire no
          later than ten years after the Award Date.
| | -------------------------------------------------------------------------------------------------------------------------------------------

| | (c)    
          Other Code Limits. Incentive Stock Options may only be granted to
          Eligible Employees who are actually employed by the Corporation or a Subsidiary
          and that satisfy the other eligibility requirements of the Code. There shall be
          imposed in any Award Agreement relating to Incentive Stock Options such other
          terms and conditions as from time to time are required in order that the Option
          be an incentive stock option as that term is defined in Section 422
          of the Code.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Section 2.4.
  Limits on 10% Holders.

No Incentive Stock Option
may be granted to any person who, at the time the Option is granted, owns (or is deemed to
own under Section 424(d) of the Code) shares of outstanding Common Stock possessing more
than 10% of the total combined voting power of all classes of stock of the Corporation,
unless the exercise price of such Option is at least 110% of the Fair Market Value of the
stock subject to the Option and such Option by its terms is not exercisable after the
expiration of five years from the date such Option is granted.

Section 2.5.
   Cancellation and Regrant/Waiver of Restrictions.

Subject to Section 1.4 and
the specific limitations on Awards contained in this Plan, the Committee from time to time
may authorize, generally or in specific cases only, for the benefit of any Eligible Person
any adjustment in the exercise or purchase price, the vesting schedule, the number of
shares subject to, the restrictions upon or the term of, an Award granted under this
Article by cancellation of an outstanding Award and a subsequent regranting of an Award,
by amendment, by substitution of an outstanding Award, by waiver or by other legally valid
means. Such amendment or other action may result among other changes in an exercise or
purchase price which is higher or lower than the exercise or purchase price of the
original Award or prior Award, provide for a greater or lesser number of shares subject to
the Award, or provide for a longer or shorter vesting or exercise period.

Section 2.6.
  Options and Rights in Substitution for Stock Options Granted by Other Corporations.

Options and Stock
Appreciation Rights may be granted to Eligible Persons under this Plan in substitution for
employee stock options granted by other entities to persons who are or who will become
Eligible Persons in respect of the Company, in connection with a distribution, merger or
reorganization by or with the granting entity or an affiliated entity, or the acquisition
by the Company, directly or indirectly, of all or a substantial part of the stock or
assets of the other entity.

ARTICLE III.    STOCK
APPRECIATION RIGHTS.

Section 3.1.
   Grants.

In its discretion, the
Committee may grant a Stock Appreciation Right to any Eligible Person either concurrently
with the grant of another Award or in respect of an outstanding Award, in whole or in
part, or independently of any other Award. Any Stock Appreciation Right granted in
connection with an Incentive Stock Option shall contain such terms as may be required to
comply with the provisions of Section 422 of the Code and the regulations promulgated
thereunder, unless the holder otherwise agrees.

Section 3.2.
  Exercise of Stock Appreciation Rights.

| | (a)    
          Exercisability. Unless the Award Agreement or the Committee otherwise
          provides, a Stock Appreciation Right related to another Award shall be
          exercisable at such time or times, and to the extent, that the related Award
          shall be exercisable.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)    
          Effect on Available Shares. To the extent that a Stock Appreciation Right
          is exercised, the number of underlying shares of Common Stock theretofore
          subject to a related Award shall be charged against the maximum amount of Common
          Stock that may be delivered pursuant to Awards under this Plan. The number of
          shares subject to the Stock Appreciation Right and the related Option of the
          Participant shall be reduced by the number of underlying shares as to which the
          exercise related, unless the Award Agreement otherwise provides.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)    
          Stand-Alone SARs. A Stock Appreciation Right granted independently of any
          other Award shall be exercisable pursuant to the terms of the Award Agreement
          but in no event earlier than six months after the Award Date, except in the case
          of death or Total Disability.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Section 3.3.
   Payment.

| | (a)   
          Amount. Unless the Committee otherwise provides, upon exercise of a Stock
          Appreciation Right and the attendant surrender of an exercisable portion of any
          related Award, the Participant shall be entitled to receive payment of an amount
          determined by multiplying
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i)     
          the difference obtained by subtracting the exercise price per share of Common
          Stock under the related Award (if applicable) or the initial share value
          specified in the Award from the Fair Market Value of a share of Common Stock on
          the date of exercise of the Stock Appreciation Right, by
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)     
          the number of shares with respect to which the Stock Appreciation Right shall
          have been exercised.
| | --------------------------------------------------------------------------------------------------------------------------------

| | (b)     
          Form of Payment. The Committee, in its sole discretion, shall determine
          the form in which payment shall be made of the amount determined under Section
          3.3(a) above, either solely in cash, solely in shares of Common Stock (valued at
          Fair Market Value on the date of exercise of the Stock Appreciation Right), or
          partly in such shares and partly in cash, provided that the Committee shall have
          determined that such exercise and payment are consistent with applicable law. If
          the Committee permits the Participant to elect to receive cash or shares (or a
          combination thereof) on such exercise, any such election shall be subject to
          such conditions as the Committee may impose.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ARTICLE IV.   
 RESTRICTED STOCK AWARDS.

Section 4.1.
   Grants.

The Committee may, in its
discretion, grant one or more Restricted Stock Awards to any Eligible Person. Each
Restricted Stock Award Agreement shall specify the number of shares of Common Stock to be
issued to the Participant, the date of such issuance, the consideration for such shares
(but not less than the minimum lawful consideration under applicable state law) by the
Participant, the extent to which the Participant shall be entitled to dividends, voting
and other rights in respect of the shares prior to vesting and the restrictions imposed on
such shares and the conditions of release or lapse of such restrictions. Such restrictions
shall not lapse earlier than six months after the Award Date, except to the extent the
Committee may otherwise provide. Stock certificates evidencing shares of Restricted Stock
pending the lapse of the restrictions (restricted shares) shall bear a legend
making appropriate reference to the restrictions imposed hereunder and shall be held by
the Corporation or by a third party designated by the Committee until the restrictions on
such shares shall have lapsed and the shares shall have vested in accordance with the
provisions of the Award and Section 1.7. Upon issuance of the Restricted Stock Award, the
Participant may be required to provide such further assurance and documents as the
Committee may require to enforce the restrictions.

Section 4.2.
   Restrictions.

| | (a)    
          Pre-Vesting Restraints. Except as provided in Section 4.1 and 1.8,
          restricted shares comprising any Restricted Stock Award may not be sold,
          assigned, transferred, pledged or otherwise disposed of or encumbered, either
          voluntarily or involuntarily, until the restrictions on such shares have lapsed
          and the shares have become vested.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)    
          Dividend and Voting Rights. Unless otherwise provided in the applicable
          Award Agreement, a Participant receiving a Restricted Stock Award shall be
          entitled to cash dividend and voting rights for all shares issued even though
          they are not vested, provided that such rights shall terminate immediately as to
          any restricted shares which cease to be eligible for vesting.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)    
          Cash Payments. If the Participant shall have paid or received cash
          (including any dividends) in connection with the Restricted Stock Award, the
          Award Agreement shall specify whether and to what extent such cash shall be
          returned (with or without an earnings factor) as to any restricted shares which
          cease to be eligible for vesting.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Section 4.3.
  Return to the Corporation.

Unless the Committee
otherwise expressly provides, restricted shares that remain subject to restrictions at the
time of termination of employment or are subject to other conditions to vesting that have
not been satisfied by the time specified in the applicable Award Agreement shall not vest
and shall be returned to the Corporation in such manner and on such terms as the Committee
shall therein provide.

ARTICLE V.   
 PERFORMANCE SHARE AWARDS AND STOCK BONUSES.

Section 5.1.
   Grants of Performance Share Awards.

The Committee may, in its
discretion, grant Performance Share Awards to Eligible Persons based upon such factors as
the Committee shall deem relevant in light of the specific type and terms of the award. An
Award Agreement shall specify the maximum number of shares of Common Stock (if any)
subject to the Performance Share Award, the consideration (but not less than the minimum
lawful consideration) to be paid for any such shares as may be issuable to the
Participant, the duration of the Award and the conditions upon which delivery of any
shares or cash to the Participant shall be based. The amount of cash or shares or other
property that may be deliverable pursuant to such Award shall be based upon the degree of
attainment over a specified period (a performance cycle) as may be established
by the Committee of such measure(s) of the performance of the Company (or any part
thereof) or the Participant as may be established by the Committee. The Committee may
provide for full or partial credit, prior to completion of such performance cycle or the
attainment of the performance achievement specified in the Award, in the event of the
Participants death, or Total Disability, a Change in Control Event or in such other
circumstances as the Committee consistent with Section 6.10(c)(2), if applicable, may
determine.

Section 5.2.
  Special Performance-Based Share Awards.

Without limiting the
generality of the foregoing, and in addition to Options and Stock Appreciation Rights
granted under other provisions of this Plan which are intended to satisfy the exception
for performance-based compensation under Section 162(m) of the Code (with such
Awards hereinafter referred to as a Qualifying Option or a Qualifying
Stock Appreciation Right, respectively), other performance-based awards within the
meaning of Section 162(m) of the Code (Performance-Based Awards),
whether in the form of restricted stock, performance stock, phantom stock, or other
rights, the vesting or exercisability of which depends on the degree of achievement of the
Performance Goals relative to preestablished targeted levels for the Corporation or the
Corporation and one or more of its Subsidiaries or divisions, may be granted under this
Plan. Any Qualifying Option or Qualifying Stock Appreciation Right shall be subject only
to the requirements of subsections (a) and (c) below in order for such Awards to satisfy
the requirements for Performance-Based Awards under this Section 5.2. With the exception
of any Qualifying Option or Qualifying Stock Appreciation Right, an Award that is intended
to satisfy the requirements of this Section 5.2 shall be designated as a Performance-Based
Award at the time of grant.

| | (a)    
          Eligible Class. The eligible class of persons for Performance-Based
          Awards under this Section shall be the executive officers of the Corporation.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)    
          Performance Goal Alternatives. The specific performance goals for
          Performance-Based Awards granted under this Section (other than Qualifying
          Options and Qualifying Stock Appreciation Rights) shall be, on an absolute or
          relative basis, one or more of the Performance Goals, as selected by the
          Committee in its sole discretion. The Committee shall establish in the
          applicable Award Agreement the specific performance target(s) relative to the
          Performance Goal(s) which must be attained before the compensation under the
          Performance-Based Award becomes payable. The specific targets shall be
          determined within the time period permitted under Section 162(m) of the Code
          (and any regulations issued thereunder) so that such targets are considered to
          be preestablished and so that the attainment of such targets is substantially
          uncertain at the time of their establishment. The applicable performance
          measurement period may not be less than one nor more than 10 years.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)    
          Maximum Performance-Based Award. Notwithstanding any other provision of
          the Plan to the contrary, in no event shall grants in any calendar year to a
          Participant under this Section 5.2 relate to more than 100,000 shares of Common
          Stock (subject to adjustment under Section 6.2) or a cash amount of more than
          $1,000,000. Awards that are cancelled during the year shall be counted against
          this limit to the extent required by Section 162(m) of the Code.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)    
          Committee Certification. Before any Performance-Based Award under this
          Section 5.2 (other than Qualifying Options or Qualifying Stock Appreciation
          Rights) is paid, the Committee must certify in writing that the Performance
          Goal(s) and any other material terms of the Performance-Based Award were
          satisfied; provided, however, that a Performance-Based Award may be paid without
          regard to the satisfaction of the applicable Performance Goal in the event of a
          Change in Control Event in accordance with Section 6.2(d).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e)    
          Terms and Conditions of Awards. The Committee will have the discretion to
          determine the restrictions or other limitations of the individual Awards granted
          under this Section 5.2 including the authority to reduce Awards, payouts or
          vesting or to pay no Awards, in its sole discretion, if the Committee preserves
          such authority at the time of grant by language to this effect in its
          authorizing resolutions or otherwise.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f)    
          Adjustments for Changes in Capitalization and other Material Changes. In
          the event of a change in corporate capitalization, such as a stock split or
          stock dividend, or a corporate transaction, such as a merger, consolidation,
          spinoff, reorganization or similar event, or any partial or complete liquidation
          of the Corporation, or any similar event consistent with regulations issued
          under Section 162(m) of the Code including, without limitation, any material
          change in accounting policies or practices affecting the Corporation and/or the
          Performance Goals or targets, then the Committee may make adjustments to the
          Performance Goals and targets relating to outstanding Performance-Based Awards
          to the extent such adjustments are made to reflect the occurrence of such an
          event; provided, however, that adjustments described in this subsection may be
          made only to the extent that the occurrence of an event described herein was
          unforeseen at the time the targets for a Performance-Based Award were
          established by the Committee.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g)    
          Stock Payout Features. In lieu of cash payment of an Award, the Committee
          may require or allow a portion of the Award to be part in the form of shares of
          Common Stock, restricted shares or an Option.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Section 5.3.
   Grants of Stock Bonuses.

The Committee may grant a
Stock Bonus to any Eligible Person to reward exceptional or special services,
contributions or achievements in the manner and on such terms and conditions (including
any restrictions on such shares) as determined from time to time by the Committee. The
number of shares so awarded shall be determined by the Committee. The Award may be granted
independently or in lieu of a cash bonus.

Section 5.4.
  Deferred Payments.

The Committee may
authorize for the benefit of any Eligible Person the deferral of any payment of cash or
shares that may become due or of cash otherwise payable under this Plan, and provide for
accredited benefits thereon based upon such deferment, at the election or at the request
of such Participant, subject to the other terms of this Plan. Such deferral shall be
subject to such further conditions, restrictions or requirements as the Committee may
impose, subject to any then vested rights of Participants.

ARTICLE VI.  OTHER
PROVISIONS.

Section 6.1.
  Rights of Eligible Persons, Participants and Beneficiaries.

| | (a)    
          Employment Status. Status as an Eligible Person shall not be construed as
          a commitment that any Award will be made under this Plan to an Eligible Person
          or to Eligible Persons generally.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)    
          No Employment Contract. Nothing contained in this Plan (or in any other
          documents related to this Plan or to any Award) shall confer upon any Eligible
          Person or other Participant any right to continue in the employ or other service
          of the Company or constitute any contract or agreement of employment or other
          service, nor shall interfere in any way with the right of the Company to change
          such persons compensation or other benefits or to terminate the employment
          of such person, with or without cause, but nothing contained in this Plan or any
          document related hereto shall adversely affect any independent contractual right
          of such person without his or her consent thereto.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)    
          Plan Not Funded. Awards payable under this Plan shall be payable in
          shares or from the general assets of the Corporation, and no special or separate
          reserve, fund or deposit shall be made to assure payment of such Awards. No
          Participant, Beneficiary or other person shall have any right, title or interest
          in any fund or in any specific asset (including shares of Common Stock, except
          as expressly otherwise provided) of the Company by reason of any Award
          hereunder. Neither the provisions of this Plan (or of any related documents),
          nor the creation or adoption of this Plan, nor any action taken pursuant to the
          provisions of this Plan shall create, or be construed to create, a trust of any
          kind or a fiduciary relationship between the Company and any Participant,
          Beneficiary or other person. To the extent that a Participant, Beneficiary or
          other person acquires a right to receive payment pursuant to any Award
          hereunder, such right shall be no greater than the right of any unsecured
          general creditor of the Company.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Section 6.2.
  Adjustments; Acceleration.

| | (a)    
          Adjustments. If there shall occur any extraordinary dividend or other
          extraordinary distribution in respect of the Common Stock (whether in the form
          of cash, Common Stock, other securities, or other property), or any
          reclassification, recapitalization, stock split (including a stock split in the
          form of a stock dividend), reverse stock split, reorganization, merger,
          combination, consolidation, split-up, spin-off, combination, or exchange of
          Common Stock or other securities of the Corporation, or there shall occur any
          other like corporate transaction or event in respect of the Common Stock or a
          sale of substantially all the assets of the Corporation as an entirety, then the
          Committee shall, in such manner and to such extent (if any) as it deems
          appropriate and equitable (1) proportionately adjust any or all of (i) the
          number and type of shares of Common Stock (or other securities) which thereafter
          may be made the subject of Awards (including the specific numbers of shares set
          forth elsewhere in this Plan), (ii) the number, amount and type of shares of
          Common Stock (or other securities or property) subject to any or all outstanding
          Awards, (iii) the grant, purchase, or exercise price of any or all
          outstanding Awards, (iv) the securities, cash or other property deliverable upon
          exercise of any outstanding Awards, or (v) the performance standards appropriate
          to any outstanding Awards, or (2) in the case of an extraordinary dividend or
          other distribution, recapitalization, reclassification, merger, reorganization,
          consolidation, combination, sale of assets, split up, exchange, or spin off,
          make provision for a cash payment or for the substitution or exchange of any or
          all outstanding Awards or the cash, securities or property deliverable to the
          holder of any or all outstanding Awards based upon the distribution or
          consideration payable to holders of the Common Stock of the Corporation upon or
          in respect of such event; provided, however, in each case, that
          with respect to Awards of Incentive Stock Options, no such adjustment shall be
          made which would cause the Plan to violate Section 424(a) of the Code or any
          successor provisions thereto without the written consent of holders materially
          adversely affected thereby. In any of such events, the Committee may take such
          action sufficiently prior to such event if necessary to permit the Participant
          to realize the benefits intended to be conveyed with respect to the underlying
          shares in the same manner as is available to stockholders generally.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)    
          Acceleration of Awards Upon Change in Control. As to any Participant,
          unless prior to a Change in Control Event the Committee determines that, upon
          its occurrence, there shall be no acceleration of benefits under Awards or
          determines that only certain or limited benefits under Awards shall be
          accelerated and the extent to which they shall be accelerated, and/or
          establishes a different time in respect of such Change in Control Event for such
          acceleration, then upon the occurrence of a Change in Control Event (i) each
          Option and Stock Appreciation Right shall become immediately exercisable, (ii)
          Restricted Stock shall immediately vest free of restrictions, and (iii) each
          Performance Share Award shall become payable to the Participant; provided,
          however, that in no event shall any Award be accelerated as to any Section 16
          Person to a date less than six months after the Award Date of such Award. The
          Committee may override the limitations on acceleration in this Section 6.2(b) by
          express provision in the Award Agreement and may accord any Eligible Person a
          right to refuse any acceleration, whether pursuant to the Award Agreement or
          otherwise, in such circumstances as the Committee may approve. Any acceleration
          of Awards shall comply with applicable regulatory requirements, including
          without limitation Section 422 of the Code.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)    
          Possible Early Termination of Accelerated Awards. If any Option or other
          right to acquire Common Stock under this Plan has been fully accelerated as
          permitted by Section 6.2(b) but is not exercised prior to (i) a dissolution of
          the Corporation, or (ii) an event described in Section 6.2(a) that the
          Corporation does not survive, or (iii) the consummation of an event described in
          Section 6.2(a) that results in a Change in Control Event approved by the Board,
          such Option or right shall thereupon terminate, subject to any provision that
          has been expressly made by the Committee for the survival, substitution,
          exchange or other settlement of such Option or right.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Section 6.3.
  Effect of Termination of Employment.

The Committee shall
establish in respect of each Award granted to an Eligible Person the effect of a
termination of employment on the rights and benefits thereunder and in so doing may make
distinctions based upon the cause of termination. In addition, in the event of, or in
anticipation of, a termination of employment with the Company for any reason, other than
discharge for cause, the Committee may, in its discretion, increase the portion of the
Participants Award available to the Participant, or Participants Beneficiary
or Personal Representative, as the case may be, or, subject to the provisions of Section
1.6, extend the exercisability period upon such terms as the Committee shall determine and
expressly set forth in or by amendment to the Award Agreement.

Section 6.4.
  Compliance with Laws.

This Plan, the granting
and vesting of Awards under this Plan and the offer, issuance and delivery of shares of
Common Stock and/or the payment of money under this Plan or under Awards granted hereunder
are subject to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law and federal
margin requirements) and to such approvals by any listing, regulatory or governmental
authority as may, in the opinion of counsel for the Corporation, be necessary or advisable
in connection therewith. Any securities delivered under this Plan shall be subject to such
restrictions, and the person acquiring such securities shall, if requested by the
Corporation, provide such assurances and representations to the Corporation as the
Corporation may deem necessary or desirable to assure compliance with all applicable legal
requirements.

Section 6.5.
  Tax Withholding.

Upon any exercise,
vesting, or payment of any Award or upon the disposition of shares of Common Stock
acquired pursuant to the exercise of an Incentive Stock Option prior to satisfaction of
the holding period requirements of Section 422 of the Code, the Company shall have the
right at its option to (i) require the Participant (or Personal Representative or
Beneficiary, as the case may be) to pay or provide for payment of the amount of any taxes
which the Company may be required to withhold with respect to such Award event or payment
or (ii) deduct from any amount payable in cash the amount of any taxes which the Company
may be required to withhold with respect to such cash payment. In any case where a tax is
required to be withheld in connection with the delivery of shares of Common Stock under
this Plan, the Committee may in its sole discretion grant (either at the time of the Award
or thereafter) to the Participant the right to elect, pursuant to such rules and subject
to such conditions as the Committee may establish, to have the Corporation reduce the
number of shares to be delivered by (or otherwise reacquire) the appropriate number of
shares valued at their then Fair Market Value, to satisfy such withholding obligation.

Section 6.6.
  Plan Amendment, Termination and Suspension.

| | (a)    
          Board Authorization. The Board may, at any time, terminate or, from time
          to time, amend, modify or suspend this Plan, in whole or in part. No Awards may
          be granted during any suspension of this Plan or after termination of this Plan,
          but the Committee shall retain jurisdiction as to Awards then outstanding in
          accordance with the terms of this Plan.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)    
          Stockholder Approval. Any amendment that would (i) materially increase
          the benefits accruing to Participants under this Plan, (ii) materially increase
          the aggregate number of securities that may be issued under this Plan, or (iii)
          materially modify the requirements as to eligibility for participation in this
          Plan, shall be subject to stockholder approval only to the extent then required
          by Section 422 of the Code or applicable law, or deemed necessary or advisable
          by the Board.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)    
          Amendments to Awards. Without limiting any other express authority of the
          Committee under but subject to the express limits of this Plan, the Committee by
          agreement or resolution may waive conditions of or limitations on Awards to
          Eligible Persons that the Committee in the prior exercise of its discretion has
          imposed, without the consent of a Participant, and may make other changes to the
          terms and conditions of Awards that do not affect in any manner materially
          adverse to the Participant, his or her rights and benefits under an Award.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)    
          Limitations on Amendments to Plan and Awards. No amendment, suspension or
          termination of the Plan or change of or affecting any outstanding Award shall,
          without written consent of the Participant, affect in any manner materially
          adverse to the Participant any rights or benefits of the Participant or
          obligations of the Corporation under any Award granted under this Plan prior to
          the effective date of such change. Changes contemplated by Section 6.2 shall not
          be deemed to constitute changes or amendments for purposes of this Section 6.6.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Section 6.7.
  Privileges of Stock Ownership.

Except as otherwise
expressly authorized by the Committee or this Plan, a Participant shall not be entitled to
any privilege of stock ownership as to any shares of Common Stock not actually delivered
to and held of record by him or her. No adjustment will be made for dividends or other
rights as a stockholders for which a record date is prior to such date of delivery.

Section 6.8.
  Effective Date of the Plan.

This Plan shall be
effective as of February 28, 1997, the date of Board approval, subject to stockholder
approval within 12 months thereafter.

Section 6.9.
  Term of the Plan.

No Award shall be granted
more than ten years after the effective date of this Plan (the termination
date). Unless otherwise expressly provided in this Plan or in an applicable Award
Agreement, any Award granted prior to the termination date may extend beyond such date,
and all authority of the Committee with respect to Awards hereunder, including the
authority to amend an Award, shall continue during any suspension of this Plan and in
respect of outstanding Awards on the termination date.

Section 6.10.
  Governing Law/Construction/Severability.

| | (a)    
          Choice of Law. This Plan, the Awards, all documents evidencing Awards and
          all other related documents shall be governed by, and construed in accordance
          with the laws of the state of incorporation of the Corporation.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)    
          Severability. If any provision shall be held by a court of competent
          jurisdiction to be invalid and unenforceable, the remaining provisions of this
          Plan shall continue in effect.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)    
          Plan Construction.
| | ------------------------------------

| | (1)    
          Rule 16b-3. It is the intent of the Corporation that transactions in and
          affecting Awards in the case of Participants who are or may be subject to
          Section 16 of the Exchange Act satisfy any then applicable requirements of Rule
          16b-3 so that such persons (unless they otherwise agree) will be entitled to the
          benefits of Rule 16b-3 or other exemptive rules under Section 16 of the Exchange
          Act in respect of these transactions and will not be subjected to avoidable
          liability thereunder. If any provision of this Plan or of any Award would
          otherwise frustrate or conflict with the intent expressed above, that provision
          to the extent possible shall be interpreted so as to avoid such conflict. If the
          conflict remains irreconcilable, the Committee may disregard the provision if it
          concludes that to do so furthers the interest of the Corporation and is
          consistent with the purposes of this Plan as to such persons in the
          circumstances.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2)    
          Section 162(m). It is the further intent of the Company that Options or
          Stock Appreciation Rights with an exercise or base price not less than Fair
          Market Value on the date of grant and Performance Share Awards under Section 5.2
          of this Plan that are granted to or held by a Section 16 Person shall qualify as
          performance-based compensation under Section 162(m) of the Code, and this Plan
          shall be interpreted consistent with such intent.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Section 6.11.
   Captions.

Captions and headings are
given to the sections and subsections of this Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material or relevant to the
construction or interpretation of the Plan or any provision thereof.

Section 6.12.
  Effect of Change of Subsidiary Status.

For purposes of this Plan
and any Award hereunder, if an entity ceases to be a Subsidiary a termination of
employment and service shall be deemed to have occurred with respect to each Eligible
Person in respect of such Subsidiary who does not continue as an Eligible Person in
respect of another entity within the Company.

Section 6.13.
  Non-Exclusivity of Plan.

Nothing in this Plan shall
limit or be deemed to limit the authority of the Board or the Committee to grant awards or
authorize any other compensation, with or without reference to the Common Stock, under any
other plan or authority.

ARTICLE VII.   DEFINITIONS.

Section 7.1.
  Definitions.

Award
shall mean an award of any Option, Stock Appreciation Right, Restricted Stock, Stock
Bonus, Performance Share Award, Performance-Based Award, dividend equivalent or deferred
payment right or other right or security that would constitute a derivative
security under Rule 16a-1(c) of the Exchange Act, or any combination thereof,
whether alternative or cumulative, authorized by and granted under this Plan.

Award
Agreement shall mean any writing setting forth the terms of an Award that has
been authorized by the Committee.

Award
Date shall mean the date upon which the Committee took the action granting an
Award or such later date as the Committee designates as the Award Date at the time of the
Award.

Award Period
shall mean the period beginning on an Award Date and ending on the expiration date of such
Award.

Beneficiary
shall mean the person, persons, trust or trusts designated by a Participant or, in the
absence of a designation, entitled by will or the laws of descent and distribution, to
receive the benefits specified in the Award Agreement and under this Plan in the event of
a Participants death, and shall mean the Participants executor or
administrator if no other Beneficiary is designated and able to act under the
circumstances.

Board
shall mean the Board of Directors of the Corporation.

Cash
Flow shall mean cash and cash equivalents derived from either (i) net cash flow
from operations or (ii) net cash flow from operations, financings and investing
activities, as determined by the Committee at the time an Award is granted.

Change in Control
Event shall mean any of the following:

| | (1)
                         Approval by the stockholders of the Corporation of the dissolution or
                    liquidation of the Corporation;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2)     

                     Approval by the stockholders of the Corporation of an agreement to merge or
                    consolidate, or otherwise reorganize, with or into one or more entities that are
                    not Subsidiaries, as a result of which less than 50% of the outstanding voting
                    securities of the surviving or resulting entity immediately after the
                    reorganization are, or will be, owned, directly or indirectly, by stockholders
                    of the Corporation immediately before such reorganization (assuming for purposes
                    of such determination that there is no change in the record ownership of the
                    Corporations securities from the record date for such approval until such
                    reorganization and that such record owners hold no securities of the other
                    parties to such reorganization); provided that an event described in this clause
                    (2) shall not constitute a Change in Control Event if the majority of members of
                    the Board of the surviving entity is comprised of individuals who were members
                    of the Board immediately prior to such event;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3)     

                     Approval by the stockholders of the Corporation of the sale of substantially
                    all of the Corporations business and/or assets to a person or entity which
                    is not a Subsidiary;
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4)     

                     Any person (as such term is used in Sections 13(d) and 14(d) of the
                    Exchange Act but excluding any person described in and satisfying the conditions
                    of Rule 13d-1(b)(1) thereunder), becomes the beneficial owner (as defined in
                    Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
                    Corporation representing more than 50% of the combined voting power of the
                    Corporations then outstanding securities entitled to then vote generally
                    in the election of directors of the Corporation; or
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5)     

                     At any time during the term of this Plan, 51% or more of the individuals
                    elected to serve, and who are then serving, on the Board are individuals who
                    were not (i) members of the Board at the time of the adoption of this Plan by
                    the Board, or (ii) nominated or elected to their current term of office as a
                    director by a committee of the Board which is authorized to fill vacancies on
                    the Board (or if there is no such committee, by a majority of the Board in
                    office at the time of such individuals nomination or election by the Board
                    to fill a vacancy), or (iii) approved by a majority of members of the Board who
                    were either members of the Board at the time this Plan was adopted by the Board,
                    or nominated or elected as described in clause (5) (ii) above.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Code
shall mean the Internal Revenue Code of 1986, as amended from time to time.

Commission
shall mean the Securities and Exchange Commission.

Committee
shall mean the Board or a committee appointed by the Board to administer this Plan, which
committee shall be comprised only of two or more directors or such greater number of
directors as may be required under applicable law, each of whom, (i) in respect of any
decision at a time when the Participant affected by the decision may be subject to Section
162(m) of the Code, shall be an outside director within the meaning of Section
162(m) of the Code, and (ii) in respect of any decision affecting a transaction at a time
when the Participant involved in the transaction may be subject to Section 16 of the
Exchange Act, shall be a non-employee director within the meaning of Rule
16b-3(b)(3) promulgated under the Exchange Act.

Common
Stock shall mean the Common Stock of the Corporation and such other securities
or property as may become the subject of Awards, or become subject to Awards, pursuant to
an adjustment made under Section 6.2 of this Plan.

Company
shall mean, collectively, the Corporation and its Subsidiaries.

Corporation
shall mean Apria Healthcare Group Inc., a Delaware corporation, and its successors.

Disinterested
shall mean disinterested within the meaning of any applicable regulatory requirements,
including Rule 16b-3.

EBITDA
shall mean earnings before interest, taxes, depreciation and amortization.

Eligible
Employee shall mean an officer (whether or not a director) or key employee of
the Company.

Eligible
Person means an Eligible Employee, or any Other Eligible Person, as determined
by the Committee in its discretion.

EPS
shall mean earnings per common share on a fully diluted basis determined by dividing (i)
net earnings, less dividends on preferred stock of the Corporation by (ii) the weighted
average number of common shares and common shares equivalents outstanding.

ERISA
shall mean the Employee Retirement Income Security Act of 1974, as amended.

Exchange
Act shall mean the Securities Exchange Act of 1934, as amended from time to
time.

Fair Market
Value on any date shall mean (i) if the stock is listed or admitted to
trade on a national securities exchange, the closing price of the stock on the principal
national securities exchange on which the stock is so listed or admitted to trade, on such
date, or, if there is no trading of the stock on such date, then the closing price of the
stock on the next preceding date on which there was trading in such shares; (ii) if
the stock is not listed or admitted to trade on a national securities exchange, the last
price for the stock on such date, as furnished by the National Association of Securities
Dealers, Inc. (NASD) through the NASDAQ National Market Reporting System or a
similar organization if the NASD is no longer reporting such information; (iii) if
the stock is not listed or admitted to trade on a national securities exchange and is not
reported on the National Market Reporting System, the mean between the bid and asked price
for the stock on such date, as furnished by the NASD or a similar organization; or
(iv) if the stock is not listed or admitted to trade on a national securities
exchange, is not reported on the National Market Reporting System and if bid and asked
prices for the stock are not furnished by the NASD or a similar organization, the value as
established by the Committee at such time for purposes of this Plan.

Free Cash
Flow shall mean cash postings less cost of sales, operating expenses (net of bad
debt) and capital expenditures.

Incentive Stock
Option shall mean an Option which is intended, as evidenced by its designation,
as an incentive stock option within the meaning of Section 422 of the Code, the award of
which contains such provisions (including but not limited to the receipt of stockholder
approval of this Plan, if the Award is made prior to such approval) and is made under such
circumstances and to such persons as may be necessary to comply with that section.

Nonqualified
Stock Option shall mean an Option that is designated as a Nonqualified Stock
Option and shall include any Option intended as an Incentive Stock Option that fails to
meet the applicable legal requirements thereof. Any Option granted hereunder that is not
designated as an incentive stock option shall be deemed to be designated a nonqualified
stock option under this Plan and not an incentive stock option under the Code.

Non-Employee
Director shall mean a member of the Board of Directors of the Corporation who is
not an officer or employee of the Company.

Option
shall mean an option to purchase Common Stock granted under this Plan. The Committee shall
designate any Option granted to an Eligible Person as a Nonqualified Stock Option or an
Incentive Stock Option.

Other Eligible
Person shall mean any Non-Employee Director or any individual consultant or
advisor who renders or has rendered bona fide services (other than services
in connection with the offering or sale of securities of the Company in a capital raising
transaction) to the Company, and who is selected to participate in this Plan by the
Committee. A non-employee agent providing bona fide services to the Company
(other than as an eligible advisor or consultant) may also be selected as an Other
Eligible Person if such agents participation in this Plan would not adversely affect
(i) the Corporations eligibility to use Form S-8 to register under the Securities
Act of 1933, as amended, the offering of shares issuable under this Plan by the Company or
(ii) the Corporations compliance with any other applicable laws.

Participant
shall mean an Eligible Person who has been granted an Award under this Plan.

Performance-Based
Award shall mean an Award of a right to receive shares of Common Stock or other
compensation (including cash) under Section 5.2, the issuance or payment of which is
contingent upon, among other conditions, the attainment of performance objectives
specified by the Committee.

Performance
Goal shall mean EBITDA or EPS or ROE or Cash Flow or Free Cash Flow, or sales
growth, or cost containment or reduction, or Total Stockholder Return, and
Performance Goals means any one or more thereof.

Performance Share
Award shall mean an Award of a right to receive shares of Common Stock made in
accordance with Section 5.1, the issuance or payment of which is contingent upon, among
other conditions, the attainment of performance objectives specified by the Committee.

Personal
Representative shall mean the person or persons who, upon the disability or
incompetence of a Participant, shall have acquired on behalf of the Participant, by legal
proceeding or otherwise, the power to exercise the rights or receive benefits under this
Plan and who shall have become the legal representative of the Participant.

Plan
shall mean this 1997 Stock Incentive Plan.

QDRO shall
mean a qualified domestic relations order as defined in Section 414(p) of the Code or
Title I, Section 206(d)(3) of ERISA (to the same extent as if this Plan were subject
thereto), or the applicable rules thereunder.

Restricted Stock
Award shall mean an award of a fixed number of shares of Common Stock to the
Participant subject, however, to payment of such consideration, if any, and such
forfeiture provisions, as are set forth in the Award Agreement.

Restricted
Stock shall mean shares of Common Stock awarded to a Participant under this
Plan, subject to payment of such consideration, if any, and such conditions on vesting and
such transfer and other restrictions as are established in or pursuant to this Plan, for
so long as such shares remain unvested under the terms of the applicable Award Agreement.

ROE
shall mean consolidated net income of the Corporation (less preferred dividends), divided
by the average consolidated common stockholders equity.

Rule
16b-3 shall mean Rule 16b-3 as promulgated by the Commission pursuant to the
Exchange Act, as amended from time to time.

Section 16
Person shall mean a person subject to Section 16(a) of the Exchange Act.

Securities Act
shall mean the Securities Act of 1933, as amended from time to time.

Stock
Appreciation Right shall mean a right to receive a number of shares of Common
Stock or an amount of cash, or a combination of shares and cash, the aggregate amount or
value of which is determined by reference to a change in the Fair Market Value of the
Common Stock that is authorized under this Plan.

Stock
Bonus shall mean an Award of shares of Common Stock granted under this Plan for
no consideration other than past services and without restriction other than such transfer
or other restrictions as the Committee may deem advisable to assure compliance with law.

Subsidiary
shall mean any corporation or other entity a majority of whose outstanding voting stock or
voting power is beneficially owned directly or indirectly by the Corporation.

Total
Disability shall mean a permanent and total disability within the
meaning of Section 22(e)(3) of the Code and (except in the case of a Non-Employee
Director) such other disabilities, infirmities, afflictions or conditions as the Committee
by rule may include.

Total Stockholder
Return shall mean with respect to the Corporation or other entities (if measures
on a relative basis), the (i) change in the market price of its common stock (as quoted in
the principal market on which it is traded as of the beginning and ending of the period)
plus dividends and other distributions paid, divided by (ii) the beginning quoted market
price, all of which is adjusted for any changes in equity structure, including but not
limited to stock splits and stock dividends.

Section 7.2.
  Changes in Applicable Law.

To the extent any terms
defined or utilized in this Plan are defined by identification to a particular statute or
regulation, and if there shall occur a change in such statutory or regulatory definition,
then the definition of such term shall be deemed to have been amended to conform to the
change in the statutory or regulatory definition, unless the Committee shall determine
that such change would create a result which is contrary to the intents and purposes of
this Plan or work to create a hardship for either any Eligible Person or the Company, in
which event the Committee, at its option, shall have authority to amend this Plan in a
manner so as to achieve the original intents and purposes of this Plan or to diminish or
eliminate the hardship caused by such change in a statutory definition. Any such amendment
may be made retroactively to the date of the change in the statutory or regulatory
definition.

---