<PAGE>

    As filed with the Securities and Exchange Commission on August 5, 1994

                                             Registration Statement No. 33-___


                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549
                      ___________________________________
                                   FORM S-8

                            REGISTRATION STATEMENT
                                     Under
                          THE SECURITIES ACT OF 1933
                      ___________________________________

                         LONGS DRUG STORES CORPORATION
            (Exact name of registrant as specified in its charter)


           Maryland                                  68-0048627
    (State or other jurisdiction                 (I.R.S. Employer
   of incorporation or organization)              Identification No.)


             141 North Civic Drive, Walnut Creek, California 94596
             (Address of Principal Executive Offices)  (Zip Code)

                        1995 Long-Term Incentive Plan
                           (Full title of the plan)

              Orlo D. Jones, Senior Vice President and Secretary
                         Longs Drug Stores Corporation
                             141 North Civic Drive
                        Walnut Creek, California  94596
                                 510-937-1170
                  (Name and address, including zip code, and
         telephone number, including area code, of agent for service)

                        Calculation of Registration Fee


<TABLE>
<CAPTION>

- ---------------------------------------------------------------------------------------
                                                      Proposed
                                     Proposed          Maximum
Title of Securities  Amount to be    Maximum          Aggregate       Amount of
to be Registered     Registered    Offering Price   Offering Price    Registration Fee
- ---------------------------------------------------------------------------------------
<S>                  <C>           <C>              <C>               <C>
Common Stock
par value $.50        700,000        $34.0625*        $23,843,750       $8,222
per share

- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------

</TABLE>

* Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457, on the basis of the average of the high and low prices of the
Registrant's Common Stock as reported on the New York Stock Exchange on
August 3, 1994.


<PAGE>

                                PART II

          INFORMATION REQUIRED IN THE REGISTRATION STATEMENT


ITEM 3.  INCORPORATION OF DOCUMENTS BY REFERENCE

            The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:  (a) the
Issuer's Annual Report on Form 10-K for the fiscal year ended January 27, 1994,
(b) the Issuer's Quarterly Report on Form 10-Q for the quarter ended April 28,
1994, and (c) the description of the Issuer's Common Stock contained in the
Company's Registration Statement on Form 8-A dated August 21, 1986, File No.
1-8978.

            All documents subsequently filed by the Issuer pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of the filing of such documents.

ITEM 4.  DESCRIPTION OF SECURITIES

            Not applicable.

ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL

            Not applicable.

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

            Article Tenth, Section 9 of the Registrant's Amended Articles of
Incorporation provides for indemnification of directors and officers of the
Registrant as follows:

            The Corporation shall indemnify (a) its directors to the full extent
      provided by the general laws of the State of Maryland now or hereafter in
      force, including the advance of expenses under the procedures provided by
      such laws; (b) its officers to the same extent it shall indemnify its
      directors; and (c) its officers who are not directors to such further
      extent as shall be authorized by the Board of Directors and be consistent
      with law.  The foregoing


                                      - 1 -
<PAGE>

      shall not limit the authority of the Corporation to indemnify other
      employees and agents consistent with law.

            Article Tenth, Section 11 of the Registrant's Amended Articles of
Incorporation further provides:

            To the fullest extent permitted by Maryland statutory of decisional
      law, as amended or interpreted, no director or officer of this Corporation
      shall be personally liable to the Corporation or its stockholders for
      money damages.  No amendment of the Charter of the Corporation or repeal
      of any of its provisions shall limit or eliminate the benefits provided to
      directors and officers under this provision with respect to any act or
      omission which occurred prior to such amendment or repeal.

            Section 2-418 of the Maryland General Corporation Law provides as
follows:

            (a)   In this section the following words have the meanings
      indicated.

                  (1)   "Director" means any person who is or was a director of
            a corporation and any person who, while a director of a corporation,
            is or was serving at the request of the corporation as a director,
            officer, partner, trustee, employee, or agent of another foreign or
            domestic corporation, partnership, joint venture, trust, other
            enterprise, or employee benefit plan.

                  (2)   "Corporation" includes any domestic or foreign
            predecessor entity of a corporation in a merger, consolidation, or
            other transaction in which the predecessor's existence ceased upon
            consummation of the transaction.

                  (3)   "Expenses" include attorney's fees.

                  (4)   "Official capacity" means the following:

                        (i)   When used with respect to a director, the office
                  of director in the corporation; and

                        (ii)  When used with respect to a person other than a
                  director as contemplated in


                                      - 2 -
<PAGE>

                  subsection (j), the elective or appointive office in the
                  corporation held by the officer, or the employment or agency
                  relationship undertaken by the employee or agent in behalf of
                  the corporation.

                        (iii) "Official capacity" does not include service for
                  any other foreign or domestic corporation or any partnership,
                  joint venture, trust, other enterprise, or employee benefit
                  plan.

                  (5)   "Party" includes a person who was, is, or is threatened
            to be made a named defendant or respondent in a proceeding.

                  (6)   "Proceeding" means any threatened, pending or completed
            action, suit or proceeding, whether civil, criminal, administrative,
            or investigative.

            (b)   (1)   A corporation may indemnify any director made a party to
      any proceeding by reason of service in that capacity unless it is
      established that:

                        (i)   The act or omission of the director was material
                  to the matter giving rise to the proceeding; and

                              1.    Was committed in bad faith; or

                              2.    Was the result of active and deliberate
                  dishonesty; or

                        (ii)  The director actually received an improper
                  personal benefit in money, property, or services; or

                        (iii) In the case of any criminal proceeding, the
                  director had reasonable cause to believe that the act or
                  omission was unlawful.

                  (2)   (i)   Indemnification may be against judgments,
                  penalties, fines, settlements, and reasonable expenses
                  actually incurred by the director in connection with the
                  proceeding.


                                      - 3 -
<PAGE>

                        (ii)  However, if the proceeding was one by or in the
                  right of the corporation, indemnification may not be made in
                  respect of any proceeding in which the director shall have
                  been adjudged to be liable to the corporation.

                  (3)   (i)   The termination of any proceeding by judgment,
            order, or settlement does not create a presumption that the director
            did not meet the requisite standard of conduct set forth in this
            subsection.

                        (ii)  However, if the proceeding was one by or in the
                  right of the corporation, indemnification may not be made in
                  respect of any proceeding in which the director shall have
                  been adjudged to be liable to the corporation.

                        (iii) The termination of any proceeding by conviction, a
                  plea of nolo contendere or its equivalent, or any entry of an
                  order of probation prior to judgment, creates a rebuttable
                  presumption that the director did not meet that standard of
                  conduct.

            (c)   A director may not be indemnified under subsection (b) of this
      section in respect of any proceeding charging improper personal benefit to
      the director, whether or not involving action in the director's official
      capacity, in which the director was adjudged to be liable on the basis
      that personal benefit was improperly received.

            (d)   Unless limited by the charter:

                  (1)   A director who has been successful, on the merits or
            otherwise, in the defense of any proceeding referred to in
            subsection (b) of this section shall be indemnified against
            reasonable expenses incurred by the director in connection with the
            proceeding.


                  (2)   A court of appropriate jurisdiction, upon application of
            a director and such notice as the court shall require, may order
            indemnification in the following circumstances:


                                      - 4 -
<PAGE>

                        (i)   If it determines a director is entitled to
                  reimbursement under paragraph (1) of this subsection, the
                  court shall order indemnification, in which case the director
                  shall be entitled to recover the expenses of securing such
                  reimbursement; or

                        (ii)  If it determines that the director is fairly and
                  reasonably entitled to indemnification in view of all the
                  relevant circumstances, whether or not the director has met
                  the standards of conduct set forth in subsection (b) of this
                  section or has been adjudged liable under the circumstances
                  described in subsection (c) of this section, the court may
                  order such indemnification as the court shall deem proper.
                  However, indemnification with respect to any proceeding by or
                  in the right of the corporation or in which liability shall
                  have been adjudged in the circumstances described in
                  subsection (c) shall be limited to expenses.

                        (3)   A court of appropriate jurisdiction may be the
                  same court in which the proceeding involving the director's
                  liability took place.

                  (e)   (1)   Indemnification under subsection (b) of this
            section may not be made by the corporation unless authorized for a
            specific proceeding after a determination has been made that
            indemnification of the director is permissible in the circumstances
            because the director has met the standard of conduct set forth in
            subsection (b) of this section.

                        (2)   Such determination shall be made:

                              (i)   By the Board of Directors by a majority vote
                        of a quorum consisting of directors not, at the time,
                        parties to the proceeding, or, if such a quorum cannot
                        be obtained, then by a majority vote of a committee of
                        the board consisting solely of two or more directors
                        not, at the time, parties to such proceeding and who
                        were duly designated to act in the matter by a majority
                        vote of the full board in which the designated directors
                        who are parties may participate:


                                      - 5 -
<PAGE>

                              (ii)  By special legal counsel selected by the
                        board of directors or a committee of the board by vote
                        as set forth in subparagraph (i) of this paragraph, or,
                        if the requisite quorum of the full board cannot be
                        obtained therefor and the committee cannot be
                        established, by a majority vote of the full board in
                        which directors who are parties may participate; or

                              (iii) By the stockholders.

                        (3)   Authorization of indemnification and determination
                  as to reasonableness of expenses shall be made in the same
                  manner as the determination that indemnification is
                  permissible.  However, if the determination that
                  indemnification is permissible is made by special legal
                  counsel, authorization of indemnification and determination as
                  to reasonableness of expenses shall be made in the manner
                  specified in subparagraph (ii) of paragraph (2) of this
                  subsection for selection of such counsel.

                        (4)   Shares held by directors who are parties to the
                  proceeding may not be voted on the subject matter under this
                  subsection.

                  (f)   (1)   Reasonable expenses incurred by a director who is
      a party to a proceeding may be paid or reimbursed by the corporation in
      advance of the final disposition of the proceeding upon receipt by the
      corporation of:

                              (i)   A written affirmation by the director of the
                        director's good faith belief that the standard of
                        conduct necessary for indemnification by the corporation
                        as authorized in this section has been met; and

                              (ii)  A written undertaking by or on behalf of the
                        director to repay the amount if it shall ultimately be
                        determined that the standard of conduct has not been
                        met.

                        (2)   The undertaking required by subparagraph (ii) of
                  paragraph (1) of this subsection shall be an unlimited


                                      - 6 -
<PAGE>

                  general obligation of the director but need not be secured and
                  may be accepted without reference to financial ability to make
                  the repayment.

                        (3)   Payments under this subsection shall be made as
                  provided by the charter, bylaws, or contract or as specified
                  in subsection (e) of this section.

                  (g)   The indemnification and advancement of expenses,
            provided or authorized by this section may not be deemed exclusive
            of any other rights, by indemnification or otherwise, to which a
            director may be entitled under the charter, the bylaws, a resolution
            of stockholders or directors, an agreement or otherwise, both as to
            action in an official capacity and as to action in another capacity
            while holding such office.

                  (h)   This section does not limit the corporation's power to
            pay or reimburse expenses incurred by a director in connection with
            an appearance as a witness in a proceeding at a time when the
            director has not been made a named defendant or respondent in the
            proceeding.

                  (i)   For purposes of this section:

                        (1)   The corporation shall be deemed to have requested
                  a director to serve an employee benefit plan where the
                  performance of the director's duties to the corporation also
                  imposes duties on, or otherwise involves services by, the
                  director to the plan or participants or beneficiaries of the
                  plan;

                        (2)   Excise taxes assessed on a director with respect
                  to an employee benefit plan pursuant to applicable law shall
                  be deemed fines; and

                        (3)   Action taken or omitted by the director with
                  respect to an employee benefit plan in the performance of the
                  director's duties for a purpose reasonably believed by the
                  director to be in the interest of the participants and
                  beneficiaries of the plan shall be deemed to be for a purpose
                  which is not opposed to the best interests of the corporation.


                                      - 7 -
<PAGE>

                  (j)   Unless limited by the charter:

                        (1)   An officer of the corporation shall be indemnified
                  as and to the extent provided in subsection (d) of this
                  section for a director and shall be entitled, to the same
                  extent as a director, to seek indemnification pursuant to the
                  provisions of subsection (d);

                        (2)   A corporation may indemnify and advance expenses
                  to an officer, employee, or agent of the corporation to the
                  same extent that it may indemnify directors under this
                  section; and

                        (3)   A corporation, in addition, may indemnify and
                  advance expenses to an officer, employee, or agent who is not
                  a director to such further extent, consistent with law, as may
                  be provided by its charter, bylaws, general or specific action
                  of its board of directors, or contract.

                  (k)   (1)   A corporation may purchase and maintain insurance
            on behalf of any person who is or was a director, officer, employee,
            or agent of the corporation, or who, while a director, officer,
            employee, or agent of the corporation, is or was serving at the
            request of the corporation as a director, officer, partner, trustee,
            employee, or agent of another foreign or domestic corporation,
            partnership, joint venture, trust, other enterprise, or employee
            benefit plan against any liability asserted against and incurred by
            such person in any such capacity or arising out of such person's
            position, whether or not the corporation would have the power to
            indemnify against liability under the provisions of this section.

                        (2)   A corporation may provide similar protection,
                  including a trust fund, letter of credit, or surety bond, not
                  inconsistent with this section.

                        (3)   The insurance or similar protection may be
                  provided by a subsidiary or an affiliate of the corporation.

                  (l)   Any indemnification of, or advance of expenses to, a
            director in accordance with this section, if arising out of a
            proceeding by or in the right of the corporation, shall be reported
            in writing to the stockholders with the notice of the next
            stockholders' meeting or prior to the meeting.


                                      - 8 -
<PAGE>

            As permitted under Subsection (k) of Section 2-418 of the Maryland
General Corporations Law, as set forth above, the Registrant has purchased and
maintains insurance on behalf of its directors and officers against any
liability asserted against such directors and officers in their capacities as
such whether or not the Registrant would have the power to indemnify such
persons under the provisions of Maryland law governing indemnification.

            There is no litigation pending, and neither the Registrant nor any
of its directors know of any threatened litigation, which might result in a
claim for indemnification by any director or officer.

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED

            Not applicable.

ITEM 8.  EXHIBITS

Exhibit
Number      Description of Document
- -------     -----------------------

4.1         1995 Long-Term Incentive Plan.

5.1         Opinion of Howard, Rice, Nemerovski, Canady, Robertson, Falk &
            Rabkin, A Professional Corporation.

23.1        Consent of Deloitte & Touche.

23.2        Consent of Howard, Rice, Nemerovski, Canady, Robertson, Falk &
            Rabkin, A Professional Corporation (included in Exhibit 5.1).

ITEM 9.  UNDERTAKINGS

            The undersigned registrant hereby undertakes:

            (1)   to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;

            (2)   that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to


                                      - 9 -
<PAGE>

be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and

            (3)   to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

            The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

            Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.  In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.



                                      - 10 -
<PAGE>

                                 SIGNATURES

            Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Walnut Creek, State of California, on August 5, 1994.


                                           LONGS DRUG STORES CORPORATION

                                       By    /s/   R. M. Long
                                          ----------------------------------
                                          R. M. Long, Chairman of the Board
                                          and Chief Executive Officer

            Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been duly signed by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.



Signature                 Title                                   Date
- ---------                 -----                                   ----

/s/   R.M. Long
- ---------------------
R.M. Long                 Chairman of the Board, Chief        August 5, 1994
                          Executive Officer and Director

/s/   W.G. Combs
- ---------------------
W.G. Combs                Vice President - Administration
                          (principal financial officer)       August 5, 1994

/s/   Grover White
- ---------------------
Grover White              Vice President - Controller
                          (principal accounting officer)      August 5, 1994

/s/   S.D. Roath
- ---------------------
S.D. Roath                President and Director              August 5, 1994

/s/   R.M. Brooks
- ---------------------
R.M. Brooks               Director                            August 5, 1994

/s/   D.G. DeSchane
- ---------------------
D.G. DeSchane             Director                            August 5, 1994

/s/   E.E. Johnston
- ---------------------
E.E. Johnston             Director                            August 5, 1994


                                      - 11 -
<PAGE>

/s/   M.S. Metz
- ---------------------
M.S. Metz                 Director                            August 5, 1994

/s/   R.A. Plomgren
- ---------------------     Senior Vice President - Development August 5, 1994
R.A. Plomgren             and Director



- ---------------------
H.R. Somerset             Director                            August 5, 1994

/s/   T.R. Sweeney
- ---------------------
T.R. Sweeney              Retired Vice President and Director August 5, 1994

/s/   F.E. Trotter
- ---------------------
F.E. Trotter              Director                            August 5, 1994


                                      - 12 -
<PAGE>

                                EXHIBIT LIST


EXHIBIT
NUMBER      DESCRIPTION OF DOCUMENT
- -------     -----------------------

  4.1       1995 Long-Term Incentive Plan.

  5.1       Opinion of Howard, Rice, Nemerovski, Canady, Robertson, Falk &
            Rabkin, A Professional Corporation.

 23.1       Consent of Deloitte & Touche.

 23.2       Consent of Howard, Rice, Nemerovski, Canady, Robertson, Falk &
            Rabkin, A Professional Corporation (included in Exhibit 5.1).




                                      - 13 -
<PAGE>

                                                            EXHIBIT 4.1



                      LONGS DRUG STORES CORPORATION
                     1995 LONG-TERM INCENTIVE PLAN

1.   PURPOSE

      The purpose of the 1995 Long-Term Incentive Plan is to provide a means
through which Longs Drug Stores Corporation, a Maryland Corporation, and its
Subsidiaries, may attract and retain the employment of able persons and to
provide a means whereby such persons can acquire and maintain stock ownership
thereby strengthening their commitment to the welfare of the Company. A further
purpose of the Plan is to provide key employees with incentive and reward
opportunities designed to enhance the profitable growth of the Company.

2.   DEFINITIONS

      The following definitions shall be applicable throughout the Plan:

      a.    "AWARD" means, individually or collectively, any Option, Stock
Appreciation Right (SAR), Restricted Stock Award or Performance Share Award.

      b.    "AWARD PERIOD" means a period of not less than three years and
relates to Performance Share Awards.

      c.    "BOARD" means the Board of Directors of the Company.

      d.    "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.  Reference in the Plan to any section of the Code shall be deemed
to include any amendments or successor provisions to such section and any
regulations under such section.

      e.    "COMMITTEE" means the committee of the Board appointed to
administer the Plan as referred to in Section 4.

      f.    "COMPANY" means Longs Drug Stores Corporation.

      g.    "DATE OF GRANT" means the date on which the granting of an Award
is authorized by the Committee or such later date as may be specified by the
Committee in such authorization.

      h.    "ELIGIBLE EMPLOYEE" means any person who satisfies the
requirements of Section 6.
      i.    "FAIR MARKET VALUE" means the fair market value of Stock, to be
determined as follows:

            (1)   For Options and SARs, it shall be the average of the highest
      price and the lowest price at which the Stock shall have been sold regular


                                      - 14 -
<PAGE>

      way on the New York Stock Exchange C Composite Transactions (hereafter
      "NYSE") on a specified date.

            (2)   For Performance Share Awards, it shall be the average of the
      reported closing prices of the Stock on the NYSE for 30 consecutive
      trading days prior to the "Valuation Date." The "Valuation Date" for the
      purpose of granting Performance Share Awards shall be the first day of the
      year in which the Award is made. The "Valuation Date" for the purpose of
      Performance Share Payments shall be the first business day following the
      end of the Award Period.

      j.    "HOLDER" means a person who has been granted an Option, an SAR, a
Restricted Stock Award, or a Performance Share Award.

      k.    "NORMAL RETIREMENT" means Termination by resignation of employment
with the Company and any Subsidiary after attaining age 65 or by resignation of
employment with the Company and any Subsidiary after attaining age 60 if the
Committee determines that such resignation constitutes a Normal Retirement for
purposes of this Plan.

      l.    "OPTION" means an Award granted under Section 7 of the Plan.

      m.    "PERFORMANCE SHARE" means an Award granted under Section 9 of the
Plan.

      n.    "PLAN" means this 1995 Long-Term Incentive Plan.

      o.    "RESTRICTED STOCK AWARD" means an Award granted under Section 10
of the Plan.

      p.    "ROE" means return on average shareholders' equity which is
defined as the Company's consolidated net earnings, before extraordinary items,
divided by the average of the shareholders' equity at the beginning and end of
the year, as set forth in the Company's consolidated statement of earnings and
balance sheet for such year. The Committee may, at its sole discretion, include
or exclude any extraordinary or unusual items in calculation of ROE. "Average
ROE" means, with respect to any one Award Period, the sum of the ROE's achieved
in each of the years of the Award Period divided by the number of years in the
Award Period.

      q.    "SEC" means the Securities and Exchange Commission.

      r.    "STOCK" means Common Shares of the Company and, after
substitution, such other stock as shall be substituted therefor as provided in
Section 12.

      s.    "STOCK APPRECIATION RIGHT" (SAR) means an Award granted under
Section 8, whether or not granted in conjunction with an Option.



                                      - 15 -
<PAGE>

      t.    "SUBSIDIARY" means any corporation of which a majority of the
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Company.

      u.    "TERMINATION" means, with respect to any person, ceasing to be an
employee of the Company or any Subsidiary, other than by death.

      v.    "UNINVITED CHANGE IN CORPORATE CONTROL" means any change in (i)
the ownership or effective control of the Company or any Subsidiary, or (ii) the
ownership of a substantial portion of the assets of the Company or any
Subsidiary, which is not approved by a majority of the directors of the Company
who have been in office at least six (6) months prior to the date of such
change.

3.    EFFECTIVE DATE, DURATION AND SHAREHOLDER APPROVAL

      This Plan shall become effective as of the date of approval of this Plan
by a majority of the shareholders of the Company present or otherwise
represented and entitled to vote at a duly convened meeting of shareholders.
Subject to the provisions of Section 13, Awards may be made as provided herein
for a period of 10 years from the date this Plan is so approved by the
shareholders. The Plan shall continue in effect until all matters relating to
the payment of Awards and administration of the Plan have been settled.

4.    ADMINISTRATION

      The Plan shall be administered by the Committee, which shall consist of
two or more members of the Board and shall be appointed by the Board. A majority
of the Committee shall constitute a quorum.

      Subject to the provisions of the Plan, the Committee shall have exclusive
power to:

      a.    Select the persons to participate in the Plan.

      b.    Determine the Awards to be made to each person selected.

      c.    Determine the time or times when Awards will be made.

      d.    Determine the conditions (including performance requirements) to
which the Awards may be subject.

      e.    Prescribe the form or forms evidencing Awards.

      The Committee shall have the authority, subject to the provisions of the
Plan, to establish, adopt, or revise such rules and regulations and to make all
such determinations relating to the Plan as it may deem necessary or advisable
for the administration of the Plan. The Committee's interpretation of the Plan
or any Awards granted pursuant thereto and all decisions and determinations by
the


                                      - 16 -
<PAGE>

Committee with respect to the Plan shall be final, binding, and conclusive on
all parties.

5.    GRANT OF OPTIONS, STOCK APPRECIATION RIGHTS, RESTRICTED STOCK AWARDS, AND
      PERFORMANCE SHARE AWARDS; SHARES SUBJECT TO THE PLAN

      The Committee may, from time to time, grant Awards to one or more persons
determined by it to be eligible for participation in the Plan in accordance with
the provisions of Section 6; provided however that:

      a.    TOTAL SHARES.  Subject to Section 12, the aggregate number of
shares of Stock made subject to Awards may not exceed 700,000.

      b.    USE OF SHARES.  Such shares shall be deemed to have been used in
payment of Performance Shares and SARs whether actually delivered or the Fair
Market Value equivalent of such shares is paid in cash. To the extent that an
Award lapses or the rights of its Holder terminate, any shares of Stock subject
to such Award shall again be available for the grant of an Award.

      c.    ELIGIBLE SHARES.  Stock delivered by the Company in settlement
under the Plan may be authorized and unissued Stock or Stock held in the
treasury of the Company or may be purchased on the open market or by private
purchase.

6.    ELIGIBILITY

      Officers and key employees of the Company or a Subsidiary who, in the
opinion of the Committee, are mainly responsible for the continued growth and
development and financial success of the business of the Company or any
Subsidiary shall be eligible to be granted Awards under the Plan.

7.    STOCK OPTIONS

      One or more Options can be granted to any Eligible Employee. Options may
be granted as Incentive Stock Options ("ISOs") and nonqualified stock options
and shall be subject to the following conditions:

      a.    OPTION PRICE.  The option price per share of Stock shall be set by
the grant but shall in no instance be less than Fair Market Value at the Date of
Grant.

      b.    FORM OF PAYMENT.  At the time of the exercise of the Option, the
option price shall be payable in cash and/or shares of Stock valued at the Fair
Market Value at the time the Option is exercised, and at the discretion of and
on terms acceptable to the Committee, by a note signed by the Holder payable to
the Company providing for simple interest at a rate to be stipulated by the
Committee.

      c.    OTHER TERMS AND CONDITIONS.  Each Option shall become exercisable
in cumulative installments in such manner and within such period or periods, not
to exceed 10 years from its Date of Grant, as set forth in the Stock Option
Agreement.


                                      - 17 -
<PAGE>

No Option shall be exercisable after the expiration of ten years from the date
it is granted. Except as set forth below, an Option shall terminate in the event
of the Holder's Termination or death.

      Unless limited to shorter periods by the Stock Option Agreement, in the
event of a Termination, the Holder shall have the right to exercise the Option
for the following periods after such Termination, but only to the extent that
the Option was exercisable at the date of the Termination and does not otherwise
expire by its terms.

            (1)   In the event of Normal Retirement, two years after the date of
      Termination.

            (2)   In the event of (a) discharge by the Company or any Subsidiary
      (except for theft or proven dishonesty) within two years from the date of
      an Uninvited Change in Corporate Control, or (b) resignation of the Holder
      within the period commencing 180 days from the date of an Uninvited Change
      in Corporate Control and ending two years from the date of an Uninvited
      Change in Corporate Control, one year after the date of Termination.

            (3)   In the event of the Holder's Termination (except as provided
      in Section 7c(2) hereof) with the prior written consent of the Company or
      any Subsidiary, three (3) months after the date of such resignation. Such
      prior written consent may be given only by the Chief Executive Officer of
      the Company or any Subsidiary or any such officer delegated by the Chief
      Executive Officer (other than the resigning person) and must specify that
      it is given for the purpose of the Holder's exercise of the Option.

            (4)   In the event of (a) discharge by the Company or any Subsidiary
      with or without cause (except as provided in Section 7c(2), hereof), or
      (b) resignation without the prior written consent of the Company or any
      Subsidiary, on the date of such discharge or resignation.

      In the event of Holder's death prior to Termination, or within three
months of a Normal Retirement, the Option may be exercised for a period of one
year after the date of Holder's death or, if shorter, the remaining term of the
Option.

       d.   SPECIAL RULES GOVERNING INCENTIVE STOCK OPTIONS (ISOS).
Notwithstanding the foregoing, any ISO granted under the Plan shall be subject
to such terms and conditions not inconsistent with the Plan as the Committee
shall impose, including the following: (1) No individual will be granted an ISO
if that individual owns stock of the Company or any of its Subsidiaries
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company or any of its Subsidiaries, unless the option
price shall not be less than 110% of the Fair Market Value of such stock on the
date such Option is granted and the Option by its terms is not exercisable more
than five years from the date it is granted; (2) The aggregate Fair Market Value
(determined at the time the ISO is


                                      - 18 -
<PAGE>

granted) of the stock with respect to which ISOs are exercisable for the first
time by any Holder during any calendar year (under all incentive stock option
plans of the Company) shall not exceed $100,000; provided, however, that all or
any portion of an Option which cannot be exercised as an ISO because of such
limitation shall be treated as a nonqualified stock option; and (3) An ISO will
not be exercisable after 90 days after Termination, unless Termination is due to
the Holder's being disabled in which event the ISO will cease to be exercisable
one year after Termination. An ISO will not be exercisable after one year after
the death of the Holder.

      e.    STOCK OPTION AGREEMENT.  Each Option granted under the Plan shall
be evidenced by a "Stock Option Agreement" between the Company and the Holder of
the Option containing provisions not inconsistent with the Plan as determined by
the Committee, and shall be subject to the following additional terms and
conditions: (1)Any Option or portion thereof that is exercisable shall be
exercisable for the full amount or for any part thereof, except as otherwise
determined by the Stock Option Agreement. (2)Each Option shall cease to be
exercisable, as to any share, when the Holder purchases the share or exercises a
related SAR or when the Option lapses. (3)Leaves of absence, approved by the
Company or a Subsidiary, shall not constitute the termination of employment of
the Holder.

      f.    EXPIRED OPTIONS.  If any Options awarded under the Plan shall be
forfeited, cancelled, or not exercised in full, the Stock subject to such
Options may again be awarded under the Plan.

      g.    TENDER OFFER OR MERGER.  Notwithstanding any other provision, in
the event of a public tender offer for all or any portion of the Stock or in the
event that a proposal to merge, consolidate, or otherwise combine with, or sell
all or a substantial portion of the assets of the Company or a Subsidiary to,
another company is submitted for shareholder approval, the Committee may in its
sole discretion declare previously granted options to be immediately
exercisable.

8.    STOCK APPRECIATION RIGHTS

      Any Option granted under the Plan may include an SAR, either at the time
of grant or by amendment. SARs may also be granted to an Eligible Employee
independent of any prior or contemporaneous Option grant and shall be
exercisable as provided therein without regard to any Option. In addition to
such terms and conditions not inconsistent with the Plan as the Committee shall
impose, SARs shall be subject to the following terms:

      a.    RIGHT TO EXERCISE.  An SAR granted with an Option shall be
exercisable to the extent and only to the extent the Option is exercisable. An
SAR not included in an Option shall have a "purchase price" ascribed thereto by
the Committee in granting such SAR, which shall not be less than the Fair Market
Value of the Stock on the Date of Grant.

      b.    PAYMENT.  An exercisable SAR shall entitle the Holder to surrender
unexercised the SAR or the Option in which it is included, as the case may be,
or any portion thereof, and, to receive in exchange therefore that number of
shares of


                                      - 19 -
<PAGE>

Stock having an aggregate Fair Market Value, as hereinafter defined, equal to
the excess of the Fair Market Value of one share over the purchase price per
share specified in such SAR or Option times the number of shares called for by
the SAR or Option, or portion thereof, which is so surrendered. The Committee
shall be entitled to elect to settle the Company's obligation arising out of the
exercise of an SAR by the payment of cash or partially by the payment of cash
and partially by the delivery of shares, the total value of which shall be in
either case equal to the aggregate Fair Market Value of the shares it would
otherwise be obligated to deliver. The Committee shall also have the right to
place such limitations and restrictions on the obligation to make such cash
payments or deliver shares under SARs as it, in its sole discretion, deems to be
in the best interest of the Company. The Fair Market Value for SAR exercise
purposes of shares shall be determined on the basis of prices on the trading day
next preceding the date on which the SAR is exercised. To the extent that an SAR
included in an Option is exercised, such Option shall be deemed to have been
exercised, and shall not be deemed to have lapsed.

      c.    SPECIAL RULES GOVERNING SARS.  An SAR not included in an Option
shall be evidenced by an agreement between the Company and the Holder in a form
approved by the Committee. Any SAR granted under the Plan shall be subject to
such terms and conditions not inconsistent with the Plan as the Committee shall
impose, including the following: (1) The SAR will lapse no later than the
underlying Option for SARs accompanying an Option or, for freestanding SARs, no
later than 10 years from its Date of Grant; (2) An SAR accompanying an Option
may be exercised only when the Fair Market Value of the Stock exceeds the option
price of the Stock subject to the SAR. (3) Such terms as the Committee
determines are necessary or desirable to qualify the SAR under Rule 16b-3 as
promulgated by the SEC under the Securities Exchange Act of 1934 for those
Holders to whom such qualification is relevant.

      d.    OTHER LIMITATIONS.  Such other limitations as the Committee shall
impose.

9. PERFORMANCE SHARES

      One or more Awards of Performance Shares may be made to an Eligible
Employee. Performance Shares shall be credited to a Performance Share account to
be maintained for each such Holder. Each Performance Share shall be deemed to be
the equivalent of one share of Stock of the Company. The Award of Performance
Shares under the Plan shall not entitle the Holder to any interest in or to any
dividend, voting, or other rights of a shareholder. The value of the Performance
Shares in a Holder's Performance Share account at the time of Award or the time
of payment shall be the Fair Market Value at any such time of an equivalent
number of shares of the Stock (subject to the limitation provided in Section
9c).

      If any Performance Shares awarded under the Plan shall be forfeited,
cancelled, or not paid out in full, such Performance Shares may again be awarded
under the Plan. Shares of Stock delivered upon payment of Performance Shares may
be either treasury shares, shares purchased for the account of the participant
or authorized and unissued shares, or any combination thereof.


                                      - 20 -
<PAGE>

      a.    AWARD GRANTS.  Grants of Performance Shares may be made by the
Committee in any fiscal year during the term of the Plan. Such shares will be
paid out in full or in part on the basis of the Company's performance in terms
of (i) ROE over the Award Period following the beginning of the Company's fiscal
year in which the Award is made as hereinafter set forth or (ii) such other
criteria as determined by the Committee. In determining the size of Awards, the
Committee shall take into account a Holder's responsibility level, performance,
potential, cash compensation level, and the Fair Market Value of the Company's
Stock at the time of Awards, as well as such other considerations as it deems
appropriate.

      In the event a Holder terminates employment during an Award Period, payout
would be as follows:

            (1)   NORMAL RETIREMENT.  Payout would be at the end of the Award
      Period and prorated for service during the period.

            (2)   RESIGNATION OR DISCHARGE.  For resignation with the prior
      written consent of the Company or a Subsidiary, the payout would be at the
      end of the Award Period and prorated for service during the period. For
      resignation other than with such consent (and not constituting Normal
      Retirement) or for discharge with or without cause, the Award would be
      completely forfeited.

            (3)   DEATH OR DISABILITY.  Payout would be at the end of the
      Award Period and prorated for service during the period.

      The Committee shall not, over the entire Plan period, grant to any single
Holder more than 15% of the maximum number of Performance Shares which may be
granted under the Plan. Awards cancelled or portions of Awards not paid out in
full for any single Holder shall not be included for purposes of this
limitation.

      Grants of Performance Shares shall be deemed to have been on January 1 of
the year in which grants are made.

      b.    RIGHT TO PAYMENT OF PERFORMANCE SHARES.  Following the end of the
Award Period, the Holder of a Performance Share shall be entitled to receive
payment of an amount based on the achievement of the performance measures for
such Award Period, as determined by the Committee. The Committee shall have the
right to establish Average ROE requirements; provided, however, that to the
extent that the performance measure is ROE over the Award Period, such
requirements shall not reduce below ten percent (10%) the Average ROE necessary
to earn one hundred percent (100%) of the Award and that any such reduction
shall be made only during the first half of each Award Period and shall not
exceed 4 percentage points in total, and in no event shall payments be permitted
for an Average ROE of less than 7 percent.

      c.    FORM AND TIMING OF PAYMENT.  No payment of Performance Shares
shall be made prior to the end of an Award Period. Payment therefore shall be
made as soon as practicable after the receipt of audited financial statements
relating to the last year of such period. The Committee may establish for each
Award Period a Fair


                                      - 21 -
<PAGE>

Market Value for purposes of payments of Performance Shares but in no event
shall it exceed by more than two hundred percent (200%) the Fair Market Value at
the time of granting of such Performance Shares.

      The payment to which a Holder shall be entitled at the end of an Award
Period shall be a dollar amount equal to the Fair Market Value at the Valuation
Date (as defined in Section 2i(2) hereof) of the number of shares of Stock equal
to the number of Performance Shares earned and payable to him in accordance with
Section 9b. Payment shall normally be made one-half in cash and one-half in
Stock; however, the Committee may authorize payment in such other combinations
of cash and Stock or all in cash or all in Stock, as it deems appropriate.
Issuance of Stock shall be subject to the authorization of the Board.

      The number of shares of Stock to be paid in lieu of cash will be
determined by dividing the portion of the payment not paid in cash by: (1) The
price per share of Stock (the average of the highest price and the lowest price
at which the Stock shall have been sold regular way on the NYSE) on the date on
which the shares are issued; or (2) The price per share paid for shares
purchased for a Holder's account should the Board of Directors determine to
authorize the purchase of shares on behalf of a holder.

      d.    TENDER OFFER OR MERGER.  Notwithstanding any other provision of
the Plan, in the event of any public tender offer for all or any portion of the
Stock or in the event that a proposal to merge, consolidate or otherwise combine
with, or sell all or a substantial portion of the assets of the Company or a
Subsidiary to, another company is submitted for shareholder approval, the
Committee may in its sole discretion declare any Award Period ended as of a
specific date and accelerate full payments of such awards accordingly. For
awards based on ROE, the Committee shall determine an Average ROE for the
reduced Award Period and may estimate ROE for any periods for which annual
reports are not yet available.

10. RESTRICTED STOCK AWARDS

      a.    RESTRICTION PERIOD TO BE ESTABLISHED BY THE COMMITTEE.  One or
more Awards of Restricted Stock may be made to an Eligible Employee. At the time
a Restricted Stock Award is made, the Committee shall establish a period of time
(the "Restriction Period") applicable to such Award which shall be not less than
one (1) year. Each Restricted Stock Award may have a different Restriction
Period, at the discretion of the Committee. In the event of a public tender
offer for all or any portion of the Stock or in the event that any proposal to
merge, consolidate or otherwise combine with, or sell all or a substantial
portion of the assets of the Company or a Subsidiary to, another company is
submitted for approval, the Committee may in its sole discretion change or
eliminate the Restriction Period. Except as permitted above or pursuant to
Section 12, the Restriction Period applicable to a particular Restricted Stock
Award shall not be changed.

      b.    OTHER TERMS AND CONDITIONS.  Stock awarded pursuant to a
Restricted Stock Award shall be represented by a stock certificate registered in
the name of the Holder of such Restricted Stock Award. The Holder shall have the
right to enjoy all


                                      - 22 -
<PAGE>

shareholder rights during the Restriction Period with the exception that: (1)
The Holder shall not be entitled to delivery of the stock certificate until the
Restriction Period shall have expired. (2) The Company may either issue shares
subject to such restrictive legends and/or stop-transfer instructions as it
deems appropriate or provide for retention of custody of the Stock during the
Restriction Period. (3) A breach of the terms and conditions established by the
Committee pursuant to the Restricted Stock Award shall cause a forfeiture of the
Restricted Stock Award, and any dividends withheld thereon. (4) Cash and stock
dividends may be either currently paid or withheld by the Company for the
Holder's account until the Restriction Period expires. At the discretion of the
Committee, interest may be paid on the amount of cash dividends withheld,
including cash dividends on stock dividends, at a rate and subject to such terms
as determined by the Committee.

      c.    FORFEITURE PROVISIONS.  In the event a Holder terminates
employment during a Restriction Period, an Award would be forfeited as follows:

            (1)   NORMAL RETIREMENT.  The Award would be prorated for service
      during the period and would be received as soon as practicable following
      retirement.

            (2)   RESIGNATION OR DISCHARGE.  For resignation with the prior
      written consent of the Company or a Subsidiary, the Award would be
      prorated for service during the period and received as soon as practicable
      following resignation. For resignation other than with such consent (and
      not constituting Normal Retirement) or for discharge with or without
      cause, the Award would be completely forfeited.

            (3)   DEATH OR DISABILITY.  The Award would be prorated for
      service during the period and received as soon as practicable following
      death or disability.

      Dividends withheld by the Company on Restricted Stock that is forfeited
shall be retained by the Company.

      d.    PAYMENT FOR RESTRICTED STOCK.  A Holder shall not be required to
make any payment for Stock received pursuant to a Restricted Stock Award.

11. GENERAL

      a.    GOVERNMENT AND OTHER REGULATIONS.  The obligation of the Company
to make payment of Awards in Stock or otherwise shall be subject to all
applicable laws, rules, and regulations, and to such approvals by governmental
agencies as may be required. The Company shall be under no obligation to
register under the Securities Act of 1933, as amended ("Act") any of the shares
of stock paid under the Plan. If the shares paid under the Plan may in certain
circumstances be exempt from registration under the Act, the Company may
restrict the transfer of such shares in such manner as it deems advisable to
ensure the availability of any such exemption.



                                      - 23 -
<PAGE>

      b.    TAX WITHHOLDING.  The Company or a Subsidiary, as appropriate,
shall have the right to deduct from all Awards paid in cash any federal, state
or local taxes as required by law to be withheld with respect to such cash
payments. In the case of Awards paid in Stock, the employee or other person
receiving such Stock may be required to pay to the Company or a Subsidiary, as
appropriate, the amount of any such taxes which the Company or Subsidiary is
required to withhold with respect to such Stock.

      c.    CLAIM TO AWARDS AND EMPLOYMENT RIGHTS.  No employee or other
person shall have any claim or right to be granted an Award under the Plan.
Neither this Plan nor any action taken hereunder shall be construed as giving
any employee any right to be retained in the employ of the Company or a
Subsidiary or limit the right of the Company or any Subsidiary to terminate an
employee at anytime, with or without cause. A holder of any right hereunder to
receive cash or Stock in respect of any Award shall have no rights other than
those of a general creditor of the Company. Awards represent unfunded and
unsecured obligations of the Company, subject to the terms and conditions of the
applicable Award.

      d.    BENEFICIARIES.  Any payment of Awards due under this Plan to a
deceased Holder shall be paid to the beneficiary duly designated by the Holder
in accordance with the Company's practices. If no such beneficiary has been
designated or survives the Holder, payment shall be made to the Holder's legal
representative. A beneficiary designation may be changed or revoked by a Holder
at any time provided the change or revocation is filed with the Committee.

      e.    NONTRANSFERABILITY.  A person's rights and interests under the
Plan, including any Award previously made to such person or any amounts payable
under the Plan, may not be assigned, pledged, or transferred except, in the
event of an employee's death, to a designated beneficiary as provided in the
Plan, or in the absence of such designation, by will or the laws of descent and
distribution, or, for any Award other than an ISO (or an SAR granted in tandem
with an ISO), pursuant to a qualified domestic relations order as defined by the
Code or Title I of the Employee Retirement Income Security Act, or the rules
thereunder.

      f.    INDEMNIFICATION.  Each person who is or shall have been a member
of the Committee or of the Board shall be indemnified and held harmless by the
Company from and against any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be a party or in which he
may be involved by reason of any action or failure to act under the Plan and
against and from any and all amounts paid by him in satisfaction of judgment in
any such action, suit, or proceeding against him. He shall give the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's Articles of Incorporation
or By-Laws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.



                                      - 24 -
<PAGE>

      g.    RELIANCE ON REPORTS.  Each member of the Committee and each member
of the Board shall be fully justified in relying or acting in good faith upon
any report made by the independent public accountant of the Company and its
Subsidiaries and upon any other information furnished in connection with the
Plan by any person or persons other than himself. In no event shall any person
who is or shall have been a member of the Committee or of the Board be liable
for any determination made or other action taken or any omission to act in
reliance upon any such report or information or for any action taken, including
the furnishing of information, or failure to act, if in good faith.

      h.    RELATIONSHIP TO OTHER BENEFITS.  No payment under the Plan shall
be taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or any
Subsidiary.

      i.    EXPENSES.  The expenses of administering the Plan shall be borne
by the Company and its Subsidiaries.

      j.    PRONOUNS.  Masculine pronouns and other words of masculine gender
shall refer to both men and women.

      k.    TITLES AND HEADINGS.  The titles and headings of the sections in
the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.

12. CHANGES IN CAPITAL STRUCTURE

      Options, SARs, Restricted Stock Awards, Performance Share Awards and any
agreements evidencing such Awards shall be subject to adjustment by the
Committee as to the number and price per share of Stock or other considerations
subject to such Awards in the event of changes in the outstanding Stock by
reason of stock dividends, stock splits, recapitalizations, reorganizations,
mergers, consolidations, combinations, exchanges, or other relevant changes in
capitalization occurring after the Date of Grant of any such Awards. In the
event of any such change in the outstanding Stock, the aggregate number of
shares available under the Plan shall be appropriately adjusted by the
Committee, whose determination shall be conclusive.

13.  AMENDMENTS AND TERMINATION

      The Board may at any time terminate the Plan or, with the express written
consent of an individual participant, cancel or reduce or otherwise alter his
outstanding Awards thereunder if, in its judgment, the tax, accounting, or other
effects of the Plan or potential payouts thereunder would not be in the best
interest of the Company. The Board may, at any time, or from time to time, amend
or suspend and, if suspended, reinstate, the Plan in whole or in part, provided,
however, that any amendment of the Plan shall be subject to the approval of the
Company's shareholders to the extent required by applicable laws, regulations or
rules.



                                      - 25 -
<PAGE>

14.   CLAIMS PROCEDURES

      Claims for benefits under the Plan shall be filed in writing with the
Committee on forms supplied by the Committee. Written notice of the disposition
of a claim shall be furnished to the claimant within 90 days after the claim is
filed. If the claim is denied, the notice of disposition shall set forth the
specific reasons for the denial, citations to the pertinent provisions of the
Plan, and, where appropriate, an explanation as to how the claimant can perfect
the claim. If the claimant wishes further consideration of his or her claim, the
claimant may appeal a denied claim to the Committee (or to a person designated
by the Committee) for further review. Such appeal shall be filed in writing with
the Committee on a form supplied by the Committee, together with a written
statement of the claimant's position, no later than 90 days following receipt by
the claimant of written notice of the denial of his or her claim. If the
claimant so requests, the Committee shall schedule a hearing. A decision on
review shall be made after a full and fair review of the claim and shall be
delivered in writing to the claimant no later than 60 days after the Committee's
receipt of the notice of appeal, unless special circumstances (including the
need to hold a hearing) require an extension of time for processing the appeal,
in which case a written decision on review shall be delivered to the claimant as
soon as possible but not later than 120 days after the Committee's receipt of
the appeal notice. The claimant shall be notified in writing of any such
extension of time. The written decision on review shall include specific reasons
for the decision, written in a manner calculated to be understood by the
claimant, and shall specifically refer to the pertinent Plan provisions on which
it is based. All determinations of the Committee shall be final and binding on
Participants and their beneficiaries.


                                      - 26 -
[{"type": "S-8", "sequence": "1", "description": "FORM S-8", "secsgml_size_bytes": 65973}]
{"company-data": {"conformed-name": "LONGS DRUG STORES CORP", "cik": "0000764762", "assigned-sic": "5912", "irs-number": "680048627", "state-of-incorporation": "MD", "fiscal-year-end": "0131"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "033-54959", "film-number": "94542128"}, "business-address": {"street1": "141 N CIVIC DR", "city": "WALNUT CREEK", "state": "CA", "zip": "94596", "phone": "4159371170"}}
As filed with the Securities and Exchange Commission on August 5, 1994

                                             Registration Statement No. 33-___

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549
                      ___________________________________
                                   FORM S-8

                            REGISTRATION STATEMENT
                                     Under
                          THE SECURITIES ACT OF 1933
                      ___________________________________

                         LONGS DRUG STORES CORPORATION
            (Exact name of registrant as specified in its charter)

           Maryland                                  68-0048627
    (State or other jurisdiction                 (I.R.S. Employer
   of incorporation or organization)              Identification No.)

             141 North Civic Drive, Walnut Creek, California 94596
             (Address of Principal Executive Offices)  (Zip Code)

                        1995 Long-Term Incentive Plan
                           (Full title of the plan)

              Orlo D. Jones, Senior Vice President and Secretary
                         Longs Drug Stores Corporation
                             141 North Civic Drive
                        Walnut Creek, California  94596
                                 510-937-1170
                  (Name and address, including zip code, and
         telephone number, including area code, of agent for service)

                        Calculation of Registration Fee
- ---------------------------------------------------------------------------------------
                                                      Proposed
                                     Proposed          Maximum
Title of Securities  Amount to be    Maximum          Aggregate       Amount of
to be Registered     Registered    Offering Price   Offering Price    Registration Fee
- ---------------------------------------------------------------------------------------
Common Stock
par value $.50        700,000        $34.0625*        $23,843,750       $8,222
per share

- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
* Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457, on the basis of the average of the high and low prices of the
Registrant's Common Stock as reported on the New York Stock Exchange on
August 3, 1994.
PART II

          INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.  INCORPORATION OF DOCUMENTS BY REFERENCE

            The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:  (a) the
Issuer's Annual Report on Form 10-K for the fiscal year ended January 27, 1994,
(b) the Issuer's Quarterly Report on Form 10-Q for the quarter ended April 28,
1994, and (c) the description of the Issuer's Common Stock contained in the
Company's Registration Statement on Form 8-A dated August 21, 1986, File No.
1-8978.

            All documents subsequently filed by the Issuer pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of the filing of such documents.

ITEM 4.  DESCRIPTION OF SECURITIES

            Not applicable.

ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL

            Not applicable.

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

            Article Tenth, Section 9 of the Registrant's Amended Articles of
Incorporation provides for indemnification of directors and officers of the
Registrant as follows:

            The Corporation shall indemnify (a) its directors to the full extent
      provided by the general laws of the State of Maryland now or hereafter in
      force, including the advance of expenses under the procedures provided by
      such laws; (b) its officers to the same extent it shall indemnify its
      directors; and (c) its officers who are not directors to such further
      extent as shall be authorized by the Board of Directors and be consistent
      with law.  The foregoing

                                      - 1 -
shall not limit the authority of the Corporation to indemnify other
      employees and agents consistent with law.

            Article Tenth, Section 11 of the Registrant's Amended Articles of
Incorporation further provides:

            To the fullest extent permitted by Maryland statutory of decisional
      law, as amended or interpreted, no director or officer of this Corporation
      shall be personally liable to the Corporation or its stockholders for
      money damages.  No amendment of the Charter of the Corporation or repeal
      of any of its provisions shall limit or eliminate the benefits provided to
      directors and officers under this provision with respect to any act or
      omission which occurred prior to such amendment or repeal.

            Section 2-418 of the Maryland General Corporation Law provides as
follows:

            (a)   In this section the following words have the meanings
      indicated.

                  (1)   "Director" means any person who is or was a director of
            a corporation and any person who, while a director of a corporation,
            is or was serving at the request of the corporation as a director,
            officer, partner, trustee, employee, or agent of another foreign or
            domestic corporation, partnership, joint venture, trust, other
            enterprise, or employee benefit plan.

                  (2)   "Corporation" includes any domestic or foreign
            predecessor entity of a corporation in a merger, consolidation, or
            other transaction in which the predecessor's existence ceased upon
            consummation of the transaction.

                  (3)   "Expenses" include attorney's fees.

                  (4)   "Official capacity" means the following:

                        (i)   When used with respect to a director, the office
                  of director in the corporation; and

                        (ii)  When used with respect to a person other than a
                  director as contemplated in

                                      - 2 -
subsection (j), the elective or appointive office in the
                  corporation held by the officer, or the employment or agency
                  relationship undertaken by the employee or agent in behalf of
                  the corporation.

                        (iii) "Official capacity" does not include service for
                  any other foreign or domestic corporation or any partnership,
                  joint venture, trust, other enterprise, or employee benefit
                  plan.

                  (5)   "Party" includes a person who was, is, or is threatened
            to be made a named defendant or respondent in a proceeding.

                  (6)   "Proceeding" means any threatened, pending or completed
            action, suit or proceeding, whether civil, criminal, administrative,
            or investigative.

            (b)   (1)   A corporation may indemnify any director made a party to
      any proceeding by reason of service in that capacity unless it is
      established that:

                        (i)   The act or omission of the director was material
                  to the matter giving rise to the proceeding; and

                              1.    Was committed in bad faith; or

                              2.    Was the result of active and deliberate
                  dishonesty; or

                        (ii)  The director actually received an improper
                  personal benefit in money, property, or services; or

                        (iii) In the case of any criminal proceeding, the
                  director had reasonable cause to believe that the act or
                  omission was unlawful.

                  (2)   (i)   Indemnification may be against judgments,
                  penalties, fines, settlements, and reasonable expenses
                  actually incurred by the director in connection with the
                  proceeding.

                                      - 3 -
(ii)  However, if the proceeding was one by or in the
                  right of the corporation, indemnification may not be made in
                  respect of any proceeding in which the director shall have
                  been adjudged to be liable to the corporation.

                  (3)   (i)   The termination of any proceeding by judgment,
            order, or settlement does not create a presumption that the director
            did not meet the requisite standard of conduct set forth in this
            subsection.

                        (ii)  However, if the proceeding was one by or in the
                  right of the corporation, indemnification may not be made in
                  respect of any proceeding in which the director shall have
                  been adjudged to be liable to the corporation.

                        (iii) The termination of any proceeding by conviction, a
                  plea of nolo contendere or its equivalent, or any entry of an
                  order of probation prior to judgment, creates a rebuttable
                  presumption that the director did not meet that standard of
                  conduct.

            (c)   A director may not be indemnified under subsection (b) of this
      section in respect of any proceeding charging improper personal benefit to
      the director, whether or not involving action in the director's official
      capacity, in which the director was adjudged to be liable on the basis
      that personal benefit was improperly received.

            (d)   Unless limited by the charter:

                  (1)   A director who has been successful, on the merits or
            otherwise, in the defense of any proceeding referred to in
            subsection (b) of this section shall be indemnified against
            reasonable expenses incurred by the director in connection with the
            proceeding.

                  (2)   A court of appropriate jurisdiction, upon application of
            a director and such notice as the court shall require, may order
            indemnification in the following circumstances:

                                      - 4 -
(i)   If it determines a director is entitled to
                  reimbursement under paragraph (1) of this subsection, the
                  court shall order indemnification, in which case the director
                  shall be entitled to recover the expenses of securing such
                  reimbursement; or

                        (ii)  If it determines that the director is fairly and
                  reasonably entitled to indemnification in view of all the
                  relevant circumstances, whether or not the director has met
                  the standards of conduct set forth in subsection (b) of this
                  section or has been adjudged liable under the circumstances
                  described in subsection (c) of this section, the court may
                  order such indemnification as the court shall deem proper.
                  However, indemnification with respect to any proceeding by or
                  in the right of the corporation or in which liability shall
                  have been adjudged in the circumstances described in
                  subsection (c) shall be limited to expenses.

                        (3)   A court of appropriate jurisdiction may be the
                  same court in which the proceeding involving the director's
                  liability took place.

                  (e)   (1)   Indemnification under subsection (b) of this
            section may not be made by the corporation unless authorized for a
            specific proceeding after a determination has been made that
            indemnification of the director is permissible in the circumstances
            because the director has met the standard of conduct set forth in
            subsection (b) of this section.

                        (2)   Such determination shall be made:

                              (i)   By the Board of Directors by a majority vote
                        of a quorum consisting of directors not, at the time,
                        parties to the proceeding, or, if such a quorum cannot
                        be obtained, then by a majority vote of a committee of
                        the board consisting solely of two or more directors
                        not, at the time, parties to such proceeding and who
                        were duly designated to act in the matter by a majority
                        vote of the full board in which the designated directors
                        who are parties may participate:

                                      - 5 -
(ii)  By special legal counsel selected by the
                        board of directors or a committee of the board by vote
                        as set forth in subparagraph (i) of this paragraph, or,
                        if the requisite quorum of the full board cannot be
                        obtained therefor and the committee cannot be
                        established, by a majority vote of the full board in
                        which directors who are parties may participate; or

                              (iii) By the stockholders.

                        (3)   Authorization of indemnification and determination
                  as to reasonableness of expenses shall be made in the same
                  manner as the determination that indemnification is
                  permissible.  However, if the determination that
                  indemnification is permissible is made by special legal
                  counsel, authorization of indemnification and determination as
                  to reasonableness of expenses shall be made in the manner
                  specified in subparagraph (ii) of paragraph (2) of this
                  subsection for selection of such counsel.

                        (4)   Shares held by directors who are parties to the
                  proceeding may not be voted on the subject matter under this
                  subsection.

                  (f)   (1)   Reasonable expenses incurred by a director who is
      a party to a proceeding may be paid or reimbursed by the corporation in
      advance of the final disposition of the proceeding upon receipt by the
      corporation of:

                              (i)   A written affirmation by the director of the
                        director's good faith belief that the standard of
                        conduct necessary for indemnification by the corporation
                        as authorized in this section has been met; and

                              (ii)  A written undertaking by or on behalf of the
                        director to repay the amount if it shall ultimately be
                        determined that the standard of conduct has not been
                        met.

                        (2)   The undertaking required by subparagraph (ii) of
                  paragraph (1) of this subsection shall be an unlimited

                                      - 6 -
general obligation of the director but need not be secured and
                  may be accepted without reference to financial ability to make
                  the repayment.

                        (3)   Payments under this subsection shall be made as
                  provided by the charter, bylaws, or contract or as specified
                  in subsection (e) of this section.

                  (g)   The indemnification and advancement of expenses,
            provided or authorized by this section may not be deemed exclusive
            of any other rights, by indemnification or otherwise, to which a
            director may be entitled under the charter, the bylaws, a resolution
            of stockholders or directors, an agreement or otherwise, both as to
            action in an official capacity and as to action in another capacity
            while holding such office.

                  (h)   This section does not limit the corporation's power to
            pay or reimburse expenses incurred by a director in connection with
            an appearance as a witness in a proceeding at a time when the
            director has not been made a named defendant or respondent in the
            proceeding.

                  (i)   For purposes of this section:

                        (1)   The corporation shall be deemed to have requested
                  a director to serve an employee benefit plan where the
                  performance of the director's duties to the corporation also
                  imposes duties on, or otherwise involves services by, the
                  director to the plan or participants or beneficiaries of the
                  plan;

                        (2)   Excise taxes assessed on a director with respect
                  to an employee benefit plan pursuant to applicable law shall
                  be deemed fines; and

                        (3)   Action taken or omitted by the director with
                  respect to an employee benefit plan in the performance of the
                  director's duties for a purpose reasonably believed by the
                  director to be in the interest of the participants and
                  beneficiaries of the plan shall be deemed to be for a purpose
                  which is not opposed to the best interests of the corporation.

                                      - 7 -
(j)   Unless limited by the charter:

                        (1)   An officer of the corporation shall be indemnified
                  as and to the extent provided in subsection (d) of this
                  section for a director and shall be entitled, to the same
                  extent as a director, to seek indemnification pursuant to the
                  provisions of subsection (d);

                        (2)   A corporation may indemnify and advance expenses
                  to an officer, employee, or agent of the corporation to the
                  same extent that it may indemnify directors under this
                  section; and

                        (3)   A corporation, in addition, may indemnify and
                  advance expenses to an officer, employee, or agent who is not
                  a director to such further extent, consistent with law, as may
                  be provided by its charter, bylaws, general or specific action
                  of its board of directors, or contract.

                  (k)   (1)   A corporation may purchase and maintain insurance
            on behalf of any person who is or was a director, officer, employee,
            or agent of the corporation, or who, while a director, officer,
            employee, or agent of the corporation, is or was serving at the
            request of the corporation as a director, officer, partner, trustee,
            employee, or agent of another foreign or domestic corporation,
            partnership, joint venture, trust, other enterprise, or employee
            benefit plan against any liability asserted against and incurred by
            such person in any such capacity or arising out of such person's
            position, whether or not the corporation would have the power to
            indemnify against liability under the provisions of this section.

                        (2)   A corporation may provide similar protection,
                  including a trust fund, letter of credit, or surety bond, not
                  inconsistent with this section.

                        (3)   The insurance or similar protection may be
                  provided by a subsidiary or an affiliate of the corporation.

                  (l)   Any indemnification of, or advance of expenses to, a
            director in accordance with this section, if arising out of a
            proceeding by or in the right of the corporation, shall be reported
            in writing to the stockholders with the notice of the next
            stockholders' meeting or prior to the meeting.

                                      - 8 -
As permitted under Subsection (k) of Section 2-418 of the Maryland
General Corporations Law, as set forth above, the Registrant has purchased and
maintains insurance on behalf of its directors and officers against any
liability asserted against such directors and officers in their capacities as
such whether or not the Registrant would have the power to indemnify such
persons under the provisions of Maryland law governing indemnification.

            There is no litigation pending, and neither the Registrant nor any
of its directors know of any threatened litigation, which might result in a
claim for indemnification by any director or officer.

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED

            Not applicable.

ITEM 8.  EXHIBITS

Exhibit
Number      Description of Document
- -------     -----------------------

4.1         1995 Long-Term Incentive Plan.

5.1         Opinion of Howard, Rice, Nemerovski, Canady, Robertson, Falk &
            Rabkin, A Professional Corporation.

23.1        Consent of Deloitte & Touche.

23.2        Consent of Howard, Rice, Nemerovski, Canady, Robertson, Falk &
            Rabkin, A Professional Corporation (included in Exhibit 5.1).

ITEM 9.  UNDERTAKINGS

            The undersigned registrant hereby undertakes:

            (1)   to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;

            (2)   that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to

                                      - 9 -
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and

            (3)   to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

            The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

            Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.  In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

                                      - 10 -
SIGNATURES

            Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Walnut Creek, State of California, on August 5, 1994.

                                           LONGS DRUG STORES CORPORATION

                                       By    /s/   R. M. Long
                                          ----------------------------------
                                          R. M. Long, Chairman of the Board
                                          and Chief Executive Officer

            Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been duly signed by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Signature                 Title                                   Date
- ---------                 -----                                   ----

/s/   R.M. Long
- ---------------------
R.M. Long                 Chairman of the Board, Chief        August 5, 1994
                          Executive Officer and Director

/s/   W.G. Combs
- ---------------------
W.G. Combs                Vice President - Administration
                          (principal financial officer)       August 5, 1994

/s/   Grover White
- ---------------------
Grover White              Vice President - Controller
                          (principal accounting officer)      August 5, 1994

/s/   S.D. Roath
- ---------------------
S.D. Roath                President and Director              August 5, 1994

/s/   R.M. Brooks
- ---------------------
R.M. Brooks               Director                            August 5, 1994

/s/   D.G. DeSchane
- ---------------------
D.G. DeSchane             Director                            August 5, 1994

/s/   E.E. Johnston
- ---------------------
E.E. Johnston             Director                            August 5, 1994

                                      - 11 -
/s/   M.S. Metz
- ---------------------
M.S. Metz                 Director                            August 5, 1994

/s/   R.A. Plomgren
- ---------------------     Senior Vice President - Development August 5, 1994
R.A. Plomgren             and Director

- ---------------------
H.R. Somerset             Director                            August 5, 1994

/s/   T.R. Sweeney
- ---------------------
T.R. Sweeney              Retired Vice President and Director August 5, 1994

/s/   F.E. Trotter
- ---------------------
F.E. Trotter              Director                            August 5, 1994

                                      - 12 -
EXHIBIT LIST

EXHIBIT
NUMBER      DESCRIPTION OF DOCUMENT
- -------     -----------------------

  4.1       1995 Long-Term Incentive Plan.

  5.1       Opinion of Howard, Rice, Nemerovski, Canady, Robertson, Falk &
            Rabkin, A Professional Corporation.

 23.1       Consent of Deloitte & Touche.

 23.2       Consent of Howard, Rice, Nemerovski, Canady, Robertson, Falk &
            Rabkin, A Professional Corporation (included in Exhibit 5.1).

                                      - 13 -
EXHIBIT 4.1

                      LONGS DRUG STORES CORPORATION
                     1995 LONG-TERM INCENTIVE PLAN

1.   PURPOSE

      The purpose of the 1995 Long-Term Incentive Plan is to provide a means
through which Longs Drug Stores Corporation, a Maryland Corporation, and its
Subsidiaries, may attract and retain the employment of able persons and to
provide a means whereby such persons can acquire and maintain stock ownership
thereby strengthening their commitment to the welfare of the Company. A further
purpose of the Plan is to provide key employees with incentive and reward
opportunities designed to enhance the profitable growth of the Company.

2.   DEFINITIONS

      The following definitions shall be applicable throughout the Plan:

      a.    "AWARD" means, individually or collectively, any Option, Stock
Appreciation Right (SAR), Restricted Stock Award or Performance Share Award.

      b.    "AWARD PERIOD" means a period of not less than three years and
relates to Performance Share Awards.

      c.    "BOARD" means the Board of Directors of the Company.

      d.    "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.  Reference in the Plan to any section of the Code shall be deemed
to include any amendments or successor provisions to such section and any
regulations under such section.

      e.    "COMMITTEE" means the committee of the Board appointed to
administer the Plan as referred to in Section 4.

      f.    "COMPANY" means Longs Drug Stores Corporation.

      g.    "DATE OF GRANT" means the date on which the granting of an Award
is authorized by the Committee or such later date as may be specified by the
Committee in such authorization.

      h.    "ELIGIBLE EMPLOYEE" means any person who satisfies the
requirements of Section 6.
      i.    "FAIR MARKET VALUE" means the fair market value of Stock, to be
determined as follows:

            (1)   For Options and SARs, it shall be the average of the highest
      price and the lowest price at which the Stock shall have been sold regular

                                      - 14 -
way on the New York Stock Exchange C Composite Transactions (hereafter
      "NYSE") on a specified date.

            (2)   For Performance Share Awards, it shall be the average of the
      reported closing prices of the Stock on the NYSE for 30 consecutive
      trading days prior to the "Valuation Date." The "Valuation Date" for the
      purpose of granting Performance Share Awards shall be the first day of the
      year in which the Award is made. The "Valuation Date" for the purpose of
      Performance Share Payments shall be the first business day following the
      end of the Award Period.

      j.    "HOLDER" means a person who has been granted an Option, an SAR, a
Restricted Stock Award, or a Performance Share Award.

      k.    "NORMAL RETIREMENT" means Termination by resignation of employment
with the Company and any Subsidiary after attaining age 65 or by resignation of
employment with the Company and any Subsidiary after attaining age 60 if the
Committee determines that such resignation constitutes a Normal Retirement for
purposes of this Plan.

      l.    "OPTION" means an Award granted under Section 7 of the Plan.

      m.    "PERFORMANCE SHARE" means an Award granted under Section 9 of the
Plan.

      n.    "PLAN" means this 1995 Long-Term Incentive Plan.

      o.    "RESTRICTED STOCK AWARD" means an Award granted under Section 10
of the Plan.

      p.    "ROE" means return on average shareholders' equity which is
defined as the Company's consolidated net earnings, before extraordinary items,
divided by the average of the shareholders' equity at the beginning and end of
the year, as set forth in the Company's consolidated statement of earnings and
balance sheet for such year. The Committee may, at its sole discretion, include
or exclude any extraordinary or unusual items in calculation of ROE. "Average
ROE" means, with respect to any one Award Period, the sum of the ROE's achieved
in each of the years of the Award Period divided by the number of years in the
Award Period.

      q.    "SEC" means the Securities and Exchange Commission.

      r.    "STOCK" means Common Shares of the Company and, after
substitution, such other stock as shall be substituted therefor as provided in
Section 12.

      s.    "STOCK APPRECIATION RIGHT" (SAR) means an Award granted under
Section 8, whether or not granted in conjunction with an Option.

                                      - 15 -
t.    "SUBSIDIARY" means any corporation of which a majority of the
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Company.

      u.    "TERMINATION" means, with respect to any person, ceasing to be an
employee of the Company or any Subsidiary, other than by death.

      v.    "UNINVITED CHANGE IN CORPORATE CONTROL" means any change in (i)
the ownership or effective control of the Company or any Subsidiary, or (ii) the
ownership of a substantial portion of the assets of the Company or any
Subsidiary, which is not approved by a majority of the directors of the Company
who have been in office at least six (6) months prior to the date of such
change.

3.    EFFECTIVE DATE, DURATION AND SHAREHOLDER APPROVAL

      This Plan shall become effective as of the date of approval of this Plan
by a majority of the shareholders of the Company present or otherwise
represented and entitled to vote at a duly convened meeting of shareholders.
Subject to the provisions of Section 13, Awards may be made as provided herein
for a period of 10 years from the date this Plan is so approved by the
shareholders. The Plan shall continue in effect until all matters relating to
the payment of Awards and administration of the Plan have been settled.

4.    ADMINISTRATION

      The Plan shall be administered by the Committee, which shall consist of
two or more members of the Board and shall be appointed by the Board. A majority
of the Committee shall constitute a quorum.

      Subject to the provisions of the Plan, the Committee shall have exclusive
power to:

      a.    Select the persons to participate in the Plan.

      b.    Determine the Awards to be made to each person selected.

      c.    Determine the time or times when Awards will be made.

      d.    Determine the conditions (including performance requirements) to
which the Awards may be subject.

      e.    Prescribe the form or forms evidencing Awards.

      The Committee shall have the authority, subject to the provisions of the
Plan, to establish, adopt, or revise such rules and regulations and to make all
such determinations relating to the Plan as it may deem necessary or advisable
for the administration of the Plan. The Committee's interpretation of the Plan
or any Awards granted pursuant thereto and all decisions and determinations by
the

                                      - 16 -
Committee with respect to the Plan shall be final, binding, and conclusive on
all parties.

5.    GRANT OF OPTIONS, STOCK APPRECIATION RIGHTS, RESTRICTED STOCK AWARDS, AND
      PERFORMANCE SHARE AWARDS; SHARES SUBJECT TO THE PLAN

      The Committee may, from time to time, grant Awards to one or more persons
determined by it to be eligible for participation in the Plan in accordance with
the provisions of Section 6; provided however that:

      a.    TOTAL SHARES.  Subject to Section 12, the aggregate number of
shares of Stock made subject to Awards may not exceed 700,000.

      b.    USE OF SHARES.  Such shares shall be deemed to have been used in
payment of Performance Shares and SARs whether actually delivered or the Fair
Market Value equivalent of such shares is paid in cash. To the extent that an
Award lapses or the rights of its Holder terminate, any shares of Stock subject
to such Award shall again be available for the grant of an Award.

      c.    ELIGIBLE SHARES.  Stock delivered by the Company in settlement
under the Plan may be authorized and unissued Stock or Stock held in the
treasury of the Company or may be purchased on the open market or by private
purchase.

6.    ELIGIBILITY

      Officers and key employees of the Company or a Subsidiary who, in the
opinion of the Committee, are mainly responsible for the continued growth and
development and financial success of the business of the Company or any
Subsidiary shall be eligible to be granted Awards under the Plan.

7.    STOCK OPTIONS

      One or more Options can be granted to any Eligible Employee. Options may
be granted as Incentive Stock Options ("ISOs") and nonqualified stock options
and shall be subject to the following conditions:

      a.    OPTION PRICE.  The option price per share of Stock shall be set by
the grant but shall in no instance be less than Fair Market Value at the Date of
Grant.

      b.    FORM OF PAYMENT.  At the time of the exercise of the Option, the
option price shall be payable in cash and/or shares of Stock valued at the Fair
Market Value at the time the Option is exercised, and at the discretion of and
on terms acceptable to the Committee, by a note signed by the Holder payable to
the Company providing for simple interest at a rate to be stipulated by the
Committee.

      c.    OTHER TERMS AND CONDITIONS.  Each Option shall become exercisable
in cumulative installments in such manner and within such period or periods, not
to exceed 10 years from its Date of Grant, as set forth in the Stock Option
Agreement.

                                      - 17 -
No Option shall be exercisable after the expiration of ten years from the date
it is granted. Except as set forth below, an Option shall terminate in the event
of the Holder's Termination or death.

      Unless limited to shorter periods by the Stock Option Agreement, in the
event of a Termination, the Holder shall have the right to exercise the Option
for the following periods after such Termination, but only to the extent that
the Option was exercisable at the date of the Termination and does not otherwise
expire by its terms.

            (1)   In the event of Normal Retirement, two years after the date of
      Termination.

            (2)   In the event of (a) discharge by the Company or any Subsidiary
      (except for theft or proven dishonesty) within two years from the date of
      an Uninvited Change in Corporate Control, or (b) resignation of the Holder
      within the period commencing 180 days from the date of an Uninvited Change
      in Corporate Control and ending two years from the date of an Uninvited
      Change in Corporate Control, one year after the date of Termination.

            (3)   In the event of the Holder's Termination (except as provided
      in Section 7c(2) hereof) with the prior written consent of the Company or
      any Subsidiary, three (3) months after the date of such resignation. Such
      prior written consent may be given only by the Chief Executive Officer of
      the Company or any Subsidiary or any such officer delegated by the Chief
      Executive Officer (other than the resigning person) and must specify that
      it is given for the purpose of the Holder's exercise of the Option.

            (4)   In the event of (a) discharge by the Company or any Subsidiary
      with or without cause (except as provided in Section 7c(2), hereof), or
      (b) resignation without the prior written consent of the Company or any
      Subsidiary, on the date of such discharge or resignation.

      In the event of Holder's death prior to Termination, or within three
months of a Normal Retirement, the Option may be exercised for a period of one
year after the date of Holder's death or, if shorter, the remaining term of the
Option.

       d.   SPECIAL RULES GOVERNING INCENTIVE STOCK OPTIONS (ISOS).
Notwithstanding the foregoing, any ISO granted under the Plan shall be subject
to such terms and conditions not inconsistent with the Plan as the Committee
shall impose, including the following: (1) No individual will be granted an ISO
if that individual owns stock of the Company or any of its Subsidiaries
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company or any of its Subsidiaries, unless the option
price shall not be less than 110% of the Fair Market Value of such stock on the
date such Option is granted and the Option by its terms is not exercisable more
than five years from the date it is granted; (2) The aggregate Fair Market Value
(determined at the time the ISO is

                                      - 18 -
granted) of the stock with respect to which ISOs are exercisable for the first
time by any Holder during any calendar year (under all incentive stock option
plans of the Company) shall not exceed $100,000; provided, however, that all or
any portion of an Option which cannot be exercised as an ISO because of such
limitation shall be treated as a nonqualified stock option; and (3) An ISO will
not be exercisable after 90 days after Termination, unless Termination is due to
the Holder's being disabled in which event the ISO will cease to be exercisable
one year after Termination. An ISO will not be exercisable after one year after
the death of the Holder.

      e.    STOCK OPTION AGREEMENT.  Each Option granted under the Plan shall
be evidenced by a "Stock Option Agreement" between the Company and the Holder of
the Option containing provisions not inconsistent with the Plan as determined by
the Committee, and shall be subject to the following additional terms and
conditions: (1)Any Option or portion thereof that is exercisable shall be
exercisable for the full amount or for any part thereof, except as otherwise
determined by the Stock Option Agreement. (2)Each Option shall cease to be
exercisable, as to any share, when the Holder purchases the share or exercises a
related SAR or when the Option lapses. (3)Leaves of absence, approved by the
Company or a Subsidiary, shall not constitute the termination of employment of
the Holder.

      f.    EXPIRED OPTIONS.  If any Options awarded under the Plan shall be
forfeited, cancelled, or not exercised in full, the Stock subject to such
Options may again be awarded under the Plan.

      g.    TENDER OFFER OR MERGER.  Notwithstanding any other provision, in
the event of a public tender offer for all or any portion of the Stock or in the
event that a proposal to merge, consolidate, or otherwise combine with, or sell
all or a substantial portion of the assets of the Company or a Subsidiary to,
another company is submitted for shareholder approval, the Committee may in its
sole discretion declare previously granted options to be immediately
exercisable.

8.    STOCK APPRECIATION RIGHTS

      Any Option granted under the Plan may include an SAR, either at the time
of grant or by amendment. SARs may also be granted to an Eligible Employee
independent of any prior or contemporaneous Option grant and shall be
exercisable as provided therein without regard to any Option. In addition to
such terms and conditions not inconsistent with the Plan as the Committee shall
impose, SARs shall be subject to the following terms:

      a.    RIGHT TO EXERCISE.  An SAR granted with an Option shall be
exercisable to the extent and only to the extent the Option is exercisable. An
SAR not included in an Option shall have a "purchase price" ascribed thereto by
the Committee in granting such SAR, which shall not be less than the Fair Market
Value of the Stock on the Date of Grant.

      b.    PAYMENT.  An exercisable SAR shall entitle the Holder to surrender
unexercised the SAR or the Option in which it is included, as the case may be,
or any portion thereof, and, to receive in exchange therefore that number of
shares of

                                      - 19 -
Stock having an aggregate Fair Market Value, as hereinafter defined, equal to
the excess of the Fair Market Value of one share over the purchase price per
share specified in such SAR or Option times the number of shares called for by
the SAR or Option, or portion thereof, which is so surrendered. The Committee
shall be entitled to elect to settle the Company's obligation arising out of the
exercise of an SAR by the payment of cash or partially by the payment of cash
and partially by the delivery of shares, the total value of which shall be in
either case equal to the aggregate Fair Market Value of the shares it would
otherwise be obligated to deliver. The Committee shall also have the right to
place such limitations and restrictions on the obligation to make such cash
payments or deliver shares under SARs as it, in its sole discretion, deems to be
in the best interest of the Company. The Fair Market Value for SAR exercise
purposes of shares shall be determined on the basis of prices on the trading day
next preceding the date on which the SAR is exercised. To the extent that an SAR
included in an Option is exercised, such Option shall be deemed to have been
exercised, and shall not be deemed to have lapsed.

      c.    SPECIAL RULES GOVERNING SARS.  An SAR not included in an Option
shall be evidenced by an agreement between the Company and the Holder in a form
approved by the Committee. Any SAR granted under the Plan shall be subject to
such terms and conditions not inconsistent with the Plan as the Committee shall
impose, including the following: (1) The SAR will lapse no later than the
underlying Option for SARs accompanying an Option or, for freestanding SARs, no
later than 10 years from its Date of Grant; (2) An SAR accompanying an Option
may be exercised only when the Fair Market Value of the Stock exceeds the option
price of the Stock subject to the SAR. (3) Such terms as the Committee
determines are necessary or desirable to qualify the SAR under Rule 16b-3 as
promulgated by the SEC under the Securities Exchange Act of 1934 for those
Holders to whom such qualification is relevant.

      d.    OTHER LIMITATIONS.  Such other limitations as the Committee shall
impose.

9. PERFORMANCE SHARES

      One or more Awards of Performance Shares may be made to an Eligible
Employee. Performance Shares shall be credited to a Performance Share account to
be maintained for each such Holder. Each Performance Share shall be deemed to be
the equivalent of one share of Stock of the Company. The Award of Performance
Shares under the Plan shall not entitle the Holder to any interest in or to any
dividend, voting, or other rights of a shareholder. The value of the Performance
Shares in a Holder's Performance Share account at the time of Award or the time
of payment shall be the Fair Market Value at any such time of an equivalent
number of shares of the Stock (subject to the limitation provided in Section
9c).

      If any Performance Shares awarded under the Plan shall be forfeited,
cancelled, or not paid out in full, such Performance Shares may again be awarded
under the Plan. Shares of Stock delivered upon payment of Performance Shares may
be either treasury shares, shares purchased for the account of the participant
or authorized and unissued shares, or any combination thereof.

                                      - 20 -
a.    AWARD GRANTS.  Grants of Performance Shares may be made by the
Committee in any fiscal year during the term of the Plan. Such shares will be
paid out in full or in part on the basis of the Company's performance in terms
of (i) ROE over the Award Period following the beginning of the Company's fiscal
year in which the Award is made as hereinafter set forth or (ii) such other
criteria as determined by the Committee. In determining the size of Awards, the
Committee shall take into account a Holder's responsibility level, performance,
potential, cash compensation level, and the Fair Market Value of the Company's
Stock at the time of Awards, as well as such other considerations as it deems
appropriate.

      In the event a Holder terminates employment during an Award Period, payout
would be as follows:

            (1)   NORMAL RETIREMENT.  Payout would be at the end of the Award
      Period and prorated for service during the period.

            (2)   RESIGNATION OR DISCHARGE.  For resignation with the prior
      written consent of the Company or a Subsidiary, the payout would be at the
      end of the Award Period and prorated for service during the period. For
      resignation other than with such consent (and not constituting Normal
      Retirement) or for discharge with or without cause, the Award would be
      completely forfeited.

            (3)   DEATH OR DISABILITY.  Payout would be at the end of the
      Award Period and prorated for service during the period.

      The Committee shall not, over the entire Plan period, grant to any single
Holder more than 15% of the maximum number of Performance Shares which may be
granted under the Plan. Awards cancelled or portions of Awards not paid out in
full for any single Holder shall not be included for purposes of this
limitation.

      Grants of Performance Shares shall be deemed to have been on January 1 of
the year in which grants are made.

      b.    RIGHT TO PAYMENT OF PERFORMANCE SHARES.  Following the end of the
Award Period, the Holder of a Performance Share shall be entitled to receive
payment of an amount based on the achievement of the performance measures for
such Award Period, as determined by the Committee. The Committee shall have the
right to establish Average ROE requirements; provided, however, that to the
extent that the performance measure is ROE over the Award Period, such
requirements shall not reduce below ten percent (10%) the Average ROE necessary
to earn one hundred percent (100%) of the Award and that any such reduction
shall be made only during the first half of each Award Period and shall not
exceed 4 percentage points in total, and in no event shall payments be permitted
for an Average ROE of less than 7 percent.

      c.    FORM AND TIMING OF PAYMENT.  No payment of Performance Shares
shall be made prior to the end of an Award Period. Payment therefore shall be
made as soon as practicable after the receipt of audited financial statements
relating to the last year of such period. The Committee may establish for each
Award Period a Fair

                                      - 21 -
Market Value for purposes of payments of Performance Shares but in no event
shall it exceed by more than two hundred percent (200%) the Fair Market Value at
the time of granting of such Performance Shares.

      The payment to which a Holder shall be entitled at the end of an Award
Period shall be a dollar amount equal to the Fair Market Value at the Valuation
Date (as defined in Section 2i(2) hereof) of the number of shares of Stock equal
to the number of Performance Shares earned and payable to him in accordance with
Section 9b. Payment shall normally be made one-half in cash and one-half in
Stock; however, the Committee may authorize payment in such other combinations
of cash and Stock or all in cash or all in Stock, as it deems appropriate.
Issuance of Stock shall be subject to the authorization of the Board.

      The number of shares of Stock to be paid in lieu of cash will be
determined by dividing the portion of the payment not paid in cash by: (1) The
price per share of Stock (the average of the highest price and the lowest price
at which the Stock shall have been sold regular way on the NYSE) on the date on
which the shares are issued; or (2) The price per share paid for shares
purchased for a Holder's account should the Board of Directors determine to
authorize the purchase of shares on behalf of a holder.

      d.    TENDER OFFER OR MERGER.  Notwithstanding any other provision of
the Plan, in the event of any public tender offer for all or any portion of the
Stock or in the event that a proposal to merge, consolidate or otherwise combine
with, or sell all or a substantial portion of the assets of the Company or a
Subsidiary to, another company is submitted for shareholder approval, the
Committee may in its sole discretion declare any Award Period ended as of a
specific date and accelerate full payments of such awards accordingly. For
awards based on ROE, the Committee shall determine an Average ROE for the
reduced Award Period and may estimate ROE for any periods for which annual
reports are not yet available.

10. RESTRICTED STOCK AWARDS

      a.    RESTRICTION PERIOD TO BE ESTABLISHED BY THE COMMITTEE.  One or
more Awards of Restricted Stock may be made to an Eligible Employee. At the time
a Restricted Stock Award is made, the Committee shall establish a period of time
(the "Restriction Period") applicable to such Award which shall be not less than
one (1) year. Each Restricted Stock Award may have a different Restriction
Period, at the discretion of the Committee. In the event of a public tender
offer for all or any portion of the Stock or in the event that any proposal to
merge, consolidate or otherwise combine with, or sell all or a substantial
portion of the assets of the Company or a Subsidiary to, another company is
submitted for approval, the Committee may in its sole discretion change or
eliminate the Restriction Period. Except as permitted above or pursuant to
Section 12, the Restriction Period applicable to a particular Restricted Stock
Award shall not be changed.

      b.    OTHER TERMS AND CONDITIONS.  Stock awarded pursuant to a
Restricted Stock Award shall be represented by a stock certificate registered in
the name of the Holder of such Restricted Stock Award. The Holder shall have the
right to enjoy all

                                      - 22 -
shareholder rights during the Restriction Period with the exception that: (1)
The Holder shall not be entitled to delivery of the stock certificate until the
Restriction Period shall have expired. (2) The Company may either issue shares
subject to such restrictive legends and/or stop-transfer instructions as it
deems appropriate or provide for retention of custody of the Stock during the
Restriction Period. (3) A breach of the terms and conditions established by the
Committee pursuant to the Restricted Stock Award shall cause a forfeiture of the
Restricted Stock Award, and any dividends withheld thereon. (4) Cash and stock
dividends may be either currently paid or withheld by the Company for the
Holder's account until the Restriction Period expires. At the discretion of the
Committee, interest may be paid on the amount of cash dividends withheld,
including cash dividends on stock dividends, at a rate and subject to such terms
as determined by the Committee.

      c.    FORFEITURE PROVISIONS.  In the event a Holder terminates
employment during a Restriction Period, an Award would be forfeited as follows:

            (1)   NORMAL RETIREMENT.  The Award would be prorated for service
      during the period and would be received as soon as practicable following
      retirement.

            (2)   RESIGNATION OR DISCHARGE.  For resignation with the prior
      written consent of the Company or a Subsidiary, the Award would be
      prorated for service during the period and received as soon as practicable
      following resignation. For resignation other than with such consent (and
      not constituting Normal Retirement) or for discharge with or without
      cause, the Award would be completely forfeited.

            (3)   DEATH OR DISABILITY.  The Award would be prorated for
      service during the period and received as soon as practicable following
      death or disability.

      Dividends withheld by the Company on Restricted Stock that is forfeited
shall be retained by the Company.

      d.    PAYMENT FOR RESTRICTED STOCK.  A Holder shall not be required to
make any payment for Stock received pursuant to a Restricted Stock Award.

11. GENERAL

      a.    GOVERNMENT AND OTHER REGULATIONS.  The obligation of the Company
to make payment of Awards in Stock or otherwise shall be subject to all
applicable laws, rules, and regulations, and to such approvals by governmental
agencies as may be required. The Company shall be under no obligation to
register under the Securities Act of 1933, as amended ("Act") any of the shares
of stock paid under the Plan. If the shares paid under the Plan may in certain
circumstances be exempt from registration under the Act, the Company may
restrict the transfer of such shares in such manner as it deems advisable to
ensure the availability of any such exemption.

                                      - 23 -
b.    TAX WITHHOLDING.  The Company or a Subsidiary, as appropriate,
shall have the right to deduct from all Awards paid in cash any federal, state
or local taxes as required by law to be withheld with respect to such cash
payments. In the case of Awards paid in Stock, the employee or other person
receiving such Stock may be required to pay to the Company or a Subsidiary, as
appropriate, the amount of any such taxes which the Company or Subsidiary is
required to withhold with respect to such Stock.

      c.    CLAIM TO AWARDS AND EMPLOYMENT RIGHTS.  No employee or other
person shall have any claim or right to be granted an Award under the Plan.
Neither this Plan nor any action taken hereunder shall be construed as giving
any employee any right to be retained in the employ of the Company or a
Subsidiary or limit the right of the Company or any Subsidiary to terminate an
employee at anytime, with or without cause. A holder of any right hereunder to
receive cash or Stock in respect of any Award shall have no rights other than
those of a general creditor of the Company. Awards represent unfunded and
unsecured obligations of the Company, subject to the terms and conditions of the
applicable Award.

      d.    BENEFICIARIES.  Any payment of Awards due under this Plan to a
deceased Holder shall be paid to the beneficiary duly designated by the Holder
in accordance with the Company's practices. If no such beneficiary has been
designated or survives the Holder, payment shall be made to the Holder's legal
representative. A beneficiary designation may be changed or revoked by a Holder
at any time provided the change or revocation is filed with the Committee.

      e.    NONTRANSFERABILITY.  A person's rights and interests under the
Plan, including any Award previously made to such person or any amounts payable
under the Plan, may not be assigned, pledged, or transferred except, in the
event of an employee's death, to a designated beneficiary as provided in the
Plan, or in the absence of such designation, by will or the laws of descent and
distribution, or, for any Award other than an ISO (or an SAR granted in tandem
with an ISO), pursuant to a qualified domestic relations order as defined by the
Code or Title I of the Employee Retirement Income Security Act, or the rules
thereunder.

      f.    INDEMNIFICATION.  Each person who is or shall have been a member
of the Committee or of the Board shall be indemnified and held harmless by the
Company from and against any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be a party or in which he
may be involved by reason of any action or failure to act under the Plan and
against and from any and all amounts paid by him in satisfaction of judgment in
any such action, suit, or proceeding against him. He shall give the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's Articles of Incorporation
or By-Laws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.

                                      - 24 -
g.    RELIANCE ON REPORTS.  Each member of the Committee and each member
of the Board shall be fully justified in relying or acting in good faith upon
any report made by the independent public accountant of the Company and its
Subsidiaries and upon any other information furnished in connection with the
Plan by any person or persons other than himself. In no event shall any person
who is or shall have been a member of the Committee or of the Board be liable
for any determination made or other action taken or any omission to act in
reliance upon any such report or information or for any action taken, including
the furnishing of information, or failure to act, if in good faith.

      h.    RELATIONSHIP TO OTHER BENEFITS.  No payment under the Plan shall
be taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or any
Subsidiary.

      i.    EXPENSES.  The expenses of administering the Plan shall be borne
by the Company and its Subsidiaries.

      j.    PRONOUNS.  Masculine pronouns and other words of masculine gender
shall refer to both men and women.

      k.    TITLES AND HEADINGS.  The titles and headings of the sections in
the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.

12. CHANGES IN CAPITAL STRUCTURE

      Options, SARs, Restricted Stock Awards, Performance Share Awards and any
agreements evidencing such Awards shall be subject to adjustment by the
Committee as to the number and price per share of Stock or other considerations
subject to such Awards in the event of changes in the outstanding Stock by
reason of stock dividends, stock splits, recapitalizations, reorganizations,
mergers, consolidations, combinations, exchanges, or other relevant changes in
capitalization occurring after the Date of Grant of any such Awards. In the
event of any such change in the outstanding Stock, the aggregate number of
shares available under the Plan shall be appropriately adjusted by the
Committee, whose determination shall be conclusive.

13.  AMENDMENTS AND TERMINATION

      The Board may at any time terminate the Plan or, with the express written
consent of an individual participant, cancel or reduce or otherwise alter his
outstanding Awards thereunder if, in its judgment, the tax, accounting, or other
effects of the Plan or potential payouts thereunder would not be in the best
interest of the Company. The Board may, at any time, or from time to time, amend
or suspend and, if suspended, reinstate, the Plan in whole or in part, provided,
however, that any amendment of the Plan shall be subject to the approval of the
Company's shareholders to the extent required by applicable laws, regulations or
rules.

                                      - 25 -
14.   CLAIMS PROCEDURES

      Claims for benefits under the Plan shall be filed in writing with the
Committee on forms supplied by the Committee. Written notice of the disposition
of a claim shall be furnished to the claimant within 90 days after the claim is
filed. If the claim is denied, the notice of disposition shall set forth the
specific reasons for the denial, citations to the pertinent provisions of the
Plan, and, where appropriate, an explanation as to how the claimant can perfect
the claim. If the claimant wishes further consideration of his or her claim, the
claimant may appeal a denied claim to the Committee (or to a person designated
by the Committee) for further review. Such appeal shall be filed in writing with
the Committee on a form supplied by the Committee, together with a written
statement of the claimant's position, no later than 90 days following receipt by
the claimant of written notice of the denial of his or her claim. If the
claimant so requests, the Committee shall schedule a hearing. A decision on
review shall be made after a full and fair review of the claim and shall be
delivered in writing to the claimant no later than 60 days after the Committee's
receipt of the notice of appeal, unless special circumstances (including the
need to hold a hearing) require an extension of time for processing the appeal,
in which case a written decision on review shall be delivered to the claimant as
soon as possible but not later than 120 days after the Committee's receipt of
the appeal notice. The claimant shall be notified in writing of any such
extension of time. The written decision on review shall include specific reasons
for the decision, written in a manner calculated to be understood by the
claimant, and shall specifically refer to the pertinent Plan provisions on which
it is based. All determinations of the Committee shall be final and binding on
Participants and their beneficiaries.

                                      - 26 -