Document:

EXHIBIT 4.3

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                                ALLSTREAM INC.

                          (formerly AT&T Canada Inc.)

                           MANAGEMENT INCENTIVE PLAN

                                 April 1, 2003

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                                ALLSTREAM INC.

                          (formerly AT&T Canada Inc.)

                           MANAGEMENT INCENTIVE PLAN

                                   ARTICLE 1
                                    PURPOSE

1.1  PURPOSE

The purpose of this Plan is to advance the interests of the Company by
assisting the Company in attracting, retaining and motivating key employees,
officers and Consultants through performance related incentives.

                                   ARTICLE 2
                                INTERPRETATION

2.1  DEFINITIONS

When used herein, unless the context otherwise requires, the following terms
have the indicated meanings, respectively:

     "Accelerated Vesting Period" means the period beginning on the
     Termination Date and ending on the 30th day of the month (except in the
     case of February, where such period shall end on the last day of
     February) during which the Notice Period (i) expires; or (ii) would have
     expired had such Notice Period been provided in accordance with the
     applicable provisions of the Employment Standards Act.

     "Acquiror" has the meaning set forth in Section 8.1(c) of this Plan;

     "Affiliated Company" has the meaning set forth in the Securities Act
     (Ontario), as amended from time;

     "Associate" has the meaning set forth in the Securities Act (Ontario), as
     amended from time to time;

     "Award" means an award of Options and/or SARs or RSUs;

     "Award Agreement" means a signed, written agreement between a Participant
     and the Company, in the form attached as Schedule A, subject to any
     amendments or additions thereto as may, in the discretion of the Board,
     be necessary or advisable, evidencing the terms and conditions on which
     an Award has been granted under this Plan;

     "Board" means the board of directors of the Company;

     "Business Day" means a day, other than a Saturday or Sunday, on which the
     principal commercial banks in the City of Toronto are open for commercial
     business during normal banking hours;

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     "CBCA" means the Canada Business Corporations Act and the regulations
     promulgated thereunder, both as amended from time to time;

     "Change in Control" means the happening of any of the following events:

          (i)  any transaction at any time and by whatever means pursuant to
               which (A) the Company goes out of existence by any means or (B)
               any Person or any group of two or more Persons acting jointly
               or in concert (other than the Company, a wholly-owned
               subsidiary of the Company, or an employee benefit plan of the
               Company or of any of its wholly-owned subsidiaries, including
               the trustee of any such plan acting as trustee) hereafter
               acquires the direct or indirect "beneficial ownership" (as
               defined by the CBCA) of, or acquires the right to exercise
               control or direction over, securities of the Company
               representing 50% or more of either (X) the then issued and
               outstanding Class A Shares (excluding securities convertible
               into Class A Shares) or (Y) the aggregate of the then issued
               and outstanding Shares, in any manner whatsoever, including,
               without limitation, as a result of a take-over bid, an exchange
               of securities, an amalgamation of the Company with any other
               entity, an arrangement, a capital reorganization or any other
               business combination or reorganization;

          (ii) the sale, assignment or other transfer of all or substantially
               all of the assets of the Company to a Person other than a
               wholly-owned subsidiary of the Company;

         (iii) the dissolution or liquidation of the Company except in
               connection with the distribution of assets of the Company to
               one or more Persons which were wholly-owned subsidiaries of the
               Company prior to such event;

          (iv) the occurrence of a transaction requiring approval of the
               Company's shareholders whereby the Company is acquired through
               consolidation, merger, exchange of securities, purchase of
               assets, amalgamation, statutory arrangement or otherwise by any
               other Person (other than a short form amalgamation or exchange
               of securities with a wholly-owned subsidiary of the Company);
               or

          (v)  the Board passes a resolution to the effect that, for the
               purposes of some or all of the Award Agreements, an event set
               forth in (i), (ii), (iii) or (iv) above has occurred.

     "Class A Shares" means the Class A Voting Shares in the capital of the
     Company and any security into which such Class A Voting Shares may be
     converted;

     "Class B Shares" means the Class B Limited Voting Shares in the capital
     of the Company and any security into which such Class B Limited Voting
     Shares may be converted;

     "Committee" has the meaning set forth in Section 3.2 of this Plan;

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     "Company" means Allstream Inc.;

     "Consultant" means an individual, other than an employee of the Company,
     that:

          (i)  is engaged to provide on a bona fide basis consulting,
               technical, management or other services to the Company or to an
               Affiliated Company, other than services provided in relation to
               a distribution, under a written contract between the Company or
               the Affiliated Company and the individual, or a consulting
               company or consulting partnership of the individual; and

          (ii) spends or will spend a significant amount of time and attention
               on the affairs and business of the Company or of an Affiliated
               Company;

     "Date of Grant" means, for any Award, the date specified by the Board at
     the time it grants the Award (which, for greater certainty, shall be no
     earlier than the date on which the Board meets for the purpose of
     granting such Award) or if no such date is specified, the date upon which
     the Award was granted;

     "Director" means a member of the Board or of the board of directors of an
     Affiliated Company;

     "Disabled" or "Disability" means the permanent and total incapacity of a
     Participant as determined in accordance with procedures established by
     the Board for purposes of this Plan;

     "Eligible Person" means a current full-time employee of the Company or of
     an Affiliated Company or a Consultant, and "Eligible Person" includes
     Registered Retirement Savings Plans or Registered Retirement Income Funds
     established by or for the individual employee or Consultant (or under
     which such individual is the beneficiary) or a subsidiary entity of such
     individual, employee or consultant;

     "Exercise Notice" means a notice in writing, substantially in the form
     set out in Schedule B, signed by a Participant holding an Option and/or
     SAR and stating the Participant's intention to exercise a particular
     Option and/or SAR;

     "Exercise Price" means the price at which a Share may be purchased
     pursuant to the exercise of an Option;

     "Exercise Period" means the period of time during which an Option or SAR
     granted under this Plan may be exercised (provided however that the
     Exercise Period may not exceed 10 years from the relevant Date of Grant);

     "Fair Market Value" means, with respect to any Share at a particular
     date, the closing price of such Shares on The Toronto Stock Exchange on
     the last trading day prior to such date (or if such Shares did not trade
     on such exchange on such day, the average of the bid and ask prices of
     such Shares at the close of trading on such day); provided that in the
     event that such Shares are not then listed on such stock exchange, the
     Fair Market Value shall be determined based on the closing price of such
     Shares on any stock exchange in

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     Canada or the United States on which such Shares are then listed on the
     last trading day prior to the particular date (or if such Shares did not
     trade on such exchange on such day, the average of the bid and ask prices
     of such Shares at the close of trading on such day); and further provided
     that in the event that such Shares are not then listed on any stock
     exchange in Canada or the United States, the Fair Market Value shall be
     determined by the Board in its sole discretion.

     "Insider" has the meaning set forth in the Policy;

     "Notice Period" means the period of notice which is required to be
     provided to an employee, as an alternative to compensation in lieu of
     notice, in respect of the termination of the employment of such employee
     without cause, all as required pursuant to the Employment Standards Act;

     "Offer" has the meaning set forth in subsection 8.1(c) of this Plan;

     "Option" means a non-assignable, non-transferable right to purchase
     Shares under this Plan;

     "Participant" means an Eligible Person who has received an Award;

     "Person" includes an individual, sole proprietorship, partnership,
     unincorporated association, unincorporated syndicate, unincorporated
     organization, trust, body corporate, and a natural person in his or her
     capacity as trustee, executor, administrator or other legal
     representative;

     "Plan" means this Management Incentive Plan;

     "Policy" means the Policy of The Toronto Stock Exchange on Employee Stock
     Option and Stock Purchase Plans, Options for Services and Related Matters
     as set forth in sections 626 to and through 637 of the Company Manual of
     The Toronto Stock Exchange, as amended or replaced from time to time;

     "Retirement" means retirement from active employment with the Company or
     an Affiliated Company in accordance with the policies of the Company in
     place from time to time or, with the consent for purposes of the Plan of
     such officer of the Company as may be designated by the Board, at or
     after such earlier age and upon the completion of such years of service
     as the Board may specify;

     "RSU" means a restricted stock or share unit awarded to a Participant
     under the Plan entitling the Participant to receive, subject to the
     provisions of the Plan, one Share;

     "SAR Price" means the price per Share at which a SAR may be exercised;

     "SAR Shares" means the number of Shares upon which a SAR is based;

     "Share Appreciation Right" or "SAR" has the meaning attributed thereto in
     subsection 5.1;

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     "Shares" means Class A Shares, Class B Shares and any security into which
     Class A Shares or Class B Shares may be converted; and

     "Termination Date" means, in the case of a Participant whose employment
     or term of office with the Company or an Affiliated Company terminates in
     the circumstances set out in subsection 7.2(b) or 7.2(c), the later of
     (A) the date that is the last day of any statutory notice period
     applicable to the Participant pursuant to applicable employment standards
     legislation in Canada, and (B) the date that is designated by the Company
     or an Affiliated Company, as the case may be, as the last day of the
     Participant's employment or term of office with the Company or the
     Affiliated Company, as the case may be, provided that in the case of
     termination of employment by voluntary resignation by the Participant,
     such date shall not be earlier than the date notice of resignation was
     given, and "Termination Date" in such case specifically does not mean the
     date on which any period of reasonable notice that the Company or the
     Affiliated Company (as the case may be) may be required at law to provide
     to the Participant, would expire.

2.2  INTERPRETATION

     (a)  Whenever the Board or, where applicable, the Committee is to
          exercise discretion in the administration of this Plan, the term
          "discretion" means the sole and absolute discretion of the Board or
          the Committee, as the case may be.

     (b)  As used herein, the terms "Article", "Section", "Subsection" and
          "clause" mean and refer to the specified Article, Section,
          Subsection and clause of this Plan, respectively.

     (c)  Words importing the singular include the plural and vice versa and
          words importing any gender include any other gender.

     (d)  Whenever any payment is to be made or action is to be taken on a day
          which is not a Business Day, such payment shall be made or such
          action shall be taken on the next following Business Day.

     (e)  In this Plan, a Person is considered to be a "subsidiary entity" of
          another Person if:

          (i)  it is controlled by,

               (A)  that other, or

               (B)  that other and one or more Persons, each of which is
                    controlled by that other, or

               (C)  two or more Persons, each of which is controlled by that
                    other; or

          (ii) it is a subsidiary entity of a Person that is that other's
               subsidiary entity.

     (f)  In this Plan, a Person is considered to be "controlled" by a Person
          if:

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               (i)  in the case of a Person,

                    (A)  voting securities of the first-mentioned Person
                         carrying more than 50% of the votes for the election
                         of directors are held, directly or indirectly,
                         otherwise than by way of security only, by or for the
                         benefit of the other Person; and

                    (B)  the votes carried by the securities are entitled, if
                         exercised, to elect a majority of the directors of
                         the first-mentioned Person;

          (ii) in the case of a partnership that does not have directors,
               other than a limited partnership, the second-mentioned Person
               holds more than 50% of the interests in the partnership; or

         (iii) in the case of a limited partnership, the general partner is
               the second-mentioned Person.

     (g)  Unless otherwise specified, all references to money amounts are to
          Canadian currency.

                                   ARTICLE 3
                                ADMINISTRATION

3.1       ADMINISTRATION

Subject  to Section  3.2,  this Plan will be  administered  by the Board and the
Board has sole and complete authority, in its discretion, to:

     (a)  determine the individuals (from among the Eligible Persons) to whom
          grants under the Plan may be made;

     (b)  make grants of Awards under the Plan relating to the issuance of
          Shares (including any combination of Options, RSUs and SARs) in such
          amounts, to such Eligible Persons and, subject to the provisions of
          this Plan, on such terms and conditions as it determines including
          without limitation:

          (i)  the time or times at which Awards may be granted;

          (ii) the conditions under which:

               (A)  Awards may be granted to Participants; or

               (B)  RSUs may be forfeited to the Company,

               including any conditions relating to the attainment of
               specified performance goals;

         (iii) the Exercise Price, SAR Price and/or price to be paid by a
               Participant in connection with the granting of RSUs;

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          (iv) the time or times when each Option and/or SAR becomes
               exercisable and, subject to Sections 4.3 and 5.4, the duration
               of the Exercise Period;

          (v)  whether restrictions or limitations are to be imposed on the
               Shares issuable pursuant to grants of RSUs or the exercise of
               Options or SARs, and the nature of such restrictions or
               limitations, if any;

          (vi) any acceleration of exercisability or vesting, or waiver of
               termination regarding any Award, based on such factors as the
               Board may determine; and

         (vii) the class of Shares subject to an Award.

          provided however that any grants of Awards to a Participant who is a
          Canadian for the purpose of the Telecommunications Act (Canada)
          shall only be grants of Awards to acquire Class A Shares;

     (c)  interpret this Plan and adopt, amend and rescind administrative
          guidelines and other rules and regulations relating to this Plan;
          and

     (d)  make all other determinations and take all other actions necessary
          or advisable for the implementation and administration of this Plan.

The Board's determinations and actions within its authority under this Plan
are conclusive and binding on the Company and all other persons. The
day-to-day administration of the Plan may be delegated to such officers and
employees of the Company or of an Affiliated Company as the Board determines.

3.2  DELEGATION TO COMMITTEE

To the extent permitted by applicable law and the Company's articles, the
Board may, from time to time, delegate to a committee (the "Committee") of the
Board all or any of the powers conferred on the Board under the Plan. In
connection with such delegation, the Committee will exercise the powers
delegated to it by the Board in the manner and on the terms authorized by the
Board. Any decision made or action taken by the Committee arising out of or in
connection with the administration or interpretation of this Plan in this
context is final and conclusive.

3.3  ELIGIBILITY

All Eligible Persons are eligible to participate in the Plan, subject to
subsections 7.1(e) and 7.2(e). Eligibility to participate does not confer upon
any Participant any right to receive any grant of an Award pursuant to the
Plan. The extent to which any Participant is entitled to receive a grant of an
Award pursuant to the Plan will be determined in the sole and absolute
discretion of the Board, provided however that the following restrictions
shall also apply to this Plan, together with all other plans, stock options or
other compensation or incentive mechanisms involving the potential issuance of
Shares to one or more service providers of the Company:

     (a)  the number of Shares reserved for issuance to any one Person
          pursuant to the Plan must not exceed 5% of the aggregate outstanding
          Shares;

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     (b)  the number of Shares reserved for issuance pursuant to the Plan
          granted to Insiders must not exceed 10% of the aggregate outstanding
          Shares;

     (c)  the number of Shares issued to Insiders within any one year period
          pursuant to the Plan must not exceed 10% of the aggregate
          outstanding Shares; and

     (d)  the number of Shares issued pursuant to the Plan to any one Insider
          and such Insider's Associates within a one-year period must not
          exceed 5% of the aggregate outstanding Shares.

For purposes of this Section, the term "outstanding shares" has the meaning
set forth in the Policy. In addition, for purposes of clauses (c) and (d)
above, "outstanding issue" will be determined on the basis of the number of
Shares that are outstanding immediately prior to the Share issuance in
question, excluding Shares issued pursuant to share compensation arrangements
over the preceding one-year period. If the Company repurchases Class A Shares
for cancellation such that any of the foregoing tests are not met following
such repurchase, this shall not constitute non-compliance under the Plan for
any Awards then outstanding.

3.4  TOTAL SHARES AVAILABLE

     (a)  The aggregate number of Shares that may be issued for all purposes
          pursuant to the Plan must not exceed 2,000,000 Shares. No grant may
          be made under the Plan if such grant would result in the issuance of
          Shares in excess of the above-noted limit. Subject to applicable
          law, the requirements of any stock exchange upon which the Shares
          may then be listed and any shareholder or other approval which may
          be required, the Board may in its discretion amend the Plan to
          increase such limit without notice to any Participants.

     (b)  To the extent Options or RSUs terminate for any reason prior to
          exercise in full or are cancelled, the Shares subject to such
          Options or RSUs shall be added back to the number of Shares reserved
          for issuance under the Plan and such Shares will again become
          available for grant under this Plan.

3.5  AWARD AGREEMENTS

All grants of Awards under this Plan will be evidenced by Award Agreements.
Award Agreements will be subject to the applicable provisions of this Plan and
will contain such provisions as are required by this Plan and any other
provisions that the Board may direct. Any one officer of the Company is
authorized and empowered to execute and deliver, for and on behalf of the
Company, an Award Agreement to each Participant granted an Award pursuant to
the Plan.

3.6  CONDITIONS OF GRANT

Each Participant will, when requested by the Company, sign and deliver all
such documents relating to the granting of Awards or exercise of Options
and/or SARs which the Company deems necessary or desirable.

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3.7  NON-TRANSFERABILITY OF AWARDS

     (a)  Subject to Section 7.1, Awards granted under this Plan may only be
          exercised during the lifetime of the Participant by such Participant
          personally. No assignment or transfer of Awards, whether voluntary,
          involuntary, by operation of law or otherwise, vests any interest or
          right in such Awards whatsoever in any assignee or transferee
          (except that a Participant may transfer Awards to a corporation in
          respect of which the Participant is the sole shareholder or to a
          Registered Retirement Savings Plan or Registered Retirement Income
          Fund established by or for the Participant or under which such
          individual is a beneficiary) and immediately upon any assignment or
          transfer, or any attempt to make the same, such Awards will
          terminate and be of no further force or effect. If any Participant
          has transferred Awards to a corporation pursuant to this Section
          3.7, such Awards will terminate and be of no further force or effect
          if at any time the transferor should cease to own all of the issued
          shares of such corporation.

     (b)  Where a SAR has been granted in conjunction with the grant of an
          Option, the transfer of the Option will automatically transfer the
          tandem SAR and the transfer of the tandem SAR will automatically
          transfer the related Option.

                                   ARTICLE 4
                               GRANT OF OPTIONS

4.1  GRANT OF OPTIONS

The Board may, from time to time, subject to the provisions of this Plan and
such other terms and conditions as the Board may prescribe, grant Options to
any Participant.

4.2  EXERCISE PRICE

The Exercise Price will be as determined by the Board but in any event will be
no less than the Fair Market Value of the underlying Shares on the day
immediately preceding the Date of Grant.

4.3  TERM OF OPTIONS

Subject to any accelerated termination as set forth in this Plan, each Option,
unless otherwise specified by the Board, expires on the tenth anniversary of
the Date of Grant, provided that in no event will the Exercise Period of an
Option exceed 10 years from its Date of Grant.

The Board shall have the authority to condition the grant or vesting of
Options upon the attainment of specified performance goals, or such other
factors (which may vary as between Options) as the Board may determine in its
sole discretion.

4.4  EXERCISE OF OPTIONS

Unless otherwise specified by the Board at the time of granting an Option and
except as otherwise provided in this Plan, each Option will vest and be
exercisable as follows:

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                                      -10-

Percentage of Total Number of
Shares that may be Purchased                 Exercisable At Any Time
-----------------------------                -----------------------

         33%                    From the first anniversary of the Date of Grant

         33%                    From the second anniversary of the Date of Grant

         34%                    From the third anniversary of the Date of Grant

Once an instalment becomes exercisable, it remains exercisable until
expiration or termination of the Option, unless otherwise specified by the
Board in connection with the grant of such Option or otherwise as specified
herein. Each Option or instalment may be exercised at any time or from time to
time, in whole or in part, for up to the total number of Shares with respect
to which it is then exercisable. The Board has the right to accelerate the
date upon which any instalment of any Option becomes exercisable.

Subject to the provisions of this Plan and any Award Agreement, Options shall
be exercised by means of a fully completed Exercise Notice delivered to the
Company.

4.5  PAYMENT OF EXERCISE PRICE

The Exercise Notice must be accompanied by payment in full of the Exercise
Price in respect of the Shares to be purchased. The Exercise Price must be
fully paid (i) by cash, certified cheque, bank draft or money order payable to
the Company; (ii) through the surrender of vested, unexercised Options with an
aggregate "in the money" value equal to the Exercise Price (for this purpose,
the "in the money value" of an Option shall be equal to the amount by which
(A) the greater of the Fair Market Value of a Class A Share (in the case of
the exercise of an Option to acquire Class A Shares) or a Class B Share (in
the case of the exercise of an Option to acquire Class B Shares), or the offer
price for a Class A Share (in the case of the exercise of an Option to acquire
Class A Shares) or a Class B Share (in the case of the exercise of an Option
to acquire Class B Shares) pursuant to any then outstanding take-over bid or
issuer bid made generally to holders of Class A Shares or Class B Shares as
applicable exceeds (B) the Exercise Price for the vested Option); or (iii)
through such other cashless exercise program as may be specified from time to
time by the Directors. No Shares will be issued or transferred until full
payment therefor has been received by the Company. As soon as practicable
after receipt of any Exercise Notice and full payment of the Exercise Price,
the Company will deliver to the Participant a certificate or certificates
representing the acquired Shares.

                                   ARTICLE 5
                      GRANT OF STOCK APPRECIATION RIGHTS

5.1  GRANT OF SARS

The Board may grant SARs in conjunction with the granting of Options, or on a
stand-alone. A SAR shall entitle the Participant, upon exercise of the SAR, to
receive a cash payment from the Company equal to the difference between the
then Fair Market Value per underlying Share and the SAR Price multiplied by
the number of SAR Shares, or portion thereof, so exercised; provided, however,
that the Board may elect to deliver the underlying Shares, cash or a
combination of underlying Shares and cash, equal in value to such difference.

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                                      -11-

5.2  SAR PRICE

The SAR Price will be as determined by the Board but in any event will be no
less than the Fair Market Value of the underlying Shares on the day
immediately preceding the Date of Grant.

5.3  TANDEM SARS

     (a)  Where SARs are granted in conjunction with the granting of Options,
          the SAR Price shall be the same as the Exercise Price, the number of
          Shares issuable upon exercise of the SAR shall be the same as the
          number of Shares issuable upon exercise of the related Option and
          the terms for the vesting of the tandem SARs shall be the same as
          the terms for the vesting of the Options to which they relate.

     (b)  Upon the exercise of SARs or any portion thereof, any Options
          granted in conjunction with tandem SARs are terminated to the extent
          of such exercise. Upon the exercise of Options or any portion
          thereof, any tandem SARs granted in conjunction with such Options
          are terminated to the extent of such exercise.

5.4  TERM OF SARS

Subject to any accelerated termination as set forth in this Plan, each SAR,
unless otherwise specified by the Board, expires on the tenth anniversary of
the Date of Grant, provided that in no event will the Exercise Period of a SAR
exceed 10 years from its Date of Grant.

The Board shall have the authority to condition the grant or vesting of SARs
upon the attainment of specified performance goals, or such other factors
(which may vary as between awards of SARs) as the Board may determine in its
sole discretion.

5.5  EXERCISE OF SARS

Unless otherwise determined by the Board and subject to Section 5.3, SARs that
are not granted in conjunction with the granting of Options will vest, as to
one third of the SARs granted, on the Date of Grant and on the first and
second anniversaries of the Date of Grant.

Once an instalment of a SAR becomes exercisable, it remains exercisable until
expiration or termination of the SAR, unless otherwise specified by the Board
in connection with the grant of such SAR or otherwise as specified herein.
Each SAR or instalment may be exercised at any time and from time to time, in
whole or in part, for up to the total number of SARs with respect to which it
is then exercisable. The Board has the right to accelerate the date upon which
any instalment of any SAR becomes exercisable.

Subject to the provisions of this Plan and any Award Agreement, SARs shall be
exercised by means of a fully completed Exercise Notice delivered to the
Company.

                                   ARTICLE 6
                   GRANT OF RESTRICTED STOCK OR SHARE UNITS

6.1  GRANT OF RSUS

The Board may, from time to time, subject to the provisions of this Plan and
such other terms and conditions as the Board may prescribe, grant RSUs to any
Participant.

6.2  TERMS OF RSUS

The Board shall have the authority to condition the grant of RSUs upon the
attainment of specified performance goals, or such other factors (which may
vary as between awards of RSUs) as the Board may determine in its sole
discretion.

6.3  VESTING OF RSUS

The Board shall have the authority to determine, in its sole discretion, the
duration of the vesting period and other vesting terms applicable to the grant
of RSUs, provided that all RSUs granted shall vest within three (3) years of
the Date of Grant.

6.4  SHARE CERTIFICATES

As soon as practicable following the expiry of the applicable vesting period,
or at such later date as may be determined by the Board in its sole
discretion, a share certificate representing the Shares issuable pursuant to
the RSUs shall be registered in the name of the Participant or as the
Participant may direct, subject to applicable securities laws.

                                   ARTICLE 7
                           TERMINATION OF EMPLOYMENT

7.1  RETIREMENT, DEATH OR DISABILITY

If a Participant dies or becomes Disabled while an employee or officer of the
Company or an Affiliated Company or if the employment or term of office of the
Participant with the Company or an Affiliated Company terminates due to
Retirement:

     (a)  the executor or administrator of the Participant's estate or the
          Participant, as the case may be, may exercise Options and/or SARs of
          the Participant. The number of Options and/or SARs exercisable shall
          equal:

          (i)  the number of Options and/or SARs which were exercisable at the
               date of such death, Disability or Retirement; plus

          (ii) a portion of the next instalment of the Options and/or SAR due
               to vest equal to the number of Options and/or SARs next due to
               vest multiplied by a fraction the numerator of which is the
               number of days elapsed since the date of vesting of the last
               instalment of the Option and/or SARs (or if none have vested,
               the Date of Grant) to the date of such death, Disability or
               Retirement and the denominator of which is the number of days

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                                      -13-

               between the date of vesting of the last instalment of the
               Option and/or SARs (or if none have vested, the Date of Grant)
               and the date of vesting of the next instalment of the Option
               and/or SAR;

     (b)  the right to exercise such Options and/or SARs terminates on the
          earlier of: (i) the date that is twelve months from the date of the
          Participant's death, Disability or Retirement; and (ii) the date on
          which the Exercise Period of the particular Option and/or SAR
          expires. Subject to subsection (a), any Options and/or SARs held by
          the Participant shall immediately expire and are cancelled on such
          date;

     (c)  a portion of the next instalment of the RSUs due to vest shall
          immediately vest, such portion to equal to the number of RSUs next
          due to vest multiplied by a fraction the numerator of which is the
          number of days elapsed since the date of vesting of the last
          instalment of the RSUs (or if none have vested, the Date of Grant)
          to the date of such death, Disability or Retirement and the
          denominator of which is the number of days between the date of
          vesting of the last instalment of the RSUs (or if none have vested,
          the Date of Grant) and the date of vesting of the next instalment of
          the RSUs;

     (d)  subject to subsection (c), any RSUs held by the Participant that
          have not yet vested at the date of death, Disability or Retirement
          immediately expire and are cancelled on such date; and

     (e)  such Participant's eligibility to receive further grants of Awards
          under the Plan ceases as of the date of the Participant's death,
          Disability or Retirement, as the case may be.

7.2  TERMINATION OF EMPLOYMENT OR SERVICES

     (a)  Where a Participant's employment or term of office with the Company
          or an Affiliated Company ceases by reason of the Participant's
          death, Disability or Retirement, then the provisions of Section 7.1
          will apply.

     (b)  Where a Participant's employment or term of office terminates by
          reason of voluntary resignation by the Participant, then any Options
          and/or SARs held by the Participant that are exercisable at the
          Termination Date continue to be exercisable by the Participant until
          the earlier of: (A) the date that is 90 days after the Termination
          Date; and (B) the date on which the Exercise Period of the
          particular Option and/or SAR expires. Any Options and/or SARs held
          by the Participant that are not exercisable at the Termination Date
          immediately expire and are cancelled on the Termination Date, and
          any RSUs held by the Participant which have not yet vested are
          immediately forfeited to the Company on the Termination Date.

     (c)  Where a Participant's employment or term of office terminates by
          reason of termination by the Company or an Affiliated Company
          without cause (whether such termination occurs with or without any
          or adequate reasonable notice, or with or without any or adequate
          compensation in lieu of such reasonable notice), then any Options
          and/or SARs held by the Participant that are exercisable at the

<PAGE>
                                      -14-

          Termination Date continue to be exercisable by the Participant until
          the earlier of: (A) the date that is 90 days after the conclusion of
          the Accelerated Vesting Period; and (B) the date on which the
          Exercise Period of the particular Option and/or SAR expires. Any
          Options and/or SARs held by the Participant that are not exercisable
          at the Termination Date, and any RSUs held by the Participant which
          have not yet vested at the Termination Date, shall fully vest in
          equal monthly instalments on the 30th day of each month occurring
          during the Accelerated Vesting Period.

     (d)  Where a Participant's employment or term of office is terminated by
          the Company or an Affiliated Company for cause, then any Options
          and/or SARs held by the Participant which are not exercisable at the
          date of the Participant's termination for cause shall immediately
          expire and be cancelled, and any RSUs held by the Participant which
          have not yet vested at the date of the Participant's termination for
          cause shall immediately be forfeited to the Company, all on such
          date and at such time as may be determined by the Board in its sole
          discretion. For greater certainty, where a Participant's employment
          or term of office is terminated by the Company or an Affiliated
          Company for cause, then any Options and/or SARs held by the
          Participant which are exercisable at the date of the Participant's
          termination for cause shall continue to be exercisable until the
          earlier of: (A) the date that is 90 days after the date of the
          Participant's termination for cause; and (B) the date on which the
          Exercise Period of the particular Option and/or SAR expires.

     (e)  A Participant's eligibility to receive further grants under the Plan
          ceases as of the date that the Company or an Affiliated Company, as
          the case may be, provides the Participant with written notification
          that the Participant's employment or term of office, as the case may
          be, is terminated, notwithstanding that such date may be prior to
          the Termination Date.

     (f)  Unless the Board, in its discretion, otherwise determines, at any
          time and from time to time, Awards are not affected by a change of
          employment arrangement within or among the Company or an Affiliated
          Company for so long as the Participant continues to be an employee
          of the Company or an Affiliated Company, including without
          limitation a change in the employment arrangement of a Participant
          whereby such Participant becomes a non-management Director.

7.3  DISCRETION TO PERMIT EXERCISE

Notwithstanding the provisions of Sections 7.1 and 7.2, the Board may, in its
discretion, at any time prior to or following the events contemplated in such
Sections, permit the exercise of any or all Options and/or SARs held by a
Participant or permit the acceleration of vesting of any or all RSUs, all in
the manner and on the terms as may be authorized by the Board, provided that
the Board will not, in any case, authorize the exercise of an Option and/or
SAR pursuant to this Section beyond the expiration of the Exercise Period of
the particular Option and/or SAR.

<PAGE>
                                     -15-

                                   ARTICLE 8
                                CHANGE IN CONTROL

8.1  CHANGE IN CONTROL

     (a)  If the Company enters into an agreement relating to, or otherwise
          becomes aware of, a transaction which, if completed, would result in
          a Change in Control, the Company shall give written notice of the
          proposed Change in Control to the Participants then holding Awards,
          together with a description of the effect of such Change in Control
          on outstanding Options, SARs and RSUs, not less than 15 Business
          Days prior to the closing of the transaction expected to result in
          the Change in Control.

     (b)  Notwithstanding Sections 3.1(b), 3.3, 3.4, 3.5 and 7.3 and any other
          provisions set forth in this Plan or any Award Agreement, subject to
          applicable securities laws and stock exchange requirements, all of
          the Options, SARs and RSUs granted to Participants shall vest not
          less than 10 Business Days prior to the happening of any transaction
          which, directly or indirectly, results in a Change of Control. If
          any such Options or SARs so vested are not exercised by either:

          (i)  5:00 p.m. (Toronto time) on the date which is 5 Business Days
               following time of occurrence of the Change of Control; or

          (ii) in the event that the Board has determined in its discretion
               that to permit the exercise of Options or SARs following the
               occurrence of the Change of Control would in any way impede or
               prevent the transaction giving rise to the Change of Control
               from occurring, the time of occurrence of the Change of
               Control,

          such unexercised Options and SARs shall terminate and expire
          effective upon the completion of the proposed transaction giving
          rise to the Change in Control. If, for any reason, the Change in
          Control does not occur within the contemplated time period, the
          acceleration of the vesting of the Awards and any exercises of
          Options and/or SARs effected pursuant thereto shall be retracted and
          nullified and vesting shall instead revert to the manner in which
          vesting was to have occurred previously.

     (c)  If any individual, corporation or other entity (an "Acquiror") makes
          an offer to purchase all of the Class A Shares (an "Offer") and the
          Offer (and any contemporaneous offer for Class B Shares, if made) is
          accepted by the holders of Shares who collectively hold a majority
          of the outstanding Shares, (not including shares held by the
          Acquiror, Affiliated Companies and Associates of the Acquiror and
          those shareholders who acquired their Shares pursuant to the
          exercise of Options or SARs or the receipt of RSUs granted under the
          Plan), shareholders who acquired Shares pursuant to Awards granted
          under the Plan shall be required to sell such Shares together with
          all other Shares which they acquire pursuant to the exercise of any
          Options or SARs or the vesting of any RSUs then owned by them to the
          Acquiror on the same terms and conditions as set out in the Offer.

<PAGE>
                                      -16-

8.2  GOING PRIVATE TRANSACTION

In the event of a transaction giving rise to a Change in Control which also
constitutes a "going private transaction" (as defined in Ontario Securities
Commission Rule 61-501 - Insider Bids, Issuer Bids, Going Private Transactions
and Related Party Transactions, or any rule, regulation, statutory provision
or replacement thereof), any Options and SARs which are "out of the money"
based on the greater of the Fair Market Value of the underlying Shares and the
consideration offered under the transaction shall terminate effective the
first Business Day following closing of the transaction.

                                   ARTICLE 9
                           SHARE CAPITAL ADJUSTMENTS

9.1  GENERAL

The existence of any Options, SARs or RSUs does not affect in any way the
right or power of the Company or its shareholders to make, authorize or
determine any adjustment, recapitalization, reorganization or any other change
in the Company's capital structure or its business, or any amalgamation,
combination, merger or consolidation involving the Company, to create or issue
any bonds, debentures, Shares or other securities of the Company or to
determine the rights and conditions attaching thereto, to effect the
dissolution or liquidation of the Company or any sale or transfer of all or
any part of its assets or business, or to effect any other corporate act or
proceeding, whether of a similar character or otherwise, whether or not any
such action referred to in this Section would have an adverse effect on this
Plan or on any Option, SAR or RSU granted hereunder.

9.2  REORGANIZATION OF COMPANY'S CAPITAL

Should the Company effect a subdivision or consolidation of Shares or any
similar capital reorganization or a payment of a stock dividend (other than a
stock dividend that is in lieu of a cash dividend), or should any other change
be made in the capitalization of the Company that does not constitute a Change
of Control and that, in the opinion of the Board, would warrant the amendment
or replacement of any existing Options, SARs or RSUs in order to adjust: (a)
the number of Shares that may be acquired on the vesting of outstanding RSUs
or the exercise of any outstanding Options or SARs; and/or (b) the Exercise
Price of any outstanding Options or SARs in order to preserve proportionately
the rights and obligations of the Participants holding such Awards, the Board
will authorize such steps to be taken as it may consider to be equitable and
appropriate to that end.

9.3  OTHER EVENTS AFFECTING THE COMPANY

In the event of an amalgamation, combination, arrangement, merger or other
transaction or reorganization involving the Company and occurring by exchange
of Shares, by sale or lease of assets or otherwise, that does not constitute a
Change of Control and that, in the opinion of the Board, warrants the
amendment or replacement of any existing Options, SARs or RSUs in order to
adjust: (a) the number of Shares that may be acquired on the vesting of
outstanding RSUs or the exercise of any outstanding Options or SARs; or (b)
the Exercise Price of any outstanding Options or SARs in order to preserve
proportionately the rights and obligations of the

<PAGE>

                                     -17-

Participants holding such Awards, the Board will authorize such steps to be
taken as it may consider to be equitable and appropriate to that end.

9.4  IMMEDIATE EXERCISE OF AWARDS

Where the Board determines that the steps provided in Sections 9.2 and 9.3
would not preserve proportionately the rights, value and obligations of the
Participants holding such Awards in the circumstances or otherwise determines
that it is appropriate:

     (a)  the Board may permit the immediate exercise of any outstanding
          Options or SARs that are not otherwise exercisable, and the
          immediate vesting of any unvested RSUs; and

     (b)  If the Board takes the step contemplated in (a) above, the Board may
          also authorize the Company, to the extent permitted under applicable
          laws, to:

          (i)  purchase any Options from any Participant for a price equal to
               the difference between the Fair Market Value of the underlying
               Shares and the Exercise Price of the Options; or

          (ii) lend to Participants an amount equal to the aggregate Exercise
               Price for those Options of the Participant which have an
               Exercise Price which is less than the Fair Market Value of the
               underlying Shares at a rate of interest equal to the current
               prime rate plus one percent provided that the Participant
               irrevocably:

               (A)  agrees to exercise all such Options of the Participant;
                    and

               (B)  authorizes the Company to sell, dispose of or deposit in
                    acceptance of an outstanding take-over bid the Shares
                    issuable upon the exercise of such Options, to deduct from
                    the proceeds of sale of such Shares an amount equal to the
                    outstanding balance of the loan plus accrued interest in
                    payment of such loan, to mail a cheque payable to the
                    Participant for the balance of the proceeds of sale and to
                    execute and deliver on behalf of the Participant all
                    transfers, consents or other documents necessary to give
                    effect to the foregoing.

9.5  ISSUE BY COMPANY OF ADDITIONAL SHARES

Except as expressly provided in this Article 9, neither the issue by the
Company of shares of any class or securities convertible into or exchangeable
for shares of any class, nor the conversion or exchange of such shares or
securities, affects, and no adjustment by reason thereof is to be made with
respect to: (a) the number of Shares that may be acquired as a result of a
grant of RSUs or upon the exercise of any outstanding Options or SARs; or (b)
the Exercise Price of any outstanding Options or SARs.

<PAGE>
                                     -18-

9.6  FRACTIONS

No fractional Shares will be issued on the exercise of an Option or SAR or the
grant of an RSU. Accordingly, if, as a result of any adjustment under Section
9.2 or 9.3, a Participant would become entitled to a fractional Share, the
Participant has the right to acquire only the adjusted number of full Shares
and no payment or other adjustment will be made with respect to the fractional
Shares which shall be disregarded.

                                  ARTICLE 10
                           MISCELLANEOUS PROVISIONS

10.1 LEGAL REQUIREMENT

The Company is not obligated to grant any Awards, issue any Shares or other
securities, make any payments or take any other action if, in the opinion of
the Board, in its sole discretion, such action would constitute a violation by
a Participant or the Company of any provision of any applicable statutory or
regulatory enactment of any government or government agency or the
requirements of any stock exchange upon which the Shares may then be listed.

10.2 PARTICIPANTS' ENTITLEMENT

Except as otherwise provided in this Plan, Options and SARs (whether or not
exercisable) and RSUs previously granted under this Plan are not affected by
any change in the relationship between, or ownership of, the Company and an
Affiliated Company. For greater certainty, all grants of RSUs remain valid and
all Options and SARs remain valid and exercisable in accordance with the terms
and conditions of this Plan and are not affected by reason only that, at any
time, an Affiliated Company ceases to be an Affiliated Company.

10.3 WITHHOLDING TAXES

The granting or vesting of each RSU and exercise of each Option and SAR
granted under this Plan is subject to the condition that if at any time the
Board determines, in its discretion, that the satisfaction of withholding tax
or other withholding liabilities is necessary or desirable in respect of such
grant, vesting or exercise, such exercise is not effective unless such
withholding has been effected to the satisfaction of the Board. In such
circumstances, the Board may require that a Participant pay to the Company, in
addition to and in the same manner as the Exercise Price, or as the Board may
determine, such amount as the Company or an Affiliated Company is obliged to
remit to the relevant taxing authority in respect of the granting or vesting
of the RSU or exercise of the Option and/or SAR. Any such additional payment
is due no later than the date on which any amount with respect to the RSU or
exercised Option or SAR is required to be remitted to the relevant tax
authority by the Company or an Affiliated Company, as the case may be.

10.4 RIGHTS OF PARTICIPANT

No Participant has any claim or right to be granted an Award (including,
without limitation, an Option and/or SAR granted in substitution for any
Option or SAR that has expired pursuant to the terms of this Plan) and the
granting of any Award is not to be construed as giving a Participant a right
to remain as an employee or Consultant of the Company or an Affiliated
Company. No Participant has any rights as a shareholder of the Company in
respect of Shares

<PAGE>
                                     -19-

issuable on the exercise of any Option or SAR or issuable pursuant to any RSU
until the allotment and issuance to such Participant of certificates
representing such Shares.

10.5 OTHER INCENTIVE AWARDS

The Board shall have the right to grant other incentive awards based upon
Shares under this Plan to Participants in accordance with applicable laws and
regulations and subject to regulatory approval, including without limitation
the approval of The Toronto Stock Exchange, having such terms and conditions
as the Board may determine, including without limitation the grant of Shares
based upon certain conditions and the grant of securities convertible into
Shares.

10.6 TERMINATION; AMENDMENT

     (a)  The Plan will terminate and, for greater certainty, all unexercised
          Options and SARs shall terminate and expire on the earliest of: (i)
          the date upon which no further Shares remain available for issuance
          under the Plan and no Options, SARs or RSUs remain outstanding; and
          (ii) the acceleration of the vesting of Options, SARs and RSUs
          pursuant to Article 8 upon the occurrence of a Change in Control,
          unless renewed for such further period and upon such terms and
          conditions as the Board may determine.

     (b)  The Board may, without notice, at any time or from time to time,
          amend, suspend or terminate this Plan or any provisions hereof in
          such respects as it, in its sole discretion, determines appropriate.
          No such amendment, suspension or termination of this Plan (i) may
          impair any rights or obligations arising from any Award previously
          granted to the Participant under this Plan without the consent of
          the Participant or the representatives of his or her estate, as
          applicable, or (ii) shall permit the expiry of Options or SARs
          beyond 10 years from the Date of Grant. Amendments may also be
          subject to approval from any Stock Exchange upon which the Shares
          may then be listed.

10.7 INDEMNIFICATION

Every Director will at all times be indemnified and saved harmless by the
Company from and against all costs, charges and expenses whatsoever including
any income tax liability arising from any such indemnification, that such
Director may sustain or incur by reason of any action, suit or proceeding,
taken or threatened against the Director, otherwise than by the Company, for
or in respect of any act done or omitted by the Director in respect of this
Plan, such costs, charges and expenses to include any amount paid to settle
such action, suit or proceeding or in satisfaction of any judgement rendered
therein.

10.8 QUEBEC STOCK SAVINGS PLAN

If the Shares qualify in any period for purposes of a stock savings plan under
the Taxation Act (Quebec) (the "Act"), the Company shall so notify all Quebec
resident Participants who are officers of the Company or of an Affiliated
Company, whereupon any such Participant who wishes to deposit pursuant to the
Act some or all of the Shares to be issued to them under the Plan in such
Period shall so indicate in the Exercise Notice.

<PAGE>
                                      -20-

10.9 PARTICIPATION IN THE PLAN

The participation of any Participant in the Plan is entirely voluntary and not
obligatory and shall not be interpreted as conferring upon such Participant
any rights or privileges other than those rights and privileges expressly
provided in the Plan. In particular, participation in the Plan does not
constitute a condition of employment or engagement nor a commitment on the
part of the Company to ensure the continued employment or engagement of such
Participant. The Plan does not provide any guarantee against any loss which
may result from fluctuations in the market value of the Shares. The Company
does not assume responsibility for the income or other tax consequences for
the Participants and they are advised to consult with their own tax advisors.

10.10 INTERNATIONAL PARTICIPANTS

With respect to Participants who reside or work outside Canada, or who are not
resident Canadians within the meaning of the Telecommunications Act (Canada),
the Board may, in its sole discretion, amend, or otherwise modify, without
shareholder approval, the terms of the Plan or Awards with respect to such
Participants in order to conform such terms with the provisions of local law
or to substitute Class B Shares for Class A Shares or Class A Shares for Class
B Shares under this Plan, and the Committee may, where appropriate, establish
one or more sub-plans to reflect such amended or otherwise modified provisions
subject to subsection 10.6(b).

10.11 EFFECTIVE DATE

This Plan becomes effective on a date to be determined by the Board.

10.12 GOVERNING LAW

This Plan is created under and is to be governed, construed and administered
in accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.

<PAGE>

                                   SCHEDULE A
                                 AWARD AGREEMENT

Allstream Inc. (the "Company") hereby grants the following Award to the
Participant named below (the "Participant"), in accordance with and subject to
the terms, conditions and restrictions of this Agreement, together with the
provisions of the Management Incentive Plan (the "Plan") of the Company dated
April 1, 2003:

          Name of Participant:

          Date of Grant:

          Total Number and Type of Shares Subject to Option:

          Total Number of SAR Shares Subject to a Tandem SAR:

          Total Number of SAR Shares For a Stand-Alone SAR:

          Total Number of RSUs:

1.   The terms and conditions of the Plan are hereby incorporated by reference
     as terms and conditions of this Award Agreement and all capitalized terms
     used herein, unless expressly defined in a different manner, have the
     meanings ascribed thereto in the Plan.

2.   Subject to any acceleration in vesting as provided in the Plan, each
     Option and any tandem SAR is exercisable in the instalments set forth in
     Section 4.4 of the Plan, each stand-alone SAR is exercisable in the
     instalments set forth in Section 5.5 of the Plan and each RSU vests as to
     one-third effective on the Business Day prior to each of the first,
     second and third anniversaries of the Date of Grant.

3.   In no event is the Option and/or SAR granted hereunder exercisable after
     the expiration of the relevant Exercise Period.

4.   No fractional Shares will be issued pursuant to an Award granted
     hereunder. If, as a result of any adjustment to the number of Shares
     issuable pursuant to an Award granted hereunder pursuant to the Plan, the
     Participant would be entitled to receive a fractional Share, the
     Participant has the right to acquire only the adjusted number of full
     Shares and no payment or other adjustment will be made with respect to
     the fractional Shares so disregarded.

5.   Nothing in the Plan or in this Award Agreement will affect the Company's
     right, or that of an Affiliated Company, to terminate the employment or
     term of office or engagement of a Participant at any time for any reason
     whatsoever. Upon such termination, a Participant's rights to exercise
     Options and/or SARs will be subject to restrictions and time limits,
     complete details of which are set out in the Plan.

6.   Each notice relating to the Award, including the exercise of any Option
     and/or SAR, must be in writing. All notices to the Company must be
     delivered personally or by prepaid registered mail and must be addressed
     to the Chief Financial Officer of the Company

<PAGE>
                                      A-2

     with a copy to the General Counsel of the Company. All notices to the
     Participant will be addressed to the principal address of the Participant
     on file with the Company. Either the Company or the Participant may
     designate a different address by written notice to the other. Such
     notices are deemed to be received, if delivered personally, on the date
     of delivery, and if sent by prepaid, registered mail, on the fifth
     business day following the date of mailing. Any notice given by either
     the Participant or the Company is not binding on the recipient thereof
     until received.

7.   Subject to Section 7.1 of the Plan, any Option and/or SAR granted
     pursuant to this Award Agreement may only be exercised during the
     lifetime of the Participant by the Participant personally and no
     assignment or transfer of an Award, whether voluntary, involuntary, by
     operation of law or otherwise, vests any interest or right in such Award
     whatsoever in any assignee or transferee, and immediately upon any
     assignment or transfer or any attempt to make such assignment or
     transfer, the Award granted hereunder terminates and is of no further
     force or effect. Complete details of this restriction are set out in the
     Plan.

8.   The Participant hereby agrees that:

     (a)  any rule, regulation or determination, including the interpretation
          by the Board of the Plan, the Award granted hereunder and, if
          applicable, its exercise, is final and conclusive for all purposes
          and binding on all persons including the Company and the
          Participant; and

     (b)  the grant of the Award does not affect in any way the right of the
          Company or any Affiliated Company to terminate the employment of the
          Participant.

9.   This Award Agreement has been made in and is to be construed under and in
     accordance with the laws of the Province of Ontario and the laws of
     Canada applicable therein.

                                               ALLSTREAM INC.

                                               By: _____________________________
                                                   Authorized Signatory

<PAGE>
                                      A-3

I have read the foregoing Award Agreement and hereby accept the Option to
purchase Shares in accordance with and subject to the terms and conditions of
such Agreement and the Plan. I understand that I may review the complete text
of the Plan by contacting the Chief Financial Officer of the Company. I agree
to be bound by the terms and conditions of the Plan governing the award.

_____________________________________         __________________________________
Date Accepted                                 Participant's Signature

                                              __________________________________
                                              Participant's Name
                                              (Please Print)

<PAGE>

                                   SCHEDULE B
                STOCK OPTION PLAN EXERCISE NOTICE FORM - OPTIONS

Pursuant to the terms of the stock option agreement (the "Agreement") dated
______________ between Allstream Inc. (the "Company") and me, I hereby exercise:

(1)  my options to purchase ________________ Class A Voting Shares/Class B
     Limited Voting Shares (circle one) of the Company (the "Options"), at the
     Exercise Price (as defined in the Agreement) of $ _________ Cdn. per
     share. Enclosed herewith is a cheque in the amount of $ ___________ Cdn.
     payable to the Company in full payment of the purchase price for such
     shares;

or

(2)  my right to receive a payment in respect of _____________ SAR Shares (as
     defined in the Agreement) in an amount equal to such number of SAR Shares
     multiplied by the difference between the current Fair Market Value per
     underlying Share and the SAR Price of $ ____________ Cdn. per SAR Share.

Please cause any Shares purchased hereby to be issued in _____________
certificate(s) of __________ Shares each, registered as follows:

          Name:    __________________________________
          Address: __________________________________

I understand that the certificate(s) for any Shares issuable to me pursuant to
this Notice will be forwarded to me by the Company's Transfer Agent by
registered mail.

I also understand that any payment owing to me pursuant to this Notice will be
forwarded to me in the form of a cheque from the Company by registered mail.

_____________________________________         __________________________________
Date                                          Participant's SignatureExhibit 4(x)

                      THE EMPIRE DISTRICT ELECTRIC COMPANY

______________________________________________________________________________

                           CERTIFICATE OF DESIGNATION
                   DESCRIPTION AND CERTAIN TERMS OF SERIES __
                         PREFERENCE STOCK, NO PAR VALUE

______________________________________________________________________________

     The Empire District Electric Company (the "Company"), a corporation
organized and existing under and by virtue of the General Corporation Code of
the State of Kansas.

     DOES HEREBY CERTIFY as follows:

          1. That pursuant to Article IV of the Restated Articles of
     Incorporation, as amended, of the Company (the "Articles"), the Company has
     authorized 2,500,000 shares of Preference Stock, no par value, of which [ ]
     shares are now outstanding. The Board of Directors of the Company is
     expressly authorized under the Company's Articles to fix, to the extent
     permitted by law, certain of the terms with respect to each particular
     series of Preference Stock (other than the Series A Participating
     Preference Stock, the terms of which are set forth in Article IV of the
     Articles).

          2. That the Board of Directors of the Company, at a meeting duly
     convened and held on *A*, at which a quorum was present and voting
     throughout, duly adopted the following resolution fixing the designations,
     preferences, voting powers and relative and other rights and
     qualifications, limitations and restrictions other than those which apply
     to all series of Preference Stock of the Company, irrespective of any
     variations between the different Series (for a statement of which reference
     is made to said aforesaid Article IV) and authorizing the issuance of a new
     series of Preference Stock as follows:

     RESOLVED, There has been created by the Board of Directors, a series of
preference stock limited to *B* shares, no par value, authorized and unissued,
known as "Series *C* Preference Stock" (the "Series *C* Preference Stock").
Shares of said series have, in addition to the general terms and characteristics
of all the authorized shares of preference stock of the corporation, as set
forth in its Restated Articles of Incorporation, the following terms and
characteristics as fixed by the Board of Directors:

          (a) The holders of Series *C* Preference Stock shall be entitled to
     receive cumulative dividends, if and when declared payable by the Board of
     Directors, at the rate of *D* % per annum from the date of original issue
     on all shares issued before *E*, which date shall be the first dividend
     payment date for said series and payable thereafter on *F*.

<PAGE>

          (b) [The holders of Series *C* Preference Stock shall be entitled to
     receive in the case of redemption thereof, at any time, at the option of
     the Company, in whole or in part, $*G* per share prior to *H* and at the
     following applicable prices per share during the respective 12-month
     periods ending *I* of the years indicated:

                         Optional                              Optional
                        Redemption                            Redemption
        Year             Premium               Year             Premium
        ----             -------               ----             -------
         *J*               *K*                 *J*                *K*

     and at *L* per share thereafter; in each case, plus accrued and unpaid
     dividends thereon to the date fixed for redemption, whether or not earned
     or declared,] *M* [provided that such Series *C* Preference Stock shall not
     be redeemable, directly or indirectly, prior to *N* with the proceeds of
     borrowed funds, or the issue of any stock ranking prior to or on a parity
     with the Series *C* Preference Stock, having a cost of money (before
     deduction of commissions and expenses) to the Company lower than *O* % per
     annum] *P*

          (c) [In the case of a mandatory sinking fund, except to the extent
     prevented from doing so by restrictions contained in the Articles or in any
     mortgage, indenture or loan agreement of the Company or to the extent
     prevented from doing so for any other reason, on *Q* and on each *R*
     thereafter so long as any shares of the Series *C* Preference Stock are
     outstanding, redeem *S* such shares (or all such shares outstanding on any
     such *R* if less than *S*), in each case at the sinking fund redemption
     price of $*T* per share plus accrued and unpaid dividends thereon to the
     date fixed for redemption. The obligation of the Company to redeem the
     shares of Series *C* Preference Stock pursuant to this sub-paragraph (c)
     shall be cumulative so that if it shall be prevented by the aforesaid
     restriction from redeeming on any such *R* the number of such shares which
     in the absence of such restrictions it would be required to redeem on such
     date, the number of such shares not so redeemed shall be redeemed as soon
     as the Company shall not be so prevented from redeeming the shares of the
     stock of such series] *U*. Any purchase or other acquisition of shares of
     Series *C* Preference Stock pursuant to sub-paragraph (b) and (d) hereof by
     the corporation shall constitute a credit against any sinking fund
     retirement required by this sub-paragraph (c).

          (d) The Company may increase the number of shares of the stock of such
     series to be redeemed on any *R* commencing *Q* pursuant to sub-paragraph
     (c), at the sinking fund redemption price of $*T* per share plus accrued
     and unpaid dividends to the date fixed for redemption, by a number of
     shares not to exceed *V* shares on any one such date; provided, however,
     that the aggregate of such increase in the number of shares redeemed
     pursuant to sub-paragraph (c) which are effected pursuant to this
     sub-paragraph (d) shall not exceed *W*] *X*.

          (e) [All redemptions pursuant to sub-paragraphs (b), (c) and (d)
     hereof shall be by lot or pro rata as the Board of Directors may determine,
     among the holders of the Series *C* Preference Stock. All shares of the
     Series *C* Preference Stock redeemed

                                      -2-
<PAGE>

     pursuant to sub-paragraph (b), (c) and (d), and all such shares purchased
     or otherwise acquired by the Company shall be deemed to be, and shall be
     restored to the status of, authorized and unissued shares of preference
     stock of no par value, each undesignated as to series, and shall not be
     reissued as shares of such series.] *Y*

          (f) [The holders of Series *C* Preference Stock shall be entitled to
     convert or exchange the Series *C* Preference Stock for shares of *Z* stock
     of the Company [at its option] [upon the happening of [specify event]].
     Appropriate adjustments shall be made to this Certificate of Designation,
     including the term "Preference Stock," to give effect to each such
     conversion or exchange.]

          (g) The holders of Series *C* Preference Stock shall be entitled to
     receive in the case of voluntary or involuntary liquidation, dissolution or
     winding up of the Company, the same amount per share as is then payable in
     the case of redemption, plus accrued and unpaid dividends thereon, whether
     or not earned or declared.

     IN WITNESS WHEREOF, The Empire District Electric Company has caused this
Certificate to be signed by its Vice President - Finance and its corporate seal
to be affixed and attested by its Secretary-Treasurer, this [ ] day of [ ], [ ].

                             THE EMPIRE DISTRICT ELECTRIC COMPANY

                             By:
                                 --------------------------------------------
                                    Name:
                                    Title:  Vice President - Finance

Attest:

________________________
Secretary- Treasurer

                                      -3-
<PAGE>

                                     LEGEND

     The following descriptions correspond to the dates, amounts and other
information not contained in this Form of Certificate of Designation, and are to
be determined as appropriate for each series of Preference Stock.

*A*  Insert applicable Board of Directors meeting date
*B*  Insert number of shares authorized for such series
*C*  Insert applicable series
*D*  Insert applicable dividend payment rate
*E*  Insert first dividend payment date
*F*  Insert dividend payment date(s)
*G*  Insert applicable redemption amount
*H*  Insert first redemption date
*I*  Insert applicable annual redemption date, month and day
*J*  Insert applicable year
*K*  Insert applicable redemption amount
*L*  Insert applicable redemption amount
*M*  Delete or revise to reflect actual redemption provisions, if any
*N*  Insert refunding date
*O*  Insert applicable rate
*P*  Delete or revise to reflect actual refunding protection, if any
*Q*  Insert first sinking fund date
*R*  Insert applicable annual sinking fund date, month and year
*S*  Insert applicable number of shares to be redeemed annually under the
     sinking fund
*T*  Insert applicable sinking fund redemption price
*U*  Delete or revise to reflect actual sinking fund provision, if any
*V*  Insert applicable number of additional shares which the Company may redeem
     annually under the sinking fund
*W*  Insert applicable limit to aggregate number of additional shares which the
     Company may redeem under the sinking fund
*X*  Delete or revise to reflect actual additional sinking fund allowance
     provisions, if any
*Y*  Delete or revise to reflect any redemption or sinking fund provision
*Z*  Insert applicable security.

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