Document:

Progress Energy, Inc. 2002 Equity Incentive Plan
                 (Amended and Restated Effective July 10, 2002)

     Section 1.   Purpose

     Progress Energy, Inc. (hereinafter  referred to as the "Sponsor"),  a North
Carolina  corporation,  hereby  establishes the 2002 Equity  Incentive Plan (the
"Plan") to promote the interests of the Sponsor and its shareholders through the
(i)  attraction  and  retention of executive  officers,  directors and other key
employees  essential  to  the  success  of  Sponsor  and  its  Affiliates;  (ii)
motivation  of  executive  officers,  directors  and other key  employees  using
performance-related  and stock-based  incentives  linked to the interests of the
Sponsor's shareholders; and (iii) enabling of such executive officers, directors
and other key  employees  to share in the  long-term  growth and  success of the
Sponsor and its  Affiliates.  The Plan permits the grant of  Nonqualified  Stock
Options,  Incentive Stock Options  (intended to qualify under Section 422 of the
Internal  Revenue  Code  of  1986,  as  amended),   Stock  Appreciation  Rights,
Restricted Stock,  Performance  Shares,  Performance  Units, and any other Stock
Unit Awards or stock-based  forms of Awards as the Committee may determine under
its sole and complete discretion at the time of grant, subject to the provisions
of this Plan  document and  applicable  law. The 1997 Equity  Incentive  Plan of
Progress  Energy,  Inc. (the "1997 Plan") shall remain  effective with regard to
all Awards made thereunder,  but shall be superseded by this Plan with regard to
all Awards after the Effective Date.

     Section 2.   Effective Date and Duration

     The Plan was approved by the Board of Directors on March 20, 2002,  subject
to approval by the  shareholders of the Sponsor.  The Plan will become effective
on  the  date  of  approval  of the  Plan  by the  Sponsor's  shareholders  (the
"Effective  Date"). The Plan was further amended and restated effective July 10,
2002.  The Plan shall expire on the tenth  anniversary  of the  Effective  Date;
however,  all Awards made prior to, and  outstanding on such date,  shall remain
valid in accordance with their terms and conditions.

     Section 3.   Definitions

     Except as otherwise defined in the Plan, the following terms shall have the
meanings set forth below:

     3.1 "Affiliate" means, with respect to Sponsor, any entity that directly or
indirectly,  through one or more intermediaries,  controls, or is controlled by,
or is under common control with Sponsor.

     3.2 "Award" means  individually or collectively,  a grant under the Plan of
Nonqualified Stock Options,  Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock,  Performance  Units,  Performance  Shares, or other Stock Unit
Awards.

     3.3 "Award  Date" or "Grant  Date" means the date on which an Award is made
by the Committee under this Plan.

     3.4 "Award Agreement" or "Agreement" means a written agreement implementing
the grant of each Award  signed by an  authorized  officer of the Sponsor and by
the Participant.

     3.5 "Beneficial Owner" shall have the meaning ascribed to such term in Rule
13d-3 under the Exchange Act.

     3.6 "Board" or "Board of  Directors"  means the Board of  Directors  of the
Sponsor.

     3.7 "Cashless  Exercise" means the exercise of an Option by the Participant
in compliance with the Federal  Reserve  Board's  Regulation T (or any successor
provision)  or as  otherwise  permitted  by the  Committee  through the use of a
brokerage  firm to make payment to the Sponsor of the exercise price either from
the proceeds of a loan to the  Participant  from the brokerage  firm or from the
proceeds of the sale of Stock issued pursuant to the exercise of the Option, and
upon receipt of such payment,  the Sponsor  delivers the exercised  Stock to the
brokerage  firm.  The date of exercise of a Cashless  Exercise shall be the date
the broker executes the sale of exercised Stock, or if no sale is made, the date
the broker  receives the exercise  loan notice from the  Participant  to pay the
Sponsor for the exercised Stock.

     3.8 "Cause" means:

          (a)  embezzlement  or  theft  from  the  Company,  or  other  acts  of
     dishonesty, disloyalty or otherwise injurious to the Company;

          (b)  disclosing  without  authorization  proprietary  or  confidential
     information of the Company;

          (c) committing any act of negligence or malfeasance  causing injury to
     the Company;

          (d) conviction of a crime  amounting to a felony under the laws of the
     United States or any of the several states;

          (e) any violation of the Company's Code of Ethics; or

          (f)  unacceptable  job  performance  which has been  substantiated  in
     accordance with the normal practices and procedures of the Company.

     3.9  "Change in Control"  means,  with  respect to any Award  granted on or
after the Effective  Date and prior to July 10, 2002, a change in control of the
Sponsor of a nature  that would be  required  to be reported in response to Item
1(a) of the  Current  Report  on Form  8-K,  as in  effect  on the date  hereof,
pursuant to Section 13 or 15(d) of the  Exchange  Act;  provided,  that  without
limitation,  such a Change in Control  shall be deemed to have  occurred at such
time as a "person" (as used in Section  14(d) of the Exchange Act) is or becomes
the  "beneficial  owner"  (as  defined in Rule 13d-3  under the  Exchange  Act),
directly  or  indirectly,  of 25% or more of the  combined  voting  power of the
Sponsor's  outstanding  securities  ordinarily  having  the  right  to  vote  in
elections of directors;  or individuals who constitute the Board of Directors of
the Sponsor on the date hereof (the  "Incumbent  Board") cease for any reason to
constitute  at least a  majority  thereof,  or of any  board of  directors  of a
successor  to  the  Sponsor,  provided  that  any  person  becoming  a  director
subsequent to the date hereof whose election,  or nomination for election by the
Sponsor's shareholders, was approved by a vote of at least three quarters of the
directors  comprising  the  Incumbent  Board  shall  be,  for  purposes  of this
subsection (b),  considered as though such person were a member of the Incumbent
Board,  in each case, as determined by the Committee in accordance  with Section
4.1.

     Notwithstanding  the  foregoing,  with  respect to any Award  granted on or
after  July 10,  2002,  a Change  in  Control  shall  mean the  earliest  of the
following dates:

          (a) the date any person or group of  persons  (within  the  meaning of
     Section 13(d) or 14(d) of the Securities  Exchange Act of 1934),  excluding
     employee benefit plans of the Sponsor, becomes, directly or indirectly, the
     "beneficial  owner"  (as  defined  in  Rule  13d-3  promulgated  under  the
     Securities  Act  of  1934)  of  securities  of  the  Sponsor   representing
     twenty-five  percent  (25%)  or more of the  combined  voting  power of the
     Sponsor's  then  outstanding   securities  (excluding  the  acquisition  of
     securities of the Sponsor by an entity at least eighty percent (80%) of the
     outstanding  voting  securities  of  which  are,  directly  or  indirectly,
     beneficially owned by the Sponsor); or

          (b) the date of  consummation  of a tender offer for the  ownership of
     more than fifty  percent  (50%) of the Sponsor's  then  outstanding  voting
     securities; or

          (c)  the  date  of  consummation  of  a  merger,   share  exchange  or
     consolidation  of  the  Sponsor  with  any  other   corporation  or  entity
     regardless  of which  entity is the  survivor,  other than a merger,  share
     exchange or  consolidation  which would result in the voting  securities of
     the Sponsor  outstanding  immediately prior thereto continuing to represent
     (either by remaining  outstanding or being converted into voting securities
     of the surviving or acquiring  entity) more than sixty percent (60%) of the
     combined  voting  power of the  voting  securities  of the  Sponsor or such
     surviving or acquiring entity outstanding  immediately after such merger or
     consolidation; or

          (d) the date, when as a result of a tender offer or exchange offer for
     the purchase of securities of the Sponsor  (other than such an offer by the
     Sponsor for its own securities), or as a result of a proxy contest, merger,
     share  exchange,  consolidation  or sale of  assets,  or as a result of any
     combination of the  foregoing,  individuals  who are  Continuing  Directors
     cease for any reason to constitute at least two-thirds (2/3) of the members
     of the Board; or

          (e)  the  date  the  shareholders  of the  Sponsor  approve  a plan of
     complete  liquidation  or winding-up of the Sponsor or an agreement for the
     sale or  disposition  by the  Sponsor  of all or  substantially  all of the
     Sponsor's assets; or

          (f) the date of any event which the Board determines should constitute
     a Change in Control.

     A Change in  Control  shall not be deemed to have  occurred  after July 10,
2002, on account of an event  described in paragraphs  (a), (b), (c), (d) or (e)
of this Section 3.9 until a majority of the members of the Board receive written
certification from the Committee that such event has occurred. Any determination
that an event  described in this Section 3.9 has occurred shall, if made in good
faith on the basis of  information  available at that time,  be  conclusive  and
binding on the Committee,  the Sponsor, the Participants and their beneficiaries
for all purposes of the Plan.

     3.10 "CEO" means the chief executive officer of the Sponsor.

     3.11 "Code" means the Internal  Revenue Code of 1986,  as amended from time
to time.

     3.12 "Committee"  means the Organization and Compensation  Committee of the
Board,  comprised  solely of Outside  Directors,  which will administer the Plan
pursuant to Section 4 herein.

     3.13 "Company" means Progress Energy,  Inc.,  including all Affiliates,  or
any successor thereto.

     3.14  "Continuing  Director"  means  the  members  of the  Board  as of the
Effective  Date;  provided,   however,  that  any  person  becoming  a  director
subsequent to such date whose  election or nomination for election was supported
by  seventy-five  percent  (75%) or more of the  directors  who  then  comprised
Continuing Directors shall be considered to be a Continuing Director.

     3.15 "Covered  Participant" means a Participant who is a "covered employee"
as defined in Section  162(m)(3) of the Code,  and the  regulations  promulgated
thereunder.

     3.16 "Department"  means the Human Resources  Department of Progress Energy
Service Company, LLC.

     3.17  "Designated  Beneficiary"  means the  beneficiary  designated  by the
Participant,  pursuant to procedures  established by the Department,  to receive
amounts due to the  Participant or to exercise any rights of the  Participant to
the extent permitted  hereunder in the event of the Participant's  death. If the
Participant  does  not  make  an  effective  designation,  then  the  Designated
Beneficiary will be deemed to be the Participant's estate.

     3.18  "Disability"  means (i) the  mental or  physical  disability,  either
occupational or non-occupational in origin, of the Participant defined as "total
disability" in the Long-term  Disability Plan of the Sponsor currently in effect
and as amended from time to time;  or (ii) a  determination  by the Committee of
"Total Disability" based on medical evidence that precludes the Participant from
engaging in any  occupation or employment for wage or profit for at least twelve
months and appears to be  permanent.  In the case of Awards of  Incentive  Stock
Options,  "Disability"  shall have the meaning set forth in Section  22(e)(3) of
the Code.

     3.19  "Divestiture"  means the sale (including the spin-off) of, or closing
by, the Company of the business operations in which the Participant is employed.

     3.20 "Early  Retirement"  means retirement of a Participant from employment
with the Company  after age 55, but prior to age 65 under the  provisions of the
Sponsor's Pension Plan or the Sponsor's Supplemental Senior Executive Retirement
Plan. In the event of a change in the Sponsor's  Pension Plan such that there is
no  longer a  definition  of  "Early  Retirement"  or the  Participant  is not a
participant  in the  Sponsor's  Pension Plan for  purposes of this plan,  "Early
Retirement" shall mean retirement before age 65 after reaching the 55th birthday
together with completion of 15 years of Vesting Service,  or after completion of
35 years of Vesting Service with no age limitation.

     3.21 "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     3.22 "Executive Officer" means an individual designated as an "officer" for
purposes  of  Section  16 of  the  Securities  Exchange  Act of  1934  and as an
"executive  officer" for Item 401(b) of Regulation  S-K by the Board pursuant to
resolutions adopted by the Board from time to time.

     3.23 "Fair Market  Value"  means,  on any given date,  the closing price of
Stock as reported on the New York Stock Exchange  composite tape on such day or,
if no shares of Stock were  traded on the New York Stock  Exchange  on such day,
then on the next  preceding day that Stock was traded on such  exchange,  all as
reported by such source as the Committee  may select.  In the case of a Cashless
Exercise,  Fair  Market  Value means the price of the Stock at the date and time
the broker executes the sale of exercised Stock.

     3.24 "Full-time  Employee"  means an employee of the Company  designated by
the Department as being a "regular,  full-time employee" who is eligible for all
plans and programs of the Company set forth for such employees. This designation
excludes all part-time,  temporary, leased or contract employees and consultants
to the Company.

     3.25 "Incentive  Stock Option" means an option to purchase  Stock,  granted
under Section 7 herein,  which is designated as an incentive stock option by the
Committee and is intended to meet the requirements of Section 422 of the Code.

     3.26 "Key Employee" means an officer or other employee of the Company,  who
is selected for participation in the Plan in accordance with Section 4.2.

     3.27 "Nonqualified Stock Option" means an Option to purchase Stock, granted
under Section 7 herein, which is not intended to be an Incentive Stock Option.

     3.28 "Normal  Retirement" means the retirement of any Participant under the
Sponsor's  Pension  Plan at age 65. In the  event of a change  in the  Sponsor's
Pension Plan such that there is no longer a definition of "Normal Retirement" or
the Participant is not a participant in the Sponsor's Pension Plan, for purposes
of the Plan "Normal  Retirement" shall mean retirement upon attaining the age of
65 years and completing five years of Vesting Service.

     3.29  "Option"  means an  Incentive  Stock Option or a  Nonqualified  Stock
Option.

     3.30 "Other  Stock Unit Award"  means  Awards of Stock or other Awards that
are  valued  in whole or in part by  reference  to, or are  otherwise  based on,
shares of Stock or other securities of the Sponsor.

     3.31  "Outside  Director"  means a member of the Board of  Directors of the
Sponsor who is not an employee of the Company.

     3.32  "Participant"  means a Key Employee or Outside  Director who has been
granted an Award under the Plan.

     3.33  "Performance-Based  Exception" means the performance-based  exception
from the tax deductibility limitations of Code Section 162(m).

     3.34 "Performance  Measures" mean, unless and until the Committee  proposes
for shareholder approval and the Sponsor's  shareholders approve a change in the
general performance  measures set forth in this article, the attainment of which
may determine  the degree of payout and/or  vesting with respect to Awards which
are designed to qualify for the Performance-Based  Exception,  measure(s) chosen
from among the following alternatives:

          (a) Total shareholder return (absolute or peer-group comparative)

          (b) Stock price increase (absolute or peer-group comparative)

          (c)  Dividend  payout  as a  percentage  of net  income  (absolute  or
     peer-group comparative)

          (d) Return on equity (absolute or peer-group comparative)

          (e) Return on capital employed (absolute or peer-group comparative)

          (f)  Cash  flow,  including  operating  cash  flow,  free  cash  flow,
     discounted cash flow return on investment,  and cash flow in excess of cost
     of capital

          (g) Economic value added (income in excess of capital costs)

          (h) Cost per KWH (absolute or peer-group comparative)

          (i) Revenue per KWH (absolute or peer-group comparative)

          (j) Market share

          (k) Customer  satisfaction as measured by survey instruments (absolute
     or peer-group comparative)

          (l)  Earnings  before  interest,  and taxes  (absolute  or  peer-group
     comparative)

          (m) Earnings before interest,  taxes,  depreciation,  and amortization
     (absolute or peer-group comparative)

     The Committee shall have the discretion to adjust the determinations of the
degree of  attainment of the  pre-established  Performance  Measures;  provided,
however,  that Awards  which are  designed to qualify for the  Performance-Based
Exception may not be adjusted  upward (the Committee shall retain the discretion
to adjust  such  Awards  downward),  except to the extent  permitted  under Code
Section   162(m)  and  the   regulations   thereunder   to   reflect   corporate
reorganizations or other events.

     3.35 "Performance Award" means a  performance-based  Award, which may be in
the form of either Performance Shares or Performance Units.

     3.36 "Performance Period" means the time period designated by the Committee
during which performance goals must be met.

     3.37 "Performance Share" means an Award, designated as a Performance Share,
granted to a  Participant  pursuant to Section 10 herein,  the value of which is
determined,  in  whole  or in part,  by the  value  of Stock in a manner  deemed
appropriate by the Committee and described in the Agreement or Sub-Plan.

     3.38 "Performance  Unit" means an Award,  designated as a Performance Unit,
granted to a  Participant  pursuant to Section 10 herein,  the value of which is
determined,  in whole or in part,  by the  attainment of  pre-established  goals
relating to Sponsor's or Company's financial or operating  performance as deemed
appropriate by the Committee and described in the Agreement or Sub-Plan.

     3.39 "Period of Restriction"  means the period during which the transfer of
shares of Restricted Stock is restricted, pursuant to Section 9 of the Plan.

     3.40  "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).

     3.41 "Plan" means the Progress  Energy,  Inc. 2002 Equity Incentive Plan as
herein described and as hereafter from time to time amended.

     3.42  "Restricted  Stock" means an Award of Stock  granted to a Participant
pursuant to Section 9 of the Plan.

     3.43 "Rule 16b-3" means Rule 16b-3 under  Section 16(b) of the Exchange Act
as adopted in Exchange Act Release No. 34-37260 (May 31, 1996,  effective August
15, 1996), or any successor rule as amended from time to time.

     3.44 "Section  162(m)"  means Section  162(m) of the Code, or any successor
section under the Code, as amended from time to time and as interpreted by final
or proposed regulations promulgated thereunder from time to time.

     3.45  "Securities  Act" means the  Securities Act of 1933 and the rules and
regulations promulgated  thereunder,  or any successor law, as amended from time
to time.

     3.46 "Secretary" means the corporate secretary of the Sponsor.

     3.47 "Sponsor" means Progress Energy, Inc., or any successor thereto.

     3.48  "Sponsor's  Pension Plan" means the Progress  Energy Pension Plan, as
amended from time to time, and any successor thereto.

     3.49 "Stock" means the common stock of the Sponsor.

     3.50 "Stock  Appreciation Right" means the right to receive an amount equal
to the excess of the Fair Market Value of a share of Stock (as determined on the
date of  exercise)  over the Fair Market Value of the Stock on the Award Date of
the Stock Appreciation Right.

     3.51  "Stock  Unit Award"  means an Award of Stock or units  granted  under
Section 11 of the Plan.

     3.52 "Sub-Plan"  means a written  document that permits the grant of Awards
consistent with the provisions of this Plan.

     3.53 "Vesting  Service"  means each year of employment  with the Company in
which a Participant works 1,000 hours.

     Section 4. Administration

     4.1 The Committee.  The Plan shall be  administered  and interpreted by the
Committee which shall have full authority and all powers  necessary or desirable
for such administration. The express grant in this Plan of any specific power to
the  Committee  shall not be construed as limiting any power or authority of the
Committee.  In its sole and complete  discretion the Committee may adopt, alter,
suspend and repeal any such administrative rules, regulations,  guidelines,  and
practices governing the operation of the Plan as it shall from time to time deem
advisable. In addition to any other powers and, subject to the provisions of the
Plan, the Committee shall have the following  specific powers:  (i) to determine
the terms and conditions  upon which the Awards may be made and exercised;  (ii)
to determine all terms and provisions of each Agreement and/or  Sub-Plan,  which
need not be  identical  for  types of  Awards  nor for the same type of Award to
different  Participants;   (iii)  to  construe  and  interpret  the  Agreements,
Sub-Plans and the Plan; (iv) to establish,  amend, or waive rules or regulations
for the Plan's  administration;  (v) to  accelerate  the  exercisability  of any
Award,  the length of a Performance  Period or the  termination of any Period of
Restriction  except for  Awards to Covered  Participants  that are  intended  to
qualify  for the  Performance-Based  Exception,  other than as may be  otherwise
provided under the terns of such an Award in the event of a Change in Control or
as hereinafter specified; and (vi) to make all other determinations and take all
other  actions  necessary  or  advisable  for the  administration  of the  Plan,
including  a  determination  of a Change  in  Control  under  Section  3.9.  The
Committee may take action by a meeting in person,  by unanimous written consent,
or by meeting with the assistance of  communications  equipment which allows all
Committee members  participating in the meeting to communicate in either oral or
written form.  The Committee may seek the assistance or advice of any persons it
deems necessary to the proper administration of the Plan.

     4.2  Selection of  Participants  Other Than Outside  Directors.  Subject to
Section 5 of the Plan, the Committee shall have sole and complete  discretion in
determining Key Employees who shall participate in the Plan; provided,  however,
the  Committee  may delegate to the CEO the authority to designate Key Employees
and/or  Awards  to be made to Key  Employees  who  are not  Executive  Officers,
subject to any  limitations  imposed by the Committee on the  designation of Key
Employees  including a fixed maximum Award amount for any group of Key Employees
and/or a maximum  Award amount for any one Key  Employee,  as  determined by the
Committee.  Awards made to the  Executive  Officers  shall be  determined by the
Committee.

     4.3 Awards to Outside Directors.  Awards to Outside Directors shall be made
in the sole discretion of the full Board of Directors;  provided,  however, that
Awards of Options to Outside  Directors shall be limited to  Nonqualified  Stock
Options.

     4.4 Award Agreements and Sub-Plans. Each Award granted under the Plan shall
be granted either under the terms of an Award Agreement and/or a Sub-Plan. Award
Agreements  and  Sub-Plans  shall  specify the terms,  conditions  and any rules
applicable   to  the  Award,   including  but  not  limited  to  the  effect  of
transferability,  a Change in Control, or death, Disability,  Divestiture, Early
Retirement,  Normal  Retirement  or  other  termination  of  employment  of  the
Participant  on the Award.  If the Award is granted  under the terms of an Award
Agreement,  the Award Agreement shall be signed by an authorized  representative
of the Sponsor and the  Participant,  and a copy of the signed  Award  Agreement
shall be provided to the  Participant.  If the Award is granted  under the terms
and conditions of a Sub-Plan, the Sub-Plan shall be approved by the Committee as
an  Exhibit to the Plan,  and a copy of the  Sub-Plan  or a summary  description
thereof shall be provided to each Participant.

     4.5 Committee  Decisions.  All  determinations  and  decisions  made by the
Committee pursuant to the provisions of the Plan shall be final, conclusive, and
binding upon all persons,  including the Company,  its employees,  Participants,
and Designated  Beneficiaries,  and the Sponsor's shareholders,  except when the
terms of any sale or award of shares of Stock or any grant of rights or  Options
under the Plan are required by law or by the Articles of Incorporation or Bylaws
of  the  Sponsor  to  be  approved  by  the  Sponsor's  Board  of  Directors  or
shareholders prior to any such sale, award or grant.

     4.6 Rule 16b-3 and Section 162(m)  Requirements.  Notwithstanding any other
provision of the Plan,  the Committee  may impose such  conditions on any Award,
and the Board may amend the Plan in any such  respects,  as may be  required  to
satisfy the requirements of Rule 16b-3 or Section 162(m).

     4.7  Indemnification  of  Committee.  In addition  to such other  rights of
indemnification  as they may have as  Outside  Directors  or as  members  of the
Committee,  the members of the  Committee  shall be  indemnified  by the Sponsor
against reasonable expenses incurred from their administration of the Plan. Such
reasonable  expenses include,  but are not limited to, attorneys' fees, actually
and reasonably  incurred in connection  with the defense of any action,  suit or
proceeding,  or in connection with any appeal  therein,  to which they or any of
them may be a party by reason of any action  taken or failure to act under or in
connection with the Plan or any Award granted or made hereunder, and against all
amounts  reasonably  paid  by  them  in  settlement  thereof  or paid by them in
satisfaction  of a judgment  in any such  action,  suit or  proceeding,  if such
members  acted in good faith and in a manner  which they  believed to be in, and
not opposed to, the best interests of the Company.

     Section 5. Eligibility

     Selection of  Participants  by the  Committee or the CEO under  Section 4.2
shall be subject to the following limitations: (i) no person owning, directly or
indirectly,  more than 5% of the total  combined  voting power of all classes of
Stock shall be eligible to  participate  under the Plan; and (ii) only Full-time
Employees shall be eligible to participate  under the Plan,  except that Outside
Directors may be granted  Nonqualified  Stock Options or Restricted Stock Awards
in accordance with Section 4.3.

     Section 6. Shares of Stock Subject to the Plan

     6.1 Number of Shares. Subject to adjustment as provided below and except as
otherwise  provided in Section 6.4 and Section 6.5 herein, the maximum aggregate
number of shares of Stock that may be issued  pursuant  to Awards made under the
Plan  shall  not  exceed  15,000,000  shares  of  Stock,  which  may  be in  any
combination of Options,  Restricted Stock, Performance Shares or any other right
or Option which is payable in the form of Stock.  Additionally,  shares of Stock
available  for  issuance  on the  Effective  Date  under the 1997 Plan  shall be
transferred  to the Plan and  added to the  shares  available  for the  grant of
Awards  under this Plan.  The  maximum  aggregate  number of shares  that may be
granted in the form of Incentive Stock Options shall be 10,000,000.  The maximum
aggregate  number  of  shares  of  Stock  that  may be  granted  in the  form of
Restricted  Stock shall be 3,000,000 and the maximum  aggregate number of shares
of Stock (or  derivatives of shares of Stock) that may be granted in the form of
Performance  Shares,  Performance  Units or other  Stock  Unit  Awards  shall be
4,000,000.  Shares of Stock may be available  from the  authorized  but unissued
shares of Stock. Except as provided in Sections 6.2 and 6.3 herein, the issuance
of shares of Stock in connection  with the exercise of, or as other payment for,
Awards under the Plan shall reduce the number of shares of Stock  available  for
future Awards under the Plan.

     6.2 Lapsed Awards of Forfeited  Shares of Stock.  In the event that (i) any
Option  or other  Award  granted  under  the Plan or the 1997  Plan  terminates,
expires,  or lapses for any reason other than exercise of the Award,  or (ii) if
shares of Stock issued  pursuant to the Awards are canceled or forfeited for any
reason,  the number of shares of Stock available for Awards under the Plan shall
be  increased  by the number of shares of Stock that were subject to such Award;
provided,  however,  that this provision shall not be construed to allow for the
issuance of treasury stock.

     6.3 Delivery of Shares of Stock as Payment. In the event a Participant pays
for any Option or other Award  granted  under the Plan  through the  delivery of
previously acquired shares of Stock, the number of shares of Stock available for
Awards  under  the Plan  shall be  increased  by the  number  of shares of Stock
surrendered  by the  Participant,  subject to Rule 16b-3 as  interpreted  by the
Securities and Exchange Commission or its staff;  provided,  however,  that this
provision shall not be construed to allow for the issuance of treasury stock.

     6.4 Capital Adjustments. The number and class of shares of Stock subject to
each  outstanding  Award,  the  maximum  number of  shares of Stock  that may be
subject to an Award under  Sections 7.7,  8.5,  9.6,  10.6 and 11.1,  the Option
Price (as  hereinafter  defined)  and the  aggregate  number,  type and class of
shares of Stock for which  Awards  thereafter  may be made  shall be  subject to
adjustment, if any, as the Committee deems appropriate,  based on the occurrence
of a number of specified and non-specified events; provided,  however, that with
respect to Incentive  Stock  Options such  adjustment  shall be made in a manner
consistent  with Section  424(a) of the Code and,  with respect to any Awards to
Executive Officers,  shall be consistent with the requirements of Section 162(m)
of the Code and the regulations promulgated thereunder.  Such events include but
are not limited to the following:

          (a) If the  outstanding  shares of Stock of the Sponsor are increased,
     decreased  or  exchanged  through  merger,  consolidation,  sale  of all or
     substantially   all  of  the  property  of  the  Sponsor,   reorganization,
     recapitalization,  reclassification,  stock dividend,  stock split or other
     distribution in respect to such shares of Stock,  for a different number or
     type of  shares  of  Stock,  or if  additional  shares  of  Stock or new or
     different  shares of Stock are  distributed  with respect to such shares of
     Stock, an appropriate and  proportionate  adjustment  shall be made in: (i)
     the maximum number of shares of Stock available for the Plan as provided in
     Section  6.1 herein,  (ii) the type of shares of Stock or other  securities
     available for the Plan,  (iii) the number of shares of Stock subject to any
     then  outstanding  Awards  under  the Plan,  and (iv) the price  (including
     exercise  price)  for each  share of Stock  (or  other  kind of  shares  or
     securities)  subject to then outstanding  Awards, but without change in the
     aggregate  purchase  price as to which such Options  remain  exercisable or
     Restricted Stock releasable.

          (b) If other events not  specified  above in this Section 6.4, such as
     any extraordinary cash dividend, split-up, spin-off, combination,  exchange
     of shares,  warrants or rights offering to purchase Stock, or other similar
     corporate  event affect the Stock such that an  adjustment  is necessary to
     maintain the benefits or potential  benefits  intended to be provided under
     this Plan, then the Committee in its discretion may make adjustments to any
     or all of (i) the number and type of shares of Stock which  thereafter  may
     be  optioned  and sold or  awarded or made  subject  to Stock  Appreciation
     Rights under the Plan, (ii) the grant,  exercise or conversion price of any
     Award  made  under the Plan  thereafter,  and (iii)  the  number  and price
     (including  Exercise Price) of each share of Stock (or other kind of shares
     or securities)  subject to then outstanding  Awards,  but without change in
     the aggregate purchase price as to which such Options remain exercisable or
     Restricted  Stock  releasable.  Any adjustment as provided above for Awards
     that are intended to qualify for the  Performance-Based  Exception shall be
     subject  to any  applicable  restrictions  set  forth in  Section  12 or in
     Section 162(m).

          (c) Any adjustment made by the Committee pursuant to the provisions of
     this Section 6.4 shall be final,  binding and conclusive.  A notice of such
     adjustment,   including   identification  of  the  event  causing  such  an
     adjustment,  the calculation  method of such adjustment,  and the change in
     price and the number of shares of Stock,  or  securities,  cash or property
     purchasable   subject  to  each  Award  shall  be  sent  to  each  affected
     Participant.  No fractional  interests shall be issued under the Plan based
     on such adjustments, and shall be forfeited.

     6.5 Acquisitions. In connection with the acquisition of any business by the
Company or any of its  Affiliates,  any outstanding  grants,  awards or sales of
options or other  similar  rights  pertaining to such business may be assumed or
replaced by grants or awards  under the Plan upon such terms and  conditions  as
the Committee determines.  The date of any such grant or award shall relate back
to the date of the initial grant or award being assumed or replaced, and service
with the  acquired  business  shall  constitute  service  with the  Company  for
purposes  of such grant or award.  Any shares of Stock  underlying  any grant or
award or sale pursuant to any such acquisition shall be disregarded for purposes
of applying the limitations,  and shall not reduce the number of shares of Stock
available,  under Section 6.1 above.  Notwithstanding any provision in this Plan
to the contrary,  the exercise  price of any such Award may be below Fair Market
Value in order to replace the value of another  award in the sole  discretion of
the Committee.

     Section 7. Stock Options

     7.1 Grant of Stock Options. Subject to the terms and provisions of the Plan
and applicable law, the Committee,  at any time and from time to time, may grant
Options to Key  Employees,  and with  respect to Outside  Directors  pursuant to
approval by the Board,  as it shall  determine.  Except with  respect to Outside
Directors,  the Committee shall have sole and complete discretion in determining
the type of Option  granted,  the Option  Price (as  hereinafter  defined),  the
duration  of the  Option,  the  number  of  shares  of Stock to which an  Option
pertains,  any conditions  imposed upon the  exercisability of the Options,  the
conditions  under  which  the  Option  may be  terminated  and  any  such  other
provisions as may be warranted to comply with the law or rules of any securities
trading system or stock exchange.  Notwithstanding the preceding,  the Committee
may delegate to the CEO authority to grant  options in  accordance  with Section
4.2. Each Option grant shall have such specified  terms and conditions  detailed
in an Award  Agreement.  The  Agreement  shall  specify  whether  the  Option is
intended to be an Incentive  Stock  Option  within the meaning of Section 422 of
the Code, or a Nonqualified Stock Option.

     7.2  Option  Price.  The  exercise  price per share of Stock  covered by an
Option  ("Option  Price")  shall  be  determined  at the  time of  grant  by the
Committee,  subject to Section  6.5  hereof and the  limitation  that the Option
Price shall not be less than 100% of the Fair  Market  Value of the Stock on the
Grant Date.

     7.3 Exercisability.  Options granted under the Plan shall be exercisable at
such times and be subject to such  restrictions  and conditions as the Committee
or the CEO, as the case may be, shall determine,  which will be specified in the
Award  Agreement  and need not be the same  for each  Participant.  However,  no
Option may be exercisable within the first year following the Grant Date, except
in the event of a Change in Control,  or after the  expiration of ten (10) years
from the Grant Date.

     7.4 Limitations on Incentive Stock Options.  Incentive Stock Options may be
granted only to  Participants  who are  employees of the Sponsor or of a "Parent
Corporation" or "Subsidiary  Corporation" (as defined in Sections 424(e) and (f)
of the Code,  respectively)  at the Grant Date.  The aggregate Fair Market Value
(determined  as of the time the Stock  Option  is  granted)  of the  Stock  with
respect to which Incentive Stock Options are exercisable for the first time by a
Participant  during any calendar year (under all option plans of the Company and
of any  Parent  Corporation  or  Subsidiary  Corporation)  shall not  exceed one
hundred thousand  dollars  ($100,000).  For purposes of the preceding  sentence,
Incentive  Stock  Options  will be taken into account in the order in which they
are granted. The per-share exercise price of an Incentive Stock Option shall not
be less than one hundred percent (100%) of the Fair Market Value of the Stock on
the Grant Date,  and no Incentive  Stock Option may be exercised  later than ten
(10) years after the date it is granted. In addition,  no Incentive Stock Option
may be issued to a  Participant  in tandem  with a  Nonqualified  Stock  Option.
Further,  Incentive Stock Options may not be granted to any Participant  who, at
the  time  of  grant,  owns  stock  possessing  (after  the  application  of the
attribution  rules of Section 424(d) of the Code) more than ten percent (10%) of
the total  combined  voting  power of all classes of stock of the Company or any
Parent Corporation or Subsidiary  Corporation,  unless the exercise price of the
option  is fixed at not less than one  hundred  ten  percent  (110%) of the Fair
Market  Value of the Stock on the Grant Date and the  exercise of such Option is
prohibited  by its terns after the  expiration  of five (5) years from the Grant
Date of such Option.

     7.5 Method of  Exercise.  Options  shall be  exercised by the delivery of a
notice from the  Participant  to the  Secretary  (or his or her designee) in the
form  prescribed  by the  Committee  setting forth the number of shares of Stock
with respect to which the Option is to be exercised, accompanied by full payment
for the shares of Stock.  The Option  Price  shall be payable to the  Sponsor in
full in cash, or its equivalent,  or by delivery of shares of Stock (not subject
to any security  interest or pledge)  valued at Fair Market Value at the time of
exercise or by a combination  of the foregoing.  In addition,  the Committee may
permit the  Cashless  Exercise  of the  Option.  As soon as  practicable,  after
receipt of notice and payment,  the Sponsor  shall  deliver to the  Participant,
Stock  certificates in an appropriate  amount based upon the number of shares of
Stock with respect to which the option is exercised, issued in the Participant's
name.

     7.6 Notice. Each Participant shall give prompt notice to the Sponsor of any
disposition  of shares of Stock  acquired  upon  exercise of an Incentive  Stock
Option if such  disposition  occurs  within either two (2) years after the Grant
Date or one (1) year after the date of  transfer  of such shares of Stock to the
Participant upon the exercise of such Incentive Stock Option.

     7.7  Maximum  Award.  The  maximum  number of  shares of Stock  that may be
granted  in the  form of  Options  pursuant  to any  Award  granted  in a single
calendar year to any one Participant shall be 2,000,000.

     7.8 Limitation on  Transferability.  Solely to the extent  permitted by the
Committee in an Award  Agreement and subject to the terms and  conditions as the
Committee shall specify, a Nonqualified Stock Option (but not an Incentive Stock
Option) may be transferred to members of the Participant's  immediate family (as
determined by the Committee) or to trusts,  partnerships or  corporations  whose
beneficiaries,  members or owners are  members  of the  Participant's  immediate
family,  and/or to such other  persons or  entities  as may be  approved  by the
Committee in advance and set forth in an Award  Agreement,  in each case subject
to the  condition  that the  Committee be satisfied  that such transfer is being
made for estate or tax planning purposes or for gratuitous or donative purposes,
without   consideration  (other  than  nominal   consideration)  being  received
therefor. Except to the extent permitted by the Committee in accordance with the
foregoing,  an Option shall be nontransferable  otherwise than by will or by the
laws of descent and distribution,  and shall be exercisable  during the lifetime
of the Participant only by such Participant.

     Section 8. Stock Appreciation Rights

     8.1 Grant of Stock Appreciation Rights. Subject to the terms and provisions
of the Plan and  applicable  law,  the  Committee,  at any time and from time to
time, may grant  freestanding  Stock  Appreciation  Rights,  Stock  Appreciation
Rights in tandem with an Option, or Stock Appreciation  Rights in addition to an
Option.  Stock  Appreciation  Rights  granted  in  tandem  with an  Option or in
addition  to an Option  may be  granted  at the time of the Option or at a later
time.

     8.2 Price.  The exercise  price of each Stock  Appreciation  Right shall be
determined at the time of grant by the Committee, subject to the limitation that
the grant price shall not be less than 100% of Fair Market Value of the Stock on
the Grant Date.

     8.3 Exercise.  The  Participant  shall be entitled to receive  payment upon
exercise of a Stock Appreciation Right in accordance with Section 8.4.

8.4 Payment. Upon exercise of the Stock Appreciation Right, the Participant
shall be entitled to receive payment from the Company in an amount determined by
multiplying (a) the difference between the Fair Market Value of a share of Stock
on the date of Exercise of the Stock Appreciation Right over the grant price
specified in the Award Agreement by (b) the number of shares of Stock with
respect to which the Stock Appreciation Right is exercised.

     8.5  Maximum  Award.  The  maximum  number of  shares of Stock  that may be
subject to Stock Appreciation  Rights granted to any Participant during a single
calendar year shall be 2,000,000.

     Section 9. Restricted Stock

     9.1 Grant of Restricted  Stock.  Subject to the terms and provisions of the
Plan and applicable  law, the Committee,  at any time and from time to time, may
grant shares of  Restricted  Stock under the Plan to such  Participants,  and in
such amounts and for such duration and/or  consideration  as it shall determine.
Participants  receiving  Restricted  Stock  Awards are not  required  to pay the
Sponsor or the Company therefor  (except for applicable tax  withholding)  other
than the rendering of services and/or other  consideration  as determined by the
Committee at its sole discretion.

     9.2  Restricted  Stock  Agreement.  Each  Restricted  Stock  grant shall be
evidenced  by an Agreement  that shall  specify the Period of  Restriction;  the
conditions  which must be  satisfied  prior to removal of the  restriction;  the
number of shares of Restricted  Stock granted;  and such other provisions as the
Committee shall determine. The Committee may specify, but is not limited to, the
following  types of  restrictions in the Award  Agreement:  (i)  restrictions on
acceleration  or  achievement  of terms or  vesting  based  an any  business  or
financial  goals of the Company,  including,  but not limited to the Performance
Measures set out in Section 3.33, and (ii) any other further  restrictions  that
may be  advisable  under  the  law,  including  requirements  set  forth  by the
Securities Act, any securities  trading system or stock exchange upon which such
shares under the Plan are listed.

     9.3 Removal of  Restrictions.  Except as otherwise noted in this Section 9,
Restricted  Stock covered by each Award made under the Plan shall be provided to
and become  freely  transferable  by the  Participant  after the last day of the
Period of  Restriction  and/or  upon the  satisfaction  of other  conditions  as
determined by the Committee.  Except as specifically provided in this Section 9,
the Committee shall have no authority to reduce or remove the restrictions or to
reduce or remove the Period of  Restriction  without the express  consent of the
shareholders  of the Sponsor.  If the grant of Restricted  Stock is  performance
based, the total Restricted  Period for any or all shares or units of Restricted
Stock so  granted  shall be no less  than one (1)  year.  Any  other  shares  of
Restricted  Stock  issued  pursuant  to this  Section 9 shall  provide  that the
minimum  Period  of  Restrictions  shall be three  (3)  years,  which  Period of
Restriction  may permit the removal of  restrictions  on no more than  one-third
(1/3) of the shares of Restricted  Stock at the end of the first year  following
the Grant Date, and the removal of the  restrictions on an additional  one-third
(1/3) of the  shares at the end of each  subsequent  year.  Notwithstanding  the
previous sentence, if a Participant terminates employment from the Company at or
following  Early  Retirement  or Normal  Retirement,  any  time-based  Period of
Restriction may be removed at the discretion of the Committee. In no event shall
any  restrictions  be removed from shares of  Restricted  Stock during the first
year  following  the Grant Date,  except due to  retirement  as described in the
preceding sentence or in the event of a Change in Control.

     9.4 Voting Rights. During the Period of Restriction,  Participants in whose
name Restricted  Stock is granted under the Plan may exercise full voting rights
with respect to those shares.

     9.5 Dividends and Other  Distributions.  During the Period of  Restriction,
Participants in whose name  Restricted  Stock is granted under the Plan shall be
entitled to receive all dividends and other  distributions  paid with respect to
those shares.  If any such dividends or  distributions  are paid in shares,  the
shares  shall be  subject to the same  restrictions  on  transferability  as the
Restricted Stock with respect to which they were distributed.

     9.6  Maximum  Award.  The  maximum  number of  shares of Stock  that may be
granted  in the form of  Restricted  Stock  pursuant  to an Award  granted  to a
Participant during a single calendar year shall be 250,000.

     Section 10. Performance Based Awards

     10.1 Grant of  Performance  Awards.  Subject to the terms and provisions of
the Plan and applicable  law, the Committee,  at any time and from time to time,
may  issue  Performance  Awards  in the  form of  either  Performance  Units  or
Performance  Shares to  Participants  subject to the  Performance  Measures  and
Performance  Period as it shall  determine.  The  Committee  shall have complete
discretion  in  determining  the  number  and  value  of  Performance  Units  or
Performance   Shares  granted  to  each  Participant.   Participants   receiving
Performance  Awards  are not  required  to pay the  Sponsor or a  Subsidiary  or
Affiliate  therefor  (except  for  applicable  tax  withholding)  other than the
rendering of services.

     10.2 Value of Performance  Awards. The Committee shall determine the number
and value of Performance Units or Performance Shares granted to each Participant
as a Performance  Award.  The Committee  shall set  Performance  Measures in its
discretion for each  Participant who is granted a Performance  Award. The extent
to which  such  Performance  Measures  are met will  determine  the value of the
Performance  Unit to the Participant or the number of Performance  Shares earned
by  the  Participant.   Such  Performance   Measures  may  be  particular  to  a
Participant, may relate to the performance of the Affiliate which employs him or
her, may be based on the division  which employs him or her, may be based on the
performance of the Company  generally,  or a combination  of the foregoing.  The
terms and conditions of each Performance Award will be set forth in an Agreement
and/or a Sub-Plan.

     10.3  Settlement of  Performance  Awards.  After a  Performance  Period has
ended, the holder of a Performance  Unit or Performance  Share shall be entitled
to  receive  the value  thereof  based on the  degree  to which the  Performance
Measures  established  by the Committee  and set forth in the  Agreement  and/or
Sub-Plan have been satisfied.

     10.4 Form of Payment. Payment of the amount to which a Participant shall be
entitled  upon the  settlement  of a  Performance  Award  shall be made in cash,
Stock, or a combination  thereof as determined by the Committee.  Payment may be
made in a lump sum or installments as prescribed by the Committee.

     10.5  Deferral of  Performance  Awards.  Prior to the year with  respect to
which a Performance  Award may vest,  the Committee may permit a Participant  to
elect,  in accordance with rules  prescribed by the Committee,  not to receive a
distribution  upon the vesting of such  Performance  Award and instead  have the
Company continue to maintain the Performance Award on its books of account.

     10.6 Maximum  Award.  The maximum number of shares of Stock that may be the
subject  of a  Performance  Share  Award  granted to a  Participant  in a single
calendar  year shall be 250,000.  The maximum  amount of  compensation  payable,
without regard to any deferred amounts,  to a Participant  pursuant to the grant
of Performance Unit Awards in any calendar year shall be $10,000,000.

     Section 11. Other Stock Based Awards

     11.1 Grant of Other Stock Based Awards. Subject to the terms and provisions
of the Plan and  applicable  law,  the  Committee,  at any time and from time to
time,  may issue to  Participants,  either  alone or in addition to other Awards
made under the Plan,  Stock Unit Awards  which may be in the form of or based on
Stock or other  securities.  The  maximum  number of shares of Stock that may be
granted  in any  calendar  year to a  Participant  as part of a Stock Unit Award
shall be 250,000.  If the value of any Stock Unit Award is not based entirely on
the value of the underlying  Stock, the maximum amount of compensation  payable,
without regard to any deferred amounts,  to a Participant  pursuant to the grant
of all such Stock Unit Awards in any  calendar  year shall be $  2,500,000.  The
Committee,  in its sole and complete  discretion,  may determine  that an Award,
either in the fore of a Stock  Unit Award  under this  Section 11 or as an Award
granted  pursuant to Sections 7 through 10, may provide to the  Participant  (i)
dividends or dividend  equivalents  (payable on a current or deferred basis) and
(ii)  cash  payments  in lieu of or in  addition  to an  Award.  Subject  to the
provisions of the Plan, the Committee in its sole and complete discretion, shall
determine the terms, restrictions, conditions, vesting requirements, and payment
rules  (all of which  are  sometimes  hereinafter  collectively  referred  to as
"rules") of the Award.  The Award  Agreement  and/or  Sub-Plan shall specify the
rules of each Award as determined  by the  Committee.  However,  each Stock Unit
Award need not be subject to identical rules.

     11.2 Rules. The Committee, in its sole and complete discretion, may grant a
Stock Unit Award subject to the following rules:

          (a) Stock or other securities issued pursuant to Stock Unit Awards may
     not be sold,  transferred,  pledged,  assigned or  otherwise  alienated  or
     hypothecated  by a Participant  until the expiration of at least six months
     from the Award  Date,  except that such  limitation  shall not apply in the
     case of death or Disability of the Participant.  All rights with respect to
     such other Stock Unit Awards granted to a Participant  under the Plan shall
     be exercisable  during his or her lifetime only by such  Participant or his
     or her guardian or legal representative.

          (b) Stock Unit Awards may require the payment of cash consideration by
     the Participant in receipt of the Award or provide that the Award,  and any
     Stock or other securities issued in conjunction with the Award be delivered
     without the payment of cash consideration.

          (c) The Committee, in its sole and complete discretion,  may establish
     certain Performance Measures that may relate in whole or in part to receipt
     of the Stock Unit Awards.

          (d) Stock Unit  Awards may be subject to a deferred  payment  schedule
     and/or vesting over a specified employment period.

          (e) The Committee, in its sole and complete discretion, as a result of
     certain circumstances,  may waive or otherwise remove, in whole or in part,
     any  restriction or condition  imposed on a Stock Unit Award at the time of
     grant.

     11.3  Deferral of Stock  Units.  Prior to the year with  respect to which a
Stock  Unit may vest,  the  Committee  may  permit a  Participant  to elect,  in
accordance with rules prescribed by the Committee, not to receive a distribution
upon the  vesting of such Stock Unit and instead  have the  Company  continue to
maintain the Stock Unit on its books of account.

     Section 12. Special Provisions Applicable to Covered Participants.

     Unless the Committee in its sole discretion  determines that any Award made
to a Covered  Employee  is not  intended to qualify  for the  Performance  Based
Exception under Section 162(m),  Awards subject to Performance Measures that are
granted  to  Covered  Participants  under  this Plan  shall be  governed  by the
conditions  of this Section 12, in addition to the  requirements  of Sections 9,
10,  and 11 above.  Should  conditions  set forth  under  this  Section 12 (when
applicable)  conflict  with the  requirements  of  Sections  9, 10,  and 11, the
conditions of this Section 12 shall prevail.

          (a) Performance Measures for Covered Participants shall be established
     by the  Committee  in writing  prior to the  beginning  of the  Performance
     Period, or by such other later date during the Performance Period as may be
     permitted   under  Section   162(m).   Performance   Measures  for  Covered
     Participants may include alternative and multiple  Performance Measures and
     may be based on one or more business criteria.

          (b) All Performance  Measures must be objective and must satisfy third
     party "objectivity" standards under Section 162(m).

          (c) The Performance Measures shall not allow for any discretion by the
     Committee as to an increase in any Award,  but discretion to lower an Award
     is permissible.

          (d) The Award and  payment  of any Award  under this Plan to a Covered
     Participant with respect to relevant Performance Period shall be contingent
     upon the attainment of the Performance Measures that are applicable to such
     Covered  Participant.  The  Committee  shall  certify in  writing  prior to
     payment  of any  such  Award  that  such  applicable  Performance  Measures
     relating to the Award are satisfied.  Approved minutes of the Committee may
     be used for this purpose.

          (e) All  Awards to  Covered  Participants  under  this  Plan  shall be
     further subject to such other conditions, restrictions, and requirements as
     the  Committee  may  determine  to be necessary to carry out the purpose of
     this Section 12.

     Section 13. General Provisions

     13.1  Withholding.  The Company shall have the right to deduct or withhold,
or  require  a  Participant  to  remit  to the  Company,  any  taxes,  including
employment taxes, required by law to be withheld with respect to the Awards made
under  this  Plan.  In the  event an Award  is paid in the  form of  Stock,  the
Committee may require the  Participant to remit to the Company the amount of any
taxes  required to be withheld  from such payment in Stock,  or, in lieu thereof
the Company may withhold (or the  Participant may be provided the opportunity to
elect to tender) the number of shares of Stock equal in Fair Market Value to the
amount required to be withheld.

     13.2 No Right to Employment.  No granting of an Award shall be construed as
a right to employment with the Company.

     13.3 Rights as Shareholder. Subject to the Award provisions, no Participant
or Designated  Beneficiary shall be deemed a shareholder of the Sponsor nor have
any rights as such with respect to any shares of Stock to be provided  under the
Plan until he or she has become the holder of such shares.  Notwithstanding  the
aforementioned, with respect to Stock granted under a Restricted Stock Agreement
under this Plan, the  Participant or Designated  Beneficiary of such Award shall
be deemed the owner of such shares.  As such,  unless contrary to the provisions
herein  or in any  such  related  Award  Agreement,  such  shareholder  shall be
entitled to full voting,  dividend and distribution rights as provided any other
Sponsor shareholder.

     13.4 Construction of the Plan. The Plan, and its rules, rights, Agreements,
Sub-Plans  and  regulations,  shall  be  governed,  construed,  interpreted  and
administered in accordance  with applicable  Federal laws, or to the extent that
Federal laws do not apply, the laws of the State of North Carolina. In the event
any provision of the Plan shall be held invalid,  illegal or  unenforceable,  in
whole or in part,  for any  reason,  such  determination  shall not  affect  the
validity,  legality or enforceability of any remaining provision,  or portion of
provision, of the Plan overall, which shall remain in full force and effect.

     13.5  Amendment of Plan. The Committee or the Board of Directors may amend,
suspend,  or terminate the Plan or any portion thereof at any time, provided (a)
such amendment is made with  shareholder  approval if such approval is necessary
to comply with any tax or regulatory  requirement,  including for these purposes
any approval  requirement  for the  Performance-Based  Exception  under  Section
162(m),  and (b) such  amendment  may not adjust or amend the exercise  price of
Options previously granted to a Participant without further shareholder approval
except  as  provided  in  Sections  6.4 and 6.5  hereof.  The  Committee  in its
discretion  may amend the Plan so as to conform with any  applicable  regulatory
requirements subject to any provisions to the contrary specified herein.

     13.6  Amendment  of  Award.  At  any  time  and in its  sole  and  complete
discretion,  the Committee may amend any Award for the  following  reasons:  (i)
additions  and/or changes are made to the Code, any federal or state  securities
law,  or other law or  regulations  subsequent  to the Grant  Date,  and have an
impact on the Award;  or (ii) for any other reason not  described in clause (i),
provided (a) such  amendment does not adversely  affect a Participant  or, if it
does,  provided the Participant gives his or her consent to such amendment,  and
(b) such  amendment  may not  adjust  or amend  the  exercise  price of  Options
previously granted to a Participant without further shareholder  approval except
as provided in Sections 6.4 and 6.5 hereof.

     13.7 Exemption from  Computation of  Compensation  for Other  Purposes.  By
accepting  an Award  under this Plan,  each  Participant  agrees that such Award
shall be  considered  special  incentive  compensation  and will be exempt  from
inclusion  as "wages" or "salary"  for purposes of  calculating  benefits  under
pension,  profit  sharing,  disability,  severance,  life  insurance,  and other
employee  benefit  plans of the Company,  except as otherwise  provided in those
benefit plans.

     13.8 Legend. In its sole and complete  discretion,  the Committee may elect
to legend  certificates  representing  shares of Stock sold or awarded under the
Plan, to make appropriate references to the restrictions imposed on such shares.

     13.9  Executive  Officers and Covered  Participants.  All Award  Agreements
and/or  Sub-Plans for  Participants  subject to Section 16(b) shall be deemed to
include any such  additional  terms,  conditions,  limitations and provisions as
Rule 16b-3 requires,  unless the Committee in its discretion determines that any
such  Award  should not be  governed  by Rule  16b3.  All Awards  subject to the
Performance  Based  Exception  shall be deemed to  include  any such  additional
terms,  conditions,  limitations  and provisions as are necessary to comply with
the  Performance-Based  Compensation  exemption  of Section  162(m),  unless the
Committee,  in its  sole  discretion,  determines  that an  Award  to a  Covered
Participant is not intended to qualify for the Performance-Based Exception.

     13.10 Change in Control. In the event of a Change in Control, the Committee
may provide, in its sole and complete discretion, either within the terms of the
Award  Agreement or  subsequently,  for the  acceleration  of the payment and/or
vesting  of any  Award,  the  extension  of the  time  during  which an Award is
exercisable  to its full  term  regardless  of a  Participant's  termination  of
employment with the Company and/or the release of any restrictions on any Award.

     13.11  Divestiture.  In the  event  of a  Divestiture,  the  Committee  may
provide,  in its sole and complete  discretion,  either  within the terms of the
Award  Agreement or  subsequently,  for the  acceleration  of the payment and/or
vesting  of any  Award,  the  extension  of the  time  during  which an Award is
exercisable  to its full  term  regardless  of a  Participant's  termination  of
employment with the Company and/or the release of any  restrictions on any Award
or the assumption of an Award as contemplated in Section 13.14.

     13.12  Unfunded  Obligation.  Nothing in this Plan shall be  interpreted or
construed  to require  the Company in any manner to fund any  obligation  to the
Participants or any Designated  Beneficiary.  Nothing contained in this Plan nor
any action taken  hereunder  shall create,  or be construed to create a trust of
any kind, or a fiduciary  relationship between the Company and/or the Committee,
and the Participants and/or any Designated  Beneficiary.  To the extent that any
Participant or Designated Beneficiary acquires a right to receive payments under
this Plan,  such  rights  shall be no greater  than the rights of any  unsecured
general creditor of the Sponsor.

     13.13 Plan Expenses.  All reasonable  expenses of the Plan shall be paid by
the Company.

     13.14  Transfer.  The  sponsorship  of  this  Plan  may be  assumed  by any
Affiliate of the Sponsor in the case of a reorganization  of the Sponsor and its
Affiliates,  or by any  successor  in interest of the Sponsor.  Further,  in the
event any Award under the Plan is assumed by an Affiliate  or another  entity in
connection  with the  disposition or sale of any business of the Sponsor and its
Affiliates, the Award so assumed shall be cancelled under the Plan.EXHIBIT A
                                       TO
                           2002 EQUITY INCENTIVE PLAN

                           PERFORMANCE SHARE SUB-PLAN

                            (Effective July 9, 2002)

     This  Performance  Share  Sub-Plan  ("Sub-Plan")  sets  forth the rules and
regulations  adopted by the Committee for issuance of  Performance  Share Awards
under Section 10 of the 2002 Equity Incentive Plan ("Plan").  Capitalized  terms
used in this Sub-Plan  that are not defined  herein shall have the meaning given
in the Plan.  In the event of any conflict  between this  Sub-Plan and the Plan,
the terms and conditions of the Plan shall control.  No Award Agreement shall be
required for participation in this Sub-Plan.

Section 1.   Definitions

When used in this Sub-Plan,  the following  terms shall have the meanings as set
forth below, and are in addition to the definitions set forth in the Plan.

1.1  "Account"  means  the  account  used to  record  and  track  the  number of
      -------
     Performance Shares granted to each Participant as provided in Section 2.4.

1.2  "Award" as used in this Sub-Plan means each aggregate  award of Performance
      -----
     Shares as provided in Section 2.2.

1.3  "EBITDA"  means  earnings  before  interest,   taxes,   depreciation,   and
      ------
     amortization as determined from time to time by the Committee.

1.4  "EBITDA  Growth" means the  percentage  increase (if any) in EBITDA for any
      --------------
     Year, as compared to the previous  Year as determined  from time to time by
     the Committee.

1.5  "Peer Group" means the utilities  included in the Standard & Poor's Utility
      ----------
     (Electric Power Companies) Index.

1.6  "Performance  Period" for purposes of this Sub-Plan means three consecutive
      -------------------
     Years beginning with the Year in which an Award is granted.

1.7  "Performance  Schedule"  means  Attachment 1 to this  Sub-Plan,  which sets
      ---------------------
     forth the Performance Measures applicable to this Sub-Plan.

1.8  "Performance  Share" for  purposes of this  Sub-Plan  means each unit of an
      ------------------
     Award granted to a Participant, the value of which is equal to the value of
     Company Stock as hereinafter provided.

1.9  "Retire" or "Retirement" means termination of employment on or after:
      ------      ----------

     (a)  becoming 65 years old with at least 5 years of service;

     (b)  becoming 55 years old with at least 15 years of service; or

     (c)  achieving at least 35 years of service, regardless of age.

1.10 "Salary" means the regular base rate of compensation payable by the Company
      ------
     to a  Participant  on an annual  basis as of the date an Award is  granted.
     Salary does not include bonuses, if any, or incentive compensation, if any.
     Such  compensation  shall not be  reduced by any  deferrals  made under any
     other plans or programs maintained by the Company.

1.11 "Total  Shareholder  Return" means the total percentage  return realized by
      --------------------------
     the owner of a share of stock during a relevant  Year or any part  thereof.
     Total  Shareholder  Return is equal to the  appreciation or depreciation in
     value of the stock (which is equal to the closing value of the stock on the
     last  trading day of the  relevant  period  minus the closing  value of the
     stock on the last  trading day of the  preceding  Year) plus the  dividends
     declared  during the relevant  period,  divided by the closing value of the
     stock on the last trading day of the preceding Year. Closing values for the
     stock on the dates given above shall be those  published in the Wall Street
     Journal.

1.12 "Year" means a calendar year.
      ----

Section 2.  Sub-Plan Participation and Awards

2.1  Participant  Selection.  Participants under this Sub-Plan shall be selected
     ----------------------
     by the  Committee in its sole  discretion as provided in Section 4.2 of the
     Plan.

2.2  Awards.  Subject to any  adjustments  to be made  under  Section  2.5,  the
     ------
     Compensation Committee may, in its sole discretion, grant Awards to some or
     all of the  Participants  in the form of a specific  number of  Performance
     Shares.  The  total  value of any  Award  shall not  exceed  the  following
     limitations,  based on the Participant's  Salary on the date that the Award
     is granted:

     -------------------------------------------- ------------------------------
                  Participant                         Award Limitation
     -------------------------------------------- ------------------------------
      CEO*/COO*                                        150% of Salary
     -------------------------------------------- ------------------------------
      Presidents*/Executive VPs*                       100% of Salary
     -------------------------------------------- ------------------------------
      Senior VPs*                                       85% of Salary
     -------------------------------------------- ------------------------------
      Department Heads and Key Managers**
             Level I                                    75% of Salary
             Level II                                   50% of Salary
             Level III                                  40% of Salary
     -------------------------------------------- ------------------------------
        * Senior Management Committee level position
        **Levels shall be determined in the sole discretion of the Committee

2.3  Award  Valuation at Grant.  In  calculating  the  limitations  set forth in
     -------------------------
     Section  2.2,  the value of each  Performance  Share  shall be equal to the
     closing  price of a share of Stock on the last trading day before the Award
     is granted,  as published in the Wall Street Journal.  Each Award is deemed
     to be granted on the day that it is approved by the Committee.

2.4  Accounting  and  Adjustment  of Awards.  The number of  Performance  Shares
     --------------------------------------
     awarded to a Participant  shall be recorded in a separate  Account for each
     Participant.  The number of Performance  Shares recorded in a Participant's
     Account shall be adjusted to reflect any splits or other adjustments in the
     Stock.  If any  cash  dividends  are  paid  on the  Stock,  the  number  of
     Performance  Shares in each  Participant's  Account shall be increased by a
     number equal to (i) the dividend  multiplied  by the number of  Performance
     Shares in each Participant's Account,  divided by (ii) the closing price of
     a share of Stock on the payment date of the  dividend,  as published in the
     Wall Street Journal.

2.5  Performance  Schedule and  Calculation  of Awards.  Each Award shall become
     -------------------------------------------------
     vested  on  January  1  immediately  following  the  end of the  applicable
     Performance Period,  subject to adjustment in accordance with the following
     procedure.

     (a)  One-half of the Award shall be adjusted as follows:

          (i) The Total  Shareholder  Return for the Company shall be determined
          for each  Year  during  the  Performance  Period,  and  shall  then be
          averaged (the "Company TSR").

          (ii) The average Total Shareholder Return for all Peer Group utilities
          shall be determined for each Year during the Performance  Period,  and
          shall then be averaged ( the "Peer Group TSR").

          (iii)The Peer Group TSR for the Performance Period shall be subtracted
          from the Company TSR for the Performance  Period.  The remainder shall
          then be used to  determine  the  number of vested  Performance  Shares
          using the  Performance  Schedule,  based on  one-half of the number of
          Performance Shares in the Participant's Account.

     (b)  The other one-half of the Award shall be adjusted as follows:

          (i) The EBITDA  Growth for the Company  shall be  determined  for each
          Year during the  Performance  Period,  and shall then be averaged (the
          "Company EBITDA Growth").

          (ii) The average EBITDA Growth for all Peer Group  utilities  shall be
          determined for each Year during the Performance  period,  and shall be
          averaged (the "Peer Group EBITDA Growth").

          (iii) The Peer Group EBITDA Growth for the Performance Period shall be
          subtracted from the Company EBITDA Growth for the Performance  Period.
          The  remainder  shall then be used to  determine  the number of vested
          Performance Shares using the Performance  Schedule,  based on one-half
          of the number of Performance Shares in the Participant's Account.

     (c)  The  total  number  of  vested   Performance  Shares  payable  to  the
          Participant  shall be the sum of the amounts  determined in accordance
          with subsections (a) and (b) above.

     (d)  The Performance  Measures and the Performance Schedule will not change
          during any  Performance  Period  with  regard to any Awards  that have
          already been granted.  The  Committee  reserves the right to modify or
          adjust the Performance Measures and/or the Performance Schedule in the
          Committee's sole discretion with regard to future grants.

2.6  Payment  Options.  Except as provided  in Section 3,  Awards  shall be paid
     after expiration of the Performance Period. The Company will pay in cash to
     each Participant the aggregate value of vested  Performance  Shares,  which
     shall be determined in accordance  with Section 2.7.  Payment shall be made
     as follows:

     (a)  100%  during  the  month of April  of the Year  immediately  following
          expiration  of  the  Performance  Period,  or  as  soon  as  practical
          thereafter; or

     (b)  in accordance with an alternative payment election made by Participant
          substantially  in the form  attached  hereto as Attachment 2, provided
          that such election is executed by the  Participant and returned to the
          Vice President,  Human  Resources  Department no later than the end of
          the first Year of the Performance  Period. Once made, this election is
          irrevocable.

2.7  Valuation of Performance  Shares. For the purposes of payment under Section
     2.6, the aggregate value of vested Performance Shares shall be equal to the
     total  number of vested  Performance  Shares in the  Participant's  Account
     (after any  applicable  adjustments  under  Section 2.5)  multiplied by the
     closing price of the Stock on the March 31 (or if March 31 is not a trading
     day,  the closing  price of the Stock on the next  preceding  trading  day)
     before payment of the Award, as published in the Wall Street Journal.

2.8  Grantor  Trust.  In the case of a Change in  Control,  the  Company  shall,
     subject to the  restrictions  in this Section 2.8 and Section  13.12 of the
     Plan,  irrevocably set aside funds in one or more such grantor trusts in an
     amount that is sufficient to pay each Participant  employed by such Company
     (or Designated Beneficiary),  the net present value as of the date on which
     the Change in Control occurs, of the earned benefits to which  Participants
     (or their Designated Beneficiaries) would be entitled pursuant to the terms
     of the Plan if the value of their  deferral  account  (if any)  established
     pursuant to section  2.6(b)  would be paid in a lump sum upon the Change in
     Control.  Any such trust  shall be  subject  to the  claims of the  general
     creditors  of  the  Sponsor  or  Company  in the  event  of  bankruptcy  or
     insolvency of the Sponsor or Company.

Section 3.  Early Vesting and Forfeiture

3.1  Retirement, Death or Divestiture. If prior to expiration of the Performance
     Period the  Participant  Retires or dies,  or in the event of a Divestiture
     during a Performance Period, the Participant's outstanding Award(s) for any
     unexpired  Performance  Period shall  immediately  become  vested,  and the
     aggregate  value of the Award shall be paid in cash after being adjusted in
     accordance with Section 3.3.

3.2  Change  in  Control.  In the  event of a  Change  in  Control  prior to the
     expiration  of  the  Performance  Period,  any  outstanding  Award  of  the
     Participant  for any  unexpired  Performance  Period  shall be  treated  as
     follows:

     (a)  If the Award is assumed by the successor to the Sponsor as of the date
          of the  Change in  Control,  each  outstanding  Award  not  previously
          forfeited  shall  continue  to vest and shall be paid  pursuant to the
          terms of this  Sub-Plan;  provided,  however,  that in the  event  the
          employment of the  Participant  is  terminated by the Company  without
          Cause  following the Change in Control,  any  outstanding  Award shall
          become vested as of the  termination  date, and the aggregate value of
          the Award  shall be paid in cash after being  adjusted  in  accordance
          with Section 3.3.

     (b)  If the Award is not assumed by the  successor to the Sponsor as of the
          date of the Change in Control,  any  outstanding  Award  shall  become
          vested as of the date of the  Change  in  Control,  and the  aggregate
          value of the  Award  shall be paid in cash  after  being  adjusted  in
          accordance with Section 3.3.

3.3  Adjustment of Awards.  Any Award which is vested pursuant to this Section 3
     prior to the end of the  Performance  Period shall be adjusted  pursuant to
     the following procedure.

     (a)  One-half of the Award shall be adjusted as follows:

          (i) The Total  Shareholder  Return for the Company shall be determined
          for  each  Year  or  partial  Year,  and  a  weighted   average  Total
          Shareholder  Return for the Company shall be calculated for the period
          between  the  first  day of the  Performance  Period  and the date the
          Participant  Retires or dies,  or the date of the  Divestiture  or the
          date that the Award is vested  pursuant to Section 3.2 (the  "Prorated
          Company TSR").

          (ii) The average Total Shareholder Return for all Peer Group utilities
          shall be  determined  for each Year or  partial  Year,  and a weighted
          average Total  Shareholder  Return shall be calculated  for the period
          between  the  first  day of the  Performance  Period  and the date the
          Participant  Retires or dies,  or the date of the  Divestiture  or the
          date that the Award is vested  pursuant to Section 3.2 (the  "Prorated
          Peer Group TSR").

          (iii) The Prorated Peer Group TSR for the Performance  Period shall be
          subtracted from the Prorated  Company TSR for the Performance  Period.
          The remainder  shall then be used to determine the vested  Performance
          Shares using the Performance Schedule, based on one-half of the number
          of Performance Shares in the Participant's Account.

     (b)  The other one-half of the Award shall be adjusted as follows:

          (i) The EBITDA  Growth for the Company  shall be  determined  for each
          Year or partial  Year,  and a weighted  average  EBITDA Growth for the
          Company  shall be calculated  for the period  between the first day of
          the Performance Period and the end of the calendar quarter immediately
          preceding the date that the Participant Retires or dies, or end of the
          calendar quarter immediately  preceding the date of the Divestiture or
          the date  that the  Award  is  vested  pursuant  to  Section  3.2 (the
          "Prorated Company EBITDA Growth").

          (ii) The average EBITDA Growth for all Peer Group  utilities  shall be
          determined  for each Year or  partial  Year,  and a  weighted  average
          EBITDA Growth shall be calculated for the period between the first day
          of  the  Performance  Period  and  the  end of  the  calendar  quarter
          immediately preceding the date the Participant Retires or dies, or the
          end of the  calendar  quarter  immediately  preceding  the date of the
          Divestiture  or the date that the Award is vested  pursuant to Section
          3.2 (the "Prorated Peer Group EBITDA Growth").

          (iii) The Prorated Peer Group EBITDA Growth for the Performance Period
          shall be subtracted  from the Prorated  Company  EBITDA Growth for the
          Performance  Period. The remainder shall then be used to determine the
          vested  Performance  Shares using the Performance  Schedule,  based on
          one-half  of the  number of  Performance  Shares in the  Participant's
          Account.

     (c)  The  total  number  of  vested   Performance  Shares  payable  to  the
          Participant  shall be the sum of the amounts  determined in accordance
          with subsections (a) and (b) above.

     (d)  If the Participant Retires, the Award shall be paid in accordance with
          the  Participant's  election  as  provided  in  Section  2.6.  If  the
          Participant  dies, or in the event of a Divestiture,  payment shall be
          made in cash within a reasonable time after the  Participant  dies, or
          within a  reasonable  time after the  Divestiture  becomes  effective,
          notwithstanding  any election  under  Section 2.6.  Payment upon death
          shall  be made to the  Participant's  Designated  Beneficiary.  If the
          Award is vested  pursuant  to  Section  3.2,  the Award  shall be paid
          within a  reasonable  time after the date of vesting,  notwithstanding
          any election  under  Section 2.6.  The  aggregate  value of the vested
          Performance Shares shall be determined in accordance with section 3.4.

3.4  Valuation of Performance  Shares. For the purposes of payment under Section
     3.3(d),  the aggregate value of vested Performance Shares shall be equal to
     the number of vested Performance Shares in the Participant's Account (after
     any  applicable  adjustments  under Section 3.3)  multiplied by the closing
     price of the Stock on the date that the Participant  Retires or dies, or on
     the date of the  Divestiture,  or the on date the Award  vests  pursuant to
     Section 3.2 (as applicable), as published in the Wall Street Journal.

3.5  Termination of  Employment.  In the event that a  Participant's  employment
     with the Company  terminates  for any reason other than as provided in this
     Section  3, any  Award  made to the  Participant  which  has not  vested as
     provided in Section 2 or Section 3 shall be  forfeited.  Any vested  Awards
     shall be paid within a reasonable time after termination (for reasons other
     than Retirement),  notwithstanding any election to defer the payment of any
     Award under Section 2.6.

Section 4.  Non-Assignability of Awards

The Awards and any right to receive payment under the Plan and this Sub-Plan may
not be anticipated,  alienated, pledged, encumbered, or subject to any charge or
legal  process,  and if any attempt is made to do so, or a  Participant  becomes
bankrupt,  then in the sole  discretion of the Committee,  any Award made to the
Participant  which  has not  vested as  provided  in  Sections  2 and 3 shall be
forfeited.

Section 5.  Amendment and Termination

This  Sub-Plan  shall be subject to amendment,  suspension,  or  termination  as
provided in the Plan.

<PAGE>

                                  ATTACHMENT 1

                              PERFORMANCE SCHEDULE

                         PERFORMANCE SHARE CALCULATION(1)
                         --------------------------------

The following table shall be used to adjust one half of the Participant's  Award
in accordance with Section 2.5(a) or Section 3.3(a) of the Plan:

If the Company TSR(2) minus               Then the 50% of the vested
the Peer Group TSR(2) is:                 Performance Share Award
                                          shall be multiplied by:

      5% or better                                  2.00

      4.0 - 4.99                                    1.75

      3.0 - 3.99                                    1.50

      2.0 - 2.99                                    1.25

      1.0 - 1.99                                    1.00

      (0.99) - 0.99                                  .50

      (1.0) - (1.99)                                 .25

      (2.0) or less                                 0.00

<PAGE>

The following table shall be used to adjust one half of the Participant's  Award
in accordance with Section 2.5(b) or Section 3.3(b) of the Plan:

If the Company EBITDA Growth(2) minus       Then the 50% of the vested
the Peer Group EBITDA Growth(2) is:         Performance Share Award
                                            shall be multiplied by:

          5% or better                                 2.00

          4.0 - 4.99                                   1.75

          3.0 - 3.99                                   1.50

          2.0 - 2.99                                   1.25

          1.0 - 1.99                                   1.00

          0.00 - 0.99                                   .50

          Less than 0                                     0

(1) The  number of  Performance  Shares  as  calculated  above  shall be paid in
accordance with the provisions of Section 2.5 and 2.6 of the Sub-Plan.

(2) For  purposes of Section 3, the Prorated  Company TSR and EBITDA  Growth and
Prorated  Peer  Group TSR and  EBITDA  Growth  shall be used,  and the number of
Performance  Shares as  calculated  above shall be paid in  accordance  with the
provisions of Section 3.3 of the Sub-Plan.

<PAGE>

                                  ATTACHMENT 2
                           Performance Share Sub-Plan
                           200_ Deferral Election Form

As a Participant in the Performance  Share Sub-Plan of the 2002 Equity Incentive
Plan ("Sub-Plan"), I hereby elect to defer payment of my Award otherwise payable
to me by the Company and  attributable  to services to be performed by me during
the Performance Period beginning on January __, 200__. This election shall apply
to [CHECK ONE]:

   [ ] 100% of the Award                    [ ]  50% of the Award
   [ ] 75% of the Award                     [ ]  25% of the Award

Upon  vesting,  I understand  that my Award shall  continue to be recorded in my
Account as  Performance  Shares as  described  in the  Sub-Plan  and adjusted to
reflect the payment and reinvesting of the Company's common stock dividends over
the deferral period, until paid in full.

I hereby elect to defer receipt (or  commencement  of receipt) of my Award until
the date specified below, or as soon as practical thereafter [CHECK ONE]:

   [ ] a specific date certain at least 5 years from
       expiration of the Performance Period:              4   / 1 /          *
                                                       -------------------------
                                                          (month/day/year)
   [ ] the April 1 following the date of retirement

   [ ] the April 1 following the first anniversary
       of my date of retirement

* Notwithstanding my election above, if I elect a date certain  distribution and
I retire before that date certain,  I understand  that the Company will commence
distribution  of my  account  no later  than the  April 1  following  the  first
anniversary of the date of retirement, or as soon as practical thereafter,  even
though  said date is earlier  than 5 years from  expiration  of the  Performance
Period.

I hereby  elect to be paid as  described  in the  Sub-Plan in the form of [CHECK
ONE]:

   [ ] a single payment     [ ] annual payments commencing on the date set forth
                                above and payable on the anniversary date
                                thereof over:

                                [ ] a two year period    [ ] a three year period
                                [ ] a four year period   [ ] a five year period

I understand that I will receive  "earnings" on those deferred amounts when they
are paid to me.

I understand that the election made as indicated  herein is irrevocable and that
all deferral elections are subject to the provisions of the Sub-Plan,  including
provisions that may affect timing of distributions.

I understand and acknowledge  that my interests  herein and my rights to receive
distribution of the deferred  amounts may not be anticipated,  alienated,  sold,
transferred,  assigned, pledged, encumbered, or subjected to any charge or legal
process, and if any attempt is made to do so, or I become bankrupt,  my interest
may be terminated by the Committee,  which,  in his sole  discretion.  I further
understand  that nothing in the Sub-Plan  shall be  interpreted  or construed to
require  the  Company  in any  manner  to fund any  obligation  to me,  or to my
beneficiary(ies) in the event of my death.

------------------------------------------    ---------------------------------
             (Signature)                                  (Date)

------------------------------------------    ---------------------------------
             (Print Name)                           (Company Location)

Received:
Agent of Chief Executive Officer

------------------------------------------    ---------------------------------
              (Signature)                                  (Date)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}]]