Document:

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                                                                   EXHIBIT 10.26

                                ROYALTY AGREEMENT

         THIS ROYALTY AGREEMENT (the "Agreement") made effective as of January
1, 1999, by and between AMERIVISION COMMUNICATIONS, INC., an Oklahoma
corporation (the "Company"), and Christian Advocates Serving Evangelism, Inc.
("CASE"), a California not-for-profit corporation.

                                    SECTION 1
                                   BACKGROUND

         The Company and CASE have entered into various agreements and
understandings regarding agent commissions and monies advanced by CASE to the
Company; and

         The Company and CASE agree to terminate all prior agent royalty
agreements and waive all rights and duties thereunder and waive all claims
involving monies advanced and seek to enter into and be bound by a new
comprehensive agreement.

         In consideration of the foregoing and the agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

                                    SECTION 2
                                      TERM

         The term of this Agreement (the "Term") is three years commencing
January 1, 1999 (the "Commencement Date").

                                    SECTION 3
                                ROYALTY PAYMENTS

         3.1 Royalty Payments. In consideration of settlement of all agent
royalties and claims under prior agreements, and in consideration of CASE's
compliance with the Noncompetition and Nonsolicitation provisions in Sections
5.3 and 5.4 below, during the Term of this Agreement, the Company shall pay CASE
royalty payments equal to $386,500 annually for 1999 and $395,000 annually for
2000 and 2001, payable in equal monthly payments. In addition, CASE will assist
the Company with relationships on existing non-profit organizations that use the
Company's services.

         3.2 No Withholding. CASE shall be responsible for paying all taxes, if
any, imposed by any federal, state, city or other taxing authority on any amount
paid under this Agreement.

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                                    SECTION 4
                                 MUTUAL RELEASE

         Subject to the satisfaction of the conditions set forth in Section 4.4
below:

         4.1 The Company's Release. The Company hereby releases and forever
discharges CASE and its successors and assigns from and against any and all
claims, losses, liabilities, obligations, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (whether known or unknown, foreseen or unforeseen, liquidated or
contingent, currently existing or arising in the future), arising from any act,
omission, event, conduct or transaction having occurred on or before the date of
this Agreement.

         4.2 CASE's Release. CASE hereby releases and forever discharges the
Company and its trustees, officers, employees, agents, counsel, subsidiaries,
affiliates, successors and assigns from and against any and all claims, losses,
liabilities, obligations, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (whether known or
unknown, foreseen or unforeseen, liquidated or contingent, currently existing or
arising in the future), arising from any act, omission, event, conduct or
transaction having occurred on or before the date of this Agreement.
Notwithstanding the foregoing, this Agreement does not modify or waive any terms
of the agreement between the Company and CASE dated April 20, 1999 regarding a
$850,000 convertible subordinated note advanced by CASE to the Company and does
not waive or modify any payments due CASE, ACLJ-National, or Regency
Productions, Inc. of 10 percent royalties based on subscribers to the Company's
long-distance services obtained by those organizations.

         4.3. Representations of the Parties. Each party or the party identified
represents, warrants and covenants to the other as follows:

                  (a) Organization. As to the Company, that it is an Oklahoma
corporation, and as to CASE that it is a California not-for-profit corporation,
in each case duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization. Each such party has the requisite
power and authority to execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to comply with the terms, conditions and
provisions hereof.

                  (b) Authority. The execution, delivery and performance of this
Agreement have been duly authorized and approved by all necessary corporate
action and do not require any further authorization or consent in the case of
the Company by such company or its board of directors and in the case of CASE by
such company or its board of directors. This Agreement is when executed and
delivered by the respective party its legal, valid and binding agreement
enforceable in accordance with its respective terms and conditions, except as
such enforceability may be limited by bankruptcy, moratorium, insolvency,
reorganization or other similar laws affecting or limiting the enforcement of
creditors' rights generally and except as such enforceability is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at Law).

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         4.4 Conditions. The releases set forth in Sections 4.1 and 4.2 above
are conditioned upon CASE's compliance with Sections 5.3 and 5.4 below.

                                    SECTION 5
                              OTHER DUTIES OF CASE

         5.1 Additional Information. CASE will, with reasonable notice during or
after the Term, furnish information as may be in its possession and cooperate
with the Company as may reasonably be requested in connection with any claims or
legal action to which the Company is or may become a party.

         5.2 Confidentiality. During the Term, CASE will not disclose or use any
Confidential Information other than as necessary in carrying out its duties on
behalf of the Company without first obtaining the Company's written consent; and
CASE agrees to take all reasonable precautions to prevent inadvertent disclosure
or use of Confidential Information. For purposes of this Agreement,
"Confidential Information" is defined as: the Company's sales, sales volume,
sales methods, sales proposals; customers and prospective customers, identity of
customers and prospective customers, identity of key purchasing personnel in the
employ of customers and prospective customers; amount or kind of customer
purchases from the Company, its sources of supply; the Company computer
programs, systems documentation, special hardware, product hardware, related
software development, the Company manuals, formulae, processes, methods,
machines, compositions, ideas, improvements, inventions; or other confidential
or proprietary information belonging to the Company or relating to the Company's
affairs. Confidential Information does not, however, include the general skills
and experience gained during CASE's engagement with the Company, or information
publicly available through no fault of CASE, or information generally known
within the industries in which the Company competes. CASE agrees that the
Confidential Information is the property of the Company; the use,
misappropriation, or disclosure of the Confidential Information would constitute
a breach of trust and could cause irreparable injury to the Company; and it is
essential to the protection of the Company's good will and to the maintenance of
the Company's competitive position that the Confidential Information be kept
secret and that CASE not disclose the Confidential Information to others or use
the Confidential Information to CASE's own advantage or to the advantage of
others. Upon termination of its engagement with the Company, CASE will promptly
deliver to the Company all software programs, questionnaires, files, manuals,
letters, notes, notebooks, reports, customer lists, and all other material
containing Confidential Information which are in its possession or under its
control.

         5.3 Noncompetition.

              (a) Basic Obligation. CASE will not Compete with the Company (as
              hereinafter defined) for a period of time equal to the Term of
              this Agreement or from the date of entry by a court of competent
              jurisdiction of a final judgment enforcing this covenant
              (whichever is later).

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              (b) Definition of "Compete with the Company." For the purposes of
              this Section 5.3, the term "Compete with the Company" means action
              by CASE in the continental United States, direct or indirect, for
              its own account or for the account of others, either as an
              officer, director, stockholder, owner, partner, member, promoter,
              employee, consultant, advisor, agent, manager, creditor or in any
              other capacity, resulting in CASE having any pecuniary interest,
              legal or equitable ownership, or other financial or non-financial
              interest, in any corporation, business trust, partnership, limited
              liability company, proprietorship or other business or
              professional enterprise that provides long-distance telephone
              services or any other product or service now or hereafter offered
              or sold by the Company during the Term of this Agreement or any
              product or service similar to, competitive with, or intended to
              compete with any such product or service; provided, however, that
              the term "Compete with the Company" shall not include ownership
              (without any other relationship) of less than a 5% interest in any
              publicly-held corporation.

              (c) Reasonableness of Scope and Duration. CASE acknowledges that
              the covenants contained herein are reasonable as to geographic and
              temporal scope.

         5.4 Non-Solicitation. During the Term of this Agreement, CASE will not
without prior consent of the Company, directly or indirectly or on CASE's own
account, or as agent, employee, partner, stockholder or otherwise, solicit, sell
to or contract, with a view to selling any long-distance services or any other
product or service offered or sold by the Company at any time during the Term of
this Agreement or any product or service similar to, competitive with, or
intended to compete with any such product or service, to any person, firm or
corporation from whom CASE solicited any order or to whom CASE sold any product
or service or otherwise dealt with on behalf of the Company, or any account that
is on the Company's customer listing at any time during CASE's engagement with
the Company, or hire, seek to hire, induce, solicit or cause to be solicited any
employee of the Company, directly or indirectly, on its own behalf or on behalf
of another employer. These provisions shall be in addition to and not in
derogation of the provisions in Section 5.3 above.

         5.5 Remedies. CASE acknowledges that its services are unique and
irreplaceable; that the Confidential Information which is the subject of this
Agreement is valuable and unique and constitutes information proprietary to the
Company; that its breach or attempted breach of any provision of Sections 5.2
through 5.4 would cause irreparable harm to the Company not compensable in
monetary damages; that the Company's remedy at law for any such breach would be
inadequate; and that, in addition to any other remedy, the Company shall be
entitled to temporary and permanent injunctive relief to enjoin an actual or
threatened breach of such provisions without being required to prove damages or
furnish any bond or other security; and legal costs incurred by the Company to
obtain injunctive or other relief from a court will be paid by CASE.

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                                   SECTION 65
                     CONSOLIDATION, MERGER OR SALE OF ASSETS

         Nothing in this Agreement shall preclude the Company from consolidating
or merging into or with, or transferring all or substantially all of its assets
to, another corporation which assumes this Agreement and all obligations and
undertakings of the Company hereunder. Upon such a consolidation, merger or sale
of assets, the term "the Company" as used will mean the other corporation, and
this Agreement shall continue in full force and effect. This Section 6 is not
intended to modify or limit the rights of CASE hereunder.

                                    SECTION 7
                                  MISCELLANEOUS

         7.1 Assignment. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective representatives,
successors and assigns. CASE may not assign its rights or delegate its
obligations under this Agreement without the Company's prior written consent.

         7.2 Notices. All notices hereunder must be in writing and (a) delivered
personally, (b) sent by facsimile, (c) delivered by recognized overnight courier
services (expenses prepaid), or (d) sent by registered or certified mail,
postage prepaid, and addressed as follows:

         If to Company to:

         AmeriVision Communications, Inc.
         5900 Mosteller Drive, Suite 1800
         Oklahoma City, Oklahoma 73112
         Attn:  David E. Grose

         If to CASE to:

         Christian Advocates Serving Evangelism, Inc.
         1000 Hurricane Shoals Road
         Suite 1100, Building D
         Lawrenceville, Georgia 30043
         Attn:  Joel Thornton

Any party may alter the address to which notices are to be sent by giving notice
of such change of address in conformity with this Section 7.2. Any notice which
is delivered personally, by facsimile or by recognized overnight courier in the
manner provided in this Section 7.2 shall be deemed to have been duly given to
the party to whom it is addressed upon actual receipt by such party. Any notice
which is delivered by registered or certified mail in the manner provided in
this Section 7.2 shall be conclusively presumed to have been given to the party
to whom it is addressed at the

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close of business, local time of the recipient, on the third business day after
it is so placed in the mail.

         7.3. Governing Law. This Agreement shall be deemed to have been made in
and shall be construed and interpreted in accordance with the laws of the State
of Oklahoma without giving effect to principles of conflicts of laws. Each party
hereto agrees that all actions and proceedings relating directly or indirectly
to this Agreement shall be litigated in courts located in Oklahoma, and the
exclusive venue therefor shall be Oklahoma County and consents to the
jurisdiction and venue of any such court and consents to service of process in
any such action or proceeding by personal delivery or any other method permitted
by law.

         7.4 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter above, and supersedes all prior agreements, understandings, inducements
or conditions, express or implied, oral or written, relating to the subject
matter above.

         7.5 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws by any court of
competent jurisdiction, such illegality, invalidity or unenforceability shall
not affect the legality, enforceability or validity of any other provisions or
of the same provision as applied to any other fact or circumstance and such
illegal, unenforceable or invalid provision shall be modified to the minimum
extent necessary to make such provision legal, valid or enforceable, as the case
may be.

         7.6. Headings. All headings in this Agreement are for convenience of
reference only, and do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of its provisions.

         7.7 Modification and Waiver. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by CASE and
Company. None of the terms or conditions of this Agreement may be waived except
in writing by the party which is entitled to the benefits above. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision (whether or not similar) nor shall such waiver
constitute a continuing waiver.

         7.8 Counterparts. This Agreement may be executed in duplicate
counterparts. Each counterpart will be an original and both together will
constitute but one and the same document.

         7.9 Grammar. As used in this Agreement, any personal pronoun shall
include the masculine, feminine, and/or the neuter thereof, and the singular of
any noun or pronoun shall include the plural and the plural the singular,
wherever the context may require.

                            [SIGNATURE PAGE FOLLOWS]

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         IN WITNESS WHEREOF, the Company and CASE have executed this Agreement
as of the date first above written.

CHRISTIAN ADVOCATES                 AMERIVISION COMMUNICATIONS, INC.
SERVING EVANGELISM, INC.

By:  /s/ Jay Sekulow                By:    /s/ Stephen D. Halliday
     ---------------------------           -------------------------------------
Name:                               Name:  Stephen D. Halliday
Title:                              Title: President and Chief Executive Officer

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                                                                   EXHIBIT 10.27

                        AMERIVISION COMMUNICATIONS, INC.

                            1999 STOCK INCENTIVE PLAN

<PAGE>   2

                        AMERIVISION COMMUNICATIONS, INC.
                            1999 STOCK INCENTIVE PLAN

1.   PURPOSE.

This Plan is intended to provide employees, directors, consultants and other
individuals (individually, a "Participant" and, collectively, the
"Participants") rendering services to or on behalf of AmeriVision
Communications, Inc. (the "Corporation") and/or one or more of its subsidiaries
(individually, a "Subsidiary" and, collectively, the "Subsidiaries") an
opportunity to acquire an equity interest in the Corporation. The Corporation
intends to use the Plan to link the long-term interests of shareholders of the
Corporation and Plan Participants, attract and retain Participants' services,
motivate Participants to increase the Corporation's value, and create
flexibility in compensating Participants.

The Plan allows the Corporation to reward Participants with (i) incentive stock
options and/or non-qualified stock options to purchase shares of common stock of
the Corporation, (ii) stock appreciation rights with respect to shares of common
stock of the Corporation, (iii) shares of common stock of the Corporation, (iv)
performance share awards which are designated as a specified number of shares of
common stock of the Corporation and earned based on performance, and (v)
performance unit awards which are designated as having a certain value per unit
and earned based on performance (individually an "Award" and collectively the
"Awards").

The Corporation has reserved the number of shares of common stock of the
Corporation specified in Section 6(a) for purposes of the Plan.

2.   DEFINITIONS.

     (a) "Award" shall mean any award granted under the Plan.

     (b) "Award Agreement" shall mean, with respect to each Award, the signed
written agreement between the Corporation and the Participant receiving the
Award setting forth the terms and conditions of the Award. The general terms and
conditions described in this Plan with respect to such type of Award shall be
incorporated by reference into the Award Agreement and shall apply to such
Award, except to the extent specifically provided otherwise in the Award
Agreement.

     (c) "Board" shall mean the Board of Directors of the Corporation.

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     (d) "Change-in-Control" of the Corporation shall mean the first to occur of
the following events occurring on or following the Effective Date of the Plan:

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         (i) Any Person (other than those persons in control of the corporation
on the Effective Date of the Plan, a trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation, or a corporation
owned directly or indirectly by the stockholders of the Corporation in
substantially the same proportions as their ownership of stock of the
Corporation) becomes the beneficial owner, directly or indirectly, of securities
of the Corporation representing fifty percent (50%) or more of the combined
Voting Power of the Corporation's then outstanding securities; or

         (ii) At any time after the Effective Date of the Plan, individuals who
on the Effective Date constitute the Board and any subsequent Board-approved
Directors cease for any reason to constitute a majority of the Board (for this
purpose, a "Board-approved Director" is any Director elected or appointed after
the Effective Date whose election or appointment was approved by a vote of at
least two-thirds (2/3) of the Directors then in office who either were Directors
at the Effective Date or whose election or appointment was previously so
approved) cease for any reason to constitute a majority thereof; or

         (iii) The stockholders of the Corporation approve (A) a plan of
complete liquidation of the Corporation, (B) an agreement for the sale or
disposition of all or substantially all the Corporation's assets (other than as
part of a reorganization excepted in Section 2(d)(iii)(C)), or (C) a merger,
consolidation, or reorganization of the Corporation with or involving any other
entity, other than a merger, consolidation, or reorganization that would result
in the voting securities of the Corporation outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least fifty percent
(50%) of the combined Voting Power of the securities of the Corporation (or such
surviving entity) outstanding immediately after such merger, consolidation, or
reorganization.

However, in no event shall a Change-in-Control be deemed to have occurred with
respect to a Participant if the Participant is part of a purchasing group which
consummates the Change-in-Control transaction. The Participant shall be deemed
"part of a purchasing group" for purposes of the preceding sentence if the
Participant is either directly or indirectly an equity participant in the
purchasing group (except for (i) passive ownership of less than three percent
(3%) of the stock of the purchasing group, or (ii) ownership of equity
participation in the purchasing group which is otherwise not significant, as
determined prior to the Change-in-Control by the Committee).

     (e) "Code" shall mean the Internal Revenue Code of 1986, as amended.

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     (f) "Committee" shall mean the Compensation Committee or any special
committee appointed by the Board in accordance with Section 4 to administer the
Plan, unless the Board, itself, administers the Plan in which event the term
"Committee" shall mean the Board.

     (g) "Common Stock" shall mean the voting, $0.10 par value common stock of
the Corporation, as constituted on the Effective Date of the Plan, or any shares
or securities into which the Common Stock may be changed, reclassified,
subdivided, consolidated or converted thereafter.

     (h) "Compensation Committee" shall mean the compensation committee of the
Board.

     (i) "Consultant" shall mean any individual who is not an Employee or
Director and who has or will render services to or on behalf of the Corporation
or a Subsidiary.

     (j) "Corporation" shall mean AmeriVision Communications, Inc., a
corporation organized under the laws of Oklahoma, and any successor or
continuing corporation resulting from the amalgamation of the Corporation and
any other corporation or resulting from any other form of corporate
reorganization of the Corporation.

     (k) "Director" shall mean a member of the Board.

     (l) "Effective Date" shall mean the date described in Section 3.

     (m) "Employee" shall mean any individual, including an officer, who is a
common law employee of the Corporation or a Subsidiary.

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

     (o) "Exercise Price" shall mean:

         (i) With respect to an Option, the price per Share at which the Option
may be exercised, as determined by the Committee and as specified in the
Participant's Award Agreement; or

         (ii) With respect to a Stock Appreciation Right, the price per Share
which is the base price for determining the future value of the Stock
Appreciation Right, as determined by the Committee and as specified in the
Participant's Award Agreement.

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     (p) "Fair Market Value" shall mean the value of one Share determined as of
any specified date as follows:

         (i) If the Shares are traded on any recognized United States securities
exchange, the value per Share shall be the closing price of the Common Stock on
the business day immediately preceding such specified date (or, if there are no
sales on that day, the last preceding day on which there was a sale) on the
principal exchange on which the Common Stock is traded;

         (ii) If the Shares are not traded on any United States securities
exchange but are traded on any formal over-the-counter quotation system in
general use in the United States, including without limitation the NASDAQ
National Market or the NASDAQ Smallcap Market, the value per Share shall be the
mean between the closing bid and closing asked quotations for the Common Stock
on the business day immediately preceding such specified date (or, if there are
no such quotations on that day, the last preceding day on which there were such
quotations) on the principal system on which the Common Stock is traded; or
(iii) If neither Paragraph (i) nor (ii) applies, then the value per Share shall
be determined by the Board in good faith as an estimate of the value per Share a
willing purchaser would pay a willing seller in an arms' length transaction with
both parties having full knowledge of all relevant material facts and neither
party being compelled to buy or sell. Such determination shall be conclusive and
binding on all persons. The Board may engage an independent appraiser to
determine the Fair Market Value of the Shares on any date.

     (q) "For Cause" shall mean the termination of a Participant's status as an
Employee, a Director or Consultant (as applicable) for any of the following
reasons, as determined by the Committee:

         (i) A Participant who is an Employee and who wilfully fails to
substantially perform the Participant's duties (other than any such failure
resulting from the Participant's Total and Permanent Disability) after a written
demand for substantial performance has been delivered by the Committee to the
Participant that specifically identifies the manner in which the Committee
believes that the Participant has not substantially performed the Participant's
duties, and the Participant fails to remedy such failure within thirty (30)
calendar days after receiving such notice;

         (ii) A Participant who is a Consultant and who commits a material
breach of any consulting, confidentiality or similar agreement with the
Corporation or a Subsidiary, as determined under such agreement;

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<PAGE>   7

         (iii) A Participant who is an Employee or a Consultant and who is
convicted (including a trial, plea of guilty or plea of nolo contendere) for
committing an act of fraud, embezzlement, theft, or other act constituting a
felony;

         (iv) A Participant who is an Employee or a Consultant and who wilfully
engages in gross misconduct or wilfully violates a Corporation or a Subsidiary
policy which is materially and demonstrably injurious to the Corporation and/or
a Subsidiary after a written demand to cease such misconduct or violation has
been delivered by the Committee to the Participant that specifically identifies
the manner in which the Committee believes that the Participant has violated
this Paragraph (iv), and the Participant fails to cease such misconduct or
violation and remedy any injury suffered by the Corporation or the Subsidiary as
a result thereof within thirty (30) calendar days after receiving such notice.
However, no act or failure to act, on the Participant's part shall be considered
"wilful" unless done, or omitted to be done, by the Participant not in good
faith and without reasonable belief that the Participant's action or omission
was in the best interest of the Corporation or the Subsidiary; or

         (v) A Participant who is an Employee and who commits a material breach
of any noncompetition, confidentiality or similar agreement with the Corporation
or a Subsidiary, as determined under such agreement.

     (r) "Incentive Stock Option" shall mean an Option of the type which is
described in Section 422(b) of the Code.

     (s) "Non-Employee Director" shall mean a member of the Board who is neither
an Employee of the Corporation or any Subsidiary.

     (t) "Non-qualified Stock Option" shall mean an Option which is not of the
type described in Section 422(b) of the Code.

     (u) "Option" shall mean any option which is granted pursuant to the Plan to
purchase one or more Shares of Common Stock, whether granted as an Incentive
Stock Option or as a Non-qualified Stock Option.

     (v) "Participant" shall mean any individual to whom an Award has been
granted under the Plan, and such term shall include, where appropriate, a
Permitted Transferee, the duly appointed conservator or other legal
representative of a mentally incompetent Participant and the transferee of a
deceased Participant, as provided in the Plan. If an Award is being exercised or
settled by the duly appointed conservator or other legal representative of a
mentally incompetent Participant or the allowable transferee of a deceased
Participant, such Person

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shall, as a condition to such exercise or settlement, submit to the Committee
evidence satisfactory to the Committee indicating the capacity in which such
Person represents the Participant.

     (w) "Performance Share" shall mean an Award designated as a specified
number of Shares which may, in whole or in part, be earned by and paid to a
Participant at the end of a performance period based on performance during that
period in achieving the performance objectives specified in the Participant's
Award Agreement. A Performance Share may be settled in cash or Shares, as
provided in the Participant's Award Agreement.

     (x) "Performance Unit" shall mean an Award designated as a specified dollar
value which may, in whole or in part, be earned by and paid to the Participant
at the end of a performance period based on performance during that period in
achieving the performance objectives specified in the Participant's Award
Agreement. A Performance Unit may be settled in cash or Shares, as provided in
the Participant's Award Agreement.

     (y) "Permitted Transferee" shall mean, with respect to an individual to
whom an Award has been granted under the Plan, the spouse or child or children
of such individual or the trust or other entity established for their benefit;
provided, however, that the transfer of such Award by such individual may occur
only with the prior consent of the Committee which may be granted or denied in
the Committee's sole discretion.

     (z) "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d).

     (aa) "Plan" shall mean this AmeriVision Communications, Inc. 1999 Stock
Incentive Plan, as amended.

     (bb) "Pyramiding" shall mean a Participant's payment, in whole or in part,
of the Exercise Price of an Option made by exchanging a Share(s) that the
Participant had acquired pursuant to the exercise of another option during the
preceding six (6) months (under this Plan or any other plan or program of the
Corporation or a Subsidiary) or had otherwise acquired from the Corporation or a
Subsidiary during the preceding six (6) months without paying full consideration
for such Share(s).

     (cc) "Reload" shall mean the grant of new Options to a Participant who pays
all or a portion of the Exercise Price of an Option with previously acquired
Shares, with the number of new Options being equal to the number of Shares
submitted by the Participant.

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     (dd) "Restricted Stock" shall mean a Share(s) of Common Stock issued to a
Participant which will Vest in accordance with the conditions specified in the
Participant's Award Agreement.

     (ee) "Retirement" shall mean, except as otherwise specifically provided in
an Award Agreement:

         (i) A Participant's voluntary termination of employment with the
Corporation and all Subsidiaries at or following "normal retirement age" (as
defined in the Corporation's or the Subsidiary's qualified 401(k) retirement
plan covering the Participant); or

         (ii) If there is no such plan, the Participant's voluntary termination
of employment with the Corporation and, all Subsidiaries at or following age 65.

     (ff) "Share" shall mean one authorized share of Common Stock.

     (gg) "Stock Appreciation Right" or "SAR" shall mean a right issued to a
Participant to receive all or any portion of the future appreciation in the Fair
Market Value of one Share over the Exercise Price of such Right. A Stock
Appreciation Right may be settled in cash or Shares, as provided in the
Participant's Award Agreement.

     (hh) "Subsidiary" shall mean:

         (i) For purposes of granting Incentive Stock Options, any corporation
(other than the Corporation) in an unbroken chain of corporations beginning with
the Corporation if, at the time of granting an Award, each of the corporations
(other than the last corporation in the unbroken chain) owns stock possessing
80% or more of the voting power in one of the other corporations in such chain;
and

         (ii) For all other purposes of the Plan, any business entity (other
than the Corporation) in which the Corporation has an equity interest.

     (ii) "Tandem Option/Stock Appreciation Right" shall mean an Option to
purchase a specified number of Share(s) and a Stock Appreciation Right granted
with respect to a specified number of Share(s) which are granted together and
designated as a "Tandem Option/SAR" in the Participant's Award Agreement,
whereby the exercise of either the Option or the SAR cancels the other granted
in tandem with it.

     (jj) "Ten Percent Stockholder" shall, for purposes of granting Incentive
Stock Options, have the meaning ascribed to

                                       8
<PAGE>   10

such term in Code Section 422(b)(6) or in any successor provision of the Code.

     (kk) "Total and Permanent Disability" shall mean with respect to a
Participant:

         (i) The mental or physical disability, either occupational or
non-occupational in cause, which satisfies the definition of "total disability"
in the principal long-term disability policy or plan provided by the Corporation
or a Subsidiary covering the Participant; or

         (ii) If no such policy is then covering the Participant, a physical or
mental infirmity which, as determined by the Committee, upon receipt of and in
reliance on sufficient competent medical advice from one or more individuals,
selected by the Committee, who are qualified to give professional medical
advice, impairs or is expected to impair the Participant's ability to
substantially perform the Participant's duties for a period of at least one
hundred eighty (180) consecutive days.

     (ll) "Vest" or "Vesting" shall mean the date on which an Award becomes
exercisable, payable and/or nonforfeitable, as applicable.

     (mm) "Voting Power" shall mean the total combined rights to cast votes at
and election for members of the Board.

3.   EFFECTIVE DATE.

The Plan was adopted by the Board to be effective on the date of approval by the
Corporation's shareholders in accordance with Section 18.

4.   ADMINISTRATION.

     (a)  Administration by the Board or the Committee.

         (i) The Plan shall be administered by the Compensation Committee,
unless the Board determines to administer the Plan itself or appoints another
Committee to administer the Plan. The Compensation Committee or any other
Committee administering the Plan may, but is not required to satisfy the
criteria set forth in Section 4(a)(ii). With respect to any period during which
the Board administers the Plan, the term "Committee" as used in the Plan and any
Award Agreement shall mean the Board;

         (ii) For purposes of Section 4(a)(i), the Committee may consist of not
less than two members, each of whom shall be a "non-employee director" within
the meaning of Rule 16b-3(b)(3)(i) promulgated by the Securities Exchange
Commission under the

                                       9
<PAGE>   11

Exchange Act, and an "outside director" within the meaning of Section
162(m)(4)(C)(i) of the Code and the regulations issued thereunder.

     (b)  Actions of the Committee.

         (i) The Committee shall hold meetings at such times and places as it
may determine. For a Committee meeting, if the Committee has two members, both
members must be present to constitute a quorum, and if the Committee has three
or more members, a majority of the Committee shall constitute a quorum. Acts by
a majority of the members present at a meeting at which a quorum is present and
acts approved in writing by all the members of the Committee shall constitute
valid acts of the Committee;

         (ii) Members of the Committee may vote on any matters affecting the
administration of the Plan or the grant of any Award pursuant to the Plan,
subject to the remainder of this Section 4(b)(ii). No member shall act upon the
granting of an Award to himself or herself.

     (c) Powers of the Committee.

On behalf of the Corporation and subject to the provisions of the Plan and Rule
16b-3 of the Exchange Act, the Committee shall have the authority and the sole
and complete discretion to:

         (i) Prescribe, amend and rescind rules and regulations of the Plan,
and, if desired, delegate authority to take actions under the Plan to the
President or other appropriate officer(s) of the Corporation within the limits
determined by the Committee;

         (ii) Select Participants to receive Awards;

         (iii) Determine the form and terms of Awards;

         (iv) Determine the number of Shares or other consideration subject to
Awards;

         (v) Determine whether Awards will be granted singly, in combination or
in tandem with, in replacement of, or as alternatives to, other Awards under the
Plan or any other incentive or compensation plan of the Corporation or any
Subsidiary;

         (vi) Construe and interpret in a consistent manner the Plan, any Award
Agreement and any other agreement or document executed pursuant to the Plan;

         (vii) Correct any defect or omission, or reconcile any inconsistency in
the Plan, any Award or any Award Agreement;

                                       10
<PAGE>   12

         (viii) Determine whether an Award has been earned and/or Vested;

         (ix) Determine whether a Participant has incurred a Total and Permanent
Disability;

         (x) Accelerate or, with the consent of the Participant, defer the
Vesting of any Award and/or the exercise date of any Award;

         (xi) Determine whether a Participant's status as an Employee, Director
or Consultant of the Corporation or any Subsidiary has been terminated For
Cause;

         (xii) Authorize any person to execute on behalf of the Corporation or
any Subsidiary any instrument required to effectuate the grant of an Award;

         (xiii) With the consent of the Participant, reprice, cancel and
reissue, or otherwise adjust the terms of an Award previously issued to the
Participant;

         (xiv) Determine when an Employee's period of employment is deemed to be
continued during an approved leave of absence;

         (xv) Determine when a Consultant's period of rendering service is
deemed to be continuous (notwithstanding a period of interrupted service) and
when a Consultant's period of rendering services has ended;

         (xvi) Determine, upon review of relevant information, the Fair Market
Value of the Common Stock; and

         (xvii) Make all other determinations deemed necessary or advisable for
the administration of the Plan.

     (d) Committee's Interpretation of the Plan.

The Board's or the Committee's interpretation and construction of any provision
of the Plan, of any Award granted under the Plan, or of any Award Agreement
shall be final and binding on all persons claiming an interest in an Award
granted or issued under the Plan. Neither the Committee, a member of the
Committee nor any Director shall be liable for any action or determination made
in good faith with respect to the Plan. The Corporation, in accordance with its
bylaws, shall indemnify and defend such parties to the fullest extent provided
by law and such bylaws.

5.   PARTICIPATION.

                                       11
<PAGE>   13

     (a) Eligibility for Participation.

Subject to the conditions of Section 5(b), all Employees, Directors and
Consultants rendering services to the Corporation and/or any Subsidiary are
eligible to be selected as Participants by the Committee. The Committee's
determination of an individual's eligibility for participation shall be final.

     (b) Eligibility for Awards.

The Committee has the authority to grant Award(s) to Participants. A Participant
may be granted more than one Award under the Plan.

6.   SHARES OF STOCK OF THE CORPORATION.

     (a) Shares Subject to The Plan.

Awards granted under the Plan shall be with respect to 40,000 authorized but
unissued or reacquired Shares of Common Stock. The aggregate number of Shares
granted as Options, Stock Appreciation Rights or Restricted Shares to a
Participant during the term of the Plan shall not exceed 10,000 Shares under the
Plan.

     (b) Awards to Directors.

No member of the Board or the Committee administering the Plan shall be eligible
to be granted an Award which is not either exempt from Rule 16b-3 of the
Exchange Act or may be granted under circumstances that may be permitted under
Rule 16b-3 of the Exchange Act without adversely affecting any requirement of
such Rule that the Plan be administered in a manner prescribed by the Rule.

     (c) Adjustment of Shares.

In the event of an adjustment described in Section 13, then (i) the number of
Shares reserved for issuance under the Plan, (ii) the Exercise Prices of and
number of Shares subject to outstanding Options, (iii) the Exercise Prices of
and number of Shares with respect to which there are outstanding Stock
Appreciation Rights, and (iv) any other factor pertaining to outstanding Awards
shall be duly and proportionately adjusted, subject to any required action by
the Board or the shareholders of the Corporation and compliance with applicable
securities laws; provided, however, that fractions of a Share shall not be
issued but shall either be paid in cash at Fair Market Value or shall be rounded
up to the nearest Share, as determined by the Committee.

                                       12
<PAGE>   14

     (d) Awards Not to Exceed Shares Available.

The number of Shares subject to Awards which have been granted under the Plan at
any time during the Plan's term shall not, in the aggregate at any time, exceed
the number of Shares authorized for issuance under the Plan. The number of
Shares subject to an Award which expires, is cancelled, is forfeited or is
terminated for any reason other than, and to the extent, being settled in
Shares, shall again be available for issuance under the Plan.

7.   GENERAL TERMS AND CONDITIONS OF AWARDS.

     (a) Award Agreements.

Each Award shall be evidenced by a written Award Agreement which shall set forth
the terms and conditions pertaining to such Award. Each Award Agreement shall
specify the manner and procedure for exercising an Award, if relevant for the
Award, and specify the effective date of such exercise.

     (b) Number of Shares Covered by an Award.

Each Award Agreement shall state the number of Shares subject to the Award,
subject to adjustment of such Shares pursuant to Section 13.

     (c) Other Provisions.

An Award Agreement may contain such other provisions as the Committee in its
discretion deems advisable, including but not limited to:

         (i) Restrictions on the exercise of the Award;

         (ii) Submission by the Participant of such forms and documents as the
Committee may require; and/or

         (iii) Procedures to facilitate the payment of the Exercise Price of an
Option under any method allowable under Section 16.

     (d) Vesting of Awards.

Each Award Agreement shall include a Vesting schedule describing the date, event
or act upon which an Award shall Vest, in whole or in part, with respect to all
or a specified portion of the Shares covered by such Award.

     (e) Effect of Termination of Employment, Directorship or Consultancy on
Nonvested and Vested Awards.

                                       13
<PAGE>   15

         (i) For purposes of the Plan, a Participant's status as an Employee, a
Director or a Consultant shall be determined by the Committee and will be
treated as continuing intact while the Participant is on military leave, sick
leave or other bona fide leave of absence, as determined by the Committee.

         (ii) If a Participant ceases to be an Employee, a Director and/or a
Consultant for any reason (A) the Participant's Award(s) which are not Vested at
the time that the Participant ceases to be an Employee, a Director or a
Consultant (as applicable) shall be forfeited, and (B) the Participant's
Award(s) which are Vested at the time the Participant ceases to be an Employee,
a Director or a Consultant (as applicable) shall be forfeited and/or expire on
the terms specified in Sections 8 through 11 (as applicable) except to the
extent specifically provided otherwise in the Participant's Award Agreement.

     (f) Nontransferability of Awards.

An Award granted to a Participant shall, during the lifetime of the Participant,
be exercisable only by the Participant and shall not, except to the extent
specifically provided otherwise in the Plan or in the Participant's Award
Agreement, be assignable or transferable. In the event of the Participant's
death, an Award is transferable by the Participant only by will or the laws of
descent and distribution. Any attempted pledge, hypothecation, assignment,
transfer or attachment by any creditor in violation of this Section 7(f) shall
be null and void, except with the prior written consent of the Board.

     (g) Modification, Extension or Renewal of Awards.

Within the limitations of the Plan, the Committee may, in its discretion,
modify, extend or renew any outstanding Award or accept the cancellation of
outstanding Award(s) for the granting of a new Award(s) in substitution
therefore. Notwithstanding the preceding sentence, no modification of an Award
shall:

         (i) Without the consent of the Participant, alter or impair any rights
or obligations under any Award previously granted;

         (ii) Without the consent of the Participant, cause an Incentive Stock
Option previously granted to fail to satisfy all the conditions required to
qualify as an Incentive Stock Option; or

         (iii) Exceed or otherwise violate any limitation set forth in the Plan.

     (h) Rights as a Stockholder.

                                       14
<PAGE>   16

A Participant shall have no rights as a stockholder of the Corporation with
respect to any Shares subject to Award until the date a stock certificate for
such Shares is issued to the Participant. No adjustment shall be made for
dividends (ordinary or extraordinary or whether in currency, securities, or
other property), distributions, or other rights for which the record date is
prior to the date such stock certificate is issued.

8.   SPECIFIC TERMS AND CONDITIONS OF OPTIONS.

     (a)  Eligibility for Incentive Stock Options.

Incentive Stock Options may be granted only to a Participant who is an Employee.
Any Incentive Stock Option granted to a Participant who is also a Ten Percent
Stockholder shall be subject to the following additional limitations: (i) the
Exercise Price of each Share subject to such Incentive Stock Option, when
granted, is equal to or exceeds 110% of the Fair Market Value of a Share as of
the date of grant, and (ii) the term of the Incentive Stock Option does not
exceed five (5) years from the date of grant.

     (b)  Exercise Price.

Each Award Agreement shall state the Exercise Price for the Shares to which the
Option pertains, provided that the Exercise Price of an Incentive Stock Option
shall not be less than 100% of the Fair Market Value of the Shares determined as
of the date the Option is granted (substituting "110%" for "100%" for any
Incentive Stock Option granted to a Ten Percent Stockholder).

     (c)  Exercise of Options, Payment of Exercise Price, and "Net Shares"
          Settlement of Options.

         (i) A Participant may exercise an Option only on or after the date on
which the Option Vests and only on or before the date on which the term of the
Option expires.

         (ii) Subject to Section 8(c)(iii) below, a Participant exercising an
Option shall pay the Exercise Price for the Shares to which such exercise
pertains in full in cash (in U.S. dollars) as a condition of such exercise,
unless the Committee, in its discretion, allows the Participant to pay the
Exercise Price in a manner allowed under Section 16, so long as the sum of cash
so paid and such other consideration equals the Exercise Price. The Committee
may, in its discretion, permit the sequential exercise of an Option through
Pyramiding and/or permit the grant of Reload Options.

         (iii) The Committee may, in its discretion, permit a Participant to
exercise an Option without paying the Exercise

                                       15
<PAGE>   17

Price for the Shares to which such exercise pertains, in which event the Option
so exercised shall be settled in a specific number of whole Shares having an
aggregate Fair Market Value equal to (A) the excess of the Fair Market Value,
determined as of the date of exercise, of one Share over the Exercise Price of
such Option, multiplied by (B) the number of Shares to which such exercise
pertains.

     (d)  Term and Expiration of Options.

Subject to Section 8(i), except as otherwise specifically provided in a
Participant's Award Agreement, the term of an Option shall expire on the first
to occur of the following:

         (i) The tenth (10th) anniversary of the date the Option was granted
(for an Incentive Stock Option granted to any Participant who is a Ten Percent
Stockholder, "fifth (5th) anniversary" shall be substituted for "tenth (10th)
anniversary");

         (ii) The date determined under Section 8(e) for a Participant who
ceases to be an Employee, Director or Consultant by reason of voluntary
termination or involuntary termination For Cause;

         (iii) The date determined under Section 8(f) for a Participant who
ceases to be an Employee, Director or Consultant by reason of the Participant's
death;

         (iv) The date determined under Section 8(g) for a Participant who
ceases to be an Employee, Director or Consultant by reason of the Participant's
Total and Permanent Disability;

         (v) The date determined under Section 8(h) for a Participant who ceases
to be an Employee, Director or Consultant by reason of involuntary termination
other than For Cause;

         (vi) On the closing date of a transaction described in Section 13(b);
or

         (vii) The expiration date specified in the Award Agreement pertaining
to the Option.

     (e)  Voluntary Termination and Involuntary Termination For Cause.

If a Participant ceases to be an Employee, Director or Consultant by resigning
or by being Terminated For Cause, then the Participant's Options which are
Vested at the time the Participant ceases to be an Employee, Director or
Consultant shall expire immediately.

                                       16
<PAGE>   18

     (f)  Death of Participant.

If a Participant dies while an Employee, Director or Consultant, any Option
granted to the Participant may be exercised, to the extent it was Vested on the
date of the Participant's death or became Vested as a result of the
Participant's death, at any time within one (1) year after the Participant's
death (but not beyond the date that the term of the Option would earlier have
expired pursuant to Section 8(d) had the Participant's death not occurred).

                                       17
<PAGE>   19

     (g)  Total and Permanent Disability of Participant.

If a Participant ceases to be an Employee, Director or Consultant as a
consequence of Total and Permanent Disability, any Option granted to the
Participant may be exercised, to the extent it was Vested on the date that the
Participant ceased to be an Employee, Director or Consultant or became Vested as
a result of Participant's Total and Permanent Disability, at any time within one
(1) year after such date (but not beyond the date that the term of the Option
would earlier have expired pursuant to 8(d) had the Participant's Total and
Permanent Disability not occurred).

     (h)  Involuntary Termination Other Than For Cause.

If a Participant ceases to be an Employee, Director or Consultant upon
termination by the Corporation for reasons other than For Cause, the
Participant's Options which are Vested at the time the Participant is terminated
may be exercised at any time within three (3) months after such date (but not
beyond the date that the term of the Option would earlier have expired pursuant
to 8(d)).

     (i)  No Disqualification of Incentive Stock Options.

Notwithstanding any other provision of the Plan, the Plan shall not be
interpreted, amended or altered, nor shall any discretion or authority granted
under the Plan be exercised, so as to disqualify the Plan under Section 422 of
the Code or, without the consent of the Participant affected, disqualify any
Incentive Stock Option under Section 422 of the Code (except as provided in
Section 8(j)).

     (j)  Limitation on Incentive Stock Options.

The aggregate Fair Market Value (determined with respect to each Incentive Stock
Option as of the date of grant of such Incentive Stock Option) of all Shares
with respect to which a Participant's Incentive Stock Options first become
Vested during any calendar year (under the Plan and under other incentive stock
option plans, if any, of the Corporation and its Subsidiaries) shall not exceed
US $100,000. Any purported Incentive Stock Options in excess of such limitation
shall be recharacterized as Non-qualified Stock Options.

9.   SPECIFIC TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.

     (a)  Exercise Price.

         (i) Each Stock Appreciation Right Award Agreement shall state the
number of Shares to which it pertains and the

                                       18
<PAGE>   20

Exercise Price which is the basis for determining future appreciation, subject
to adjustment pursuant to Section 13, provided that the Exercise Price of a
Stock Appreciation Right shall not be less than 100% of the Fair Market Value of
a Share determined as of the date the Stock Appreciation Right is granted;

         (ii) A Stock Appreciation Right shall be issued to and exercised by a
Participant without payment by the Participant of any consideration.

     (b) Exercise and Settlement of Stock Appreciation Rights.

         (i) A Participant may exercise a Stock Appreciation Right only on or
after the date on which the Stock Appreciation Right Vests and only on or before
the date on which the Stock Appreciation Right expires;

         (ii) A Participant's properly exercised Stock Appreciation Right may be
settled in the form of cash (either in a lump sum payment or in installments),
whole Shares or a combination thereof, as the Award Agreement prescribes.

     (c) Term and Expiration of Stock Appreciation Rights.

Except as otherwise specifically provided in a Participant's Award Agreement,
the term of a Stock Appreciation Right shall expire on the first to occur of the
following:

         (i) The tenth (10th) anniversary of the date the Right was granted;

         (ii) The date determined under Section 9(d) for a Participant who
ceases to be an Employee, Director or Consultant by reason of voluntary
termination or involuntary termination For Cause;

         (iii) The date determined under Section 9(e) for a Participant who
ceases to be an Employee, Director or Consultant by reason of the Participant's
death;

         (iv) The date determined under Section 9(f) for a Participant who
ceases to be an Employee, Director or Consultant by reason of the Participant's
Total and Permanent Disability;

         (v) The date determined under Section 9(g) for a Participant who ceases
to be an Employee, Director or Consultant by reason of involuntary termination
other than For Cause;

         (vi) On the effective date of a transaction described in Section 13(b);
or

                                       19
<PAGE>   21

         (vii) The expiration date specified in the Award Agreement pertaining
to the Stock Appreciation Right.

     (d)  Voluntary Termination and Involuntary Termination For Cause.

If a Participant ceases to be an Employee, Director or Consultant by resigning
or by being terminated For Cause, the Participant's Stock Appreciation Rights
which are Vested at the time the Participant ceases to be an Employee, Director
or Consultant shall expire immediately.

     (e)  Death of Participant.

If a Participant dies while an Employee, Director or Consultant, any Stock
Appreciation Right granted to the Participant may be exercised, to the extent it
was Vested on the date of the Participant's death or became Vested as a
consequence of the Participant's death, at any time within one (1) year after
the Participant's death (but not beyond the date that the term of the Stock
Appreciation Right would earlier have expired pursuant to Section 9(c) had the
Participant's death not occurred).

     (f)  Total and Permanent Disability of Participant.

If a Participant ceases to be an Employee, Director or Consultant as a
consequence of Total and Permanent Disability, any Stock Appreciation Right
granted to the Participant may be exercised, to the extent it was Vested on the
date that the Participant ceased to be an Employee or became Vested as a
consequence of the Participant's Total and Permanent Disability, at any time
within one (1) year after such date (but not beyond the date that the term of
the Stock Appreciation Right would earlier have expired pursuant to 9(c) had the
Participant's Total and Permanent Disability not occurred).

     (g)  Involuntary Termination Other Than For Cause.

If a Participant ceases to be an Employee, Director or Consultant upon
termination by the Corporation for reasons other than For Cause, the
Participant's Stock Appreciation Rights which are Vested at the time the
Participant is terminated may be exercised at any time within three (3) months
after such date (but not beyond the date that the term of the Stock Appreciation
Rights would earlier have expired pursuant to 9(c)).

10.  SPECIFIC TERMS AND CONDITIONS OF RESTRICTED STOCK.

     (a)  Purchase Price.

                                       20
<PAGE>   22

         (i) Each Award Agreement shall state the number of Shares of Restricted
Stock to which it pertains and the purchase price per Share, if any, that the
Participant paid for such Shares, subject to adjustment pursuant to Section 13;

         (ii) A Share of Restricted Stock may be issued to a Participant with or
without payment by the Participant of any consideration (other than past and/or
future services), unless the Participant is required, pursuant to the related
Award Agreement, to pay a minimum purchase price, such as par value, for such
Shares.

                                       21
<PAGE>   23

     (b)  Forfeiture of Restricted Stock.

If a Participant's status as an Employee, Director or Consultant terminates for
any reason, any Share of Restricted Stock which was not Vested or did not become
Vested as the result of the Participant's termination shall be forfeited
immediately.

     (c)  Certificates Representing Non-Vested Shares of Restricted Stock.

As a condition to receiving an Award of Restricted Stock which are not Vested,
the Participant shall duly execute a "power of attorney" or a form of "stock
power" provided by the Corporation with respect to such Shares authorizing the
re-transfer, without any further action by the Participant, to the Corporation
any Shares which may be forfeited by the Participant. The Corporation shall
retain the stock certificate evidencing such Shares until the Shares are Vested.
If, in the opinion of the Corporation and its counsel, the retention of the
stock certificate representing such Restricted Stock is no longer required, the
Corporation shall deliver to the Participant a stock certificate representing
such Shares, bearing such restrictive legends as are required or may be deemed
advisable under the Plan or the provisions of any applicable law.

     (d)  Legends.

Stock certificates evidencing Restricted Stock shall bear a restrictive legend
noting the forfeiture provisions attached to such Shares and such other
restrictive legends as are required or may be deemed advisable by the Committee
under the Plan or the provisions of any applicable law.

11.  PERFORMANCE SHARES AND PERFORMANCE UNITS.

     (a)  Number of Shares Covered by a Performance Share Award.

Each Performance Share Award Agreement shall state the number of Shares to which
it pertains, subject to adjustment pursuant to Section 13.

     (b)  Value and Criteria of a Performance Unit Award.

Each Performance Unit Award Agreement shall state the value of such Award (in
U.S. dollars) and the specific performance objectives necessary to Vest such
Award.

     (c)  Purchase Price.

                                       22
<PAGE>   24

A Performance Share and a Performance Unit shall be issued to a Participant
without payment by the Participant of any consideration (other than past and/or
future services).

     (d)  Settlement of a Performance Share and a Performance Unit.

Following the end of the performance period applicable to a Performance Share or
a Performance Unit and the Committee's determination of the extent to which the
Award Vests, the Award shall be settled in the form of cash (either in a lump
sum payment or in installments), whole Shares or a combination thereof, as the
Award Agreement prescribes.

     (e)  Term and Expiration of Performance Shares and Performance Units.

Except as otherwise specifically provided in a Participant's Award Agreement,
the term of a Performance Share and Performance Unit shall expire on the first
to occur of the following events:

         (i) The date determined under Section 11(f) for a Participant who
ceases to be an Employee, Director or Consultant for any reason;

         (ii) On the effective date of a transaction described in Section 13(b);
or

         (iii) The expiration date specified in the Award Agreement pertaining
to the Performance Share or the Performance Unit.

     (f)  Forfeiture of Performance Shares and Performance Units.

If a Participant status as an Employee, Director or Consultant terminates for
any reason, any Performance Share and Performance Unit which was not Vested or
did not become Vested as the result of the Participant's termination shall be
forfeited immediately.

12.  TERM OF PLAN.

Awards may be granted pursuant to the Plan through the period commencing on the
Effective Date and ending on the tenth (10th) anniversary of the Effective Date
at 11:59 p.m. All Awards which are outstanding on such date shall remain in
effect until they are exercised or expire by their terms. The Plan shall expire
for all purposes on the twentieth (20th) anniversary of the Effective Date at
11:59 p.m. The Board is authorized to extend the Plan for an additional term at
any time; however, no Incentive Stock Options may be granted under the Plan on
or after the tenth (10th) anniversary of the Effective Date of the Plan,

                                       23
<PAGE>   25

unless an extension is approved by the shareholders of the Corporation within
one (1) year of such extension.

13.  RECAPITALIZATION, DISSOLUTION AND CHANGE OF CONTROL.

     (a)  Recapitalization.

Notwithstanding any other provision of the Plan to the contrary, but subject to
any required action by the stockholders of the Corporation and compliance with
any applicable securities laws, the Committee, in its sole discretion, shall
make any adjustments to the class and/or number of Shares covered by the Plan,
the number of Shares for which each outstanding Award pertains, the Exercise
Price of an Option, the Exercise Price of a Stock Appreciation Right, and/or any
other aspect of this Plan to prevent the dilution or enlargement of the rights
of Participants under this Plan in connection with any increase or decrease in
the number of issued Shares resulting from the payment of a Common Stock
dividend, stock split, reverse stock split, recapitalization, combination, or
reclassification or any other event which results in an increase or decrease in
the number of issued Shares without receipt of adequate consideration by the
Corporation (as determined by the Committee). The conversion of any convertible
securities of the Corporation shall not be deemed to have been issued without
adequate consideration.

     (b)  Dissolution, Merger, Consolidation, or Sale or Lease of Assets.

In connection with a Change-in-Control of the Corporation described in Section
2(d)(iii), each Award shall expire immediately prior to the closing date of such
transaction, provided that the Committee shall, to the extent possible
considering the timing of the transaction, give at least thirty (30) days' prior
written notice of such event to any Participant who shall then have the right to
exercise his or her Vested Awards (as an Award Agreement may provide) prior to
the closing date of such transaction, subject to earlier expiration pursuant to
Sections 8 through 11, as applicable. The preceding sentence shall not apply if
the Change-in-Control of the Corporation is described in Section 2(d)(iii)(C)
and the surviving entity agrees to assume outstanding Awards.

     (c)  Determination by the Committee.

All adjustments described in this Section 13 shall be made by the Committee and
shall be conclusive and binding on all persons.

     (d)  Limitation on Rights of Participants.

Except as expressly provided in this Section 13, no Participant shall have any
rights by reason of any reorganization,

                                       24
<PAGE>   26

dissolution, Change-in-Control, merger or acquisition. Any issuance by the
Corporation or any Subsidiary of Awards shall not affect, and no adjustment by
reason thereof shall be made with respect to, any Awards previously issued under
the Plan.

     (e)  No Limitation on Rights of Corporation.

The grant of an Award pursuant to the Plan shall not affect in any way the right
or power of the Corporation or any Subsidiary to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or to dissolve, liquidate, sell or
transfer all or any part of its business or assets.

14.  SECURITIES LAW REQUIREMENTS.

     (a)  Legality of Issuance.

No Share shall be issued upon the exercise of any Award unless and until the
Committee has determined that:

         (i) The Corporation, its Subsidiaries and the Participant have taken
all actions required to register the Shares under the Securities Act of 1933, as
amended (the "Act"), or to perfect an exemption from registration requirements
of the Act, or to determine that the registration requirements of the Act do not
apply to such exercise;

         (ii) Any applicable listing requirement of any stock exchange on which
the Share is listed has been satisfied; and

         (iii) Any other applicable provision of state, federal or foreign law
has been satisfied.

As a condition to the issuance of any Share pursuant to an Award or the transfer
of such Share, the Corporation may require an opinion of counsel, satisfactory
to the Corporation, to the effect that such issuance or transfer will not be in
violation of the Act or any other applicable securities laws or that such
issuance or transfer has been duly registered under federal and all applicable
state securities laws. The Corporation shall not be liable to any party for
damages due to a delay in the delivery or issuance of any stock certificate for
any reason.

     (b)  Restrictions on Transfer; Representations of Participant; Legends.

Regardless of whether the offering and sale of Shares under the Plan have been
registered under the Act or have been registered or qualified under the
securities laws of any state, the Corporation may impose restrictions upon the
sale, pledge or

                                       25
<PAGE>   27

other transfer of such Shares (including the placement of appropriate legends on
stock certificates) if, in the judgment of the Corporation and its counsel, such
restrictions are necessary or desirable to achieve compliance with the
provisions of the Act, the securities laws of any state, or any other law. If
the offering and/or sale of Shares under the Plan is not registered under the
Act and the Corporation determines that the registration requirements of the Act
apply but an exemption is available which requires an investment representation
or other representation, the Participant shall be required, as a condition to
acquiring such Shares, to represent that such Shares are being acquired for
investment, and not with a view to the sale or distribution thereof, except in
compliance with the Act, and to make such other representations, to execute such
documents and to provide the Corporation with such information as are deemed
necessary or appropriate by the Corporation and its counsel. Stock certificates
evidencing Shares acquired pursuant to an unregistered transaction to which the
Act applies shall bear a restrictive legend substantially in the following form
and such other restrictive legends as are required or deemed advisable under the
Plan or the provisions of any applicable law:

     THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
     ACT OF 1933 ("ACT"). THEY MAY NOT BE TRANSFERRED, SOLD OR OFFERED
     FOR SALE UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN
     EFFECT AS TO SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE
     ISSUER EITHER SUCH REGISTRATION IS UNNECESSARY IN ORDER FOR SUCH
     TRANSFER TO COMPLY WITH THE ACT OR THE REGISTRATION PROVISIONS OF
     THE ACT DO NOT APPLY TO SUCH PROPOSED TRANSFER.

Any determination by the Corporation, its Subsidiaries and its counsel in
connection with any of the matters set forth in this Section 14 shall be
conclusive and binding on all persons.

     (c)  Registration or Qualification of Securities.

The Corporation and/or its Subsidiaries may, but shall not be obligated to,
register or qualify the offering or sale of Shares under the Act or any other
applicable law.

     (d)  Exchange of Certificates.

If, in the opinion of the Corporation, its Subsidiaries and its counsel, any
legend placed on a stock certificate representing Shares issued pursuant to the
Plan is no longer required, the Participant or the holder of such certificate
shall be entitled to exchange such certificate for a certificate representing
the same number of Shares but lacking such legend.

15.  AMENDMENT OF THE PLAN.

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<PAGE>   28

The Committee may, from time to time, terminate, suspend or discontinue the
Plan, in whole or in part, or revise or amend it in any respect whatsoever
including, but not limited to, the adoption of any amendment deemed necessary or
advisable to qualify the Awards under rules and regulations promulgated by the
Securities and Exchange Commission (the "SEC") with respect to Participants who
are subject to the provisions of Section 16 of the Exchange Act, or to correct
any defect or supply any omission or reconcile any inconsistency in the Plan or
in any Award granted under the Plan, with or without approval of the
stockholders of the Corporation, but if any such action is taken without the
approval of the Corporation's stockholders, no such revision or amendment shall:

     (a) Increase the number of Shares subject to the Plan, other than any
increase pursuant to Section 13;

     (b) Change the designation of the class of persons eligible to receive
Awards; or

     (c) Amend this Section 15 to defeat its purpose.

No amendment, termination or modification of the Plan shall, without the consent
of a Participant, adversely affect the Participant with respect to any Award
previously granted to the Participant.

16.  PAYMENT FOR SHARE PURCHASES.

Payment of the Exercise Price for any Shares purchased pursuant to the Plan may
be made in cash (in U.S. dollars) or, where expressly approved for the
Participant by the Committee, in its discretion, and where permitted by law:

     (a) By check;

     (b) By wire transfer of immediately available funds;

     (c) By cancellation of indebtedness of the Corporation or a Subsidiary to
the Participant;

     (d) By surrender of Shares that either: (A) have been owned by the
Participant for more than six months (unless the Committee permits a Participant
to exercise an Option by Pyramiding, in which event the six months holding
period shall not apply) and have been "paid for" within the meaning of SEC Rule
144 (and, if such shares were purchased from the Corporation or a Subsidiary by
use of a promissory note, such note has been fully paid with respect to such
Shares); or (B) were obtained by the Participant in the public market, in each
case subject to applicable holding period and distribution restrictions required
by the Act and the Exchange Act;

                                       27
<PAGE>   29

     (e) By waiver of compensation due or accrued to Participant for services
rendered;

     (f) With respect only to purchases upon exercise of an Option, and provided
that a public market for the Corporation's stock exists:

         (i) Through a "same day sale" commitment from the Participant and a
broker-dealer that is a member of the National Association of Securities Dealers
(an "NASD Dealer") whereby the Participant irrevocably elects to exercise the
Option and to sell a portion of the Shares so purchased to pay the Exercise
Price, and whereby the NASD Dealer irrevocably commits upon receipt of such
Shares to forward the Exercise Price and any applicable withholding taxes
directly to the Corporation or a Subsidiary; or

         (ii) Through a "margin" commitment from the Participant and an NASD
Dealer whereby the Participant irrevocably elects to exercise the Option and to
pledge the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the Exercise Price,
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price and any applicable withholding taxes directly to the
Corporation or a Subsidiary; or

     (g) By any combination of the foregoing and/or by any other method approved
by the Committee.

17.  APPLICATION OF FUNDS.

The proceeds received by the Corporation and its Subsidiaries from the sale of
Common Stock pursuant to the exercise of an Option or in any other manner with
respect to any Award shall be used for general corporate purposes.

18.  APPROVAL OF SHAREHOLDERS.

The Plan shall be subject to approval by the affirmative vote of the holders of
a majority of the outstanding shares present and entitled to vote at the first
meeting of shareholders of the Corporation following the adoption of the Plan by
the Board. Prior to such approval, Awards may be granted but may not be
exercised or settled. Pursuant to Section 15, certain amendments shall also be
subject to approval by the Corporation's shareholders.

19.  WITHHOLDING OF TAXES.

     (a) General.

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<PAGE>   30

Whenever Shares are to be issued under the Plan, the Corporation or a Subsidiary
may require, as a condition to such issuance of Shares, the Participant to remit
to the Corporation or such Subsidiary, from any source, an amount sufficient to
satisfy foreign, federal, state and local withholding tax requirements prior to
the delivery of any certificate or certificates for such Shares. Whenever, under
the Plan, payments in satisfaction of Awards are to be made in cash, such
payment shall be net of an amount sufficient to satisfy foreign, federal, state,
and local withholding tax requirements.

         (b)      Stock Withholding.

When, under applicable tax laws, a Participant incurs a tax liability in
connection with the issuance of Shares under the Plan and the Participant is
obligated to pay the Corporation or a Subsidiary the amount required to be
withheld, the Participant may elect to satisfy the minimum withholding tax
obligation by having the Corporation or such Subsidiary withhold from the Shares
to be issued the specific number of Shares having a Fair Market Value equal to
the minimum amount required to be withheld, determined on the date that the
amount of tax to be withheld is to be determined (the "Tax Date"). All elections
by a Participant to have Shares withheld for this purpose shall be made in
writing in a form acceptable to the Committee and shall be subject to the
following restrictions:

         (i) The election must be made on or prior to the applicable Tax Date;

         (ii) Once made, then except as provided below, the election shall be
irrevocable as to the particular Shares as to which the election is made; and

         (iii) All elections shall be subject to the consent or disapproval of
the Committee.

20.  RIGHTS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT.

The Plan shall not be construed to give any individual the right to remain in
the employ of the Corporation (or a Subsidiary) or to affect the right of the
Corporation (or such Subsidiary) to terminate such individual's status as an
Employee, Director or Consultant at any time, with or without cause. The grant
of an Award shall not entitle the Participant to, or disqualify the Participant
from, participation in the grant of any other Award under the Plan or
participation in any other plan maintained by the Corporation or any Subsidiary.

21.  NOTICES.

                                       29
<PAGE>   31

Any notice to be provided by one party to the other party under this Plan shall
be deemed to have been duly delivered to the other party (i) on the date such
notice is delivered at the address provided in a Participant's Award Agreement
or at such other address as the party may notify the other party in writing at
any time, or (ii) on the date such notice is deposited in the United States mail
as first class mail, postage prepaid if addressed to the party at the address
provided in a Participant's Award Agreement or at such other address as the
party may notify the other party in writing at any time. For the purposes of
clause (i), the term "delivered" shall include hand delivery, delivery by
facsimile, and delivery by electronic mail.

22.  MISCELLANEOUS.

     (a) Unfunded Plan.

The Plan shall be unfunded and the Corporation and its Subsidiaries shall not be
required to establish any special account or fund or to otherwise segregate or
encumber assets to ensure payment of any Award.

     (b) No Restrictions on Other Programs.

Nothing contained in the Plan shall prevent the Corporation or any Subsidiary
from adopting other or additional compensation arrangements or plans, subject to
shareholder approval if such approval is required, and such arrangements or plan
may be either generally applicable or applicable only to specific classes.

     (c) Governing Laws.

The Plan and each Award Agreement shall be governed by the laws of the
Commonwealth of Virginia, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of the Plan
or Award Agreement to the substantive law of another jurisdiction. Unless
otherwise provided in the Award Agreement, recipients of an Award are deemed to
submit to the exclusive jurisdiction and venue of the federal or state courts of
Virginia, in the County of the principal offices of the Corporation in the
Commonwealth, to resolve any and all issues that may arise out of or relate to
the Plan and any related Award Agreement.

     (d) Attorney Fees.

In the event that a Participant or the Corporation or any Subsidiary brings an
action to enforce the terms of the Plan or any Award Agreement and the
Corporation or such Subsidiary prevails, the Participant shall pay all costs and
expenses incurred by the Corporation and such Subsidiary in connection with that
action, including reasonable attorney's fees, and all

                                       30
<PAGE>   32

further costs and fees, including reasonable attorney's fees, incurred by the
Corporation and such Subsidiary in connection with collection.

     (e) Invalidity or Unenforceability of Any Provision.

If any provision of the Plan is or becomes or is deemed invalid, illegal of
unenforceable in any jurisdiction, or would disqualify the Plan or any Award
under any law deemed applicable by the Committee, such provisions shall be
construed or deemed amended or limited in scope to conform to applicable laws
or, in the discretion of the Committee, it shall be stricken and the remainder
of the Plan shall remain in effect.

     (f) No Fractional Shares.

No fractional Shares may be issued under the Plan. The Committee shall determine
whether to disregard any fractional Share, round-up to the next higher Share, or
round-down to the next lower Share.

                                       31

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