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                                                                   EXHIBIT 10.6



                            ALLEGIANCE TELECOM, INC.
                           1998 STOCK INCENTIVE PLAN


1.       Purpose.

         This plan shall be known as the Allegiance Telecom, Inc. 1998 Stock
Incentive Plan (the "Plan").  The purpose of the Plan shall be to promote the
long-term growth and profitability of Allegiance Telecom, Inc., a Delaware
corporation (the "Company") and its Subsidiaries by (i) providing certain
directors, officers and key employees of, and certain other key individuals who
perform services for, the Company and its Subsidiaries with incentives to
maximize stockholder value and otherwise contribute to the success of the
Company and (ii) enabling the Company to attract, retain and reward the best
available persons for positions of substantial responsibility.  Grants of
incentive or nonqualified stock options, stock appreciation rights ("SARs"),
either alone or in tandem with options, restricted stock, performance awards,
or any combination of the foregoing may be made under the Plan.

2.       Definitions.

         (a)     "Board of Directors" and "Board" mean the board of directors
of the Company.

         (b)     "Change in Control" means the occurrence of one of the
following events:

                 (i)      if any "person" or "group" as those terms are used in
Sections 13(d) and 14(d) of the Exchange Act, other than an Exempt Person, is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 50% or
more of the combined voting power of the Company's then outstanding securities;
or

                 (ii)     during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board and any
new directors whose election by the Board or nomination for election by the
Company's stockholders was approved by at least two-thirds of the directors
then still in office who either were directors at the beginning of the period
or whose election was previously so approved, cease for any reason to
constitute a majority thereof; or

                 (iii)    the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation (A) which would result in all or a portion of the voting
securities of the Company outstanding immediately prior thereto
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continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation or (B) by which the
corporate existence of the Company is not affected and following which the
Company's chief executive officer and directors retain their positions with the
Company (and constitute at least a majority of the Board); or

                 (iv)     the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all the Company's assets, other than a
sale to an Exempt Person.

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

         (d)     "Committee" means the Compensation Committee of the Board.
The membership of the Committee shall be constituted so as to comply at all
times with the applicable requirements of Rule 16b-3 under the Exchange Act and
Section 162(m) of the Code.

         (e)     "Common Stock" means the Common Stock, par value $.01 per
share, of the Company, and any other shares into which such stock may be
changed by reason of a recapitalization, reorganization, merger, consolidation
or any other change in the corporate structure or capital stock of the Company.

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

         (g)     "Exempt Person" means any employee benefit plan of the Company
or a trustee or other administrator or fiduciary holding securities under an
employee benefit plan of the Company.

         (h)     "Fair Market Value" of a share of Common Stock of the Company
means, as of the date in question, the officially-quoted closing selling price
of the stock (or if no selling price is quoted, the bid price) on the principal
securities exchange on which the Common Stock is then listed for trading
(including for this purpose the Nasdaq National Market) (the "Market") for the
date in question or, if the Common Stock is not then listed or quoted in the
Market, the Fair Market Value shall be the fair value of the Common Stock
determined in good faith by the Board; provided, however, that when shares
received upon exercise of an option are immediately sold in the open market,
the net sale price received may be used to determine the Fair Market Value of
any shares used to pay the exercise price or withholding taxes and to compute
the withholding taxes.

         (i)     "Incentive Stock Option" means an option conforming to the
requirements of Section 422 of the Code and any successor thereto.

         (j)     "Non-Employee Director" has the meaning given to such term in
Rule 16b-3 under the Exchange Act.





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         (k)     "Nonqualified Stock Option" means any stock option other than
an Incentive Stock Option.

         (l)     "Other Company Securities" mean securities of the Company
other than Common Stock, which may include, without limitation, unbundled stock
units or components thereof, debentures, preferred stock, warrants and
securities convertible into or exchangeable for Common Stock or other property.

         (m)     "Subsidiary" means a corporation or other entity of which
outstanding shares or ownership interests representing 50% or more of the
combined voting power of such corporation or other entity entitled to elect the
management thereof, or such lesser percentage as may be approved by the
Committee, are owned directly or indirectly by the Company.

3.       Administration.

         The Plan shall be administered by the Committee; provided that the
Board may, in its discretion, at any time and from time to time, resolve to
administer the Plan, in which case the term "Committee" shall be deemed to mean
the Board for all purposes herein.  The Committee shall consist of at least two
directors.  Subject to the provisions of the Plan, the Committee shall be
authorized to (i) select persons to participate in the Plan, (ii) determine the
form and substance of grants made under the Plan to each participant, and the
conditions and restrictions, if any, subject to which such grants will be made,
(iii) modify the terms of grants made under the Plan, (iv) interpret the Plan
and grants made thereunder, (v) make any adjustments necessary or desirable in
connection with grants made under the Plan to eligible participants located
outside the United States  and (vi) adopt, amend, or rescind such rules and
regulations, and make such other determinations, for carrying out the Plan as
it may deem appropriate.  Decisions of the Committee on all matters relating to
the Plan shall be in the Committee's sole discretion and shall be conclusive
and binding on all parties.  The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with applicable federal and state laws and rules and regulations
promulgated pursuant thereto.  No member of the Committee and no officer of the
Company shall be liable for any action taken  or omitted to be taken by such
member, by any other member of the Committee or by any officer of the Company
in connection with the performance of duties under the Plan, except for such
person's own willful misconduct or as expressly provided by statute.

         The expenses of the Plan shall be borne by the Company.  The Plan 
shall not be required to establish any special or separate fund or make any
other segregation of assets to assume the payment of any award under the Plan,
and rights to the payment of such awards shall be no greater than the rights of
the Company's general creditors.

4.       Shares Available for the Plan.

         Subject to adjustments as provided in Section 15, an aggregate of
3,806,658 shares of Common Stock (the "Shares") may be issued pursuant to the
Plan.  Such Shares may be in whole or in part authorized and unissued, or
shares which are held by the Company as treasury shares.  If any grant under
the Plan expires or terminates unexercised, becomes unexercisable or is
forfeited as





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to any Shares, such unpurchased or forfeited Shares shall thereafter be
available for further grants under the Plan unless, in the case of options
granted under the Plan, related SARs are exercised.

5.       Participation.

         Participation in the Plan shall be limited to those directors
(including Non-Employee Directors), officers (including non-employee officers)
and key employees of, and other key individuals performing services for, the
Company and its Subsidiaries selected by the Committee (including participants
located outside the United States).  Nothing in the Plan or in any grant
thereunder shall confer any right on a participant to continue in the employ of
or the performance of services for the Company or shall interfere in any way
with the right of the Company to terminate the employment or performance of
services of a participant at any time.  By accepting any award under the Plan,
each participant and each person claiming under or through him or her shall be
conclusively deemed to have indicated his or her acceptance and ratification
of, and consent to, any action taken under the Plan by the Company, the Board
or the Committee.

         Incentive Stock Options or Nonqualified Stock Options, SARs, alone or
in tandem with options, restricted stock awards, performance awards, or any
combination thereof, may be granted to such persons and for such number of
Shares as the Committee shall determine (such individuals to whom grants are
made being sometimes herein called "optionees" or "grantees," as the case may
be).  Determinations made by the Committee under the Plan need not be uniform
and may be made selectively among eligible individuals under the Plan, whether
or not such individuals are similarly situated.  A grant of any type made
hereunder in any one year to an eligible participant shall neither guarantee
nor preclude a further grant of that or any other type to such participant in
that year or subsequent years.

6.       Incentive and Nonqualified Options.

         The Committee may from time to time grant to eligible participants
Incentive Stock Options, Nonqualified Stock Options, or any combination
thereof; provided that the Committee may grant Incentive Stock Options only to
eligible employees of the Company or its subsidiaries (as defined for this
purpose in Section 424(f) of the Code).  Subject to adjustments as provided for
in Section 15, in any one calendar year, the Committee shall not grant to any
one participant, options or SARs to purchase a number of shares of Common Stock
in excess of 500,000.  The options granted shall take such form as the
Committee shall determine, subject to the following terms and conditions.

         It is the Company's intent that Nonqualified Stock Options granted
under the Plan not be classified as Incentive Stock Options, that Incentive
Stock Options be consistent with and contain or be deemed to contain all
provisions required under Section 422 of the Code and any successor thereto,
and that any ambiguities in construction be interpreted in order to effectuate
such intent.  If an Incentive Stock Option granted under the Plan does not
qualify as such for any reason, then to the extent of such nonqualification,
the stock option represented thereby shall be regarded as a Nonqualified Stock
Option duly granted under the Plan, provided that such stock option otherwise
meets the Plan's requirements for Nonqualified Stock Options.





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         (a)     Price. The price per Share deliverable upon the exercise of
each option ("exercise price") shall be established by the Committee, except
that in the case of the grant of any Incentive Stock Option, the exercise price
may not be less than 100% of the Fair Market Value of a share of Common Stock
as of the date of grant of the option, and in the case of the grant of any
Incentive Stock Option to an employee who, at the time of the grant, owns more
than 10% of the total combined voting power of all classes of stock of the
Company or any of its Subsidiaries, the exercise price may not be less that
110% of the Fair Market Value of a share of Common Stock as of the date of
grant of the option, in each case unless otherwise permitted by Section 422 of
the Code.

         (b)     Payment.  Options may be exercised, in whole or in part, upon
payment of the exercise price of the Shares to be acquired. Unless otherwise
determined by the Committee, payment shall be made (i) in cash (including
check, bank draft or money order), (ii) by delivery of outstanding shares of
Common Stock with a Fair Market Value on the date of exercise equal to the
aggregate exercise price payable with respect to the options so exercised,
(iii) by simultaneous sale through a broker reasonably acceptable to the
Committee of Shares acquired on exercise, as permitted under Regulation T of
the Federal Reserve Board, (iv) by authorizing the Company to withhold from
issuance a number of Shares issuable upon exercise of the options which, when
multiplied by the Fair Market Value of a share of Common Stock on the date of
exercise is equal to the aggregate exercise price payable with respect to the
options so exercised or (v) by any combination of the foregoing. Options may
also be exercised upon payment of the exercise price of the Shares to be
acquired by delivery of the optionee's promissory note, but only to the extent
specifically approved by and in accordance with the policies of the Committee.

         In the event a grantee elects to pay the exercise price payable with 
respect to an option pursuant to clause (ii) above, (A) only a whole number of
share(s) of Common Stock (and not fractional shares of Common Stock) may be
tendered in payment, (B) such grantee must present evidence acceptable to the
Company that he or she has owned any such shares of Common Stock tendered in
payment of the exercise price (and that such tendered shares of Common Stock
have not been subject to any substantial risk of forfeiture) for at least six
months prior to the date of exercise, and (C) Common Stock must be delivered to
the Company.  Delivery for this purpose may, at the election of the grantee, be
made either by (A) physical delivery of the certificate(s) for all such shares
of Common Stock tendered in payment of the price, accompanied by duly executed
instruments of transfer in a form acceptable to the Company, or (B) direction
to the grantee's broker to transfer, by book entry, such shares of Common Stock
from a brokerage account of the grantee to a brokerage account specified by the
Company.  When payment of the exercise price is made by delivery of Common
Stock, the difference, if any, between the aggregate exercise price payable
with respect to the option being exercised and the Fair Market Value of the
share(s) of Common Stock tendered in payment (plus any applicable taxes) shall
be paid in cash.  No grantee may tender shares of Common Stock having a Fair
Market Value exceeding the aggregate exercise price payable with respect to the
option being exercised (plus any applicable taxes).

         In the event a grantee elects to pay the exercise price payable with 
respect to an option pursuant to clause (iv) above, (A) only a whole number of
Share(s) (and not fractional Shares) may be withheld in payment and (B) such
grantee must present evidence acceptable to the Company that





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he or she has owned a number of shares of Common Stock at least equal to the
number of Shares to be withheld in payment of the exercise price (and that such
owned shares of Common Stock have not been subject to any substantial risk of
forfeiture) for at least six months prior to the date of exercise.  When
payment of the exercise price is made by withholding of Shares, the difference,
if any, between the aggregate exercise  price payable with respect to the
option being exercised and the Fair Market Value of the Share(s) withheld in
payment (plus any applicable taxes) shall be paid in cash.  No grantee may
authorize the withholding of Shares having a Fair Market Value exceeding the
aggregate exercise price payable with respect to the option being exercised
(plus any applicable taxes).  Any withheld Shares shall no longer be issuable
under such option.

         (c)     Terms of Options.  The term during which each option may be
exercised shall be determined by the Committee, but, except as otherwise
provided herein, in no event shall an option be exercisable in whole or in
part, in the case of a Nonqualified Stock Option or an Incentive Stock Option
(other than as described below), more than ten years from the date it is
granted or, in the case of an Incentive Stock Option granted to an employee who
at the time of the grant owns more than 10% of the total combined voting power
of all classes of stock of the Company or any of its Subsidiaries, if required
by the Code, more than five years from the date it is granted.  All rights to
purchase Shares pursuant to an option shall, unless sooner terminated, expire
at the date designated by the Committee.  The Committee shall determine the
date on which each option shall become exercisable and may provide that an
option shall become exercisable in installments.  The Shares constituting each
installment may be purchased in whole or in part at any time after such
installment becomes exercisable, subject to such minimum exercise requirements
as may be designated by the Committee.  Unless otherwise provided herein or in
the terms of the related grant, an optionee may exercise an option only if he
or she is, and has continuously since the date the option was granted, been a
director, officer or employee of or performed other services for the Company or
a Subsidiary.  Prior to the exercise of an option and delivery of the Shares
represented thereby, the optionee shall have no rights as a stockholder with
respect to any Shares covered by such outstanding option (including any
dividend or voting rights).

         (d)     Limitations on Grants. If required by the Code, the aggregate
Fair Market Value (determined as of the grant date) of Shares for which any
single Incentive Stock Option is exercisable for the first time during any
calendar year under all equity incentive plans of the Company and its
Subsidiaries (as defined in Section 422 of the Code) may not exceed $100,000.

         (e)     Grant of Reload Options.  The Committee may provide (either at
the time of grant or exercise of an option), in its discretion, for the grant
to a grantee who exercises all or any portion of an option  ("Exercised
Options") and who pays all or part of such exercise price with shares of Common
Stock, of an additional option (a "Reload Option") for a number of shares of
Common Stock equal to the sum (the "Reload Number") of the number of shares of
Common Stock tendered or withheld in payment of such exercise price for the
Exercised Options plus, if so provided by the Committee, the number of shares
of Common Stock, if any, tendered or withheld by the grantee or withheld by the
Company in connection with the exercise of the Exercised Options  to satisfy
any federal, state or local tax withholding requirements.  The terms of each
Reload Option, including the date of its expiration and the terms and
conditions of its exercisability and transferability, shall be the same as the
terms of the Exercised Option to which it relates, except that (i) the grant





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date for each Reload Option shall be the date of exercise of the Exercised
Option to which it relates and (ii) the exercise price for each Reload Option
shall be the Fair Market Value of the Common Stock on the grant date of the
Reload Option.

7.       Stock Appreciation Rights.

         The Committee shall have the authority to grant SARs under this Plan,
either alone or to any optionee in tandem with options (either at the time of
grant of the related option or thereafter by amendment to an outstanding
option).  SARs shall be subject to such terms and conditions as the Committee
may specify.

         No SAR may be exercised unless the Fair Market Value of a share of
Common Stock of the Company on the date of exercise exceeds the exercise price
of the SAR or, in the case of SARs granted in tandem with options, any options
to which the SARs correspond.  Prior to the exercise of the SAR and delivery of
the cash and/or Shares represented thereby, the participant shall have no
rights as a stockholder with respect to Shares covered by such outstanding SAR
(including any dividend or voting rights).

         SARs granted in tandem with options shall be exercisable only when, to
the extent and on the conditions that any  related option is exercisable. The
exercise of an option shall result in an immediate forfeiture of any related
SAR to the extent the option is exercised, and the exercise of an SAR shall
cause an immediate forfeiture of any related option to the extent the SAR is
exercised.

         Upon the exercise of an SAR, the participant shall be entitled to a
distribution in an amount equal to the difference between the Fair Market Value
of a share of Common Stock on the date of exercise and the exercise price of
the SAR or, in the case of SARs granted in tandem with options, any option to
which the SAR is related, multiplied by the number of Shares as to which the
SAR is exercised.  The Committee shall decide whether such distribution shall
be in cash, in Shares having a Fair Market Value equal to such amount, in Other
Company Securities having a Fair Market Value equal to such amount or in a
combination thereof.

         All SARs will be exercised automatically on the last day prior to the
expiration date of the SAR or, in the case of SARs granted in tandem with
options, any related option, so long as the Fair Market Value of a share of
Common Stock on that date exceeds the exercise price of the SAR or any related
option, as applicable.  An SAR granted in tandem with options shall expire at
the same time as any related option expires and shall be transferable only
when, and under the same conditions as, any related option is transferable.

8.       Restricted Stock.

         The Committee may at any time and from time to time grant Shares of
restricted stock under the Plan to such participants and in such amounts as it
determines.  Each grant of restricted stock shall specify the applicable
restrictions on such Shares, the duration of such restrictions (which shall be
at least six months except as otherwise provided by the Committee), and the
time or times





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at which such restrictions shall lapse with respect to all or a specified
number of Shares that are part of the grant.

         The participant will be required to pay the Company the aggregate par
value of any Shares of restricted stock (or such larger amount as the Board may
determine to constitute capital under Section 154 of the Delaware General
Corporation Law, as amended) within ten days of the date of grant, unless such
Shares of restricted stock are treasury shares.  Unless otherwise determined by
the Committee, certificates representing Shares of restricted stock granted
under the Plan will be held in escrow by the Company on the participant's
behalf during any period of restriction thereon and will bear an appropriate
legend specifying or referring to the applicable restrictions thereon, and the
participant will be required to execute a blank stock power therefor.  Except
as otherwise provided by the Committee, during such period of restriction the
participant shall have all of the rights of a holder of Common Stock, including
but not limited to the rights to receive dividends and to vote, and any stock
or other securities received as a distribution with respect to such
participant's restricted stock shall be subject to the same restrictions as
then in effect for the restricted stock.

9.       Performance Awards.

         Performance awards may be granted to participants at any time and from
time to time as determined by the Committee.  The Committee shall have complete
discretion in determining the size and composition of performance awards so
granted to a participant and the appropriate period over which performance is
to be measured (a "performance cycle").  Performance awards may include (i)
specific dollar-value target awards (ii) performance units, the value of each
such unit being determined by the Committee at the time of issuance, and/or
(iii) performance Shares, the value of each such Share being equal to the Fair
Market Value of a share of Common Stock.

         The value of each performance award may be fixed or it may be
permitted to fluctuate based on a performance factor (e.g., return on equity)
selected by the Committee.

         The Committee shall establish performance goals and objectives for
each performance cycle on the basis of such criteria and objectives as the
Committee may select from time to time, including, without limitation, the
performance of the participant, the Company, one or more of its Subsidiaries or
divisions or any combination of the foregoing.  During any performance cycle,
the Committee shall have the authority to adjust the performance goals and
objectives for such cycle for such reasons as it deems equitable.

         The Committee shall determine the portion of each performance award
that is earned by a participant on the basis of the Company's performance over
the performance cycle in relation to the performance goals for such cycle. The
earned portion of a performance award may be paid out in Shares, cash, Other
Company Securities, or any combination thereof, as the Committee may determine.





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10.      Withholding Taxes.

         (a)     Participant Election.  Unless otherwise determined by the
Committee, a participant may elect to deliver shares of Common Stock (or have
the Company withhold shares acquired upon exercise of an option or SAR or
deliverable upon grant or vesting of restricted stock, as the case may be) to
satisfy, in whole or in part, the amount the Company is required to withhold
for taxes in connection with the exercise of an option or SAR or the delivery
of restricted stock upon grant or vesting, as the case may be.  Such election
must be made on or before the date the amount of tax to be withheld is
determined.  Once made, the election shall be irrevocable. The fair market
value of the shares to be withheld or delivered will be the Fair Market Value
as of the date the amount of tax to be withheld is determined. In the event a
participant elects to deliver shares of Common Stock pursuant to this Section
10(a), such delivery must be made subject to the conditions and pursuant to the
procedures set forth in Section 6(b) with respect to the delivery of Common
Stock in payment of the exercise price of options.

         (b)     Company Requirement.  The Company may require, as a condition
to any grant or exercise under the Plan or to the delivery of certificates for
Shares issued hereunder, that the grantee make provision for the payment to the
Company, either pursuant to Section 10(a) or this Section 10(b), of any
federal, state or local taxes of any kind required by law to be withheld with
respect to any grant or any delivery of Shares.  The Company, to the extent
permitted or required by law, shall have the right to deduct from any payment
of any kind (including salary or bonus) otherwise due to a grantee, an amount
equal to any federal, state or local taxes of any kind required by law to be
withheld with respect to any grant or to the delivery of Shares under the Plan,
or to retain or sell without notice a sufficient number of the Shares to be
issued to such grantee to cover any such taxes, the payment of which has not
otherwise been provided for in accordance with the terms of the Plan, provided
that the Company shall not sell any such Shares if such sale would be
considered a sale by such grantee for purposes of Section 16 of the Exchange
Act that is not exempt from matching thereunder.

11.      Written Agreement; Vesting.

         Each participant to whom a grant is made under the Plan shall enter
into a written agreement with the Company that shall contain such provisions,
including without limitation, vesting requirements, consistent with the
provisions of the Plan, as may be approved by the Committee.  Unless the
Committee determines otherwise, no grant under this Plan may be exercised, and
no restrictions relating thereto may lapse, within six months of the date such
grant is made.

12.      Transferability.

         Unless the Committee determines otherwise, no option, SAR, performance
award, or restricted stock granted under the Plan shall be transferable by a
participant otherwise than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code.
Unless the Committee determines otherwise, an option, SAR, or performance award
may be exercised only by the optionee or grantee thereof or his guardian or
legal representative;





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provided that Incentive Stock Options may be exercised by such guardian or
legal representative only if permitted by the Code and any regulations
promulgated thereunder.

13.      Listing, Registration and Qualification.

         If the Committee determines that the listing, registration or
qualification upon any securities exchange or under any law of Shares subject
to any option, SAR, performance award or restricted stock grant is necessary or
desirable as a condition of, or in connection with, the granting of same or the
issue or purchase of Shares thereunder, no such option or SAR may be exercised
in whole or in part, no such performance award may be paid out and no Shares
may be issued unless such listing, registration or qualification is effected
free of any conditions not acceptable to the Committee.

         It is the intent of the Company that the Plan comply in all respects
with Section 162(m) of the Code, that awards made hereunder comply in all
respects with Rule 16b-3 under the Exchange Act, that any ambiguities or
inconsistencies in construction of the Plan be interpreted to give effect to
such intention and that if any provision of the Plan is found not to be in
compliance with Section 162(m), such provision shall be deemed null and void to
the extent required to permit the Plan to comply with Section 162(m), as the
case may be.

14.      Transfer of Employee.

         The transfer of an employee from the Company to a Subsidiary, from a
Subsidiary to the Company, or from one Subsidiary to another shall not be
considered a termination of employment; nor shall it be considered a
termination of employment if an employee is placed on military or sick leave or
such other leave of absence which is considered by the Committee as continuing
intact the employment relationship.

15.      Adjustments.

         In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, distribution of assets,
or any other change in the corporate structure or shares of the Company, the
Committee shall make such adjustment as it deems appropriate in the number and
kind of Shares or other property reserved for issuance under the Plan, in the
number and kind of Shares or other property covered by grants previously made
under the Plan, in the exercise price of outstanding options and SARs and in
any limitations or other provisions in the Plan expressed in terms of a number
of shares.  Any such adjustment shall be final, conclusive and binding for all
purposes of the Plan.  In the event of any merger, consolidation or other
reorganization in which the Company is not the surviving or continuing
corporation or in which a Change in Control is to occur, all of the Company's
obligations regarding options, SARs performance awards, and restricted stock
that were granted hereunder and that are outstanding on the date of such event
shall, on such terms as may be approved by the Committee prior to such event,
be assumed by the surviving or continuing corporation or canceled in exchange
for property (including cash).





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         Without limitation of the foregoing, in connection with any
transaction of the type specified by clause (iii) of the definition of a Change
in Control in Section 2(b), the Committee may, in its discretion, (i) cancel
any or all outstanding options under the Plan in consideration for payment to
the holders thereof of an amount equal to the portion of the consideration that
would have  been payable to such holders pursuant to such transaction if their
options had been fully exercised immediately prior to such transaction, less
the aggregate exercise price that would have been payable therefor, or (ii) if
the amount that would have been payable to the option holders pursuant to such
transaction if their options had been fully exercised immediately prior thereto
would be less than the aggregate exercise price that would have been payable
therefor, cancel any or all such options for no consideration or payment of any
kind.  Payment of any amount payable pursuant to the preceding sentence may be
made in cash or, in the event that the consideration to be received in such
transaction includes securities or other property, in cash and/or securities or
other property in the Committee's discretion.

16.      Termination and Modification of the Plan.

         The Board of Directors or the Committee, without  approval of the
stockholders, may modify or terminate the Plan, except that no modification
shall become effective without prior approval of the stockholders of the
Company if stockholder approval would be required for continued compliance with
the performance-based compensation exception of Section 162(m) of the Code or
any listing requirement of the principal stock exchange on which the Common
Stock is then listed.

17.      Amendment or Substitution of Awards under the Plan.

         The terms of any outstanding award under the Plan may be amended from
time to time by the Committee in its discretion in any manner that it deems
appropriate (including, but not limited to, acceleration of the date of
exercise of any award and/or payments thereunder or of the date of lapse of
restrictions on Shares); provided that, except as otherwise provided in Section
15, no such amendment shall adversely affect in a material manner any right of
a participant under the award without his or her written consent.  The
Committee may, in its discretion, permit holders of awards under the Plan to
surrender outstanding awards in order to exercise or realize rights under other
awards, or in exchange for the grant of new awards, or require holders of
awards to surrender outstanding awards as a condition precedent to the grant of
new awards under the Plan.

18.      Commencement Date; Termination Date.

         The date of commencement of the Plan shall be June __, 1998, subject
to approval by the shareholders of the Company.  Unless previously terminated
upon the adoption of a resolution of the Board terminating the Plan, the Plan
shall terminate at the close of business on June __, 2008; provided that the
Board may, prior to such termination, extend the term of the Plan for up to
five years for the grant of awards other than Incentive Stock Options.  No
termination of the Plan shall materially and adversely affect any of the rights
or obligations of any person, without his or her consent, under any grant of
options or other incentives theretofore granted under the Plan.

19.      Governing Law.





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         The Plan shall be governed by the corporate laws of the State of
Delaware, without giving effect to any choice of law provisions.





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