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                                                                     EXHIBIT 4.9

                            COMPASS BANCSHARES, INC.

                        2002 INCENTIVE COMPENSATION PLAN

         SECTION 1. PURPOSE OF THE PLAN; DEFINITIONS. The purpose of the Compass
Bancshares, Inc. 2002 Incentive Compensation Plan (the "Plan") is to further the
growth in earnings and market appreciation of Compass Bancshares, Inc. (the
"Corporation"). The Plan provides long-term incentives to those officers, key
employees and other personnel of the Corporation and its Affiliates (as
hereinafter defined) who make substantial contributions to the Corporation
through their ability, loyalty, industry and invention, and to members of the
Board of Directors of the Corporation who are not also employees of the
Corporation (the "Non-Employee Directors"). The Corporation intends that the
Plan will facilitate securing, retaining and motivating officers, key employees,
other personnel and Non-Employee Directors of the Corporation.

         For purposes of the Plan, the following terms shall be defined as set
forth below:

         (a) "Act" means the Securities Exchange Act of 1934, as amended, or any
successor statute thereto.

         (b) "Affiliate" means (i) any entity that, directly or indirectly
through one or more intermediaries, is controlled by the Corporation and (ii)
any entity in which the Corporation has a significant equity interest, as
determined by the Committee.

         (c) "Award" means any Stock Option, Stock Appreciation Right,
Restricted Stock, Performance Unit, supplemental cash payment or other award
granted under the Plan.

         (d) "Award Agreement" means any written agreement, contract or other
instrument or document evidencing any Award granted under the Plan.

         (e) "Board" means the Board of Directors of the Corporation.

         (f) "Cause" means, unless otherwise determined by the Committee and
reflected in the applicable Award Agreement, the occurrence of any one or more
of the following (i) the willful and continued failure by a Participant to
substantially perform his or her duties (other than any such failure resulting
from the Participant's Disability, death or Retirement), after a written demand
for substantial performance is delivered by the Committee to the Participant
that specifically identifies the manner in which the Committee believes that the
Participant has not substantially performed his or her duties, and the
Participant has failed to remedy the situation within thirty (30) calendar days
of receiving such notice or (ii) a Participant's conviction for committing an
act of fraud, embezzlement, theft or another act constituting a felony or a
crime involving moral turpitude or (iii) substantial dependence or addiction to
any drug illegally taken or to alcohol that is in either event materially and
demonstrably injurious to the Corporation or (iv) the engaging by a Participant
in gross misconduct materially and demonstrably injurious to the Corporation. No
act or failure to act, on a Participant's part shall be considered "willful"
unless done, or omitted to be done, by the Participant not in good faith and
without reasonable belief that his action or omission was in the best interest
of the Corporation. Cause shall be determined by the Committee in exercise of
good faith and reasonable judgment.

         (g) "Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute thereto.

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         (h) "Commission" means the Securities and Exchange Commission.

         (i) "Committee" means the Compensation Committee of the Board.

         (j) "Common Stock" means the common stock, par value $2.00 per share,
of the Corporation.

         (k) "Disability" means total and permanent disability as determined
under the Corporation's long-term disability plan.

         (l) "Disinterested Person" means an individual who qualifies as a
"non-employee director" within the meaning set forth in Rule 16b-3(b)(3) as
promulgated by the Commission under the Act, or any successor definition adopted
by the Commission and who qualifies as an "outside director" within the meaning
set forth in Section 162(m) of the Code and the regulations promulgated
thereunder, or any successor definition thereto.

         (m) "Early Retirement" means retirement from active employment with the
Corporation or its Affiliates on or after the date on which the Participant
reaches the age of 55 but before the date on which the Participant reaches the
age of 65.

         (n) "Eligible Person" means any Employee, director (including any
Non-Employee Director), consultant or independent contractor providing services
to the Corporation or any Affiliate who is in a position in which his or her
decisions, actions and/or counsel significantly impact the performance of the
Corporation and its Affiliates and who the Committee determines to be an
Eligible Person.

         (o) "Employee" means any employee of the Corporation or its Affiliates,
including officers of the Corporation or its Affiliates. Non-Employee Directors
shall not be considered Employees for purposes of the Plan.

         (p) "Fair Market Value" means, as of any given date, the closing price
of the Common Stock (or if no transactions were reported on such date on the
next preceding date on which transactions were reported) in the principal market
in which such Common Stock is traded on such date.

         (q) "Incentive Stock Option" means any Stock Option intended to be and
designated by the Committee as an "incentive stock option" within the meaning of
Section 422 of the Code.

         (r) "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.

         (s) "Normal Retirement" means retirement from active employment with
the Corporation or its Affiliates on or after the date on which the Participant
reaches the age of 65.

         (t) "Participant" means an Eligible Person designated to be granted an
Award under the Plan.

         (u) "Performance Units" means an Award granted to a Participant
pursuant to Section 9 hereof contingent upon achieving certain performance
targets.

         (v) "Person" means any individual, corporation, partnership,
association or trust.

         (w) "Restricted Stock" means an Award of shares of Common Stock granted
to a Participant pursuant to and subject to the restrictions set forth in
Section 10 hereof.

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         (x) "Retirement" means Early Retirement and Normal Retirement.

         (y) "Stock Appreciation Rights" means a right granted under Section 8
hereof, which entitles the holder to receive cash or Common Stock in an amount
equal to the excess of (i) the Fair Market Value of a specified number of shares
of Common Stock at the time of exercise over (ii) a specified price.

         (z) "Stock Option" means any option to purchase shares of Common Stock
granted pursuant to Section 7 hereof.

         (aa) "Ten Percent Shareholder" means a Person who owns (after taking
into account the attribution rules of Section 424(d) of the Code) more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Corporation.

         SECTION 2. ADMINISTRATION.

         (a) The Plan shall be administered by the Committee. The Committee
shall be appointed by the Board and shall consist of three or more members of
the Board who are Disinterested Persons. Other than as set forth in Section 12
below, no member of the Committee shall be eligible to receive an Award under
the Plan while serving on the Committee. The Committee shall have full and final
authority in its discretion (i) to interpret the provisions of the Plan (and any
Award Agreement and any other agreement or instrument relating to the Plan) and
to decide all questions of fact arising in its application, (ii) to designate
Participants, (iii) to determine the Participants to whom Awards shall be made
under the Plan, (iv) to determine the type of Award to be made and the amount,
size, terms and conditions of each such Award, (v) to determine and establish
additional terms and conditions not inconsistent with the Plan for any Award
Agreements entered into with Participants in connection with the Plan, (vi) to
determine the time when Awards will be granted and when rights may be exercised,
which may be after termination of employment, (vii) to adopt, alter and repeal
such administrative rules, guidelines and practices governing the Plan as it
shall, from time to time, deem advisable and (viii) to make all other
determinations necessary or advisable for the administration of the Plan.

         (b) A majority of the Committee shall constitute a quorum, and the
action of a majority of members of the Committee present at any meeting at which
a quorum is present shall be the act of the Committee. The Committee may also
act by unanimous written consent. Any decision made, or action taken, by the
Committee arising out of or in connection with the interpretation and
administration of the Plan shall be final and conclusive; provided, however,
that any such decision made or action taken may be reviewed by the Board, in
which event the determination of the Board shall be final and conclusive. This
provision shall not be construed to grant to any Person any right to review by
the Board of any decision made or action taken by the Committee.

         (c) Neither the Board nor any member thereof shall be liable for any
act, omission, interpretation, construction or determination made in connection
with the Plan in good faith, and the members of the Board may be entitled to
indemnification and reimbursement by the Corporation in respect of any claim,
loss, damage or expense (including attorneys' fees) arising therefrom to the
full extent permitted by law and under any directors' and officers' liability
insurance that may be in effect from time to time, in all events as a majority
of the Board then in office may determine from time to time, as evidenced by a
written resolution thereof. In addition, no member of the Board and no Employee
shall be liable for any act, or failure to act hereunder, by any other member or
other Employee or by any agent to whom duties in connection with the
administration of this Plan have been delegated or for any act or failure to act
by such member or Employee, in all events except in circumstances involving such
member's or Employee's bad faith, gross negligence, intentional fraud or
violation of a statute.

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         (d) The Committee may, in its sole discretion, delegate any of its
powers to grant Awards under the Plan to any officer of the Corporation deemed
appropriate by the Committee; provided, however, that no officer to whom the
power to grant Awards under the Plan has been delegated shall have the power to
grant Awards under the Plan to himself or herself.

         SECTION 3. ELIGIBILITY; PARTICIPANTS. Any Eligible Person shall be
eligible to be designated a Participant. Incentive Stock Options may only be
granted to full or part-time Employees (which term as used herein includes,
without limitation, officers and directors who are also Employees), and
Incentive Stock Options shall not be granted to an Employee of an Affiliate
unless such Affiliate is also a "subsidiary corporation" of the Corporation
within the meaning of Section 424(f) of the Code or any successor provision.

         SECTION 4. AWARDS UNDER THE PLAN. Awards by the Committee under the
Plan may be in the form of Incentive Stock Options, Non-Qualified Stock Options,
Stock Appreciation Rights, Performance Units, Restricted Stock, supplemental
cash payments and such other forms as the Committee may in its discretion deem
appropriate, including any combination of the above. No fractional shares shall
be issued under the Plan, and the minimum value of any shares issued under the
Plan shall be the par value at the time of Award.

         SECTION 5. SHARES SUBJECT TO PLAN.

         (a) The total number of shares of Common Stock reserved and available
for distribution under the Plan shall be Six Million Three Hundred Fifty
Thousand (6,350,000); provided, however, that no more than One Million
(1,000,000) shares may be awarded under the Plan in the form of Awards other
than Stock Options. Such shares may consist of, in whole or in part, authorized
and unissued shares or shares previously issued that have been repurchased by
the Corporation. Except as otherwise provided herein, any shares subject to a
Stock Option or right that for any reason expires or terminates unexercised as
to such shares and any shares of Restricted Stock which are forfeited by a
Participant or otherwise reacquired by the Corporation shall again be available
for award under the Plan.

         (b) The maximum number of shares of Common Stock subject to Awards that
may be granted under the Plan to any individual in any one year is Four Hundred
Thousand (400,000) (subject to appropriate adjustments to reflect changes in the
capitalization of the Corporation).

         (c) In the event of any change in the outstanding number of shares of
Common Stock by reason of a stock dividend or distribution, recapitalization,
merger, consolidation, split-up, combination, exchange of shares or otherwise,
the Committee shall adjust the number of shares of Common Stock which may be
issued under the Plan and the Committee shall provide for an equitable
adjustment of any shares issuable pursuant to Awards outstanding under the Plan.

         SECTION 6. EFFECTIVE DATE. The Plan has been adopted by the Board
subject to the approval of the stockholders of the Corporation. If the Plan is
approved by the stockholders of the Corporation, the effective date of the Plan
will be February 11, 2002, the date it was adopted by the Board. If any Awards
are granted under the Plan before the date of such stockholder approval, such
Awards automatically shall be granted subject to such approval.

         SECTION 7. STOCK OPTIONS. Stock Options may be granted either alone or
in addition to other Awards granted under the Plan. Any Stock Option granted
under the Plan shall be in such form as the Committee may from time to time
approve, and the provisions of Stock Option Awards need not be the same with
respect to each Participant. Each Stock Option shall be evidenced by an Award
Agreement in such form that is not inconsistent with the Plan and that the
Committee may from time to time approve. Such Award Agreement shall specify,
among other things, the type of Stock Option granted, the option

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price, the duration of the Stock Option, the number of shares of Common Stock to
which the Stock Option pertains and the schedule on which such Stock Option
becomes exercisable.

         Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options and (ii) Non-Qualified Stock Options.

         The Committee shall have the authority to grant any Participant (other
than Non-Employee Directors) Incentive Stock Options, Non-Qualified Stock
Options or both types of Stock Options (in each case with or without Stock
Appreciation Rights). To the extent that any Stock Option does not qualify as an
Incentive Stock Option, it shall constitute a separate Non-Qualified Stock
Option.

         Anything in the Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify either the Plan or any Incentive Stock Option
under Section 422 of the Code. Notwithstanding the foregoing, in the event a
Participant voluntarily disqualifies a Stock Option as an Incentive Stock Option
within the meaning of Section 422 of the Code, the Committee may, but shall not
be obligated to, make such additional grants, awards or bonuses as the Committee
shall deem appropriate, to reflect the tax savings to the Corporation which
result from such disqualification.

         Stock Options granted under the Plan shall be subject to the following
terms and conditions and such additional terms and conditions, not inconsistent
with the terms of the Plan, as the Committee shall deem desirable, which
additional terms and conditions shall be reflected in the applicable Award
Agreement:

         (a) Option Price. The option price per share of Common Stock
purchasable under a Stock Option shall be determined by the Committee at the
time of grant but shall not be less than the Fair Market Value of the Common
Stock on the date of the grant of the Stock Option; provided, however, if the
Stock Option is an Incentive Stock Option granted to a Ten Percent Shareholder,
the option price for each share of Common Stock subject to such Incentive Stock
Option shall not be less than one hundred ten percent (110%) of the Fair Market
Value of a share of Common Stock on the date such Incentive Stock Option is
granted. Notwithstanding the foregoing and except as permitted by the provisions
of Sections 5(c) and 13 hereof, the Committee shall not have the power to (i)
amend the terms of previously granted Stock Options to reduce the option price
per share subject to such Stock Option or (ii) cancel such Stock Options and
grant substitute Stock Options with a lower price per share than the cancelled
Stock Options.

         (b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten (10)
years after the date such Incentive Stock Option is granted; provided, however,
that if a Stock Option is an Incentive Stock Option granted to a Ten Percent
Shareholder, such Incentive Stock Option shall not be exercisable more than five
(5) years after the date such Incentive Stock Option is granted.

         (c) Exercisability. Subject to Section 7(g) hereof with respect to
Incentive Stock Options, Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee. If the Committee provides, in its discretion, that any Stock Option
is exercisable only in installments, the Committee may waive such installment
exercise provisions at any time, in whole or in part, based on performance
and/or such other factors as the Committee may determine in its sole discretion.

         (d) Method of Exercise. Stock Options may be exercised in whole or in
part at any time during the option period, by giving written notice of exercise
to the Corporation specifying the number of shares to be purchased, accompanied
by payment in full of the purchase price, in cash, by check payable

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to the Corporation or such other instrument as may be acceptable to the
Committee. As determined by the Committee, in its sole discretion, at or after
the time of grant, payment in full or in part may also be made in the form of
unrestricted Common Stock owned by the Participant (based on the Fair Market
Value of the Common Stock on the date the Stock Option is exercised, as
determined by the Committee). No shares of Common Stock resulting from the
exercise of a Stock Option shall be issued until full payment therefor has been
made.

         (e) Voluntary Termination and Termination by the Corporation for Cause.
Unless otherwise determined by the Committee and reflected in the applicable
Award Agreement, a Participant granted a Stock Option who voluntarily terminates
employment, other than by reason of Retirement, or whose employment is
terminated involuntarily for Cause, will forfeit all rights under such Stock
Option.

         (f) Termination for Any Reason Other Than Cause and Voluntary
Termination. The rights of any Participant granted a Stock Option, whose
employment is terminated for any reason other than as set forth in subsection
(e) above, shall be as determined by the Committee, in its discretion, and
reflected in the applicable Award Agreement.

         (g) Limit on Value of Incentive Stock Option First Exercisable
Annually. The aggregate Fair Market Value (determined at the time of grant) of
the Common Stock for which Incentive Stock Options are exercisable for the first
time by a Participant during any calendar year under the Plan (and/or any other
stock option plans of the Corporation or any Affiliate) shall not exceed One
Hundred Thousand and No/100 Dollars ($100,000).

         SECTION 8. STOCK APPRECIATION RIGHTS. Each Stock Appreciation Right
shall be evidenced by an Award Agreement in such form that is not inconsistent
with the Plan and that the Committee may from time to time approve. Stock
Appreciation Rights granted under the Plan shall be subject to the following
terms and conditions and such additional terms and conditions, not inconsistent
with the terms of the Plan, as the Committee shall deem desirable, which
additional terms and conditions shall be reflected in the applicable Award
Agreement:

         (a) Award. A Stock Appreciation Right shall entitle the Participant to
receive upon exercise the excess of (i) the Fair Market Value of a specified
number of shares of Common Stock at the time of exercise over (ii) a specified
price which shall not be less than one hundred percent (100%) of the Fair Market
Value of the Common Stock at the time the Stock Appreciation Right was granted,
or, if granted in connection with a previously issued Stock Option, not less
than one hundred percent (100%) of the Fair Market Value of the Common Stock at
the time such Stock Option was granted. A Stock Appreciation Right may be
granted in connection with all or any portion of a previously or
contemporaneously granted Stock Option (including, in addition to Stock Options
granted under the Plan, stock options granted under other plans of the
Corporation), or not in connection with a Stock Option.

         (b) Term. Stock Appreciation Rights shall be granted for a period of
not more than ten (10) years, and shall be exercisable in whole or in part at
such time or times and subject to such other terms and conditions as shall be
prescribed by the Committee.

         (c) Payment. Upon exercise of a Stock Appreciation Right, payment shall
be made in the form of Common Stock (at the Fair Market Value on the date of
exercise), in cash, or in a combination thereof, as the Committee may determine.

         (d) Effect on Shares. The exercise of a Stock Appreciation Right shall
be treated as the issuance of a share of Common Stock for purposes of
calculating the maximum number of shares that have been issued under the Plan.

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         (e) Stock Appreciation Right Granted with Incentive Stock Option. A
Stock Appreciation Right granted in connection with an Incentive Stock Option
may be exercised only if and when the Fair Market Value of the Common Stock
subject to the Incentive Stock Option exceeds the exercise price of such Stock
Option.

         (f) Voluntary Termination and Termination by the Corporation for Cause.
Unless otherwise determined by the Committee and reflected in the applicable
Award Agreement, a Participant granted a Stock Appreciation Right who
voluntarily terminates employment, other than by reason of Retirement, or whose
employment is terminated involuntarily for Cause, will forfeit all rights under
such Stock Appreciation Right.

         (g) Termination for Any Reason Other Than Cause and Voluntary
Termination. The rights of any Participant granted a Stock Appreciation Right,
whose employment is terminated for any reason other than as set forth in
subsection (f) above shall be as determined by the Committee, in its discretion,
and reflected in the applicable Award Agreement.

         SECTION 9. PERFORMANCE UNITS. The Committee may grant Performance Units
(which may be denominated in either shares of Common Stock or cash) under which
payment may be made to the Participant upon the attainment of specific
performance goals. If the Performance Unit is denominated in shares of Common
Stock, such shares may be either (i) transferred to the Participant on the date
of the Award (in the form of Restricted Stock in accordance with Section 10
below), subject to forfeiture if the goal is not attained or (ii) transferable
to the Participant only upon attainment of the relevant performance goal. If the
Performance Unit is denominated in cash, it may be paid upon attainment of the
relevant performance goal either in cash or shares of Common Stock (based on the
then current fair market value of such Common Stock), at the Committee's
discretion. Each Performance Unit shall be evidenced by an Award Agreement in
such form that is not inconsistent with the Plan and that the Committee may from
time to time approve. Performance Units granted under the Plan shall be subject
to the following terms and conditions and such additional terms and conditions,
not inconsistent with the terms of the Plan, as the Committee shall deem
desirable, which additional terms and conditions shall be reflected in the
applicable Award Agreement:

         (a) Performance Period. The performance period for a Performance Unit
shall be established by the Committee and shall be not more than ten (10) years.

         (b) Valuation of Units. A value for each Performance Unit shall be
established by the Committee, together with principal and minimum performance
targets to be achieved with respect to the Performance Unit during the
performance period. The Participant shall be entitled to receive one hundred
percent (100%) of the value of the Performance Unit if the principal target is
achieved during the performance period, but shall be entitled to receive nothing
for such Performance Unit if the minimum target is not achieved during the
performance period. The Participant shall be entitled to receive a stated
portion of the value of the Performance Unit for performance during the
performance period that meets or exceeds the minimum target but fails to meet
the principal target.

         (c) Performance Goals. The Committee may establish performance goals
based on any business criteria deemed appropriate by the Committee including
without limitation, earnings per share, return on common equity, return on
assets, the ratio of earnings to shareholder's equity, the ratio of earnings to
total capital or the ratio of operating expenses to total revenue. These
performance goals may be designed to measure corporate performance under any
standards as may be determined by the Committee, including the absolute
performance of the Corporation or its Affiliates relative to prior periods, the
performance of the Corporation or its Affiliates relative to other companies or
the performance of the departments or divisions of the Corporation or its
Affiliates with respect to which the

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recipient has supervisory responsibility. Multiple performance goals may be
established and may have the same or different weighting.

         (d) Adjustments. At any time prior to payment of the Performance Units,
the Committee may adjust previously established performance goals and other
terms and conditions, to reflect major unforeseen events such as changes in
laws, regulations or accounting policies or procedures, mergers, acquisitions or
divestitures or extraordinary, unusual or nonrecurring items or events, subject
to the limitations of Section 162(m) of the Code and the regulations promulgated
thereunder with respect to those Performance Units which are structured to
qualify for an exception to the limitations on deductibility imposed by Section
162(m) of the Code and the regulations promulgated thereunder (as discussed
below).

         (e) Payments of Performance Units. Following the conclusion of each
performance period, the Committee shall determine the extent to which
performance goals have been attained for such period as well as the other terms
and conditions established by the Committee. With respect to Performance Units
denominated in cash, the Committee shall determine what, if any, payment is due
with respect to the Performance Units and whether such payment shall be made in
cash, in Common Stock, or partially in cash and partially in Common Stock. Any
payments made in Common Stock shall be calculated based on the Fair Market Value
of the Common Stock on the date of payment. Payments shall be made as promptly
as practicable following the end of the performance period unless deferred
subject to such terms and conditions as may be prescribed by the Committee. With
respect to Performance Units denominated in shares of Common Stock, the
Committee shall determine the extent to which either (i) shares previously
transferred to the Participant on the date of the Award (in the form of
Restricted Stock in accordance with Section 10 below) shall be forfeited, if the
relevant performance goal is not attained or (ii) shares shall be transferred to
the Participant, if the relevant performance goal is attained.

         (f) Voluntary Termination and Termination by the Corporation for Cause.
Unless otherwise determined by the Committee and reflected in the applicable
Award Agreement, a Participant granted a Performance Unit who voluntarily
terminates employment, other than by reason of Retirement, or whose employment
is terminated involuntarily for Cause, will forfeit all rights under such
Performance Unit.

         (g) Termination for Any Reason Other Than Cause and Voluntary
Termination. The rights of any Participant granted a Performance Unit, whose
employment is terminated for any reason other than as set forth in subsection
(f) above, shall be as determined by the Committee, in its discretion, and
reflected in the applicable Award Agreement.

         (h) Section 162(m) Provisions. The Committee shall determine whether to
award any Performance Units in a manner intended to result in "qualified
performance-based compensation" within the meaning of Section 162(m) of the Code
and the regulations promulgated thereunder (a "Qualifying Performance Unit"). If
the Committee intends that an Award be a Qualifying Performance Unit, the
Committee shall satisfy the requirements of Section 162(m) of the Code and the
regulations promulgated thereunder in connection with such Award.

         The maximum amount payable under a Performance Unit will depend on the
value of the Performance Unit; provided, however, the maximum amount payable
with respect to Qualifying Performance Units awarded to any single officer in
any given performance period shall be Two Million Five Hundred Thousand and
No/100 Dollars ($2,500,000) notwithstanding the terms of such Performance Unit.

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         SECTION 10. RESTRICTED STOCK AWARDS.

         (a) Administration. Shares of Restricted Stock may be issued either
alone or in addition to other Awards granted under the Plan. The Committee shall
determine the Eligible Persons to whom, and the time or times at which, grants
of Restricted Stock will be made, the number of shares to be awarded, the price,
if any, to be paid for such shares by the recipient of Restricted Stock (subject
to Section 10(b) hereof), the period of time during which the transfer of such
shares is restricted and all other terms and conditions of such Awards, which
terms and conditions shall not be inconsistent with the terms and conditions of
the Plan. The Committee may also condition the grant of Restricted Stock, and
the terms and conditions applicable to such Restricted Stock, upon the
attainment of specified performance goals (which grants may be structured as
Performance Units or Qualifying Performance Units in accordance with Section 9
hereof), or such other criteria as the Committee may determine, in its sole
discretion. The provisions of Restricted Stock Awards need not be the same with
respect to each Participant.

         (b) Awards and Certificates. Each Award of shares of Restricted Stock
shall be evidenced by an Award Agreement (a "Restricted Stock Award Agreement")
in such form that is not inconsistent with the Plan and that the Committee may
from time to time approve.

                  (i) Awards of Restricted Stock must be accepted within a
         period of ninety (90) days (or such shorter period as the Committee may
         specify) after the award date by executing a Restricted Stock Award
         Agreement and paying whatever price for such shares, if any, is
         required.

                  (ii) A stock certificate representing shares of Restricted
         Stock shall be issued in the name of each Participant who is awarded
         Restricted Stock. Such certificate shall be registered in the name of
         the Participant, and shall bear an appropriate legend referring to the
         terms, conditions, and restrictions applicable to such Award,
         substantially in the following form:

                  "The transferability of this certificate and the shares of
                  stock represented hereby are subject to the terms and
                  conditions (including forfeiture) of the Compass Bancshares,
                  Inc. 2002 Incentive Compensation Plan and a Restricted Stock
                  Award Agreement entered into between the registered owner and
                  the Corporation. Copies of such Plan and Award Agreement are
                  on file in the offices of the Corporation, 15 South 20th
                  Street, Birmingham, Alabama 35233."

                  (iii) The Committee shall require that the stock certificates
         evidencing such shares be held in custody by the Corporation until the
         restrictions thereon shall have lapsed, and that, as a condition of any
         Restricted Stock Award, the Participant shall have delivered a stock
         power, endorsed in blank, relating to the Common Stock covered by such
         Award.

         (c) Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Section 10 shall be subject to the following restrictions and
conditions:

                  (i) Subject to the provisions of this Plan and the Restricted
         Stock Award Agreements, from the date of grant through such period as
         may be set by the Committee (the "Restriction Period"), the Participant
         shall not be permitted to sell, transfer, pledge or assign shares of
         Restricted Stock awarded under the Plan. The Restriction Period may
         include the performance period with respect to Performance Units
         denominated in shares of stock. Within these limits, the Committee may,
         in its sole discretion, provide for the lapse of such restrictions in
         installments and may accelerate or waive such restrictions in whole or
         in part based on performance and/or such other factors as the Committee
         may determine, in its sole discretion; provided, however, that with
         respect to Restricted Stock transferred to Participants pursuant to

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         Qualifying Performance Units prior to the expiration of the relevant
         performance period in accordance with Section 9 above, the Committee
         shall not have the discretion to alter the performance goal or
         accelerate the performance period.

                  (ii) Except as provided in subsection (c)(i) of this Section
         10, the Participant shall have, with respect to the shares of
         Restricted Stock, all of the rights of a stockholder of the
         Corporation, including the right to vote and to receive any dividends.
         Dividends paid in stock of the Corporation or stock received in
         connection with a stock split with respect to Restricted Stock shall be
         subject to the same restrictions as on such Restricted Stock.
         Certificates for shares of unrestricted Common Stock shall be delivered
         to the Participant after, and only after, the period of forfeiture
         shall expire without forfeiture in respect of such shares of Restricted
         Stock.

                  (iii) Subject to the provisions of the Restricted Stock Award
         Agreement and this Section 10, upon termination of employment for any
         reason during the Restriction Period, all shares still subject to
         restriction shall be forfeited by the Participant; provided, however,
         that the Participant shall be entitled to retain any shares of
         Restricted Stock which have been fully paid for by the Participant.

                  (iv) The Committee may, in its sole discretion, waive in whole
         or in part any or all restrictions with respect to such Participant's
         shares of Restricted Stock.

         SECTION 11. SUPPLEMENTAL CASH PAYMENTS. Subject to the Committee's
discretion, Award Agreements may provide for the payment by the Corporation of a
supplemental cash payment after the exercise of a Stock Option or Stock
Appreciation Right, at the time of payment of a Performance Unit or at the end
of the restriction period of a Restricted Stock Award. Supplemental cash
payments shall be subject to such terms and conditions as shall be provided by
the Committee, provided that in no event shall the amount of each payment
exceed:

         (a) In the case of a Stock Option, the excess of the Fair Market Value
of a share of Common Stock on the date of exercise over the option price
multiplied by the number of shares for which such Stock Option is exercised, or

         (b) In the case of a Stock Appreciation Right, Performance Unit or
Restricted Stock Award, the value of the shares and other consideration issued
in payment of such Award.

         SECTION 12. NON-QUALIFIED STOCK OPTIONS TO NON-EMPLOYEE DIRECTORS. The
Corporation shall issue Non-Qualified Stock Options to Non-Employee Directors in
accordance with this Section 12. For purposes of this Section 12, the following
terms shall be defined as set forth below:

         (a) "Director Disability" means that the Non-Employee Director (i) has
         established to the satisfaction of the Board that the Non-Employee
         Director is unable to perform his or her duties as a member of the
         Board by reason of any medically determinable physical or mental
         impairment which can be expected to last for a continuous period of not
         less than twelve (12) months and (ii) has satisfied any requirement
         imposed by the Committee in regard to evidence of such disability.

         (b) "Director Misconduct" means the occurrence of any one or more of
         the following (i) the willful and continued failure by a Non-Employee
         Director to substantially perform his or her duties (other than any
         such failure resulting from Director Disability, death or Director
         Retirement), after a written demand for substantial performance is
         delivered by the Board to the Non-Employee Director that specifically
         identifies the manner in which the Board believes that the Non-Employee
         Director has not substantially performed his or her duties, and the
         Non-Employee Director has failed to remedy the situation within thirty
         (30) calendar days of receiving

                                       10
<PAGE>

         such notice or (ii) a Non-Employee Director's conviction for committing
         an act of fraud, embezzlement, theft or another act constituting a
         felony or a crime involving moral turpitude or (iii) substantial
         dependence or addiction to any drug illegally taken or to alcohol that
         is in either event materially and demonstrably injurious to the
         Corporation or (iv) the engaging by a Non-Employee Director in gross
         misconduct materially and demonstrably injurious to the Corporation. No
         act or failure to act, on a Non-Employee's part shall be considered
         "willful" unless done, or omitted to be done, by the Non-Employee
         Director not in good faith and without reasonable belief that his
         action or omission was in the best interest of the Corporation.
         Director Misconduct shall be determined by the Board in exercise of
         good faith and reasonable judgment.

         (c) "Director Retirement" means mandatory retirement from service as a
         member of the Board pursuant to the Corporation's policies.

         Each Non-Employee Director first elected or appointed to the Board
following the effective date of the Plan shall be granted, as of the date of
such Non-Employee Director's first election or appointment to the Board, a
Non-Qualified Stock Option to purchase Two Thousand (2,000) shares of Common
Stock (subject to adjustment pursuant to Sections 5(c) and 13 hereof). Each
Non-Employee Director shall be granted during the term of the Plan, as of the
date of each Annual Meeting of Stockholders of the Corporation commencing with
the 2002 Annual Meeting of Stockholders of the Corporation, if such Non-Employee
Director's term of office continues after such date, a Non-Qualified Stock
Option to purchase Two Thousand (2,000) shares of Common Stock (subject to
adjustment pursuant to Sections 5(c) and 13 hereof).

         Each Non-Qualified Stock Option granted to a Non-Employee Director
pursuant to this Section 12 shall be exercisable in full as of the date of
grant, shall have an exercise price equal to the Fair Market Value of a share of
Common Stock on the date of grant and shall expire on the tenth (10th)
anniversary of the date of grant, except as provided below. Each Non-Qualified
Stock Option granted pursuant to this Section 12 may be transferable pursuant to
terms established by the Committee consistent with the Plan; provided, however,
that a transferred Non-Qualified Stock Option may be exercised by the transferee
only to the extent that the Non-Employee Director would have been entitled to
exercise such Non-Qualified Stock Option had the Non-Qualified Stock Option not
been transferred.

         All grants of Non-Qualified Stock Options pursuant to this Section 12
shall be automatic and non-discretionary and shall be made strictly in
accordance with the foregoing terms and the following additional provisions:

         (i) A Non-Employee Director granted a Non-Qualified Stock Option
pursuant to this Section and whose service to the Corporation in all capacities
("Service") ceases shall forfeit all rights under such Non-Qualified Stock
Option, except that:

                  (A) If such Non-Employee Director's Service ceases for any
         reason other than Director Misconduct, death, Director Disability or
         Director Retirement, such Non-Employee Director may at any time within
         a period of three (3) months after such cessation, but not after the
         stated termination date of the Non-Qualified Stock Option, exercise the
         Non-Qualified Stock Option. If such Non-Employee Director shall die
         following any such cessation and prior to the expiration of such three
         (3) month period, the Non-Qualified Stock Option may be exercised in
         accordance with its terms within such three (3) month period by the
         personal representatives of the estate of such Non-Employee Director or
         by any Person or Persons to whom the Non-Qualified Stock Option has
         been transferred by gift or by will or the applicable laws of descent
         and distribution.

                                       11
<PAGE>

                  (B) If such Non-Employee Director's Service ceases by reason
         of Director Misconduct during the course of such Non-Employee
         Director's term, the Non-Employee Director's rights to such
         Non-Qualified Stock Option shall be forfeited as of the date of the
         occurrence of such Director Misconduct.

                  (C) If such Non-Employee Director's Service ceases by reason
         of Director Disability or Director Retirement, such Non-Employee
         Director may exercise the Non-Qualified Stock Option in accordance with
         the terms thereof as though such cessation had never occurred. If such
         Non-Employee Director shall die following any such cessation, the
         Non-Qualified Stock Option may be exercised in accordance with its
         terms by the personal representatives of the estate of such
         Non-Employee Director or by any Person or Persons to whom the
         Non-Qualified Stock Option has been transferred by gift or by will or
         the applicable laws of descent and distribution.

                  (D) If such Non-Employee Director shall die while a
         Non-Employee Director of the Corporation, the Non-Qualified Stock
         Option may be exercised in accordance with its terms by the personal
         representatives of the estate of such Non-Employee Director or by any
         Person or Persons to whom the Non-Qualified Stock Option has been
         transferred by gift or by will or the applicable laws of descent and
         distribution for a period of three (3) years from the date of such
         death or until the expiration of the stated term of such Non-Qualified
         Stock Option, whichever period is shorter.

         (ii) Non-Qualified Stock Options granted to Non-Employee Directors may
be exercised in whole or in part at any time during the option period, by giving
written notice of exercise to the Corporation specifying the number of shares to
be purchased, accompanied by payment in full of the purchase price. A
Non-Employee Director may, at such Non-Employee Director's election, pay the
purchase price in cash, by check payable to the Corporation or in unrestricted
shares of Common Stock owned by such Non-Employee Director (based on the Fair
Market Value of the Common Stock on the date the Non-Qualified Stock Option is
exercised) or in any combination thereof having a Fair Market Value on the date
the Non-Qualified Stock Option is exercised equal to the applicable purchase
price.

         SECTION 13. SALE, MERGER OR CHANGE IN CONTROL. In the case of a merger
or consolidation in which the Corporation is not the surviving corporation, or a
sale of all or substantially all of the business or assets of the Corporation,
or liquidation or dissolution of the Corporation, or in the event of a tender
offer or any other change involving a threatened change in control of the
Corporation which, in the opinion of the Committee, could deprive the holders of
the benefits intended to be conferred by Awards hereunder, the Committee may, in
anticipation of any such transaction or event, either at the time of grant or
thereafter, make such adjustments in the terms and conditions of outstanding
Awards, as the Committee in its sole discretion determines are equitably
warranted under the circumstances including, without limitation, (i)
acceleration of exercise terms, or (ii) acceleration of the lapse of
restrictions and/or performance objectives or other terms.

         SECTION 14. GENERAL PROVISIONS.

         (a) Governmental or Other Regulations. Each Award under the Plan shall
be subject to the requirement that, if at any time the Committee shall determine
that (i) the listing, registration or qualification of the shares of Common
Stock subject or related thereto upon any securities exchange or under any state
or federal law, or (ii) the consent or approval of any government regulatory
authority, or (iii) an agreement by the recipient of an Award with respect to
the disposition of shares of Common Stock, is necessary or desirable as a
condition of, or in connection with, the granting of such Award or the issue or
purchase of shares of Common Stock thereunder, such Award may not be consummated
in whole or in part unless such listing, registration, qualification, consent,
approval or agreement shall have been effected or obtained free of any
conditions not acceptable to the Committee. A Participant shall agree, as

                                       12
<PAGE>

a condition of receiving any Award under the Plan, to execute any documents,
make any representations, agree to restrictions on stock transferability and
take any actions which in the opinion of legal counsel to the Corporation is
required by any applicable law, ruling or regulation.

         (b) Rights of a Stockholder. The recipient of any Award under the Plan,
unless otherwise provided by the Plan, shall have no rights as a stockholder
with respect thereto unless and until certificates for shares of Common Stock
are issued to the recipient.

         (c) No Additional Rights. Nothing set forth in this Plan shall prevent
the Board from adopting other or additional compensation arrangements, subject
to stockholder approval if such approval is required; and such arrangements may
be either generally applicable or applicable only in specific cases. Nothing in
the Plan or in any agreement entered into pursuant to the Plan shall confer upon
any Participant the right to continue in the employment of the Corporation or
its Affiliates, or affect any right which the Corporation or such Affiliates may
have to terminate the employment of the Participant.

         (d) Withholding. Whenever the Corporation proposes or is required to
issue or transfer shares of Common Stock under the Plan, the Corporation shall
have the right to require the recipient to remit to the Corporation or provide
indemnification satisfactory to the Corporation for, an amount sufficient to
satisfy any federal, state or local withholding tax requirements prior to the
issuance or delivery of any certificate or certificates for such shares.
Whenever payments are to be made in cash, such payments shall be net of an
amount sufficient to satisfy any federal, state or local withholding tax
requirements.

         (e) Non-Assignability. Unless otherwise determined by the Committee and
reflected in the applicable Award Agreement, no Award under the Plan shall be
assignable or transferable by a Participant except by will or by the laws of
descent and distribution and all Awards shall be exercisable, during the
Participant's lifetime, only by the Participant or by the Participant's legal
guardian. A transferee of an Award shall have only those rights that the
Participant would have had had the Award not been transferred. In addition, if
the Committee allows an Award to be transferable or assignable, such Award shall
be subject to such additional terms and conditions as the Committee deems
appropriate.

         (f) Unfunded Status of Plan. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant by the Corporation, nothing set forth
herein shall give any such Participant any rights that are greater than those of
a general creditor of the Corporation. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Common Stock or payments in lieu of or with
respect to Awards hereunder; provided, however, that the existence of such
trusts or other arrangements is consistent with the unfunded status of the Plan.

         (g) Non-Uniform Determination. The Committee's determinations under the
Plan (including, without limitation, determinations of the Eligible Persons to
receive Awards, the form, amount and timing of such Awards, the terms and
provisions of Awards and the Award Agreements, and the establishment of values
and performance targets) need not be uniform and may be made by it selectively
among Eligible Persons who receive, or are eligible to receive, Awards under the
Plan, whether or not such Eligible Persons are similarly situated.
Notwithstanding anything contained in the Plan, the Corporation may make loans
to Participants in connection with Awards under the Plan or otherwise.

         (h) Amendment or Termination. The Board may amend, modify, suspend or
terminate the Plan at any time; provided, however, that without stockholder
approval, the Board may not increase the maximum number of shares which may be
issued under the Plan (except increases pursuant to Sections 5(c) and 13
hereof), change the class of Persons eligible to receive Awards, extend the
period during which any Award may be exercised, extend the term of the Plan or
change the minimum option price. The termination or any modification, suspension
or amendment of the Plan shall not adversely affect a

                                       13
<PAGE>

Participant's rights under an Award previously granted without the consent of
such Participant. The Committee may amend the terms of any Award theretofore
granted, prospectively or retroactively, but no such amendment shall impair the
rights of any Participant or permitted transferee without his or her consent.

         (i) Use of Proceeds. The proceeds received by the Corporation from the
sale of Common Stock pursuant to the sale or exercise of Awards under the Plan
shall be added to the Corporation's general funds and used for general corporate
purposes.

         (j) Section 16. It is intended that the Plan and any grants made to a
Person subject to Section 16 of the Act meet all of the requirements of Rule
16b-3 thereunder. If any provision of the Plan or any Award hereunder would
disqualify the Plan or such Award, or would otherwise not comply with Rule
16b-3, such provision or Award shall be construed or deemed amended to conform
to Rule 16b-3.

         (k) No Restriction on Right of Company to Effect Corporate Changes.
Nothing in the Plan shall affect the right or power of the Corporation or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Corporation's capital structure or its
business, or any merger or consolidation of the Corporation, or any issue of
stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the
Corporation, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.

         (l) Award Agreement. The prospective recipient of an Award under the
Plan shall not have any rights with respect to such Award, unless and until such
recipient has executed an Award Agreement evidencing the Award and has delivered
a fully executed copy thereof to the Corporation, and has otherwise complied
with the then-applicable terms and conditions.

         (m) Construction of Plan. The validity, interpretation, and
administration of the Plan and of any rules, regulations, determinations, or
decisions made thereunder, and the rights of any and all Persons having or
claiming to have any interest therein or thereunder, shall be determined
exclusively in accordance with the laws of the State of Alabama.

         (n) Duration of the Plan. The Plan shall remain in effect until all
Awards under the Plan have been satisfied by the issuance of shares or the
payment of cash, but no Award shall be granted more than ten (10) years after
the effective date hereof.

                                       14<PAGE>

                                                                     EXHIBIT 4.1

                   LABORATORY CORPORATION OF AMERICA HOLDINGS

                            2000 STOCK INCENTIVE PLAN
                      As Amended and Restated April 3, 2002

              1.  Purpose; Restrictions on Amount Available under this Plan.

       This 2000 Stock Incentive Plan, as amended and restated April 3, 2002,
(this "Plan") is intended to encourage stock ownership by employees,
consultants, and non-employee directors of Laboratory Corporation of America
Holdings (the "Company") and employees and consultants of Affiliate Corporations
(as defined in Section 2(a) hereof), so that they may acquire or increase their
proprietary interest in the Company, and to encourage such employees,
consultants and non-employee directors to remain in the employ and/or service of
the Company and to put forth maximum efforts for the success of the business of
the Company. It is further intended that options granted by the Committee
pursuant to Section 6 of this Plan shall constitute "incentive stock options"
("Incentive Stock Options") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended, and the regulations issued thereunder (the
"Code"), and options granted by the Committee pursuant to Sections 7 and 8 of
this Plan shall constitute "nonqualified stock options" ("Nonqualified Stock
Options"). Grants under this Plan may consist of Incentive Stock Options,
Nonqualified Stock Options (collectively, "Options"), stock appreciation rights
("Rights"), which Rights may be either granted in conjunction with Options
("Related Rights") or unaccompanied by Options ("Free Standing Rights"),
restricted stock awards ("Restricted Shares"), or performance awards
("Performance Awards"), as hereinafter set forth.

              2.  Definitions.

       As used in this Plan, the following words and phrases shall have the
meanings indicated:

                  (a) "Affiliate Corporation" or "Affiliate" shall mean any
corporation, directly or indirectly, through one or more intermediaries,
controlling, controlled by, or under common control with the Company.

                  (b) "Award" shall mean an Option, a Right, Restricted Share,
or Performance Award granted hereunder.

                  (c) "Award Agreement" shall have the meaning set forth in
Section 3 hereof.

                  (d) "Change in Control" shall mean an event of a nature that:

                      (i) any "person" (as the term is defined in Sections 13(d)
                  and 14(d) of the Securities Exchange Act of 1934, as amended,
                  "the Exchange Act") who is not now presently but becomes the
                  "beneficial owner" (as defined in Rule 13d-3 under the
                  Exchange Act), directly or indirectly, of securities of the
                  Company representing 30% or more of the Company's outstanding
                  securities except for any securities purchased by any
                  tax-qualified employee benefit plan of the Company; or

                      (ii) individuals who constitute the Board of Directors on
                  the Effective Date (the "Incumbent Board") cease for any
                  reason to constitute at least a majority thereof, provided
                  that any person becoming a director subsequent to the date
                  hereof whose election was approved by a vote of at least
                  three-quarters of the directors comprising the Incumbent
                  Board, or whose nomination for election by the Company's
                  stockholders was approved by the Incumbent Board, shall be for
                  purposes of this clause (ii), considered as though he or she
                  were a member of the Incumbent Board; or a plan of
                  reorganization, merger, consolidation, sale of all or
                  substantially

<PAGE>

                  all the assets of the Company or similar transaction occurs in
                  which the Company is not the resulting entity; or

                      (iii) a proxy statement soliciting proxies from
                  shareholders of the Company, by someone other than the current
                  management of the Company, seeking stockholder approval of a
                  plan of reorganization, merger or consolidation of the Company
                  or similar transaction with one or more corporations, as a
                  result of which the outstanding shares of the class of
                  securities not issued by the Company shall be distributed.

                  (e) "Common Stock" shall mean shares of the Company's common
         stock, par value $0.10 per share.

                  (f) "Covered Officer" as of a particular date shall mean (i)
         any individual who, with respect to the previous taxable year of the
         Company, was a "covered employee" of the Company within the meaning of
         Section 162(m) of the Internal Revenue Code; provided, however, that
         the term "Covered Officer" shall not include any such individual who is
         designated by the Committee, in its discretion, at the time of any
         Award or at any subsequent time, as reasonably expected not to be such
         a "covered employee" with respect to the current taxable year of the
         Company and (ii) any individual who is designated by the Committee, in
         its discretion, at the time of any Award or at any subsequent time, as
         reasonably expected to be such a "covered employee" with respect to the
         current taxable year of the Company or with respect to the taxable year
         of the Company in which any applicable Award will be paid.

                  (g) "Disability" shall mean a Participant's inability to
         engage in any substantial gainful activity by reason of medically
         determinable physical or mental impairment that can be expected to
         result in death or that has lasted or can be expected to last for a
         continuous period of not less than twelve (12) months.

                  (h) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (i) "Fair Market Value" per share as of a particular date
         shall mean (i) the closing sales price per share of Common Stock on a
         national securities exchange for the last preceding date on which there
         was a sale of such Common Stock on such exchange, or (ii) if the shares
         of Common Stock are then traded on an over-the-counter market, the
         average of the closing bid and asked prices for the shares of Common
         Stock in such over-the-market for the last preceding date on which
         there was a sale of such Common Stock in such market, or (iii) if the
         shares of Common Stock are not then listed on a national securities
         exchange or traded in an over-the-counter market, such value as the
         Committee in its discretion may determine.

                  (j) "Parent Corporation" shall mean any corporation (other
         than the Company) in an unbroken chain of corporations ending with the
         Company if, at the time of granting an Award, each of such corporations
         (other than the Company) owns stock possessing fifty percent (50%) or
         more of the total combined voting power of all classes of stock in one
         of the other corporations in such chain.

                  (k) "Participant" shall have the meaning set forth in Section
         4 hereof.

                  (l) "Prior Plans" shall mean the Laboratory Corporation of
         America Holdings Amended and Restated 1999 Stock Incentive Plan and the
         Laboratory Corporation of America Holdings 1994 Stock Option Plan.

                  (m) "Retirement" shall mean a Participant's termination of
         employment in accordance with the provisions of the Company's Employee
         Retirement Plan at such Participant's Normal Retirement Date, as
         defined in such Plan.

                  (n) "Subsidiary Corporation" shall mean any corporation (other
         than the Company) in an unbroken chain of corporations beginning with
         the Company if, at the time of granting an option, each of such
         corporations other than the last corporation in the unbroken chain owns
         stock possessing fifty percent (50%) or more of the total combined
         voting power of all classes of stock in one of the other corporations
         in such chain.
                                       2

<PAGE>

                  (o) "Ten Percent Stockholder" shall mean a Participant who, at
         the time an Incentive Stock Option is granted, owns stock possessing
         more than ten percent (10%) of the total combined voting power of all
         classes of stock of the Company or of its Parent Corporation or
         Subsidiary Corporations.

           3.   Administration.

         This Plan shall be administered by a committee (the "Committee")
appointed by the Board of Directors of the Company (the "Board"), which shall be
comprised of two or more persons, each of whom shall qualify as a "Non-Employee
Director" as described in Rule 16b-3(b)(3)(i) promulgated under the Exchange
Act.

         The Committee shall have the authority in its discretion, subject to
and not inconsistent with the express provisions of this Plan, to administer
this Plan and to exercise all the powers and authorities either specifically
granted to it under this Plan or necessary or advisable in the administration of
this Plan, including, without limitation, the authority to grant Awards; to
designate Participants, other than as set forth in Section 8 hereof; to
determine the type or types of Awards to be granted to a Participant; to
determine which Options shall constitute Incentive Stock Options and which
Options shall constitute Nonqualified Stock Options; to determine which Rights
(if any) shall be granted in conjunction with Options; to determine the purchase
price of the shares of Common Stock covered by each Option (the "Option Price");
to determine the persons to whom, and the time or times at which, Awards shall
be granted; to determine the number of shares to be covered by each Award; to
interpret this Plan; to prescribe, amend and rescind rules and regulations
relating to this Plan; to determine the terms and provisions of the agreements
(which need not be identical) entered into in connection with Awards granted
under this Plan (each an "Award Agreement"); and to make all other
determinations deemed necessary or advisable for the administration of this
Plan. The Committee may delegate to one or more of its members or to one or more
agents such administrative duties as may be deemed advisable, and the Committee
or any person to whom it has delegated duties as aforesaid may employ one or
more persons to render advice with respect to any responsibility the Committee
or such person may have under this Plan.

         No member of the Board of Directors or Committee shall be liable for
any action taken or determination made in good faith with respect to this Plan
or any Award granted hereunder.

           4.   Eligibility.

         Awards may be granted to key employees (including, without limitation,
officers and directors who are employees) and non-employee directors of the
Company or its present or future Affiliate Corporations. For purposes of the
foregoing, "employee" shall mean any employee, independent contractor,
consultant, advisor, or similar individual who is providing or who has agreed to
provide services to the Company or to any of its present or future Affiliate
Corporations. Notwithstanding any provision of this paragraph, Incentive Stock
Options shall be granted only to individuals who, on the date of such grant, are
employees of the Company or a Parent Corporation or a Subsidiary Corporation. In
determining the persons to whom Awards shall be granted and the number of shares
to be covered by each Award, the Committee shall take into account the duties of
the respective persons, their present and potential contributions to the success
of the Company and such other factors as the Committee shall deem relevant in
connection with accomplishing the purpose of this Plan. A person to whom an
Award has been granted hereunder is sometimes referred to herein as a
"Participant" or "Optionee."

         A Participant shall be eligible to receive more than one grant of an
Award during the term of this Plan, but only on the terms and subject to the
restrictions hereinafter set forth.

           5.   Stock.

         The stock subject to Awards hereunder shall be shares of Common Stock.
Such shares may, in whole or in part, be authorized but unissued shares or
shares that shall have been or that may be reacquired by the Company. The
aggregate number of shares of Common Stock as to which Awards may be granted
from time to time under this Plan shall not exceed 7.4 million, plus any shares
which remain available for grants of awards under the Prior Plans, of which the
number of shares of Common Stock as to which Restricted Shares and/or
Performance Awards may be granted from time to time under this Plan shall not
exceed 3 million. No person may be granted Options or Rights under this Plan
representing an aggregate of more than 300,000 shares of Common Stock in any
year. The

                                       3

<PAGE>

limitations established by the preceding three sentences shall be subject to
adjustment as provided in Sections 14 and 18 hereof.

         To the extent that (1) any Award granted under the Plan or the Prior
Plans expires, is terminated or forfeited without being exercised, settled or
with respect to Restricted Shares, vested, (2) any Option granted under the Plan
or the Prior Plans is surrendered on exercise of a Right for cash or the
issuance of fewer shares of Common Stock than issuable under such surrendered
Option, or (3) any Free Standing Right granted under the Plan or the Prior Plans
expires or is terminated without being exercised, the shares of Common Stock
issuable thereunder, less such shares issued, shall become available for grants
of Awards.

           6.   Incentive Stock Options.

         Options granted pursuant to this Section 6 are intended to constitute
Incentive Stock Options and shall be subject to the following special terms and
conditions, in addition to the general terms and conditions specified in
Sections 5 and 9 hereof:

                  (a) Value of Shares. The aggregate Fair Market Value
         (determined as of the date the Incentive Stock Option is granted) of
         the shares of Common Stock with respect to which Options granted under
         this Plan and all other option plans of the Company, any Parent
         Corporation and any Subsidiary Corporation become exercisable for the
         first time by a Participant during any calendar year shall not exceed
         $100,000.

                  (b) Ten Percent Stockholders. In the case of an Incentive
         Stock Option granted to a Ten Percent Stockholder, (i) the Option Price
         shall not be less than one hundred ten percent (110%) of the Fair
         Market Value of a share of Common Stock of the Company on the date of
         grant of such Incentive Stock Option, and (ii) the exercise period
         shall not exceed five (5) years from the date of grant of such
         Incentive Stock Option.

           7.   Employee Nonqualified Stock Options.

         Options granted pursuant to this Section 7 are intended to constitute
Nonqualified Stock Options and shall be subject only to the general terms and
conditions specified in Sections 5 and 9 hereof.

           8.   Director Nonqualified Stock Options.

                  (a) Each non-employee director shall be granted an Option to
         purchase that number of shares of Common Stock having a Fair Market
         Value equal to $65,000 as of the date of each annual meeting of the
         stockholders of the Company (the "Annual Grant Amount") following the
         meeting at which the Plan is approved at which such individual is
         elected or reelected to the office of director (the "Meeting Grant
         Date") with each such grant effective as of each Meeting Grant Date. In
         addition, notwithstanding the foregoing, (i) options will be granted to
         directors elected at the meeting at which the Plan is approved for a
         number of shares having a Fair Market Value equal to $65,000 as of the
         Effective Date to be effective as of the Effective Date and (ii) with
         respect to any person who is elected or nominated as and becomes a
         director other than in connection with an annual meeting of the
         stockholders of the Company, such director shall be granted an Option,
         to be effective as of the date of his or her election or appointment,
         in an amount equal to the product of the Annual Grant Amount and a
         fraction the numerator which is the number of months from the date of
         such election or appointment until the expected date of the next annual
         meeting and the denominator of which is twelve. Options granted
         pursuant to this Section 8 are intended to constitute Nonqualified
         Stock Options and shall be subject, to the extent applicable, to the
         general terms and conditions specified in Sections 5 and 9 hereof.

                  (b) No fractional shares shall be issued under this provision.
         Any fractional share that would otherwise be granted in connection with
         the Annual Grant Amount shall be rounded down to the nearest whole
         share, with the remainder being paid in cash.

                  (c) With respect to the Options granted pursuant to this
         Section 8, neither the Board nor the Committee shall have discretion
         with respect to the selection of directors to receive Options, the
         number of

                                       4

<PAGE>

         shares subject to such Options, the purchase price thereunder or the
         timing of the grant of Options under this Section 8.

                  (d) Unless otherwise provided in an award agreement, the
         Options granted pursuant to this Section 8 shall vest in equal
         one-third installments on each of the three anniversaries following the
         grant date.

           9.   Terms and Conditions of Options.

         Each Option granted pursuant to this Plan shall be evidenced by a
written Award Agreement between the Company and the Participant, which agreement
shall comply with and be subject to the following terms and conditions:

                  (a) Number of Shares. Each Award Agreement shall state the
         number of shares of Common Stock to which the Option relates.

                  (b) Type of Option. Each Award agreement shall specifically
         identify the portion, if any, of the Option that constitutes an
         Incentive Stock Option and the portion, if any, which constitutes a
         Nonqualified Stock Option.

                  (c) Option Price. Each Award Agreement shall state the Option
         Price per share of Common Stock, which shall be not less than one
         hundred percent (100%) of the Fair Market Value of a share of Common
         Stock of the Company on the date of grant of the Option and which, in
         the case of Incentive Stock Options, shall be further subject to the
         limitation described in Section 6(b) hereof. The Option Price shall be
         subject to adjustment as provided in Section 14 hereof. The date on
         which the Committee adopts a resolution expressly granting an Option
         shall be considered the day on which such Option is granted.

                  (d) Medium And Time of Payment. The Option Price shall be paid
         or satisfied in full, at the time of exercise, in cash or in shares of
         Common Stock owned by the Participant for at least six months (which
         are not the subject of any pledge or other security interest) having a
         Fair Market Value equal to such Option Price or in a combination of
         cash and such shares, and may be effected in whole or in part, at the
         discretion of the Committee (i) with monies received from the Company
         at the time of exercise as a compensatory cash payment, or (ii) with
         monies borrowed from the Company pursuant to repayment terms and
         conditions as shall be determined from time to time by the Committee,
         in its discretion separately with respect to each exercise of Options
         and each Participant; provided, however, that each such method and time
         for payment and each such borrowing and terms and conditions of
         security, if any, and repayment shall be permitted by and be in
         compliance with applicable law.

                  (e) Term and Exercise of Options. Options shall be exercisable
         over the exercise period as and at the times and upon the conditions
         that the Committee may determine, as reflected in the Award Agreement;
         provided, however, that the Committee shall have the authority to
         accelerate the exercisability of any outstanding Option at such time
         and under such circumstances as it, in its sole discretion, deems
         appropriate. The exercise period shall be determined by the Committee;
         provided, however, that in the case of any Incentive Stock Option, such
         exercise period shall not exceed ten (10) years from the date of grant
         of such Incentive Stock Option and such exercise period shall be
         further limited in circumstances described in Section 6(b) hereof. The
         exercise period shall be subject to earlier termination as provided in
         Section 9(f) and 9(g) hereof. An Option may be exercised as to any or
         all full shares of Common Stock as to which the Option has become
         exercisable, by giving written notice of such exercise to the
         Committee; provided, however, that an Option may not be exercised at
         any one time as to fewer than one hundred (100) shares (or such number
         of shares as to which the Option is then exercisable if such number of
         shares is less than one hundred (100)).

                  (f) Termination of Employment. Except as provided in this
         Section 9(f) and in Section 9(g) hereof, an Option may not be exercised
         unless the Participant is then in the employ or service of (1) the
         Company, (2) an Affiliate Corporation or (3) a corporation issuing or
         assuming the Option in a transaction to which Section 424 of the Code
         applies or a parent corporation or subsidiary corporation of the

                                       5

<PAGE>

         corporation described in this Clause 3, and unless the Participant has
         remained continuously so employed since the date of grant of the
         Option. In the event that the employment or service of a Participant
         shall terminate (other than by reason of death, Disability or
         Retirement), all Options of such Participant that are exercisable at
         the time of such termination may, unless earlier terminated in
         accordance with their terms, be exercised within three (3) months after
         such termination. Nothing in this Plan or in any Option or Right
         granted pursuant hereto shall confer upon an individual any right to
         continue in the employ or service of the Company or any of its
         Affiliate Corporations or interfere in any way with the right of the
         Company or any such Affiliate Corporation to terminate such employment
         or service at any time.

                  (g) Acceleration of Benefits upon Death, Disability or
         Retirement of Participant or a Change in Control. If (i) a Participant
         shall die while employed by the Company or an Affiliate Corporation
         thereof, (ii) a Participant shall die within three (3) months after the
         termination of such Participant's employment, (iii) the Participant's
         employment shall terminate by reason of Disability or Retirement, or
         (iv) there is a Change in Control, then in any such case all Options
         theretofore granted to such Participant (whether or not then
         exercisable) may, unless earlier terminated or expired in accordance
         with their terms, be exercised by the Participant or by the
         Participant's estate or by a person who acquired the right to exercise
         such Option by bequest or inheritance or otherwise by reason of the
         death or Disability of the Participant, at any time within one year
         after the date of death, Disability or Retirement of the Participant or
         the Change in Control.

                  (h) Nontransferability of Options. Except as otherwise
         provided in an Award Agreement, Options granted under this Plan shall
         not be transferable otherwise than by will or by the laws of descent
         and distribution, and Options may be exercised, during the lifetime of
         the Participant, only by the Participant or by his guardian or legal
         representative.

                  (i) Rights as a Stockholder. A Participant who is the holder
         of an Option or a transferee of an Option shall have no rights as a
         stockholder with respect to any shares covered by the Option until the
         date of the issuance of a stock certificate to him or her for such
         shares. No adjustment shall be made for dividends (ordinary or
         extraordinary, whether in cash, securities or other property) or
         distribution of other rights for which the record date is prior to the
         date such stock certificate is issued, except as provided in Section 14
         hereof.

                  (j) Other Provisions. The Award Agreements authorized under
         this Plan shall contain such other provisions, including, without
         limitation, (i) the granting of Rights, (ii) the imposition of
         restrictions upon the exercise of an Award, and (iii) in the case of an
         Incentive Stock Option, the inclusion of any condition not inconsistent
         with such Option qualifying as an Incentive Stock Option, as the
         Committee shall deem advisable.

          10.  Stock Appreciation Rights.

                  (a) Grant and Exercise. In the case of a Nonqualified Stock
         Option, Related Rights may be granted either at or after the time of
         the grant of such Option. In the case of an Incentive Stock Option,
         related Rights may be granted only at the time of the grant of the
         Incentive Stock Option.

         A Related Right or applicable portion thereof granted with respect to a
given Option shall terminate and no longer be exercisable upon the termination
or exercise of the related Option, except that, unless otherwise provided by the
Committee at the time of grant, a Related Right granted with respect to less
than the full number of shares covered by a related Option shall only be reduced
if and to the extent that the number of shares covered by the exercise or
termination of the related Option exceeds the number of shares not covered by
the Right.

         A Related Right may be exercised by a Participant, in accordance with
paragraph (b) of this Section 10, by surrendering the applicable portion of the
related Option. Upon such exercise and surrender, the Participant shall be
entitled to receive an amount determined in the manner prescribed in paragraph
(b) of this Section 10. Options, which have been so surrendered, in whole or in
part, shall no longer be exercisable to the extent the Related Rights have been
exercised.

                                       6

<PAGE>

                  (b) Terms and Conditions. Rights shall be subject to such
         terms and conditions, not inconsistent with the provisions of this
         Plan, as shall be determined from time to time by the Committee and as
         evidenced by a written Award Agreement between the Company and the
         Participant, including the following:

                         (i)    Related Rights shall be exercisable only at such
                  time or times and to the extent that the Options to which they
                  relate shall be exercisable in accordance with the provisions
                  of Section 6, 7, 9 and this Section 10 of this Plan.

                         (ii)   Upon the exercise of a Related Right, a
                  Participant shall be entitled to receive up to, but not more
                  than, an amount in cash or shares of Common Stock equal in
                  value to the excess of the Fair Market Value of one (1) share
                  of Common Stock over the option price per share specified in
                  the related Option multiplied by the number of shares in
                  respect of which the Related Right shall have been exercised,
                  with the Committee having the right to determine the form of
                  payment.

                         (iii)  Related Rights shall be transferable only when
                  and to the extent that the underlying Option would be
                  transferable under paragraph (h) of Section 9 of this Plan.

                         (iv)   A Related Right granted in connection with an
                  Incentive Stock Option may be exercised only if and when the
                  market price of the Common Stock subject to the Incentive
                  Stock Option exceeds the exercise price of such Option.

                         (v)    Free Standing Rights shall be exercisable at
                  such time or times and subject to such terms and conditions as
                  shall be determined by the Committee at or after grant.

                         (vi)   The term of each Free Standing Right shall be
                  fixed by the Committee, but no Free Standing Right shall be
                  exercisable more than ten (10) years after the date such right
                  is granted.

                         (vii)  Upon the exercise of a Free Standing Right, a
                  Participant shall be entitled to receive up to, but not more
                  than, an amount in cash or shares of Common Stock equal in
                  value to the excess of the Fair Market Value of one share of
                  Common Stock over the price per share specified in the Free
                  Standing Right (which shall be no less than one hundred
                  percent (100%) of the Fair Market Value of the Common Stock on
                  the date of grant) multiplied by the number of shares in
                  respect of which the Right is being exercised, with the
                  Committee having the right to determine the form of payment.

                         (viii) No Free Standing Right shall be transferable by
                  the Participant otherwise than by will or by the laws of
                  descent and distribution, and all such rights shall be
                  exercisable, during the Participant's lifetime, only by the
                  Participant or his legal guardian or legal representative.

                         (ix)   In the event of the termination of employment of
                  a recipient of a Free Standing Right, such right shall be
                  exercisable to the same extent that an Option would have been
                  exercisable in the event of the termination of employment of a
                  Participant.

          11.  Restricted Shares.

                    (a) Grant. Subject to the provisions of this Plan, the
         Committee shall have sole and complete authority to determine the
         Participants to whom Restricted Shares shall be granted, the number of
         Restricted Shares to be granted to each Participant, the duration of
         the period during which, and the conditions under which, the Restricted
         Shares may be forfeited to the Company, and the other terms and
         conditions of such Awards (including whether or not such Restricted
         Shares shall qualify as Performance Awards).

                                       7

<PAGE>

                  (b) Transfer Restrictions. Restricted Shares may not be sold,
         assigned, transferred, pledged or otherwise encumbered, except as
         otherwise provided in an Award Agreement. Certificates issued in
         respect of Restricted Shares shall be registered in the name of the
         Participant and deposited by such Participant, together with a stock
         power endorsed in blank, with the Company. Upon the lapse of the
         restrictions applicable to such Restricted Shares, the Company shall
         deliver such certificates to the Participant or the Participant's legal
         representative.

                  (c) Dividends and Distributions. Dividends and other
         distributions paid on or in respect of Restricted Shares, if any, may
         be paid directly to the Participant, or may be reinvested in additional
         Restricted Shares, as determined by the Committee in its sole
         discretion.

                  (d) Acceleration of Benefits upon Death, Disability or
         Retirement of Participant or a Change in Control. If (i) a Participant
         shall die while employed by the Company or an Affiliate Corporation
         thereof, (ii) the Participant's employment shall terminate by reason of
         Disability or Retirement, or (iii) there is a Change in Control, then
         in any such case all Restricted Shares theretofore granted to such
         Participant shall become immediately vested and nonforfeitable.

          12.   Performance Awards.

                  (a) Grant. Subject to the provisions of this Plan, the
         Committee shall have sole and complete authority to determine the
         Participants to whom Performance Awards shall be granted, the number of
         shares of Common Stock subject to Performance Awards, the duration of
         the period during which, and the conditions under which, the
         Performance Awards may be forfeited to the Company, and the other terms
         and conditions of such Awards. Performance Awards may be (i)
         denominated in cash or Shares, (ii) valued, as determined by the
         Committee, in accordance with the achievement of such performance goals
         during such performance periods as the Committee shall establish, and
         (iii) payable at such time and in such form as the Committee shall
         determine.

                  (b) Terms and Conditions. Subject to the terms of the Plan and
         any applicable Award Agreement, the Committee shall determine the
         performance goals to be achieved during any performance period, the
         length of any performance period, the amount of any Performance Award
         and the amount and kind of any payment or transfer to be made pursuant
         to any Performance Award. Unless otherwise provided in an Award
         Agreement, Performance Awards may not be sold, assigned, transferred,
         pledged or otherwise encumbered.

                  (c) Payment of Performance Awards.  Performance Awards may be
         paid in a lump sum or in installments following the close of the
         performance period or, in accordance with procedures established by the
         Committee, on a deferred basis.

          13.   Provisions Applicable to Covered Officers.

         To the extent the Committee determines, all performance-based
Restricted Shares and Performance Awards granted to Covered Officers shall be
subject to the terms and provisions of this Section 13.

                  (a) Performance goals shall be limited to one or more of the
         following Company, subsidiary, operating unit or division financial
         performance measures:

                           (i)   earnings before interest, taxes, depreciation
                                 and/or amortization

                          (ii)   operating income or profit

                         (iii)   return on equity, assets, capital, capital
                                 employed, or investment

                          (iv)   after tax operating income

                           (v)   net income

                                       8

<PAGE>

                          (vi)   earnings or book value per share

                         (vii)   cash flow(s)

                        (viii)   total sales or revenues or sales or revenues
                                 per employee

                          (ix)   stock price or total shareholder return

                           (x)   dividends

                          (xi)   strategic business objectives, consisting of
                  one or more objectives based on meeting specified cost
                  targets, business expansion goals, and goals relating to
                  acquisitions or divestitures or any combination thereof. Each
                  goal may be expressed on an absolute and/or relative basis,
                  may be based on or otherwise employ comparisons based on
                  internal targets, the past performance of the Company and/or
                  the past or current performance of other companies, and in the
                  case of earnings-based measures, may use or employ comparisons
                  relating to capital, shareholders' equity and/or shares
                  outstanding, or to assets or net assets.

                  (b) The maximum annual number of shares in respect of which
         performance-based Restricted Shares and Performance Awards may be
         granted to any Participant under the Plan is 200,000 and the maximum
         annual amount of any such Award settled per Participant in cash is $5
         million.

                  (c) To the extent necessary to comply with Section 162(m), no
         later than 90 days following the commencement of each performance
         period (or such other time as may be required or permitted by Section
         162(m) of the Code), the Committee shall, in writing, (A) select the
         performance goal or goals applicable to the performance period, (B)
         establish the various targets and bonus amounts which may be earned for
         such performance period and (C) specify the relationship between
         performance goals and targets and the amounts to be earned by each
         Covered Officer for such performance period. Following the completion
         of each performance period, the Committee shall certify in writing
         whether the applicable performance targets have been achieved and the
         amounts, if any, payable to Covered Officers for such performance
         period. In determining the amount earned for a given performance
         period, subject to any applicable Award Agreement, the Committee shall
         have the right to reduce (but not increase) the amount payable at a
         given level of performance to take into account additional factors that
         the Committee may deem relevant to the assessment of individual or
         corporate performance for the performance period.

          14.   Effect of Certain Changes.

                  (a) If there is any change in the number of outstanding shares
         of Common Stock by reason of any stock dividend, stock split,
         recapitalization, combination, exchange of shares, merger,
         consolidation, liquidation, split-up, spin-off or other similar change
         in capitalization, any distribution to shareholders, including a rights
         offering, other than cash dividends, or any like change, then the
         number of shares of Common Stock available for Awards, the maximum
         number of shares of Common Stock that may be subject to Awards, the
         number of such shares of Common Stock covered by outstanding Awards,
         and the price per share of Options or the applicable market value of
         Rights, shall be proportionately adjusted by the Committee to reflect
         such change or distribution; provided, however, that any fractional
         shares resulting from such adjustment shall be eliminated.

                  (b) In the event of a change in the Common Stock as presently
         constituted, which is limited to a change of all of its authorized
         shares with par value into the same number of shares with a different
         par value or without par value, the shares resulting from any such
         change shall be deemed to be Common Stock within the meaning of this
         Plan.

                  (c) To the extent that the foregoing adjustments relate to
         stock or securities of the Company, such adjustments shall be made by
         the Committee, whose determination in that respect shall be final,
         binding and conclusive, provided that each Incentive Stock Option
         granted pursuant to this Plan shall not

                                       9

<PAGE>

         be adjusted in a manner that causes such option to fail to continue to
         qualify as an Incentive Stock Option within the meaning of Section 422
         of Code.

          15.   Agreement by Participant Regarding Withholding Taxes.

         If the Committee shall so require, as a condition of grant, exercise,
or settlement or otherwise, each Participant shall agree that:

                  (a) no later than the date a Participant recognizes taxable
         income in connection with an Award granted hereunder in connection with
         the exercise or settlement of such Award or otherwise, the Participant
         will pay to the Company or make arrangements satisfactory to the
         Committee regarding payment of any federal, state or local taxes of any
         kind required by law to be withheld upon the exercise or settlement of
         such Award (any such tax, a "Withholding Tax"); and

                  (b) the Company shall, to the extent permitted or required by
         law, have the right to deduct any Withholding Tax from any payment of
         any kind otherwise due to the Participant.

          16.   Gross-Up for Excise Tax.

         An Award Agreement may provide that in the event that a Participant
becomes entitled by reason of a Change of Control to the accelerated vesting of
an Award, if such Participant will be subject to excise tax (the "Excise Tax")
under Section 4999 of the Code, the Company shall pay to such Participant as
additional compensation an amount (the "Gross-Up Payment") which, after payment
by such Participant of all taxes (including any federal, state and local income
tax and excise tax upon the payment provided for by this Section 16) allows
Participant to retain an amount of the Gross-Up Payment equal to the Excise Tax.
For purposes of determining whether a Participant will be subject to the Excise
Tax and the amount of such Excise Tax, (i) any other payments or benefits
received or to be received by such Participant in connection with a Change in
Control of the Company or the Participant's termination of employment (whether
pursuant to the terms of the Award Agreement or any other plan, arrangement or
agreement with the Company, any entity whose actions result in a Change in
Control of the Company or any entity affiliated with the Company or such entity)
shall be treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "excess parachute payments" within the meaning
of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax,
unless in the opinion of tax counsel selected by the Company's independent
auditors and reasonably acceptable to the Participant such other payments or
benefits (in whole or in part) do not constitute parachute payments, including
by reason of Section 280G(b)(4)(A) of the Code, or such excess parachute
payments (in whole or in part) represent reasonable compensation for services
actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, or
are otherwise not subject to the Excise Tax, (ii) the amount of payments or
benefits treated as subject to the Excise Tax shall be equal to the lesser of
(A) the total amount of payments or benefits conferred on such Participant by
reason of the Change of Control or (B) the amount of excess parachute payments
within the meaning of Section 280G(b)(1) of the Code (after applying clause (i),
above), and (iii) the value of any noncash benefits or any deferred payment or
benefit shall be determined by the Company's independent auditors in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Participant shall be deemed
to pay federal income taxes at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rate of taxation in the
state and locality of the Participant's residence on the date on which the
Excise Tax is incurred, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes. In the
event that the Excise Tax is subsequently determined to be less than the amount
taken into account hereunder, the Participant shall repay to the Company, at the
time that the amount of such reduction in Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such reduction (plus that
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state and local income tax deduction) plus interest on the amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the
event that the Excise Tax is determined to exceed the amount taken into account
hereunder (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), the Company shall
make an additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by the Participant with respect to such
excess) at the time that the amount of such excess finally is determined. The
Participant and the

                                       10

<PAGE>

Company each shall reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the existence or amount of
liability for Excise Tax.

          17.   Termination and Amendment.

         Unless terminated by action of the Board of Directors or the Committee,
no Awards may be granted under this Plan after May 4, 2010. This Plan may be
amended or terminated at any time by the Committee, except that no amendment may
be made without shareholder approval if the Committee determines that such
approval is necessary to comply with any tax or regulatory requirement,
including any approval requirement which is a prerequisite for exemptive relief
from Section 16 of the Exchange Act, for which or with which the Committee
determines that it is desirable to qualify or comply. The Committee may amend
the terms of any Award Agreement and any Award granted, retroactively or
prospectively, but no amendment may adversely affect any vested Award without
the holder's consent.

          18.   Effectiveness; Approval of Stockholders.

         Except as otherwise provided herein, this amended and restated Plan
shall take effect as of May 15, 2002 (the "Effective Date"), subject to the
approval of the holders of the majority of the voting shares of the Company at
the Company's 2002 annual meeting of Stockholders (the "2002 Annual Meeting").
If the Plan amendments to increase from 3.4 million to 7.4 million the number of
authorized shares for issuance under such plan and to increase from 1.5 million
to 3 million the number of shares of common stock as to which Restricted Shares
and/or Performance Awards may be granted under such plan are not approved by the
holders of the majority of the voting shares of the Company, this Plan will be
restated so that the number of shares of Common Stock authorized for issuance
shall be adjusted so that the limitations set forth therein shall revert to the
unamended Plan. The limitations established by the preceding sentence shall be
subject to adjustment as provided in Sections 14 hereof.

          19.   Effect of Headings.

         The section and subsection headings contained herein are for
convenience only and shall not affect the construction hereof.

          20.   Governing Law

         The validity, construction and effect of the Plan shall be determined
in accordance with the laws of the State of Delaware.

                                       11

<PAGE>

                         FORM OF STOCK OPTION AGREEMENT

THIS AGREEMENT dated as of the ___ day of __________, ____ between Laboratory
Corporation of America Holdings, a Delaware corporation (the "Company") and
((First_Name)) ((MI)) ((Last_Name)) (the "Employee").

                                   WITNESSETH

In consideration of the mutual promises and covenants made herein and the mutual
benefits to be derived herefrom, the parties hereto agree as follows:

1.   Grant of Options.

Subject to the provisions of this Agreement and to the provisions of the
Laboratory Corporation of America Holdings Amended and Restated 2000 Stock
Incentive Plan (the "Plan"), the Company hereby grants to the Employee the right
and option (the "Option") to purchase all or any part of the number of shares of
common stock, par value $0.10 per share ("Common Stock") of the Company, set
forth on Schedule A attached hereto at the price per share and on the other
terms set forth on Schedule A.

2.   Exercisability of Options.

One-third (1/3) of the shares subject to the Options may be purchased by the
Employee pursuant to exercise of the Options on or after ________________, an
additional one-third (1/3) of such shares on or after ________________, and all
of such shares on or after ________________, in each case subject to the prior
expiration or sooner termination of the Options; provided, however, that Options
may not be exercised at any one time as to fewer than 100 shares (or such number
of shares as to which the Options are then exercisable if such number of shares
is less than 100).

3.   Method of Exercise of the Options.

     (a) The Options as to which the Employee is vested shall be exercisable by
delivery to the Company of a written notice stating the number of shares to be
purchased pursuant to this Agreement and accompanied by payment for the full
purchase price of the shares to be purchased. Fractional share interests shall
be disregarded except that they may be accumulated.

     (b) The exercise price shall be paid in cash or by certified check or bank
draft payable to the order of the Company, or by exchange of Common Stock of the
Company having an aggregate fair market value equal to the aggregate exercise
price, or by a combination of the foregoing.

4.   Termination of Employment.

Except as provided in Paragraph 4 and in Paragraph 5 hereof, Options may not be
exercised unless the Employee is then in the employ of (i) the Company, (ii) an
affiliated corporation or (iii) a corporation issuing or assuming the Options in
a transaction to which Section 424 and/or 425(a) of the Internal Revenue Code of
1986 applies or a parent corporation or subsidiary corporation of the
corporation described in the clause (iii), and unless the Employee has remained
continuously so employed since the date of grant of the Options. In the event
that the employment of the Employee shall terminate (other than by reason of
death, disability or retirement), all Options of such Employee that are
exercisable at the time of such termination may, unless earlier terminated in
accordance with their terms, be exercised within three (3) months after such
termination, subject to the restrictions on sales of securities imposed by the
LabCorp Insider Trading Policy including, without limitation, any applicable
mandatory "black-out periods."

Nothing in this Agreement or the Plan shall confer upon the Employee any right
to continue in the employ of the Company or any of its affiliate corporations or
interfere in any way with the right of the Company or any such affiliate
corporation to terminate such employment at any time.

5.   Acceleration of Benefits Upon Death, Disability or Retirement of Employee
     or Change in Control.

If (i) Employee shall die while employed by the Company or an affiliate
corporation thereof, (ii) the Employee shall die within three (3) months after
the termination of the Employee's employment, (iii) the Employee's employment
shall terminate by reason of Disability or Retirement (as defined in the Plan)
or (iv) there is a termination as a result of a Change in Control (as defined in
the Plan), all Options granted pursuant to this Agreement which are vested and
which have not been exercised may, unless earlier terminated in accordance with
their terms, be exercised by the

<PAGE>

Employee or by the Employee's estate or by a person who acquired the right to
exercise such Options by bequest or inheritance or otherwise by reason of the
death or disability of the Employee, at any time within one (1) year after the
date of Death, Disability or Retirement of the Employee or the Change in
Control, subject to the restrictions on sales of securities imposed by the
LabCorp Insider Trading Policy including, without limitation, any applicable
mandatory "black-out periods."

6.   Nontransferability of Options.

The Options are non-transferable by the Employee other than by will or the laws
of descent and distribution, and Options may be exercised during the lifetime of
the Employee only by the Employee or by his guardian or legal representative.

7.   Effect of Certain Changes.

     (a) If there is any change in the number of outstanding shares of Common
Stock by reason of any stock dividend, stock split, recapitalization,
combination, exchange of shares, merger, consolidation, liquidation, split-up,
spin-off or other similar change in capitalization, any distribution to common
shareholders, including a rights offering, other than cash in dividends, or any
like change, the number of shares covered by outstanding Options granted
pursuant to this Agreement, and the price per share of such Options, shall be
proportionately adjusted by the Committee (as defined in the Plan) to reflect
any such change or distributing provided, however, that any fractional shares
resulting form such adjustment shall be eliminated.

     (b) In the event of a change in the Common Stock of the Company as
presently constituted, which is limited to a change of all of its authorized
shares with par value into the same number of shares with different par value or
without par value, the shares resulting from any such change shall be deemed to
be Common Stock within the meaning of this Agreement and the Plan.

     (c) To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Committee,
whose determination in that respect shall be final, binding and conclusive.

8.   Rights as a Stockholder.

An Employee or a transferee of Options shall have no rights as a stockholder
with respect to any shares covered by such Options until the date of the
issuance of a stock certificate to such individual for such shares. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distribution of other rights for which
the record date is prior to the date a stock certificate is issued, except as
provided in Paragraph 7 of this Agreement.

9.   Payment of Transfer Taxes, Fees, and Other Expenses.

The Company agrees to pay any and all original issue taxes and stock transfer
taxes that may be imposed on the issuance of shares acquired pursuant to the
exercise of the Options, together with any and all the fees and expenses
necessarily incurred by the Company in connection therewith.

10.  Other Restrictions.

The exercise of each Option shall be subject to the requirement that, if at any
time the Committee shall determine that (i) the listing, registration or
qualification of the shares of Common Stock subject or related thereto upon any
securities, exchange or under any state or federal law, or (ii) the consent or
approval of any government regulatory body, or (iii) an agreement by the
Employee with respect to the disposition of shares of Common Stock, is necessary
or desirable as a condition of, or in connection with, such exercise or the
delivery or purchase of shares pursuant thereto, then in any such event, such
exercise shall not be effective unless such listing, registration,
qualification, consent, approval or agreement shall have been effected or
obtained free of any conditions not acceptable to the Committee.

11.  Taxes and Withholding.

No later than the date of exercise of any Options granted hereunder, the
Employee shall pay to the Company or make arrangements satisfactory to the
Committee regarding payment of any federal, state or local taxes of any kind
required by law to be withheld upon the exercise of such Options and the Company
shall, to the extent permitted or required by law, have the right to deduct from
any payment of any kind otherwise due to the Employee, federal, state and local
taxes of any kind required by law to be withheld upon the exercise of such
Options.

                                       2

<PAGE>

12.  Notices.

Any notices to be given under the terms of this Agreement shall be in writing
and addressed to the Company at 430 South Spring Street, Burlington, North
Carolina 27215, Attention: Corporate Secretary and to the Employee at the
address set forth on Schedule A, or at such address as either party may
hereafter designate in writing to the other.

13.  Effect of Agreement.

Except as otherwise provided hereunder, this Agreement shall be binding upon and
shall inure to the benefit of any successor or successors of the Company.

14.  Law Applicable to Construction.

The Options have been granted, executed and delivered in the State of New York,
and the interpretation, performance and enforcement of this Agreement shall be
governed by the laws of the State of New York, as applied to contracts executed
in and performed wholly within the State of New York.

15.  Conflicts and Interpretation.

If there is any conflict between this Agreement and the Plan, or if there is any
ambiguity in this Agreement, any term which is not defined in this Agreement, or
any matter as to which this Agreement is silent, in any such case, the Plan
shall govern including, without limitation, the provisions thereof pursuant to
which the Committee has the power, among others, to (i) interpret the Plan, (ii)
prescribe, amend and rescind rules and regulations relating to the Plan and
(iii) make all other determinations deemed necessary or advisable for the
administration of the Plan.

16.  Headings.

The headings of paragraphs herein are included solely for convenience of
reference and shall not affect the meaning or interpretation of any of the
provisions of this Agreement.

17.  Amendment.

This Agreement may not be modified, amended or waved in any manner except by an
instrument in writing signed by both parties hereto. The waiver by either party
of compliance with any provision of this Agreement shall not operate or be
construed as a waiver of any other provision of this Agreement, or of any
subsequent breach by such party of a provision of this Agreement.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its
behalf by a duly authorized officer and the Employee has hereunto set his/her
hand, effective as of the day and year first above written.

                                LABORATORY CORPORATION OF AMERICA HOLDINGS

                                By: ____________________________________________
                                        Thomas P. MacMahon, Chairman and CEO

                                                EMPLOYEE

                                By: __________________________________________
                                        First Name, Middle Initial, Last Name

                                       3

<PAGE>

                      Schedule A to Stock Option Agreement

Employee Name and Address:
((First_Name)) ((MI)) ((Last_Name))
((Address))
((City)), ((State)) ((Zip))

Employee Social Security Number:

((SSN))

Number and Type of Options:
((Options)) non-qualified options

Exercise Price:
$_______ per share

Vesting:

1/3 on or after ________________________
1/3 on or after ________________________
100% on or after _______________________

Expiration of Options:
                                  __________________

                                       4

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