Document:

EXHIBIT 10.17

                             AVON PRODUCTS, INC.

                  COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS

                             Effective May 1, 1997

                           (Restated June 1, 2000)

I.    GENERAL PROVISIONS

      1.1  Purpose   The purpose of the Avon Products, Inc.
Compensation Plan for Non-Employee Directors (the "Plan") is to provide
a comprehensive revised compensation program which will attract and
retain qualified individuals who are not employed by Avon Products, Inc.
or its subsidiaries (the "Company") to serve on the Company's Board of
Directors.  In particular, the Plan aligns the interests of such
directors with those of the Company's shareholders by providing that a
significant portion of such compensation is directly linked to increases
in the value of the Company's Common Stock.

      1.2  Relationship to 2000 Stock Incentive Plan   The Company's
2000 Stock Incentive Plan ("2000 Plan") which was approved by the
Company's shareholders at the Annual Meeting of Shareholders on May 4,
2000, provides for the award of stock incentives, including stock
options and restricted stock, to key employees of the Company including

non-employee directors.

      1.3  Definitions   Capitalized words and phrases in this Plan
shall have the same meaning as the definitions set forth in the 2000
Stock Incentive Plan to the extent they are defined therein.

II.   ANNUAL RETAINER AND MEETING FEES

      2.1  Annual Retainer   Each non-employee director shall be
entitled to receive an annual retainer consisting of (a) $25,000 payable
in cash and (b) Restricted Stock having a value as of the date of grant
of approximately $25,000.  The cash portion shall be payable in
quarterly installments of $6,250 each.

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      2.2  Annual Restricted Stock Award   As part of the Annual
Retainer compensation, each non-employee director will receive an award
of shares of Restricted Stock immediately following each Annual Meeting
of Shareholders.  The number of shares so granted each year will be
determined by dividing the sum of $25,000 by the closing price of a
share of the Company's Common Stock on the New York Stock Exchange
averaged over 10 consecutive trading days, ending with the trading day
immediately preceding the applicable Annual Meeting.  All grants of
Restricted Stock shall be subject to the terms and conditions set forth
in Article IV below.

      2.3  Meeting Fees   Each non-employee director shall receive a
fee of $1,000, payable in cash, for each meeting of a committee of the
Board of Directors that he or she attends and each special meeting of
the Board of Directors that he or she attends.  No fee is payable with
respect to attendance at a regular meeting of the Board of Directors,
including the annual organizational meeting occurring immediately after
an Annual Meeting of Shareholders.

      2.4  Retainer Fee for Committee Chairs   A non-employee director
appointed to chair any committee of the Board of Directors shall be paid
an annual retainer of $3,000 in cash, such payment to be made within 30
days following the effective date of appointment.

      2.5  Deferred Cash Alternative   Each non-employee director
annually may elect to have all or a part of his or her cash
compensation, including annual retainers and meeting fees, deferred for
payment in accordance with the provisions of the Deferred Compensation -
Stock Credit Plan.  All such elections for each year shall be made prior
to the beginning of the year.

III.  STOCK OPTIONS

      3.1  Annual Grants of Stock Options   As of the close of business
on the date of each Annual Meeting of Shareholders, each non-employee
director who then continues as a director (whether or not re-elected at
any such meeting) shall be granted an Option to purchase 4,000 shares.
All Options granted pursuant to the Plan shall be non-qualified Options
and shall expire ten (10) years from the date of grant.

<PAGE>

      3.2  Option Exercise Price   The per share price to be paid to
exercise an Option shall be the "Fair Market Value" of the Stock on the
date of grant in accordance with the 2000 Plan.

      3.3  Vesting and Exercise of Options   Each Option will become
exercisable one year after the date of grant and may be exercised for a
period of ten (10) years after the date of grant.  In the event of
death, a vested Option may be exercised by the estate of the non-
employee director.

      3.4  Method of Exercise and Purchase   An Option shall be
exercised by giving written notice to the Secretary, or an Assistant
Secretary, of the Company specifying the number of shares to be
purchased and the particular grant being exercised.  Such notice shall
be accompanied by a check as payment of the exercise price of the shares
with respect to which such Option, or portion thereof, is exercised.
Alternatively, such notice may include an election to have such shares
delivered to a broker-dealer with whom arrangements have been made to
immediately sell the shares and withhold from the net sale proceeds the
full purchase price amount to be delivered to the Company.  The Company
may also require payment of all withholding taxes to exercise an Option,
whether or not a broker-dealer arrangement has been used.

IV.   RESTRICTED STOCK

      4.1  Annual Retainer Grants of Restricted Stock   At the close of
business on the date of each Annual Meeting of Shareholders, each non-
employee director who then continues as a director (whether or not re-
elected at any such meeting) shall be granted shares of Restricted
Stock.  The number of shares of Restricted Stock to be granted will have
a Fair Market Value of $25,000 on the date of grant.  The Fair Market
Value per share shall be deemed to be the closing price of a share of
Company Common Stock as reported on the New York Stock Exchange averaged
over the ten trading days next preceding the date of grant.  A
fractional share resulting from such calculation will be rounded to the
nearest whole share.

      4.2  Restrictions and Terms and Conditions   All shares of
Restricted Stock granted under this Plan may not be sold, traded,
assigned, transferred or otherwise encumbered until and unless
restrictions are removed.  The Company shall retain custody of all
shares until restrictions are removed or may hold such

<PAGE>

shares by book entry registration.  Each director granted Restricted
Stock shall have all the rights of a Shareholder with respect to such
shares, including the right to vote such shares and receive dividends
and other distributions.

      4.3  Removal of Restrictions   No shares of Restricted Stock will
become free of restrictions and non-forfeitable for a director until the
termination of the director's services as a member of the Company's
Board of Directors.  Shares shall become non-forfeitable at the earliest
to occur of:

            (a) the director's death or permanent disability,

            (b) mandatory retirement, pursuant to Company policy,
                effective at the end of the term of service during which
                the director has attained age 70,

            (c) resignation, or failure to stand for re-election, prior
                to such mandatory retirement provided that such action
                must have the consent of at least 80% of all directors
                then on the Board, with the affected director
                abstaining, or

            (d) the occurrence of a Change of Control as defined in the
                2000 Stock Incentive Plan.

      Termination of service as a director for any other reason shall
result in forfeiture of his or her shares of Restricted Stock.
Forfeiture of shares will also result with respect to a director who,
without the Company's written consent, becomes employed by, or provides
consulting services to, a company substantially engaged in a business
which is competitive to a principal business conducted by the Company.

V.    ADDITIONAL PROVISIONS

      5.1  The Plan shall be administered by the Compensation Committee
of the Board of Directors which shall have the power to interpret the
Plan and amend it from time to time as it deems proper.  To the fullest
extent practicable, however, the terms and conditions of the 2000 Stock
Incentive Plan shall be applicable to this Plan.

<PAGE>

      5.2  The number of shares of Stock covered by any Option or award
of Restricted Stock shall be proportionately adjusted for any increase
or decrease in the number of issued shares of Stock resulting from a
split or subdivision of shares, a combination of shares, or the payment
of a stock dividend.

      5.3  All Options shall become fully exercisable and all shares of
Restricted Stock will become vested, upon the occurrence of a Change of
Control as defined in the 2000 Stock Incentive Plan.

      5.4  The Plan shall be governed by and subject to the laws of the
State of New York and applicable Federal laws.CITIZENS COMMUNICATIONS COMPANY

                                      WITH

                                   LEONARD TOW

                              Employment Agreement

                          Dated: As of October 1, 2000

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                                                  TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S>                                                                                                              <C>
1.       EMPLOYMENT; DUTIES.......................................................................................2

2.       TERM.....................................................................................................3

3.       COMPENSATION, EXPENSES AND BENEFITS......................................................................3

                  a.       Base Salary............................................................................3
                  b.       Stock Compensation.....................................................................3
                  c.       Registration of Shares.................................................................8

4.       PARTICIPATION IN PLANS..................................................................................10

5.       SPECIAL INSURANCE ARRANGEMENT...........................................................................12

6.       EXPENSES, TAX AND OTHER SERVICES; ACCOUTERMENTS OF OFFICE, VACATION.....................................13

                  a.       Expenses..............................................................................13
                  b.       Tax and Other Services................................................................13

7.       PLACE AND TIME FOR SERVICES.............................................................................13

8.       BONUS; ADDITIONAL PAYMENTS..............................................................................14

9.       SPLIT-DOLLAR INSURANCE..................................................................................14

10.      EXCLUSIVITY.............................................................................................14

11.      ADVISORY SERVICES.......................................................................................15

                  a.       General...............................................................................15
                  b.       Termination...........................................................................16
                  c.       Other Matters.........................................................................16

12.      WAIVERS; LIMITATIONS OF LAW.............................................................................17

13.      CONTINUED AVAILABILITY OF BENEFITS AFTER RETIREMENT.....................................................18

14.      TERMINATION.............................................................................................19

                  a.       Termination for Cause.................................................................19
                  b.       Other Termination.....................................................................20
                  c.       Challenge or Contest..................................................................21

15.      CONSEQUENCES OF TERMINATION.............................................................................21

                  a.       Termination Under Section 14a.........................................................21
                  b.       Termination Under Section 14b.........................................................23
                  c.       Special Advisory Term Payment.........................................................24
                  d.       Vested Rights not Affected............................................................24
                  e.       Mitigation............................................................................25
                  f.       Excess Parachute Payments.............................................................25
                  g.       Remedies..............................................................................25

16.      INDEMNITY, DIRECTORS' AND OFFICERS' INSURANCE...........................................................25

17.      DETERMINATION OF BENEFITS...............................................................................26

18.      MERGER, CONSOLIDATION, OR SALE OF ASSETS OR STOCK.......................................................26

19.      ADDITIONAL OPTION TO ACQUIRE SHARES.....................................................................27

20.      MISCELLANEOUS...........................................................................................29

                  a.       Decisions by Company..................................................................29
                  b.       Entire Agreement......................................................................29
                  c.       Assignability.........................................................................29
                  d.       No Attachment.........................................................................29
                  e.       Binding Agreement.....................................................................29
                  f.       No Waiver.............................................................................30
                  g.       Expenses and Legal Fees...............................................................30
                  h.       Right to Accelerate...................................................................30
                  i.       Severability..........................................................................31
                  j.       Headings..............................................................................31
                  k.       Governing Law.........................................................................31
                  l.       Counterparts..........................................................................31
                  m.       Notices...............................................................................32
                  n.       Transfer..............................................................................32

21.      NON-APPROVAL OF 2000 PLAN...............................................................................33

22.      FAMILY MEMBER...........................................................................................33

23.      NO DIMINUTION OF BENEFITS...............................................................................33
</TABLE>

<PAGE>

                              EMPLOYMENT AGREEMENT

     This Employment Agreement entered into as of October 1, 2000 by and between
Citizens Communications  Company, a Delaware corporation,  with offices at Three
High Ridge Park, Stamford, Connecticut 06905 ("the Company") and Leonard Tow, an
individual  residing at 160 Lantern Ridge Road,  New Canaan,  Connecticut  06840
("the Executive").

                                    RECITALS

     The Company and the Executive  under date of July 11, 1996 have  heretofore
entered into an agreement  pursuant to which the Company  employed the Executive
as its Chief  Executive  Officer for a term ending  December 31, 2000 (the "1996
Agreement"). The Executive is currently acting as Chief Executive Officer of the
Company  and  as its  Chairman  pursuant  to  the  1996  Agreement  to the  full
satisfaction of the Company.

     The Company is desirous of retaining  the services of the  Executive as its
Chief  Executive and Chairman for an additional  five (5) years beyond  December
31,  2000 and having the  benefit of the  Executive's  advice and counsel for an
additional  five (5) years  beyond  December  31,  2005 all is set forth in this
Agreement and believes such retention is in the best interests of the Company.

     The Company has requested the Executive to extend his  employment  with the
Company under the terms,  provisions and conditions set forth in this Agreement.
As an  inducement to the  Executive to enter into this  Agreement  extending his
employment  by the  Company,  the  Company  is  willing  to grant  and award the
Executive  shares of stock in the  Company  and  options to  acquire  additional
shares of stock of the Company as well as other benefits.  The Company  believes
such grants,  awards and benefits will continue to motivate the Executive in the
performance  of his duties.  At the same time the Company has  requested and has
advised the Executive that as part of this Agreement  extending his  employment,
and a material  inducement to the Company,  the  Executive  shall be required to
extend the date when  restrictions  lapse on the 500,000 shares of the Company's
Common Stock awarded to the Executive under the Company's 1990 Management Equity
Incentive Plan (the "Current Restricted Shares") and presently 559,974 shares by
reason of stock  dividends,  to a date  subsequent  to the  expiration  or prior
termination of this Agreement, all as provided in this Agreement.

     The Executive is willing to extend his term of employment  with the Company
for such additional  five-year  period and to enter into this Agreement upon the
terms, provisions and conditions set forth herein, including without limitation,
the  award and grant of shares of the  Company's  Common  Stock and  options  to
acquire  additional  shares of the Company's Common Stock and the other benefits
provided  herein,  and  including  extension  of the  date as  provided  in this
Agreement when restrictions will lapse on the Current Restricted Shares provided
the number of Current Restricted shares is increased from 559,974 to 809,974, to
which the Company has agreed.

     NOW THEREFORE,  in  consideration  of the mutual covenants herein contained
and other good and  valuable  consideration,  each to the other in hand paid and
the receipt and adequacy of which is mutually acknowledged, the parties agree as
follows:

1.   EMPLOYMENT; DUTIES:
     ------------------

     1. The Company hereby employs and continues the employment of the Executive
     and the Executive  hereby  accepts such  employment for the duration of the
     Term (as  herein  defined)  and upon the  terms  and  conditions  hereafter
     provided,  as  chief  executive  officer  of the  Company.  As  such  chief
     executive,  the  Executive  shall have the power and authority set forth in
     Schedule "A" annexed,  which is an integral part of this Agreement.  During
     the Term the Executive  shall  continue to be designated as the Chairman of
     the Board of the Company and the By-Laws of the Company  shall  continue to
     provide that the Chairman of the Board shall be the chief executive officer
     of the  Company.  The  Executive  currently  serves as chairman of Electric
     Lightwave,  Inc.  (ELI),  a subsidiary of the Company and shall continue in
     that capacity for the duration of the Term, so long as ELI is controlled by
     the Company. Additionally,  during the Term, the Executive agrees to serve,
     if it is mutually  determined to be appropriate or if the Executive desires
     to be so  elected  or  appointed,  for the  period for which he is and from
     time-to-time shall be appointed or elected, as an officer of any subsidiary
     or affiliate of the Company, in addition to ELI. The Company shall not take
     any  action to reduce  the scope of the  Executive's  authority,  position,
     functions,  duties and responsibilities from that which is in effect at the
     date hereof and/or which is contemplated hereby,  unless he shall otherwise
     consent in writing.

     2. The  Executive  is  currently a member of the Board of  Directors of the
     Company.  The Company  shall use its best efforts to cause the Executive to
     continue to be a member of its Board of Directors  throughout the Term, and
     shall  include  the  Executive  in  management's  slate for  election  as a
     director  at every  stockholders'  meeting  at which his term for  director
     would otherwise expire and/or at all annual meetings of  stockholders.  The
     Company shall use its best efforts to cause the Executive to be a member of
     the Board of Directors of all  subsidiaries  of the Company  throughout the
     Term. The Executive agrees to serve and continue to serve, if elected, as a
     director and as a member of any  committee of the Board of Directors of the
     Company and also agrees to serve,  if elected,  as a member of the Board of
     Directors  of all  subsidiaries  of the  Company.  During  the  Term of the
     Agreement,  the  Executive  shall not  receive a fee as a director  or as a
     member of any  committee of directors of the Company or any  subsidiary  of
     the Company.

2.   TERMS:
     -----

     1.  The term of the  Executive's  employment  under  this  Agreement  shall
     commence  on October 1, 2000 and shall  expire on  December  31,  2005 (the
     "Term"). The Executive's  employment under this Agreement may be terminated
     prior to the expiration of the Term, as hereinafter provided.

     2. The phrase  "terminate  this  Agreement" when used herein shall refer to
     the termination of the period of employment as well as the Advisory Period,
     as hereafter  defined,  and the rendering of advisory  services  under this
     Agreement.

3.  COMPENSATION, EXPENSES AND BENEFITS:
    -----------------------------------

     1. Base Salary.  For the period  October 1, 2000 through  December 31, 2000
     the Company shall pay the Executive a base salary of $225,000  which is the
     base salary payable under the 1996 Agreement.  The Company shall pay to the
     Executive a base salary of $900,000  (the "Base  Salary")  for each year of
     the Term commencing  January 1, 2001. The payment of aforesaid  $225,000 as
     well as the Base Salary shall be payable  currently in accordance  with the
     customary  payroll practices of the Company but in no event less frequently
     than monthly and shall be subject to such  withholdings  as may be required
     by applicable law.

     2. Stock Compensation. In addition to his Base Salary, and in consideration
     of his  entering  into this  Agreement,  and  subject to the  provision  of
     sub-section (c) of this Section 3, and in the event of termination pursuant
     to the  provisions  of Section 14 subject to the  provisions of Section 15,
     the  Executive  shall be awarded and  Company  agrees to and shall give and
     deliver to the Executive, upon the execution and delivery of this Agreement
     (or at such later date set forth in this Section 3b) the  following  shares
     and options to acquire shares:

          1. 750,000 shares of the Common Stock of the Company (the  "Additional
          Restricted  Shares"),  which are in addition to the Current Restricted
          Shares,  and which shall be  registered  in the  Executive's  name but
          shall be subject to a restriction period (the "Additional  Restriction
          Period") (after which all  restrictions  shall lapse) which shall mean
          the  period  commencing  with  the  delivery  of  said  shares  to the
          Executive  and ending with the first to occur of (i) the first January
          1 next  succeeding  the  expiration on December 31, 2005 of the Term ,
          (ii)  termination of employment by death of the Executive or by either
          the Executive or the Company under this  Agreement in accordance  with
          its  provisions  prior to  December  31,  2005,  provided  that if the
          Executive is the chief executive officer on December 31 of the year in
          which such  termination  occurs or if the  Executive  is  otherwise  a
          "covered  employee" for the purpose of Section  162(m) of the Internal
          Revenue  Code of 1986,  as amended  ("Code"),  for the taxable year in
          which such termination occurs, the Additional Restriction Period shall
          end on the next  succeeding  January 1 after such  termination,  (iii)
          sale of all or substantially all of the assets or capital stock of the
          Company,   (iv)  merger,   consolidation  or  other   amalgamation  or
          combination of the Company,  in which merger or other  transaction the
          Company  is not the  surviving  entity,  or (v) a Change in Control as
          defined in Section 19. During the Additional  Restriction Period, none
          of  the  Additional   Restricted   Shares  may  be  sold,   exchanged,
          transferred,  hypothecated  or  otherwise  disposed of except that the
          Executive  shall  not be  precluded  from  exchanging  any  Additional
          Restricted  Shares for any other  shares of the Company  that  thereby
          become   similarly   restricted  by  this  Section  or  are  similarly
          restricted   and  except  that   Executive  may  transfer   Additional
          Restricted Shares to a Family Member as defined in Section 23 provided
          the Family Member agrees to hold said shares  subject to the terms and
          provisions  of this  Agreement.  Except  for the  restrictions  on the
          Additional Restricted Shares during the Additional  Restriction Period
          set forth in the immediately preceding sentence,  Executive shall have
          all of the rights of a  shareholder  with  respect  to the  Additional
          Restricted Shares,  including without limitation the right to vote the
          shares  and  receive  dividends  and other  distributions.  During the
          Additional  Restriction  Period,  dividends  and  other  distributions
          payable in capital  stock of the  Company  received  by the  Executive
          shall be subject to the foregoing restrictions.

               [1.] The  foregoing  award of the  Additional  Restricted  Shares
               shall be  subject  to the  following  proviso:  In the event that
               EBIDTA of the  Company as herein  defined (A) for the fiscal year
               2005, if the Term of this Agreement expires on December 31, 2005,
               or (B) for the fiscal year most  recently  completed in the event
               the  employment  of  Executive  as  chief  executive  officer  is
               terminated  by the Company for "Good Cause" as defined in Section
               14(a), is not in excess of $360,000,000 by at least the following
               applicable percentages (the "Applicable Percentage"):

                    Applicable Fiscal Year Under Applicable
                        (A) or (B) above         Percentage

                   Calendar Year 2001                 5
                   Calendar Year 2002                 10
                   Calendar Year 2003                 15
                   Calendar Year 2004                 20
                   Calendar Year 2005                 25

               the  750,000  Additional   Restricted  Shares,  as  same  may  be
               otherwise adjusted by stock dividends or other adjustments, shall
               be  reduced  by  a  fraction,  the  numerator  of  which  is  the
               difference  between  the  Applicable  Percentage  and the  actual
               percentage  increase  in  EBIDTA  for the  particular  applicable
               fiscal  year  and the  denominator  of  which  is the  Applicable
               Percentage for the particular year. (If termination occurs during
               a fiscal year, the EBIDTA for such year shall be annualized based
               on the EBIDTA for the portion of the year prior to  termination.)
               As an example of the application of the foregoing,  assuming that
               termination  of  employment  occurs at the end of the fiscal 2003
               and the  actual  EBIDTA  for  fiscal  year  2003 is in  excess of
               $360,000,000  by 12%,  then the  reduction in  Restricted  Shares
               (assuming the 750,000 Additional  Restricted Shares have not been
               otherwise adjusted) shall be determined as follows:

        15% (the Applicable Percentage) minus 12% (the Actual Percentage)
                    for the particular applicable fiscal year
        ----------------------------------------------------------------  = 20%
              15% (the Applicable Percentage) multiplied by [750,000]
                    reduction in number of Restricted Shares

               [2.] The  reduction  of 20%  results in the number of  Restricted
               Shares being 750,000 minus 150,000 shares, or 600,000 shares.

               [3.] Provided further,  however,  (I) the aforesaid formula shall
               apply and the number of  Additional  Restricted  Shares  shall be
               reducible in accordance  with such formula only if the Additional
               Restriction  Period terminates by reason of an event set forth in
               subdivisions  (A),  or (B) in [i]  above,  (II) in the event that
               employment  under  this  Agreement  terminates  by  reason of the
               events  set  forth in  subdivision  (B)  above,  and only in such
               events,  the  number of  Additional  Restricted  Shares  shall be
               subject to reduction  pursuant to said  formula and  additionally
               shall be subject to further  reduction (the "Further  Reduction")
               by the  fraction,  the  numerator of which shall be the number of
               full calendar  months  remaining in the unexpired  portion of the
               Term at the date of the  termination  of  employment  under  this
               Agreement  pursuant  to an event  set  forth in  subdivision  (B)
               above,  and the  denominator  of  which is 60,  (III)  and if the
               Additional  Restriction  Period terminates by reason of any event
               other than one referred to in subdivision (A) or (B) above, there
               shall be no  reduction  in the  number of  Additional  Restricted
               Shares pursuant to the aforesaid formula (relating to EBIDTA) and
               fraction  (relating to Further  Reduction) and both the aforesaid
               formula and the aforesaid fraction shall not be applicable.

               [4.] For the purpose of this  Agreement,  EBIDTA  means,  for any
               period,   consolidated  net  income  or  loss  for  such  period,
               excluding  gains or losses from  extraordinary  or  non-recurring
               items (including but not limited to Assimilation Costs associated
               with the  integration  of  acquisitions),  of the Company and its
               consolidated   or   combined   subsidiaries   plus   the  sum  of
               consolidated  interest  expense,  depreciation  and  amortization
               expense,  provision  for  income  taxes,  and all other  non-cash
               expenses and income included in the  determination  of net income
               or loss.  Notwithstanding  the above,  EBIDTA  shall  include the
               EBIDTA  of any  investment  or  subsidiary  accounted  for on the
               equity  method  of  accounting  to the  extent  of the  Company's
               interest in same. Provided, however, if the Company or any of its
               subsidiaries has sold,  discontinued or otherwise disposed of any
               of  its  subsidiaries,   divisions  or  businesses  (a  "Disposed
               Property" or "Disposed  Properties")  during any period for which
               EBIDTA is to be  computed,  or during the Term,  EBIDTA  shall be
               computed  as if each of such  Disposed  Properties  had not  been
               owned by the Company or a subsidiary  during any part of the Term
               or during  the fiscal  year ended  December  31,  1999.  Minority
               interests  included in cash flow in accordance with the first two
               sentences  of  this  paragraph  shall  be  treated  in  a  manner
               consistent with the immediately  preceding  sentence with respect
               to any Disposed Property. For all purposes for which EBIDTA is to
               be determined under this Agreement, EBIDTA shall be determined by
               the Company's  independent public accountants  utilizing for each
               of the  applicable  years  those  generally  accepted  accounting
               principles ("GAAP") which are in effect for the fiscal year ended
               December 31, 1999.

     2. Options to acquire  2,500,000 shares of the Common Stock of the Company,
     568,933  of  which  are to be  granted  under  the  Company's  1996  Equity
     Incentive  Plan (the "1996 Plan") and  1,931,067 of which are to be granted
     under the Company's 2000 Management Equity Incentive Plan (the "2000 Plan")
     subject to the approval of such plan by the stockholders of the Company, or
     in such other manner as the Executive and the Company may agree,  and which
     options shall vest and be  exercisable  at the  following  times and option
     prices with the understanding  that once vested options may be exercised at
     any time thereafter  during the consecutive  ten-year period  commencing on
     the date of the  grant of said  options,  which is deemed to be the date of
     the  execution of this  Agreement  and with the  understanding  that in the
     event  from  and  after  the  date   hereof,   of  a  change  in  corporate
     capitalization,  stock  split or  stock  dividend,  the  number  of  shares
     purchasable upon exercise of an option shall be increased by the new number
     of shares  which result from the shares  covered by the option  immediately
     before the change,  split or dividend.  The exercise price for shares shall
     be reduced  proportionately  and the total  exercise  price will remain the
     same.

          [1.]  Options to Purchase  250,000  shares  shall vest on December 31,
          2000 and (subject to the approval of the 2000 Plan by the stockholders
          of the Company with respect to each of the last eight (8) installments
          of 250,000 options) on each December 31 of each of the succeeding nine
          (9) consecutive years (except that the last 250,000 options shall vest
          on the date that the immediately  preceding 250,000 options vest) with
          the  understanding  that upon the  expiration or prior  termination of
          this  Agreement  or upon the  earlier  termination  of the  Additional
          Restriction  Period,  all options  which have not as yet vested  shall
          immediately vest.

          [2.] The exercise price of the first 500,000  options to vest shall be
          the Fair Market Value of the shares of the  Company's  Common Stock as
          defined and  determined  under 1996 Plan or other  arrangement  on the
          date of the grant of such  options,  which is the date of execution of
          this  Agreement  and the exercise  price for each  additional  500,000
          options  to vest  shall be $2.00 per  share in excess of the  exercise
          price of the immediately preceding 500,000 shares.

3.   Registration of Shares.
     ----------------------

          1. The Company  represents  and warrants  that (A) the issuance to the
          Executive of the Current  Restricted  Shares was effected under and in
          accordance  with the Company's 1990 Management  Equity  Incentive Plan
          (the "1990 Plan") and was registered under the Securities Act of 1933,
          as  amended  (the  "Securities  Act"),   pursuant  to  a  registration
          statement  on Form S-8,  (B) the offer and sale of all shares of stock
          of the Company subject to the 1996 Plan, including the shares issuable
          upon exercise of the options  granted to the Executive  under the 1996
          Plan,  have been  registered  under the  Securities  Act pursuant to a
          registration  statement  on Form S-8,  and (C) each such  registration
          statement  is   currently   effective,   complies   with  all  current
          requirements of the Securities Act and the  regulations  thereunder as
          may be  applicable,  and is not  subject  to any  stop  order or other
          proceeding.

          2.  The  Company  agrees  that it will  submit  the  2000  Plan to its
          stockholders  for their approval at the next meeting of  stockholders,
          and will use its best efforts to obtain such approval.

          3. The Company  further agrees that, as promptly as practicable  after
          the date  hereof,  it will  prepare and file with the  Securities  and
          Exchange Commission (the "Commission"), and cause to become effective,
          (A) such amendments to each of the registration statements referred to
          in Section 3(c)(A),  including a re-offer  prospectus (as such term is
          used in the  instructions to Form S-8), so that the Executive would be
          permitted, without limitation under Section 5 of the Securities Act as
          to time or  amount,  to dispose of any or all of the shares of Company
          stock referred to in Section 3(c)(A), and (B) one or more registration
          statements  on Form S-8  relating  to (x) the shares of Company  stock
          subject to the 2000 Plan,  including  the  shares  issuable  under the
          options to be granted to the  Executive  under the 2000 Plan,  (y) the
          Additional  Restricted  Shares,  and (z) the 250,000 shares of Company
          stock  referred to in Section  3(d).  The Company will include in each
          registration  statement  referred to in Section  3(c)(C)(B) a re-offer
          prospectus  so  that  the  Executive   would  be  permitted,   without
          limitation under Section 5 of the Securities Act as to time or amount,
          to dispose of any or all of the shares of Company stock referred to in
          Section  3(c)(C)(B).  Each  re-offer  prospectus  referred  to in this
          Section  3(c)(C) shall also relate to the resale by any person to whom
          the  Executive may transfer any such stock other than pursuant to such
          re-offer  prospectus,  so long as such  transfer  did not violate this
          Agreement,  and  shall  describe  such  plan  of  distribution  as the
          Executive may reasonably request.

          4.  At  all  times  after  the  date  hereof,  in  the  case  of  each
          registration  statement referred to in Section 3(c)(A), or the date of
          filing,  in the case of each  registration  statement  referred  to in
          Section  3(c)(C),  and until the  disposition  by the Executive of all
          Company stock which he acquired or has the right to acquire under such
          registration statement,  the Company shall (A) use its best efforts so
          that such registration statement shall remain effective, (B) from time
          to time, as may be required, prepare and file with the Commission such
          amendments  and  supplements  to such  registration  statement and the
          prospectuses  (including the re-offer  prospectus)  used in connection
          therewith  as may be necessary  to comply with the  provisions  of the
          Securities  Act and the  regulations  thereunder  and to  continue  to
          permit the disposition by the Executive of all such Company stock, (C)
          furnish  to the  Executive  such  numbers  of copies  of the  re-offer
          prospectus   contained  therein  as  he  may  reasonably   request  to
          facilitate the disposition of such stock, and (D) notify the Executive
          of the  happening  of any  event as a result  of  which  the  re-offer
          prospectus included in such registration statement, as then in effect,
          includes  an untrue  statement  of  material  fact or omits to state a
          material fact  required to be stated  therein or necessary to make the
          statements  therein not  misleading in the light of the  circumstances
          then existing,  and promptly file such amendments to such registration
          statement as shall be necessary so that such re-offer  prospectus does
          not contain such an untrue statement or omission.

          5. The  representations  and  covenants of the Company in this Section
          3(c) shall be for the  benefit  of the  Executive  and any  transferee
          referred to in the last sentence of Section 3(c) (C).

     4. In further  consideration of the Executive entering into this Agreement,
     the Company  agrees that the number of Current  Restricted  Shares shall be
     increased by 250,000 shares of the Company's Common Stock,  from 559,974 to
     809,974  shares.  The 559,974 shares shall be held under the same terms and
     provisions as set forth in the 1996 Agreement  except that the  Restriction
     Period therein set forth is modified so that same shall be identical to the
     Additional  Restriction  Period  and  that  same  shall be  subject  to the
     provisions  of Section  3(b)A [i] relating to the EBIDTA  formula,  subject
     however,  to the provisions of Section  3bA[iii].  The  additional  250,000
     shares shall be subject to both the Additional Restricted Period and to the
     provisions of Section 3(b)A [i] relating to the EBIDTA  formula  subject to
     the  provisions  of  Section  3bA[iii]  and  the  Further   Reduction,   if
     applicable,  and in the event of termination pursuant to Section 14, to the
     provisions of Section 15 with respect to the Additional  Restricted Shares,
     provided that both the Current  Restricted  Shares and said 250,000  shares
     may be  transferred  as provided in Section 3bA with respect to  Additional
     Restricted Shares.

4.   PARTICIPATION IN PLANS:
     ----------------------

     1. The various  plans (in the  aggregate  the "Plans" and  individually,  a
     "Plan")  presently  in effect by the Company and ELI for the benefit of its
     respective  employees  are set forth in Schedule  "B"  annexed  which is an
     integral part of this Agreement.

     2.  The  Executive  shall  continue  to  participate  and  be  entitled  to
     participate  in all Plans and all plans which may  hereafter  be adopted by
     the Company for the benefit of employees and/or senior employees generally,
     in an amount  consistent with and  appropriate to the Executive's  station,
     compensation  and function as Chief  Executive  Officer and Chairman of the
     Company. In addition,  it is agreed that the Executive shall be entitled to
     participate  in similar  plans of  subsidiaries  of the Company,  including
     without limitation any and all plans for the benefit of employees or senior
     employees of ELI.

          1.  Provided  however  that it is  acknowledged  and agreed  under and
          pursuant to the  Company's  Pension Plan the maximum  amount of annual
          compensation  that is taken into account in  determining an employee's
          pension is currently $170,000. To compensate for the inability to take
          into account the Executive's annual compensation in excess of $170,000
          (or the then current  maximum amount) in determining his pension under
          the  Company's  Pension  Plan  and  in  further  consideration  of the
          Executive  entering  into this  Employment  Agreement  and to  further
          induce the Executive so to do, the Company,  the  Executive  (and/or a
          trust created by the Executive)  shall put into effect  promptly after
          the execution of this Agreement, but in no event later than sixty (60)
          days  immediately  succeeding  the  execution  of  this  Agreement,  a
          split-dollar  insurance policy and arrangement utilizing both first to
          die and  second-to-die  policies on the lives of the Executive and his
          wife, Claire Tow, with companies licensed to underwrite such insurance
          in the State of  Connecticut  which will  provide that on the death of
          the  second-to-die of the Executive and his said wife a payment of not
          less than $15 million shall be made to the  aforesaid  trust or to the
          trustee of the trust  concurrently  being  created by the Executive as
          grantor  thereof,  which trust shall also be the owner of the policies
          effecting such insurance.

          2. The  arrangement  for this  split-dollar  life  insurance  shall be
          substantially the same as the arrangement entered into with respect to
          the split-dollar  insurance  referenced in Section  3(c)(iv)(B) of the
          1996 Agreement including but not limited to payment of all premiums by
          the Company  and with the express  undertaking  and  agreement  of the
          Company that the policies of insurance shall be fully paid-up policies
          on or before expiration or prior termination of this Agreement and the
          Executive's employment by the Company.

          3. Further, to the extent that the Executive, his said wife and/or the
          applicable  trustee or trust  become or are  subject to income  and/or
          gift taxes  under the Code and/or  applicable  state law, by reason of
          any  premiums  paid  by the  Company  on the  applicable  policies  of
          insurance,  (whether paid directly to the insurance  carrier or to the
          Executive or the  applicable  trustee or trust) and/or with respect to
          the PS 58 or PS 38 (or successor  promulgations)  values applicable to
          each policy (including but not limited to such values  attributable to
          time frames following payment of all premiums on the applicable policy
          or  policies)  and/or by reason of any other  amounts  taxable  to the
          Executive,  his said wife,  or the  applicable  trustee or trust (both
          income and gift taxes)  emanating from such  arrangement,  the Company
          shall pay all such taxes and fully  reimburse the Executive,  his said
          wife and/or the  applicable  trust or trustee for same on a grossed-up
          and after tax basis.

          4.  Provided  further  however  that  in  the  event  the  Executive's
          employment  is  terminated  pursuant  to Section  14(a),  the said $15
          million of life insurance  required to be maintained by the Company at
          its cost shall be reduced by a fraction (the "Reducing  Fraction") the
          numerator of which shall be the number of full months remaining in the
          Term  following  termination  of the  Executive's  employment  and the
          denominator of which is 60 (the reduced amount of life insurance being
          referred to as the "Reduced  Insurance")  with the  understanding  and
          agreement that notwithstanding the foregoing, the life insurance shall
          be maintained at the $15 million level at the request of the Executive
          (or his surviving  spouse)  provided the  differential  in the cost of
          maintaining  said  life  insurance  over and  above  the  level of the
          Reduced  Insurance  shall be the  obligation  of the Executive (or his
          surviving spouse, if applicable).

          5. Provided  further that in the event the  Executive  and/or his wife
          are not  accepted for said  insurance  by reason of medical  condition
          then in lieu of such insurance being  effected,  the Company shall pay
          to the  Executive or his estate or legal  representatives  as the case
          may be, the sum of $7 million on the expiration or sooner  termination
          of this  Agreement and the  Executive's  employment  with the Company,
          with the understanding that in the event the Executive's employment by
          the Company is  terminated  pursuant to the  provision of said Section
          14(a),  the  aforesaid  $7 million  shall be reduced by the  Reduction
          Fraction.

          6. Payments to be made to the  Executive  under any of the Plans shall
          be  made  as   provided   in  the   respective   Plans   except   that
          notwithstanding  the provisions of any particular Plan,  payment under
          the Plans shall be made to the  Executive  or his  representatives  no
          later than the expiration or prior termination of this Agreement. None
          of the benefits of the Executive under any of the Plans and under this
          Agreement  shall  be  subject  to  forfeiture,   notwithstanding   any
          provision to the contrary in such Plan for  forfeiture or  divestiture
          of benefits or compensation, subject to the provisions of Section 12.

5. SPECIAL INSURANCE ARRANGEMENT: It is acknowledged that the Executive does not
participate in the arrangement  presently  existing for senior management of the
Company which provides for benefits to participating  employees on retirement or
sooner death utilizing the vehicle of life insurance on a split-dollar basis. In
lieu of such  participation,  a policy of insurance on the life of the Executive
in the  principal  amount of  $3,000,000  and  underwritten  by Security Life of
Denver,  currently  owned  by  the  Company  and  with  the  Company  being  the
beneficiary  thereof,  shall be modified so that the beneficiary thereof, at the
Executive's  election,  shall be the Executive or his legal  representatives and
that said beneficiary  designation  shall be irrevocable  vis-a-vis the Company,
with only the  Executive  having the right to change  same.  The  Company  shall
maintain  said  policy  in full  force  and  effect  and pay all  costs  of such
maintenance,  including  without  limitation  the  payment  to  Executive  on  a
grossed-up  after tax  basis,  any and all  taxes  levied  or  assessed  against
Executive  or for  which  Executive  may be or  become  liable  by reason of the
Company  providing  and  maintaining  said  insurance  or  emanating  from  such
insurance.  At the  expiration  of the  Term,  as  extended  by this  Employment
Agreement,  or the prior  termination  of Executive's  employment  other than by
reason of his death,  the  ownership  of said policy shall be turned over to the
Executive or his legal representatives,  as applicable on a fully paid-up basis,
with no  additional  premiums  due or to become due therein and with the Company
remaining obligated to pay Executive,  on a grossed-up after tax basis any taxes
for which Executive may become liable by reason of the continued  maintenance of
said policy.

6.   EXPENSES, TAX AND OTHER SERVICES; ACCOUNTERMENTS OF OFFICE, VACATION:

     1.  Expenses.  The Company  will  promptly  pay or, if not paid,  reimburse
     Executive  upon  reasonable  substantiation,  for all  expenses,  including
     without limitation, travel and business entertainment expenses, incurred by
     Executive on behalf of or in connection with the conduct of the business of
     the  Company.   In  connection   with  the  rendition  and  performance  of
     Executive's services,  the Company shall provide Executive with the use of,
     and shall pay all  costs of  maintenance  and  repair of an  automobile  of
     Executive's choosing, and a driver. The Executive shall also be entitled to
     all  accouterments of office that are currently being made available by the
     Company to the Executive.

     2. Tax and Other  Services.  To further  induce the Executive to enter into
     this  Agreement,  and to enable the Executive to render the most  effective
     services practicable and to facilitate  appropriate financial planning, and
     consistent  with the Company's  prior practice the Company shall  reimburse
     the  Executive  or pay  for  costs  incurred  by him  for  tax,  financial,
     investment,  estate planning,  legal and accounting services,  which may be
     rendered or incurred at any time during the Term.  Such  payments  shall be
     made on the Executive's request therefor as such cost are incurred by him.

     3.  Vacation.  Executive  shall be  entitled to a vacation of six (6) weeks
     during each year of the Term, at times mutually  agreeable to Executive and
     the Company.  All  payments  and  benefits to  executive  shall be paid and
     continue during all vacation periods.

7.  PLACE  AND  TIME  FOR  SERVICES:  Executive's  base of  operations  shall be
Fairfield County, CT (the "Base Area"), although Executive, at his election, may
render  his  services  from other  locations.  However,  Executive  shall not be
required to render his  services on a permanent  or other than  temporary  basis
outside of the Base Area. Executive agrees, nevertheless,  from time-to-time, to
take such trips and travel  outside said area as may  reasonably be necessary in
connection with his duties.  In the event any trip or the contemplated  duration
of any trip by the  Executive  outside  of the Base Area is in excess of two (2)
days,  Executive's  wife may  accompany  Executive  and the costs  and  expenses
incident to the Executive's wife shall be paid for or reimbursed by the Company.
First class travel  including  without  limitation,  first class air travel,  or
travel by plane  consistent  with current  practice  being made available to the
Executive, and lodging arrangements shall be made available to the Executive.

8. BONUS; ADDITIONAL PAYMENTS:  Nothing in any provision of this Agreement shall
preclude increases in Executive's  compensation,  including without  limitation,
additional  benefits,  annual  and other  bonuses,  incentive  awards  and other
payments or benefits as the Board of Directors or  appropriate  committee of the
Board of Directors of the Company may approve,  in its sole  discretion,  all of
which payments and benefits are expressly authorized.

9. SPLIT-DOLLAR INSURANCE:  The Company and Executive confirm the obligations of
the  Company to provide,  maintain  and pay for  insurance  of the type known as
split-dollar  life  insurance  as set forth in Sections  3(c)(iv) A and B of the
1996 Agreement and that all premiums on all of the insurance  referenced in said
sections  have  been  paid in full  and  that the  policies  providing  for said
insurance  are paid-up  policies.  The  provisions  of said sections of the 1996
Agreement  shall govern the  relationship  of the Executive and the Company with
respect to such insurance.

10.  EXCLUSIVITY:
     -----------

     1. The Company acknowledges that the Executive from time-to-time during the
     term  may  serve  as a  member  of  the  Board  of  Directors  of  Adelphia
     Communications Corporation,  and certain of such company's subsidiaries and
     affiliated  companies (all referred to as  "Adelphia").  The Company agrees
     that the  Executive  may serve as such director (or a member of a committee
     of  directors)  and the Company  shall make no claim of any nature  against
     Executive for his legal  representatives  by reason of any association with
     Adelphia.  Additionally,  subject to the  provisions of Section 10(b) (with
     respect to Executive engaging in competition  materially detrimental to the
     Company),  and without the  necessity  of seeking  approval of the Board of
     Directors of the Company,  the Executive may serve as a member of the board
     of directors,  non-working officer,  non-working partner or stockholder, or
     in any other  similar  position or capacity for any company,  firm,  person
     other than the  Company  and other  than  Adelphia,  concurrently  with his
     employment  under this Agreement,  and further may engage in the management
     of his own affairs and  supervision  of his  investments  and other  assets
     concurrently with his employment hereunder.  Executive shall retain for his
     account any and all  compensation  and other benefits payable or awarded to
     him with the respect to services  rendered to or for  Adelphia or to or for
     such other entities.

     2. Other that an  association  with Adelphia and as otherwise  permitted by
     Section  10(a),  the  Executive  shall not engage in  competition  with the
     Company which is materially detrimental to the Company; provided,  however,
     that the Executive shall not be deemed to have engaged in such  competition
     unless and until the Executive shall have received written notice on behalf
     of the Board of  Directors of the Company  from an  independent  consultant
     selected  by  those  Directors  who  are  not  employees  of  the  Company,
     specifying  the conduct  alleged to constitute  such  competition,  and the
     Executive  has  thereafter  continued  to  engage in such  conduct  after a
     reasonable  opportunity and a reasonable period, (but in no event less than
     60 or more than 120 days) after receipt of such notice to refrain from such
     conduct.  In the event of discontinuance by the Executive,  he shall not be
     or be deemed to be in violation of the  provisions  of this Section  10(b).
     Additionally,  and without  limitation,  Executive  shall have the right to
     contest  in  appropriate   forums  the  determination  of  the  independent
     consultant.  Notwithstanding and without limitation of the foregoing, it is
     agreed that  ownership  by Executive  and/or his wife of a  non-controlling
     interest in a publicly traded entity that is competitive to the Company and
     its subsidiaries,  taken as a whole, without the rendition by the Executive
     of senior  management  services,  shall not be deemed to be  engagement  in
     competition.  The  provisions  of this Section  shall  constitute  the sole
     contractual  provisions  between the Executive and the Company  restricting
     the activities or conduct of the Executive.  Any similar  provisions in any
     Plan, or any other Company benefit plan, or elsewhere,  shall terminate and
     be deemed  terminated and be unenforceable to the extent  inconsistent with
     or  more   burdensome  to  Executive  than  this  Section  subject  to  the
     limitations of Section 12 of this Agreement.

11.  ADVISORY SERVICES:
     -----------------

     1. General.  The Executive shall render the advisory services  described in
     this Section 11(a) as an  advisor-consultant  of the Company for the period
     commencing  on  January  1,  2006,  the  day  immediately   succeeding  the
     expiration of the Term. This advisory  period shall continue  consecutively
     through  the  fifth  anniversary  of the  commencement  date  thereof  (the
     "Advisory Period").  During the Advisory Period, the Executive will provide
     such advisory services  concerning the business,  affairs and management of
     the Company as may reasonably be requested by the Board of Directors of the
     Company,  which shall be  performed  at a time or times and at places which
     are mutually  convenient to both parties and which are consistent  with the
     Executive's  other  employment  and  private  activities.  Services  may be
     performed via telephone, facsimile,  telecopier,  electronic mail, or other
     avenue of  communication.  The  Executive  may  engage  in other  full time
     employment of any kind during the Advisory Period, provided that during the
     Advisory Period the Executive shall not engage in full time employment that
     is in  materially  detrimental  competition  with the Company or any of its
     subsidiaries  as provided for in Section  10(b),  it being  agreed  without
     limitation  that  the  rendition  of  services  for or to  Adelphia  or any
     successor  of Adelphia is not and shall not be deemed in  competition  with
     the Company or any of its  subsidiaries.  During each year of the  Advisory
     Period,  the Company shall pay the  Executive  and the  Executive  shall be
     entitled  to  receive  a  payment  of  $500,000  payable  in equal  monthly
     installments. Such payments are referred to as the Advisory Payments.

     2. Termination.  Notwithstanding the foregoing,  coincident with, or at any
     time after the  commencement  of the Advisory  Period,  the  Executive,  on
     notice to the Company may terminate the Advisory Period and not be required
     to render any additional  advisory services and have no further obligations
     to the  Company  in the event  such  termination  is based on the advice or
     recommendation  of Executive's  physician(s) or other medical and/or mental
     health  practitioner(s)  that  in his  (her  or  their)  opinion  continued
     rendering of his services and acting as an advisor-consultant  would likely
     have an adverse  effect on the  Executive's  physical  or mental  health (a
     "Disability  Notice").  The Advisory Period is also terminated by the death
     of the  Executive  and may also be  terminated  by the Company but only for
     Good  Cause  as   defined   in   Section   14(a)  and  for  breach  of  the
     non-competitive provisions referenced in Section 11(a).

     3. Other Matters. During the Advisory Period and for such further period as
     may be  mutually  agreed  (in the event that  subsequent  to the end of the
     Advisory  Period there should then be a business  relationship  between the
     Company  and the  Executive),  the  Company at its  expense  shall  provide
     Executive  with and maintain in good repair and  condition,  an appropriate
     private  office  outside the  Company's  offices  (taking  into account the
     position held by the  Executive and his length of service and  contribution
     to the growth and  development of the Company) at a location  acceptable to
     the Executive,  appropriate office furnishings,  all utilities,  equipment,
     parking privileges,  office and secretarial  assistants and other amenities
     and  accouterments  of office (all of which are  referred  to as  "Advisory
     Support"),  it being understood and agreed that such Advisory Support is to
     be and is being provided for the Company's benefit, and provided,  however,
     that until the  Executive's  new office is ready (it being agreed that same
     will be ready immediately succeeding  commencement of the Advisory Period),
     the Company  shall provide  Executive  with and maintain in good repair and
     condition an appropriate  temporary private office together with office and
     secretarial assistants and other services which were available to Executive
     when acting as chief  executive  officer.  The Company shall be responsible
     for the hiring,  employment by the Company and compensation,  including all
     benefits, of the personnel forming part of the Advisory Support and for all
     required moving and relocation expenses.

     4. Provided however that  notwithstanding  the provisions of Section 11(a),
     in the  discretion  of the Company,  the Company may elect to eliminate the
     Advisory  Period and  substitute in its place on a  split-dollar  basis,  a
     second-to-die  insurance policy or policies of life insurance insuring both
     the Executive  and his wife and with a trust and trustee  designated by the
     Executive as the owner and  beneficiary of said policy or policies,  in the
     principal sum of not less than $7 million. Such insurance shall be effected
     prior to the  effectiveness  of any  election  and as a condition to making
     such  election.  The  Executive,  his wife and said  trust and the  trustee
     thereof as well as the Company  shall have the same  respective  rights and
     obligations with the respect to said policy or policies as are set forth in
     Section  4b.  of  this  Agreement  with  respect  to  the  $15  million  of
     second-to-die  life insurance  referenced in said section,  with same being
     reduced  by the  Reducing  Fraction  in the  event the  Advisory  Period is
     terminated   by  the   Company   for  Good  Cause  or  for  breach  of  the
     non-competitive  provisions of Section 10(b). Provided further that in lieu
     of such  insurance  being  effected  and in lieu of an Advisory  Period and
     Advisory  Support,  the Company shall pay to the Executive or his estate or
     legal representatives, as the case may be, not later than the date when the
     Advisory  Period would  otherwise have  commenced,  the sum of $3.2 million
     with the  understanding  that same shall  only be  reduced by the  Reducing
     Fraction in the event the Advisory  Period is terminated by the Company for
     Good Cause.

12. WAIVERS; LIMITATIONS OF LAW: The Company shall make such waivers, amendments
to Plans or consents under Plans,  or amendments and consents in connection with
other benefits  provided for herein, as may be necessary to carry-out the intent
of Sections 3(b), 3(d) and 4. However, in no event shall the Company or any Plan
take any action which would (A) contravene  applicable  law, (B) bring about the
disqualification  under the Code of any Plan presently qualified under the Code,
or (C)  eliminate  any  exception  from  liability  under  Section  16(b) of the
Securities Exchange Act of 1934 for any director or officer subject thereto. If,
by reason of any  matter  referred  to in this  Section,  any  action  cannot be
undertaken  at the time at which it is  expected,  requested  or proposed by the
Executive,  it (or as much thereof as shall be permissible)  shall be undertaken
at the  earliest  time  possible  thereafter,  or in the case of a  request  for
deferred  payment,  at the time closest to that  requested  which is permissible
without  contravening this Section.  To the extent that benefits under a Plan or
other  benefits or payments  provide for herein  would be lost to the  Executive
permanently  or for any period of time by reason of this  Section,  the  Company
shall  provide  such  benefits  supplementarily  outside  such  Plan  or  in  an
alternative form within the Plan which will not disqualify the Plan.

13.  CONTINUED AVAILABILITY OF BENEFITS AFTER RETIREMENT:
     ---------------------------------------------------

     1. Nothing  herein is intended to limit or eliminate  any benefits to which
     the Executive (or,  after his death,  his  beneficiaries  or estate) or his
     wife is or may be or become  entitled under any of the Plans.  No amendment
     to any Plan shall be  carried-out  which shall deprive the Executive or his
     wife from  continuing to participate in and receive the aforesaid  benefits
     and all other benefits provided for in this Agreement, unless the Executive
     or his wife is compensated by  supplemental  payments and benefits  outside
     said  Plan so  that  he or she is in no way  prejudiced  by any  such  Plan
     amendment.  Additionally, after expiration or prior termination of the Term
     and/or the Advisory Period,  the life insurance coverage and entitlement of
     the  Executive  and his wife shall be  continued  at the level of  coverage
     provided in this  Agreement and the 1996  Agreement  until his death and if
     applicable,  until the last to die of the  Executive  and his wife,  in all
     cases without  diminution of any of the  Company's  obligations  under this
     Agreement and the 1996 Agreement.  The Executive may convert such insurance
     arrangements  into  new or  different  insurance  coverages  or  substitute
     different insurance arrangements,  as he shall determine from time to time,
     and also may extend  coverage  to his wife and extend the period to include
     her lifetime; provided, however, that if the Executive should elect to make
     any such different  arrangements,  the total cost of an actuarial  basis of
     the insurance  coverage  which shall be borne or be expected to be borne by
     the Company shall not exceed the cost to the Company on an actuarial  basis
     of  maintaining   (for  the  remainder  of  the  Executive's  life  and  if
     applicable,  that of Executive's wife) the level of life insurance coverage
     to which the  Executive  is entitled as described  above.  Such costs on an
     actuarial  basis shall be determined as provided in Section 17 hereof.  The
     implementation  of this  paragraph  shall be subject to the  provisions set
     forth in Section 12.

     2. The Company  agrees and shall  provide the Executive and his wife or the
     survivor  of them,  at the sole  cost of the  Company,  effective  with the
     expiration  or  prior  termination,  for  any  reason,  of the  Term or the
     Executive's  employment by the Company, and for the duration of joint lives
     of the Executive and his wife and the life of the survivor of them,  with a
     medical,  dental,  hospitalization and health plan and insurance having the
     same  benefits as are  contained in the plans  available  for the Executive
     immediately  preceding the  expiration or prior  termination of the Term or
     his  employment  with the Company.  In the event such plans provide for the
     continuation of such benefits  subsequent to the Executive's  employment by
     the Company and for the duration of the lives of the Executive and his wife
     and for the  survivor of them,  the Company may utilize  such plans and the
     participation  of the  Executive  and  wife in such  plans to  satisfy  its
     obligations set forth in the immediately preceding sentence.

14.  TERMINATION:
     -----------

     1. Termination of Cause.  The Executive's  employment by the Company may be
     terminated  as  follows  with the  understanding  that  termination  of the
     Executive's employment shall also terminate the Advisory Period.

          1. The Company may terminate the Executive's employment by the Company
          for  "Good  Cause"  as  hereafter  defined.   With  the  exception  of
          termination under Section 14(b)(ii),  this is the only basis for which
          the Company may terminate the Executive's employment.

          2. As used in this  Agreement,  "Good  Cause"  shall be limited to (A)
          chronic   alcoholism  or  chronic  drug   addiction   materially   and
          injuriously   affecting  the  Executive's   performance,   (B)  wilful
          malfeasance by the Executive  consisting of his refusal without proper
          cause to perform his duties of Chief Executive  Officer of the Company
          under this  Agreement  and which  refusal has a  materially  injurious
          effect on the Company's business,  (C) the Executive's conviction of a
          felony  involving moral turpitude and related  directly to the conduct
          of Executive's Office (which through lapse of time or otherwise is not
          subject to appeal) or (D)  engaging in and not  thereafter  refraining
          from competition as provided in Section 10(b),  provided that any such
          termination  shall be effective as of the date which is 120 days after
          receipt of the  written  notice  referenced  in  Section  10(b) by the
          Executive provided the Executive has not refrained from the particular
          competition,  and provided further however, if any such termination is
          based on of the Executive's wilful malfeasance without proper cause to
          perform his duties as Chief Executive Officer under this Agreement and
          within 30 business days following the date of the receipt of notice of
          termination the Executive uses his reasonable  efforts to perform such
          obligations,   the  termination   shall  not  be  effective.   Without
          limitation the Executive  shall have the right to contest or challenge
          in appropriate forums any termination for Good Cause.

     2. Other Termination.  This Agreement and the Executive's employment by the
     Company  shall be  terminated  (i) on the death of the  Executive,  (ii) on
     written notice from the Company to the Executive in the event of an illness
     or other disability which has  incapacitated  the Executive from performing
     his duties for twelve or more consecutive months ("Permanent  Incapacity"),
     and may be terminated  (iii) by the  Executive  effective 30 days after the
     giving  of  notice in the  instance  of an  illness  or  disability  to the
     Executive which may not be a Permanent  Incapacity under this Section 14(b)
     but is one which  the  Executive's  physician(s)  or other  medical  and/or
     mental  health  practitioner(s),  advise or  recommend  that in his (her or
     their) the  continuance  of  Executive in his  employment  with the Company
     would likely have an adverse effect on the  Executive's  physical or mental
     health;  provided  however  that if  within  30 days  after  receiving  the
     aforesaid  notice from the Executive,  the Company shall give notice to the
     Executive  that the Company  wishes the  Executive to continue to remain as
     chief executive of the Company  notwithstanding  such illness or disability
     with the Executive  only being required to render  services  subject to the
     limitations  and  restriction  of such  illness or  disability  and without
     diminution of compensation and benefits, the effectiveness of the notice of
     termination of employment  given by the Executive  shall be postponed for a
     period  designated  by the  Company in its notice but not in excess of four
     months,  at the end of which the Executive  shall  reconsider his notice of
     termination  in light of the condition of his illness or disability at that
     time,  provided further that, if the Executive shall give further notice of
     termination  at the end of such period,  termination  of  employment  shall
     occur ten (10) days after the giving of such notice,  (iv) by the Executive
     on written notice to the Company effective 30 days after the giving of such
     notice,  if at any time  during the Term the  Company  shall be in material
     breach of any of its obligations  hereunder,  provided that the Executive's
     services shall not terminate if within such 30-day period the Company shall
     have  cured  all  such  material  breaches  of its  obligations,  it  being
     understood  that a material  breach by the Company for the purposes of this
     Section  shall  include,  but not be limited to failure of  Executive to be
     elected or retained as Chairman of the Board and Chief Executive Officer of
     the Company  and  chairman of the Board of ELI (so long as ELI is a Company
     controlled  by  the  Company),  or the  failure  of the  Company  to  cause
     Executive  to so serve in all such  positions,  a reduction by the Board of
     Directors   in   the   Executive's   authority,    functions,   duties   or
     responsibilities  provided in this Agreement (whether or not accompanied by
     a change in title)  which has not been fully  corrected  within said 30-day
     period,  the  Company's  requirement  that all  persons and  personnel  (or
     causing all persons or personnel to) report directly or indirectly to other
     than  Executive,  or the  Company's  failure to cause  Executive  to be the
     senior officer of the Company,  (v) by the Executive,  on written notice to
     the Company upon a Change in Control as this term is defined in Section 19,
     and (vi) by the Executive in the event of a merger of the Company, in which
     the  Company  is  not  the  surviving  company,   or  in  the  event  of  a
     consolidation of the Company or a sale of all or  substantially  all of the
     assets or Capital Stock of the Company.

     3. Challenge or Contest. Without limitation on his rights and remedies, the
     Executive  shall have the right to challenge or contest any  termination by
     the Company  pursuant to Section  14(a) or 14(b)(ii) by  appropriate  legal
     action.  In the event the Executive  challenges or contests  termination by
     the Company  pursuant to Section  14(a) or  14(b)(ii)  no such  termination
     shall  be  effective  until  a  non-appealable  order  of  a  court  having
     jurisdiction  finds that such termination was justified,  and the Executive
     has not cured the particular  default within a reasonable time  thereafter.
     In any such  legal  action  the  Executive  shall  have the right to obtain
     damages  from the Company  (including  without  limitation,  legal fees and
     expenses)   and  in  addition   thereto,   the   payments,   proceeds   and
     participations  set forth in Section  15(b) if and to the extent  that such
     termination  is determined by final  non-appealable  court order of a court
     having jurisdiction to have been wrongful. With particular reference to the
     Company  seeking to terminate this  Agreement for "Good Cause,"  failure of
     the  court to find  that  the  Company  terminated  employment  under  this
     Agreement   for  "Good  Cause"  as  defined,   shall  be  deemed  to  be  a
     determination that the termination by the Company was wrongful.

15.  CONSEQUENCES OF TERMINAITON:
     ---------------------------

     1. Termination  Under Section 14a. In the event the Executive's  employment
     with the Company is terminated pursuant to Section 14a, the Executive shall
     be entitled  to receive and be given and the Company  shall pay over to and
     provide the Executive with the following:

          1. The  Executive's  Base Salary  through the end of the week in which
          the  termination  is effective and all cash balances in any and all of
          the Plans  and all  deferred  compensation  payments  allocable  to or
          accrued to the Executive as of the date of termination.

          2. All options theretofore granted to the Executive, whether under any
          of the Plans or otherwise,  that vest or may have  theretofore  vested
          under  their  respective  terms on or prior to the  termination  date,
          shall be  exercisable  by the  Executive,  according to the respective
          terms of the applicable  option  agreements but in no event no earlier
          than 12 months immediately succeeding such termination.

          3. All restrictions  shall lapse on such number of Current  Restricted
          Shares  determined by applying to the aggregate of Current  Restricted
          Shares a  fraction,  the  numerator  of which is the  number  of whole
          months in the Term to the date of termination,  and the denominator of
          which  is  60  and  subject  to  possible  further  reduction  by  the
          applicability of the provision of Sections 3(b)A [i]. Such lapse shall
          occur the first day immediately succeeding termination and the Company
          confirms  that said shares are the sole  property of the Executive for
          any and all purposes.  The shares on which said restrictions shall not
          have lapsed shall be forfeited to the Company.

          4.  All  restrictions   shall  lapse  on  such  number  of  Additional
          Restricted  Shares  (including  for this  purpose the  250,000  shares
          referenced  in Section 3d)  determined by applying to the aggregate of
          such Additional  Restricted Shares a fraction,  the numerator of which
          is the number of whole  months in the Term to the date of  termination
          and the  denominator  of which is 60 and subject to  possible  further
          reduction by the  applicability of the provisions of Section 3(b)A[i].
          Such  lapse   shall  occur  the  first  day   immediately   succeeding
          termination  and the Company  confirms that said lapsed shares are the
          sole property of the Executive for any and all purposes. The shares on
          which said  restrictions  shall not have lapsed  shall be forfeited to
          the Company.

          5. The  benefits of all  split-dollar  life  insurance  referenced  in
          Sections 4, and 11d of this  Agreement  shall continue to be available
          to the  Executive  and the Company  shall  continue in force and shall
          continue to maintain said insurance and the polices providing for same
          and to pay any and all income and gift taxes taxable to the Executive,
          his wife and/or the  applicable  trust,  on a gross-up  and  after-tax
          basis,  by  reason  of or  relating  to said  split-dollar  insurance,
          subject with respect to said split-dollar  insurance,  to reduction in
          amount as set forth in said  Sections;  provided  however  that in the
          event all premiums  have not been paid on the policies  providing  for
          said split-dollar  insurance such that said policies are fully paid-up
          policies  requiring no further payment of premiums,  the Company shall
          pay over to a trust  created by the  Executive,  such amount of monies
          that will provide (from  principal) all of the funds necessary to make
          all future payments of premiums on said policies, and provided further
          that in the  event  said  insurance  was not  available  by  reason of
          medical  condition of the  Executive  and/or his wife,  the  monetized
          amount provided for in said Sections 4 and 11d of this Agreement shall
          be  paid  over  to the  Executive  subject  to  reduction  as  therein
          provided.

          6. The Company shall remain  obligated to provide to the Executive and
          his wife  during  their  joint  lives and the life of the  survivor of
          them,  the  medical,  dental,   hospitalization  and  health  benefits
          referenced in Section 13(b) of this Agreement.

     2.  Termination  Under  Section  14b. In the event this  Agreement  and the
     Executive's  employment with the Company is terminated  pursuant to Section
     14b, the Executive or his estate or legal representatives,  as the case may
     be,  shall be entitled  to receive  and be given and the Company  shall pay
     over to and provide the Executive, his estate or legal representatives with
     the  following  and the  provisions  of  Section  3(b) A [i]  shall  not be
     applicable in the instances of any of the subsections below:

          1.  All  of  the  monies,  options,   shares,  vesting  and  lapse  of
          restrictions,  insurance  and  other  benefits  (all  referred  to  as
          "Benefits")  that are to be paid over and given or made  available  to
          the  Executive  in the instance of a  termination  pursuant to Section
          14(a), plus the following,  with the understanding that there shall be
          no duplication of payments and benefits provided in this Section 15(b)
          with payments and benefits provided in Section 15(a).

          2. Base Salary for the  remainder of the Term plus a bonus payment for
          the fiscal year of the Term  commencing  with the fiscal year in which
          termination occurs (the "Remaining Years") determined by utilizing the
          average of the bonuses  awarded (in cash  and/or  securities)  for the
          full fiscal years of the Term preceding  termination and applying same
          proportionately for the Remaining Years;  provided that if termination
          occurs prior to January 1, 2002, the period to be utilized is the full
          fiscal years in the 1996 Agreement.

          3. The  amount  by which  the  split-dollar  insurance  referenced  in
          Sections  4b.  and  11(d),  would  otherwise  be  reduced,  as therein
          referenced in the event this  Agreement  were  terminated  pursuant to
          Section 14(a),  or if said insurance has been monetized as provided in
          Section 4b, E and Section  11(d),  the amount by which said  monetized
          amount would be reduced if this Agreement were terminated  pursuant to
          Section 14(a).

          4. The  immediate  vesting of all  options  heretofore  granted to the
          Executive  which  have  not  theretofore  vested  prior to the date of
          termination, including without limitation, those options referenced in
          Section  3 of this  Agreement  which  have not  vested  at the date of
          termination,  with the right to exercise same from time to time during
          the later of the 12-month period  immediately  succeeding  termination
          and the  respective  dates  provided  therefore  under the  applicable
          option  agreement,  which with respect to the options granted pursuant
          to Section 3, is the ten-year period as referenced in Section 3.

          5.  The  immediate  lapse of all  restrictions  on  shares  heretofore
          granted  or  awarded to the  Executive,  which did not lapse  prior to
          termination  including but not limited to  restrictions on the Current
          Restricted Shares and the Additional Restricted Shares,  including the
          250,000  shares  referenced  in  Section  3d  within  the  meaning  of
          Additional Restricted Shares and the Company confirms that all of said
          lapsed  shares are the sole  property of the Executive for any and all
          purposes.

          6. All benefits  under any and all Plans (as well as all future plans)
          adopted  by  the  Company  which  would  have  been  available  to the
          Executive  through the  expiration  of the Term on  December  31, 2005
          assuming the Executive  were employed and fully  performing all of his
          obligations to such date.

     3. Special Advisory Term Payment.  In addition to the payments and benefits
     provided in Section  15(a) and 15(b),  in the event the Advisory  Period is
     terminated  pursuant to Section 11(b) other than termination by the Company
     for  Good  Cause,  there  shall  be paid to the  Executive  the sum of $3.2
     million  reduced by the Advisory Period  payments  theretofore  paid to him
     pursuant to Section 11(a).

     4. Vested Rights not Affected.  Consistent with both the provisions and the
     intent of Section  15(b),  any  termination  under  Section 14(b) shall not
     affect any vested rights which the Executive may have at the effective date
     of such termination  pursuant to any insurance or other death benefit plans
     or  arrangements   of  the  Company  or  under  any  stock  option,   stock
     appreciation right, bonus unit,  management  incentive or other plan of the
     Company  maintained  for its senior  executives  whether or not  referenced
     herein,  all of which rights shall remain in full force and effect (and any
     period  shall  not  be  deemed  shortened  as  result  of  the  Executive's
     termination  of employment,  notwithstanding  the provisions of any related
     plan,  agreements  or  certificates  issued  thereunder),  nor  shall  such
     termination  affect the  obligations  of the Company to continue to provide
     the  Executive  with the other  benefits,  payments and other  entitlements
     required to be provided to the Executive under this Agreement.

     5. Mitigation.  In the event of the termination of this Agreement,  whether
     under Section 14(a) or 14(b),  or the  termination  of the Advisory  Period
     subsequent to the commencement thereof, the Executive shall not be required
     to mitigate his damages  hereunder  and payments and benefits to be made in
     event of  termination  under either of said sections or the  termination of
     the  Advisory  Period,  shall  not be  limited  or  reduced  by any  amount
     Executive might earn or be able to earn from other employment or ventures.

     6. Excess Parachute  Payments.  The parties believe that the above payments
     or  benefits  pursuant  to  Section 15 do and will not  constitute  "Excess
     Parachute  Payments" under Section 208G of the Code.  Notwithstanding  such
     belief,  if any such payment or benefit  under  Section 15 is determined by
     the United  States  Internal  Revenue  Service  to be an "Excess  Parachute
     Payment"  the Company  shall pay  Executive  additional  amounts  (the "Tax
     Payment") on a fully reimbursed  after-tax basis equal to the sum of excise
     tax under  Section 4999 of the Code,  income taxes under  Subtitle A of the
     Code  and all  other  taxes  under  applicable  state  law on  such  Excess
     Parachute Payments.

     7. Remedies.  The Company recognizes and agrees that because of Executive's
     special  talents,  stature and  opportunities  that the  provisions of this
     Agreement regarding further payments of Base Salary,  Advisory Payments and
     the other payments and the benefits  provided for in Section 15, constitute
     fair and reasonable provisions for the consequences of such termination and
     do not constitute a penalty.

16.  INDEMNITY, DIRECTORS' AND OFFICERS' INSURANCE:
     ---------------------------------------------

     1. The Company  agrees to and confirms its  obligations,  to indemnify  the
     Executive  as an officer,  director,  employee  and agent,  and its related
     obligation  to advance  funds for expenses to the Executive as contained in
     the  Company's   certificate  of  incorporation,   by-laws  and  any  other
     instruments or provided for by law or otherwise.  Such obligations shall be
     in  scope  the  greatest  of (i) the  obligations  existing  as of the date
     hereof, (ii) the obligations as they may be amended or otherwise revised in
     the future, or (iii) the maximum  protection  available for officers and/or
     directors  under  applicable  law. The Company  agrees that it will use its
     best efforts to the end that the By-laws and  Certificate of  Incorporation
     of the  Company  shall not be amended to reduce  any  indemnity  protection
     presently available to officers and/or directors.

     2. The Company  presently  maintains  Directors  and Officers  Insurance in
     limits of  $25,000,000.  The  Company  agrees to  maintain  Directors'  and
     Officers'  Insurance  (at a minimum in such limit)  covering the  Company's
     obligation,  among other  things,  to  indemnify  the  Executive  for loss,
     liability and expense resulting from litigation  relating to his activities
     a an officer, director, employee or agent of the Company, and/or any of its
     subsidiaries,   and,   following   termination  of  employment  under  this
     Agreement,  to maintain  equivalent  coverage  for the  executive,  for the
     maximum period of all applicable periods of limitation,  on an "occurrence"
     basis (or as a named former  officer and director on a "claims  made" basis
     or otherwise, for his activities during the Term and Advisory Period, while
     he is an officer or director of the Company or any of its subsidiaries.

17. DETERMINATION OF BENEFITS.  Whenever under this Agreement it is necessary to
determine  actuarially  equivalent  continuing benefits, or whether one benefit,
cost or payment is less than,  equal to or larger than  another  (whether or not
such benefit,  cost or payment is provided under this  Agreement) or to make any
determination  or  calculation  specifically  designated in this Agreement to be
made in  accordance  with this  Section 17, or the present or commuted  value of
payment  or  payments  to be made in the  future  or over a period  of time,  or
whenever  either party hereto  requests  that any  calculation  relevant to this
calculation be checked,  such  determination,  calculation or procedure shall be
made by an  independent  actuary  acceptable  to the  Executive and the Company,
using when such information is needed the mortality tables when currently in use
for purposes of the  Company's  Pension Plan  (assuming  100% joint and survivor
benefits),  and the discount rate equal to the United  States  Treasury Rate for
the period closest to the period over which the determination is being made.

18.  MERGER, CONSOLIDAITON, OR SALE OF ASSETS OR STOCK:
     -------------------------------------------------

     1. Nothing in this Agreement shall preclude the Company from  consolidating
     or merging into or with, or transferring  all or  substantially  all of its
     assets or capital stock to, another  corporation  or business  organization
     which has a net  worth at least  equal to that of the  Company  immediately
     preceding  such merger,  consolidation,  transfer or sale,  and which other
     corporation  or business  organization  expressly  assumes in writing  this
     Agreement and all benefit plans, programs or practices, and other corporate
     undertakings,  obligation and agreements of the Company,  including without
     limitation,  those set forth in this Agreement.  Upon such a consolidation,
     merger or transfer of assets or stock and  assumption,  the term  "Company"
     shall refer to such other  corporation or business  organization,  and this
     Agreement  shall  continue  in  full  force  and  effect,  and  such  other
     corporation or business organization shall, ipso facto, assume, in writing,
     this  Agreement and all other  obligations of the Company  contemplated  by
     this Agreement. No such consolidation, merger or transfer shall relieve the
     Company from any of the Company's  obligations under this Agreement without
     he written  consent of the  Executive  or if  Executive  is deceased of his
     legal  representative,  or if permanently  incapacitated,  of his surviving
     wife,  or if the  Executive's  surviving  wife is deceased  or  permanently
     incapacitated, the Executive's legal representatives.

     2. Nothing in this Section 18 shall  diminish  the  provisions  of Sections
     3(b) and 15(b) which provide for lapse of  restrictions  on the  Additional
     Restricted Shares on expiration,  or prior termination of this Agreement in
     the  instance  of,  a  sale  of  assets,   transfer  of  stock,  merger  or
     consolidation of the Company or change in control.

:
19.  ADDITIONAL OPTION TO ACQUIRE SHARES:
     -----------------------------------

     1. In the event of a Change in  Control,  as defined in  Section  19c,  the
     Executive  shall have the right and option,  exercisable  by  Executive  in
     Executive's  discretion,  from time to time  during  the  period  set forth
     below,  by notice to the Company (the "Option  Notice") to acquire from the
     Company up to 10,000,000  shares,  in the aggregate  (the precise number of
     shares to be determined by the Executive in his discretion),  of the Common
     Stock ("Common Stock") of the Company  (adjusted as set forth in Subsection
     (b)) at a price per share,  to be paid by  Executive  equal to the  Closing
     Price (as hereafter defined) of said stock on the date of the giving of the
     Option  Notice,  or if such day is a Saturday,  Sunday or  Holiday,  on the
     immediately preceding business day on which securities are generally traded
     (the "Applicable  Date"). The Option Notice shall be given on or before the
     latest of (i) December 31, 2005, (ii) the expiration date of any renewal or
     extension  of this  Agreement  or any other  employment  agreement  between
     Executive  and the  Company  (the "New  Agreement")  and  (iii) six  months
     following  the  termination  of  Executive's  employment  with the  Company
     subsequent to the Term or the term of any new agreement.  The Closing price
     shall be the last such reported sales price, regular way, on the Applicable
     Date, or, in case no such reported sale takes place on such particular day,
     the average of the  closing bid and asked  prices,  regular  way,  for such
     particular day, in each case on the principal national  securities exchange
     or in the  NASDAQ-National  Market  System (the  "Securities  Exchange") on
     which the shares of Common  Stock are listed or  admitted to trading or, if
     not listed or admitted to trading, the average of the closing bid and asked
     prices of the Common  Stock in the  over-the-counter  market as reported by
     NASDAQ or any comparable  system,  as adjusted  pursuant to Subsection (b).
     Payment  shall  be made by the  Executive  within  ten (10)  business  days
     following the giving of the Option Notice.

     2. The number of shares  subject to the option set forth in subsection  (a)
     above, shall be adjusted to reflect, after the date of this Agreement,  any
     (i)  declaration  or payment of dividends in the form of Common  Stock,  or
     other  stock of the  Company,  (ii) stock  splits,  (iii)  subdivisions  or
     combinations or  reclassifications of outstanding shares of Common Stock or
     (d) the issuance to holders of Common Stock of options,  warrants or rights
     to  acquire  additional  shares  of such  respective  series  and any other
     distribution made by its Company to holders of Common Stock, and the Option
     Price shall be adjusted to reflect all of the foregoing.

     3. A "Change in Control"  of the Company  shall be deemed to occur when (A)
     any person or group of affiliated or related persons (other than a group of
     which  Executive or an entity  controlled by Executive is a participant and
     other than an employee benefit plan of the Company)  acquires,  directly or
     indirectly,  voting  securities  or assets of the Company  if,  immediately
     after giving effect to such acquisition, such person or group of affiliated
     or related  persons either (i)  beneficially  owns 15% or more of the total
     voting power of all of the Company's voting  securities  outstanding at the
     time of such acquisition,  or 15% or more than the fair market value of the
     Company's  issued and  outstanding  stock,  or (ii)  within  the  preceding
     12-month period acquired the voting power referenced in (i) above, or (iii)
     within the preceding  12-month period acquired 15% or more of the assets of
     the Company, or (iv) otherwise  effectively  controls the operations of the
     Company,  whether by control of its Board of  Directors,  by  contract,  or
     otherwise,  or (B) a majority of the members of the Board of  Directors  of
     the Company is replaced  during the preceding  12-month period by directors
     whose appointment or election was not endorsed by the prior Board. Provided
     that if (a)(i) the  acquisition of voting  securities or assets or (ii) the
     beneficial  ownership of voting power by such person or group of affiliated
     or  related  persons  or (b)  the  transfer  of  effective  control  of the
     operations  of the  Company,  or  control  of the board or other  effective
     control of the  Company to such  person or group or  affiliated  or related
     persons  requires  the  approval  or  authorization  of any  regulatory  or
     governmental  agency or authority  as a condition to any such  acquisition,
     beneficial  ownership,  transfer  of  effective  control  or control of the
     board,  the Change of Control shall be deemed to take place on the later of
     the date (A) when such  approval or  authorization  is obtained or (B) when
     such acquisition or transfer of control takes place.

20.  MISCELLANEOUS:
     -------------

     1.  Decisions by Company.  Except as otherwise  expressly  provided in this
     Agreement,  any  decision,  designation,  consent  or other  action  by the
     Company relating to this Agreement, its operation or its termination, shall
     be made by the  Board of  Directors,  or at the  direction  of the Board of
     Directors, when so requested by the Executive.

     2. Entire  Agreement.  This Agreement  sets forth the entire  agreement and
     understanding  of the parties  relating to the subject matter  hereof,  and
     supersedes all prior agreements,  arrangements and understandings,  written
     or oral, between the parties and may not be modified except by an agreement
     signed by the Executive (and/or where applicable his legal  representatives
     and his wife) and the Company.

     3.   Assignability.   This  Agreement,   and  the  Executive's  rights  and
     obligations  hereunder,  may not be assigned or delegated by the Executive;
     provided,  however,  that nothing in this subsection (c) shall preclude (1)
     the Executive from designating a beneficiary to receive any benefit payable
     on his  death,  and (ii) the  legal  representatives  of the  estate of the
     Executive or his wife from assigning any rights  hereunder to the person or
     persons  entitled  thereto under his or her will, or, in case of intestacy,
     to the person or persons  entitled thereto under the laws of the intestacy.
     Except as  expressly  provided  for in Section 18, this  Agreement  and the
     Company'  rights  and  obligations  hereunder,  may  not  be  assigned  or
     delegated by the Company.

     4. No Attachment.  Except as otherwise required by law, no right to receive
     payments  under this  Agreement  shall be subject to  encumbrance,  charge,
     execution,  attachment,  levy or similar process or assignment by operation
     of law, and any attempt voluntary/or involuntary, to effect any such action
     shall be null, void and of no effect.

     5. Binding Agreement.  This Agreement shall be binding upon an inure of the
     benefit of the  Executive  and the Company and their  respective  permitted
     successors and permitted assigns.

     6. No Waiver.  No term or  condition of this  Agreement  shall be deemed to
     have been waived,  nor shall there be any estoppel  against the enforcement
     of any  provision of this  Agreement,  except by written  instrument of the
     party charged with such waiver or estoppel. No such written waiver shall be
     deemed a continuing  waiver unless  specifically  stated therein,  and each
     such waiver shall operate only as to the specific term or condition  waived
     and shall not  constitute a waiver of such term or condition for the future
     or as to any act other than that specifically waived.

     7.  Expenses  and Legal Fees.  The Company  shall pay all legal fees (which
     shall include without limitation,  fees of tax advisors and tax counsel and
     associated  expenses  and  disbursements)  incurred  by  Executive  in  the
     negotiation  and  execution of this  Agreement.  Additionally,  the Company
     shall pay all legal fees of litigation,  and other expenses incurred by the
     Executive,   his  wife,  or  the  estate,  legal  representative  or  other
     beneficiary  of either  ("Claimant")  (i) as a result of (A) the  Company's
     refusal to make  payments or failure to make payments when due to which the
     Claimant or any benefit  plan,  fund or agent is or shall  become  entitled
     under  this  Agreement,  or  otherwise,  (B) the  refusal or failure of the
     Company to make provision for or acknowledge any employee  benefit to which
     the Claimant is or shall become  entitled as provided for by this Agreement
     or otherwise,  or (C) the refusal or failure by any benefit  plan,  fund or
     agent  established  for the benefit of the Company's  employees to make any
     such payment when due, or (ii) contesting the validity,  enforceability  or
     interpretation of this Agreement or any portion thereof.

     8. Right to  Accelerate.  Without  limitation of any rights of Executive to
     otherwise cause acceleration of any benefits or monies due or to become due
     to Executive,  his wife or their respective legal  representatives,  if the
     Company or any of the benefit plans or funds  referenced  herein shall fail
     to make,  when due,  any  payment  referred to in this  Agreement  or shall
     refuse to make any such payment,  or shall fail or refuse to make provision
     for, any employee or other  benefit to which the Claimant is entitled,  the
     Claimant  may, at his,  her or its  option,  accelerate  and  declare  due,
     payable and  performable  all such  payments,  provisions  or  entitlement,
     provided, however, that such acceleration shall be effected only by written
     notice  thereof  delivered  by the  Claimant to the Company  specifying  in
     detail the basis for  acceleration,  and shall be  effective as of the date
     which is thirty (30)  business days after the receipt of such notice by the
     Company;  provided  further,  however,  that if within thirty (30) business
     days  following  the date of receipt of such notice the Company shall make,
     when due,  the payment in question or shall agree to make any such  payment
     when due, or shall make provision  therefor,  the acceleration shall not be
     effective. If at any time the Claimant has the right to accelerate payments
     under  this  Section,  same  shall be  determined  in  accordance  with the
     provisions  of  Section17,  but  incorporating,  however,  in said lump sum
     calculation  the average  annual  increase in the Consumer  Price Index for
     (the New York - Northeastern New Jersey Area Consumer Price Index for Urban
     Wage Earners and Clerical Workers, or any equivalent  succession thereto as
     determined  by  the  Bureau  of  Labor  Statistics  of  the  United  States
     Department of Labor) the most recent 36 months  preceding the date on which
     said accelerated  payment is to be made. The Claimant may, but shall not be
     required to, bring one or more legal actions to enforce  payment,  or other
     appropriate  remedy,  of any and all amounts to which the Claimant has then
     become, or shall at any time in the future become entitled,  whether or not
     then due, payable or performable.

     9. Severability. If for any reason any provision of this Agreement shall be
     held invalid,  such invalidity shall not affect any other provision of this
     Agreement not held invalid, and all other such provisions shall to the full
     extent  consistent  with law  continue  in full  force and  effect so as to
     carry-out the intent of this Agreement. If any such provision shall be held
     invalid in part,  such  invalidity  shall in no way affect the rest of such
     provision not held invalid,  and the rest of such provision,  together with
     all other  provisions of this Agreement,  shall likewise to the full extent
     consistent  with  the  law  continue  in full  force  and  effect  so as to
     carry-out  the  intent  of  this  Agreement.  In  the  event  of  any  such
     invalidity,  the parties  shall both endeavor and negotiate in, good faith,
     to agree upon  substitute  provisions  to  effectuate  the  interest of the
     provisions held to be invalid.

     10. Headings.  The headings of Sections are included solely for convenience
     of reference and shall not control the meaning or  interpretation of any of
     the provisions of this Agreement.

     11. Governing Law. The Company being a Delaware corporation,  the validity,
     interpretation,  performance  and  enforcement of this  Agreement  shall be
     governed  by the  internal  laws of the  State of  Delaware  applicable  to
     agreements made and fully to be performed therein, without any reference to
     any rules of conflicts of laws.

     12.   Counterparts.   This  Agreement  may  be  executed  in  two  or  more
     counterparts,  and such  counterparts  when taken together shall constitute
     one executed instrument.

     13.  Notices.  All notices and other  communications  hereunder shall be in
     writing and shall be deemed given (i) when delivered personally,  (ii) when
     transmitted  by facsimile  transmission  to the facsimile  number set forth
     below  (during  normal  business  hours of the  recipient or the  immediate
     succeeding  business day),  (iii) when mailed,  on the second  business day
     immediately  succeeding the mailing by registered or certified mail (return
     receipt  requested),  postage prepaid,  or (iv) when delivered by overnight
     courier such as Federal  Express,  on the day  delivered,  addressed to the
     parties at the following respective address (or at such other address for a
     party as shall be  specified  by like  notice,  provided  that  notices  of
     changes of address shall be effective only upon receipt thereof):

                  (i)      If to the Company at:
                           Three High Ridge Park
                           Stamford, CT  06907
                                    Attention:  Board of Directors
                                            Facsimile Number:  (203) 329-4627

                  (ii)     If to Executive at:

                           160 Lantern Ridge Road
                           New Canaan, CT  06240

                                            Facsimile Number:  (203) 972-2821

                                    With A Copy To:

                                            David Z. Rosensweig, Esq.
                                            Duane, Morris & Heckscher LLP
                                            39th Floor
                                            380 Lexington Avenue
                                            New York, NY  10168

                                              Facsimile Number:  (212) 692-1095

     14.  Transfer.  Nothing in the 1996 Agreement as modified by this Agreement
     shall be deemed to limit or  prohibit  the  transfer  by  Executive  of any
     shares of the Common Stock of the Company to which he becomes the holder or
     beneficial owner except as expressly provided herein in this Agreement.

21. NON-APPROVAL OF 2000 PLAN: In the event the 2000 Plan is not approved by the
Stockholders of the Company at their next meeting, the Company and the Executive
shall  promptly  (and in no event  more than  twenty  (20) days  following  such
failure to  approval)  meet and in good  faith  negotiate  alternative  forms of
benefits  to be paid  and  provided  to the  Executive  as a  substitute  and to
compensate  Executive  for the inability of the Company to provide the Executive
with the options under the 2000 Plan provided for in this Agreement.

22. FAMILY MEMBERS: For the purposes of Section 3bA and other provisions of this
Agreement,  the term Family Member shall mean the Executive's  spouse, any issue
of the Executive,  and any trust for the benefit of the Executive, his spouse or
any  issue  of the  Executive,  a  charitable  organization,  including  without
limitation,  a private foundation,  organized or managed by the Executive or any
of the foregoing,  or entity,  organization,  company organized or controlled by
the Executive.

23. NO  DIMINUTION OF BENEFITS:  Nothing in this  Agreement  shall  diminish any
monies  or  benefits  payable  or  available  to the  Executive  under  the 1996
Agreement. In the event any provision of the 1996 Agreement is inconsistent with
the  provisions  of this  Agreement,  the  provisions  of this  Agreement  shall
prevail,  provided that the fact that a payment or benefit  provided for in this
Agreement is cumulative to a benefit or payment in the 1996  Agreement  does not
by itself  make same  inconsistent  with the  terms and  provisions  of the 1996
Agreement.

<PAGE>

     IN WITNESS  WHEREOF,  the parties hereto have signed their names, all as of
the date and year first above written.

                                             Citizens Communications Company

                                            By: _______________________________
                                                Its
Attest:

_______________________________
Secretary of
Citizens Communications Company
                                                _______________________________
                                                Leonard Tow
APPROVED:

_______________________________

_______________________________

_______________________________

_______________________________

Robert A. Stanger (Chairman)

Constituting all of the Members of the
Compensation Committee of the Board
of Directors of Citizens Communications
Company.

<PAGE>

                                   SCHEDULE A

                   POWER AND AUTHORITY OF THE CHIEF EXECUTIVE

     As chief  executive,  the  Executive  shall be in charge of and have  final
authority and  responsibility  for all phases of the activities,  operations and
business of the Company and its subsidiaries, subject only to such authority and
responsibility which under applicable law cannot be delegated and which may only
be exercised by the Board of Directors of the Company.  The  Executive  shall be
the most  senior  officer of the  Company  and report  directly  to the Board of
Directors, and no officer of the Company shall have authority and responsibility
greater than or senior to the Executive.

<PAGE>

                                   SCHEDULE B

24. The Citizens Communications Company Management Equity Incentive Plan (1990);

25. The Citizens Communications Company 1996 Equity Incentive Plan;

26. The Citizens Communications Company 2000 Equity Incentive  Plan 1;

27. The Citizens Communications Company 401 K Savings Plan;

28. The Citizens Communications Company Incentive Plan;

29. The Citizens Communications Company Executive Deferred Savings Plan;

30. Welfare plans such as medical, dental and other health plans of the Company;

31. The Company's Pension Plan;

32. The Electric Lightwave, Inc. 1997 Equity Incentive Plan;

33. Travel Insurance Plan,

34. Other plans currently in effect but not enumerated above.

---------------------------
     1 Approved by the  Company's  Board of  Directors.  To be  submitted to the
Company's stockholders for their approval at their next annual meeting.

<PAGE>

                           AGREEMENT OF CLARIFICATION

     Under the date hereof we, the undersigned,  Leonard Tow (sometimes referred
to as the "Executive"),  and Citizens  Communications  Company  ("Citizens") are
entering into an agreement of  employment  (the  "Agreement")  pursuant to which
Citizens  employs the Executive as its chief  executive for a period of five (5)
years commencing  January 1, 2001,  subject to prior  termination as provided in
the Agreement.

     Sections 3(b) and 3(d) of the Agreement provides for the grant to Executive
of 750,000 shares and 250,000 shares, respectively, of Citizens Common Stock, to
be reduced under certain  circumstances if the applicable percentage increase in
EBIDTA (as defined in the  Agreement)  is not met,  all as  provided  for in the
Agreement.

     We are now mutually  desirous of clarifying the  determination of EBIDTA as
applied to earnings generated by the net proceeds available to Citizens from the
discontinuance,  sale or other disposition of a Disposed Property, as defined in
the Agreement (the "Additional Proceeds"). As currently defined in the Agreement
such  earnings are to be taken into account and included in  determining  EBIDTA
for an applicable year.

     In the event either of the  undersigned  believes that such  inclusion will
work an  inequitable  measurement of the increase in EBIDTA from the fiscal year
1999 to the year of  termination,  such party  (the  "Notifying  Party")  within
twenty (20) days following the end of the first fiscal year of Citizens in which
EBIDTA includes earnings generated by the Additional Proceeds,  shall notify the
other  party  (the   "Receiving   Party")  of  this  position  in  writing  (the
"Notification") and thereafter and within 20 days immediately  following receipt
of the Notification by the Receiving Party, the parties shall meet and negotiate
in good faith the methodology pursuant to which the amount of earnings generated
by the Additional Proceeds are to be included in the determination of EBIDTA. If
the  parties  are  unable  to  reach  an  agreement  within  20  days  following
commencement of the negotiation (the "Negotiation Period") the methodology to be
utilized shall be determined by arbitration in New York City by a panel of three
(3)  arbitrators,  one (1)  chosen by the  Selected  Arbitrators.  The  Selected
Arbitrators shall be chosen within ten (10) days immediately  succeeding the end
of the Negotiation  Period and the third (3rd) arbitrator shall be chosen by the
Selected  Arbitrators  within 10 days  immediately  succeeding the date when the
second  of the  Selected  Arbitrators  is  chosen.  In the  event  the  American
Arbitration  Association ("AAA") permits or authorizes its then obtaining rules,
other than the rules of the AAA  relating to  selection  of  arbitrators,  to be
utilized by the  arbitrators,  such rules of the AAA shall be  utilized.  In the
event the AAA does not  authorize  or permit  such rules to be  utilized  by the
arbitrators,  the  arbitrators  shall  hold  such  procedures  as they  may deem
appropriate  and which are in  accordance  with  applicable  law,  and have such
authority  that is  available  to  arbitrators  under the  applicable  law.  The
arbitrators  shall  complete their  hearings  proceedings  with thirty (30) days
immediately  succeeding the designation of the third arbitrator and shall render
their  decision  (which  may be by  majority  vote)  within 30 days  immediately
succeeding the completion of proceedings.  The decision of the arbitrators shall
be final and binding as provided by applicable law.

     In  connection   with  the   foregoing   each  of  Executive  and  Citizens
acknowledges  and agrees  that it is his or its  respective  intention  that the
manner of computing  EBIDTA  resulting  from any  discontinuance,  sale or other
disposition of any Disposed  Property,  as defined in the  Agreement,  shall not
have any negative or  detrimental  effect or impact on attaining  the  specified
percentage increases in EBIDTA set forth in Section 3(b). In reaching a decision
the arbitrators are to take into account this intention of the parties.

     In the event no  Notification  is given  with said  twenty-day  period,  no
adjustment  shall be made in determining  EBIDTA and same shall be determined as
provided for in Section 3(b) of the Agreement.

     Additionally  and consistent  with the intent set forth in Section 4, 5 and
11 of the  Agreement,  in the event  the  split-dollar  arrangements  referenced
therein result in income and/or gift tax on or being imposed, levied or assessed
against Executive,  his wife and/or any of the trusts or the trustees referenced
in said section by reason of the Technical Advice  Memorandum  9604001 issued by
the U. S. Internal  Revenue Service under the date of September 8, 1995 (copy of
which is annexed) and rules  referenced  therein,  Citizens shall pay such taxes
and fully  reimburse,  on an after tax  basis,  the  Executive,  his wife or the
applicable trust and trustee, as the case may be.

     By signing their respective names,  hereto, the undersigned hereby agree to
the foregoing.

CITIZENS COMMUNICATIONS COMPANY

By: _________________________________      ____________________________________
    Its                                     Leonard Tow

<PAGE>

Approval of  Compensation  Committee of the Company to be annexed  together with
applicable  resolution adopted by the Committee as well as applicable resolution
of the full Board,  and Secretary's  certification  that  resolutions  were duly
adopted and are subsisting.

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