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<FONT SIZE=2><P ALIGN="CENTER">As filed with the Securities and Exchange Commission on July 22,1999</P>
<P ALIGN="CENTER">Registration No. 333-______________</P>
</FONT><P><HR WIDTH="45%"></P>
<FONT SIZE=2><P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</P>
<P ALIGN="CENTER">Washington, D.C. 20549</P>
</FONT><P><HR WIDTH="45%"></P>
<B><FONT SIZE=2><P ALIGN="CENTER">FORM S-8</P>
</B><P ALIGN="CENTER">REGISTRATION STATEMENT</P>
<P ALIGN="CENTER">Under</P>
<P ALIGN="CENTER">THE SECURITIES ACT OF 1933</P>
</FONT><P><HR WIDTH="45%"></P>
<B><P ALIGN="CENTER">CLAYTON HOMES, INC.</P>
</B><I><FONT SIZE=1><P ALIGN="CENTER">(Exact name of registrant as specified in its charter)</P>
</I></FONT><FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=730>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER"></TD>
<TD WIDTH="40%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER">DELAWARE</B></FONT></TD>
<TD WIDTH="37%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER">62-1671360</B></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="40%" VALIGN="TOP">
<I><FONT SIZE=1><P ALIGN="CENTER">(State of Incorporation)</I></FONT></TD>
<TD WIDTH="37%" VALIGN="TOP">
<I><FONT SIZE=1><P ALIGN="CENTER">(I.R.S. Employer Identification No.)</I></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>

<P><HR WIDTH="45%"></P>
<FONT SIZE=2><P ALIGN="CENTER">5000 Clayton Road</P>
<P ALIGN="CENTER">Maryville, Tennessee 37804</P>
</FONT><I><FONT SIZE=1><P ALIGN="CENTER">(Address of principal executive offices)</P>
</I></FONT><P><HR WIDTH="45%"></P>
<B><FONT SIZE=2><P ALIGN="CENTER">CLAYTON HOMES, INC.</P>
<P ALIGN="CENTER">1991 EMPLOYEE STOCK INCENTIVE PLAN</P>
</B></FONT><I><FONT SIZE=1><P ALIGN="CENTER">(Full Title of the Plan)</P>
</I></FONT><P><HR WIDTH="45%"></P>
<FONT SIZE=2><P ALIGN="CENTER">KEVIN T. CLAYTON</P>
<P ALIGN="CENTER">5000 Clayton Road</P>
<P ALIGN="CENTER">Maryville, Tennessee 37804</P>
<P ALIGN="CENTER">(423) 380-3000</P>
</FONT><I><FONT SIZE=1><P ALIGN="CENTER">(Name, address and telephone number of agent for service)</P>
</FONT><FONT SIZE=2><P ALIGN="CENTER">&nbsp;</P>
</FONT><FONT SIZE=1><P ALIGN="CENTER">(with copies to:)</P>
</I></FONT><FONT SIZE=2><P ALIGN="CENTER">ROBERT G. MCCULLOUGH</P>
<P ALIGN="CENTER">Baker, Donelson, Bearman &amp; Caldwell </P>
<P ALIGN="CENTER">1700 Nashville City Center</P>
<P ALIGN="CENTER">511 Union Street</P>
<P ALIGN="CENTER">Nashville, Tennessee 37219</P>
</FONT><P><HR WIDTH="45%"></P>
<FONT SIZE=2><P>&nbsp;</P>
</FONT><B><P ALIGN="CENTER">CALCULATION OF REGISTRATION FEE</P></B>
<TABLE BORDER CELLSPACING=2 BORDERCOLOR="#000000" CELLPADDING=9 WIDTH=642>
<TR><TD WIDTH="20%" VALIGN="MIDDLE" HEIGHT=51>
<P ALIGN="CENTER"><B><FONT SIZE=2>Title of Securities to be Registered</B></FONT></TD>
<TD WIDTH="20%" VALIGN="MIDDLE" HEIGHT=51>
<B><FONT SIZE=2><P ALIGN="CENTER">Amount to be Registered</B></FONT></TD>
<TD WIDTH="20%" VALIGN="MIDDLE" HEIGHT=51>
<B><FONT SIZE=2><P ALIGN="CENTER">Proposed Maximum Offering Price Per Share</B></FONT></TD>
<TD WIDTH="20%" VALIGN="MIDDLE" HEIGHT=51>
<B><FONT SIZE=2><P ALIGN="CENTER">Proposed Maximum Aggregate Offering Price</B></FONT></TD>
<TD WIDTH="20%" VALIGN="MIDDLE" HEIGHT=51>
<B><FONT SIZE=2><P ALIGN="CENTER">Amount of Registration Fee</B></FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="MIDDLE" HEIGHT=32>
<FONT SIZE=2><P ALIGN="CENTER">Common Stock</FONT></TD>
<TD WIDTH="20%" VALIGN="MIDDLE" HEIGHT=32>
<FONT SIZE=2><P ALIGN="CENTER">2,000,000<SUP>1</SUP></FONT></TD>
<TD WIDTH="20%" VALIGN="MIDDLE" HEIGHT=32>
<FONT SIZE=2><P ALIGN="CENTER">$10.78125<SUP>2</SUP></FONT></TD>
<TD WIDTH="20%" VALIGN="MIDDLE" HEIGHT=32>
<FONT SIZE=2><P ALIGN="CENTER">$21,562,500<SUP>2</SUP></FONT></TD>
<TD WIDTH="20%" VALIGN="MIDDLE" HEIGHT=32>
<FONT SIZE=2><P ALIGN="CENTER">$5,994</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>&nbsp;</P>
</FONT><P><HR ALIGN="LEFT" WIDTH="45%"></P>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=648>
<TR><TD WIDTH="8%" VALIGN="TOP" HEIGHT=57>
<P ALIGN="JUSTIFY"><SUP>1</SUP></TD>
<TD WIDTH="92%" VALIGN="TOP" HEIGHT=57>
<FONT SIZE=1><P>The number of shares being registered under the Plan represents the number of shares presently anticipated to be purchased if eligible individuals elected to purchase such shares authorized under such Plan.</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<SUP><P>2</SUP>&#9;</TD>
<TD WIDTH="92%" VALIGN="TOP">
<FONT SIZE=1><P>Based on the average high and low prices of the Common Stock on the New York Stock Exchange on July 19, 1999, pursuant to Rule 457(h). The Plan provides for the purchase of Common Stock at the fair market value on the dates of grants of
incentive stock options or not less than 85% of the fair market value in the case of nonqualified stock options, which prices are presently indeterminable.</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P ALIGN="CENTER">&nbsp;</P>
</FONT><P><HR></P>
<FONT SIZE=2><P ALIGN="CENTER">PART II</P>
</FONT><P><HR></P>
<FONT SIZE=2><P ALIGN="CENTER">&nbsp;</P>
<B><P ALIGN="JUSTIFY">Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE</P>
</B><P ALIGN="JUSTIFY">The following documents filed with the Securities and Exchange Commission are incorporated herein by reference:</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=634>
<TR><TD WIDTH="5%" VALIGN="TOP">
<P ALIGN="RIGHT"><FONT SIZE=2>1.</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<FONT SIZE=2><P>The Registrant's Annual Report on Form 10-K for the year ended June 30, 1998.</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&nbsp;2.</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">The Registrant's Quarterly Reports on Form 10-Q for the quarters ended September 30, 1998, December 31, 1998 and March 31, 1999.</FONT></TD>
</TR>
<TR><TD WIDTH="5%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&nbsp;3.</FONT></TD>
<TD WIDTH="95%" VALIGN="TOP">
<FONT SIZE=2><P>The description of the Registrant's Common Stock contained in its Registration Statement on Form 8-B, filed with the Commission on March 31, 1997.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>All documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which
registers all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part thereof from the date of filing of such documents.</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P>
<B><P ALIGN="JUSTIFY">Item 4. DESCRIPTION OF SECURITIES</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">No response is required to this item.</FONT></TD>
</TR>
</TABLE>

<B><FONT SIZE=2><P ALIGN="JUSTIFY">Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">No response is required to this item.</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;<B>Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=642>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY"><FONT SIZE=2>The Company is incorporated under the laws of the State of Delaware. Section 145 of the General Corporation Law of the State of Delaware ("Section 145") provides that a Delaware corporation may indemnify any person who is,
or is threatened to be made, a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that
such person was an officer, director, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses
(including attorneys fees), judgments, fines and amount paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such person acted in good faith and in a manner he reasonably believed
to be in or not opposed to the corporation's best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his conduct was illegal. A Delaware corporation may indemnify any person who is, or is threatened
to be made, a party to any threatened, pending or completed action or suit by or in the right of the corporation by reason of the fact that such person was a director, officer, employee or agent of such corporation, or is or was serving at the request of
such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of
such action or suit, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation's best interests except that no indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or
director has actually and reasonably incurred.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">The Company's Certificate of Incorporation provides for the indemnification of directors of the Company to the fullest extent permitted by the Delaware General Corporation Law as is currently effective or may hereafter be
amended from time to time, a director of the Corporation shall not be liable to the Corporation or its shareholders for monetary damages for breach of fiduciary duty as a director. If after filing of this Certificate of Incorporation, the Delaware General
Corporation Law is amended or a successor statute is enacted further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the
Delaware General Corporation Law or any successor statute, as so amended from time to time. Any repeal or modification of this paragraph by the shareholders of the Corporation shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification or with respect to events occurring prior to such time.</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P>
<B><P ALIGN="JUSTIFY">Item 7. EXEMPTION FROM REGISTRATION CLAIMED</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="9%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="91%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">No response is required to this item.</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P>
<B><P ALIGN="JUSTIFY">Item 8. EXHIBITS</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="JUSTIFY"><U><FONT SIZE=2>Exhibit Number</U></FONT></TD>
<TD WIDTH="83%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="JUSTIFY">Description</U></FONT></TD>
</TR>
<TR><TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">5</FONT></TD>
<TD WIDTH="83%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Opinion and Consent of Baker, Donelson, Bearman &amp; Caldwell</FONT></TD>
</TR>
<TR><TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">10.1</FONT></TD>
<TD WIDTH="83%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Clayton Homes, Inc. 1991 Employee Stock Incentive Plan</FONT></TD>
</TR>
<TR><TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">24.1</FONT></TD>
<TD WIDTH="83%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Consent of Baker, Donelson, Bearman &amp; Caldwell (contained in Exhibit 5)</FONT></TD>
</TR>
<TR><TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">24.2</FONT></TD>
<TD WIDTH="83%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Consent of PricewaterhouseCoopers, LLP</FONT></TD>
</TR>
<TR><TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">25</FONT></TD>
<TD WIDTH="83%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Power of Attorney (Included on signature page)</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P>
<B><P ALIGN="JUSTIFY">Item 9. UNDERTAKINGS</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=653>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY"><FONT SIZE=2>(a) The undersigned registrant hereby undertakes:</FONT></TD>
</TR>
</TABLE>

<B><FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=653>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=4>
<P ALIGN="RIGHT"><FONT SIZE=2>(1) </FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P ALIGN="JUSTIFY">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.</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=4>
<FONT SIZE=2><P ALIGN="RIGHT">(2) </FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P ALIGN="JUSTIFY">That, for the purpose of determining any liability under the Securities Act of 1933 (the "1933 Act"), each such post-effective amendment 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.</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=4>
<FONT SIZE=2><P ALIGN="RIGHT">(3) </FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P ALIGN="JUSTIFY">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.</FONT></TD>
</TR>
<TR><TD VALIGN="MIDDLE" COLSPAN=7>
<P ALIGN="JUSTIFY">&nbsp;<FONT SIZE=2>(b)</FONT> <FONT SIZE=2>The undersigned registrant hereby undertakes that, for the purposes of determining any liability under the 1933 Act, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the 1934 Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Act) 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.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=7>
<FONT SIZE=2><P ALIGN="JUSTIFY">(c) Insofar as indemnification for liabilities arising under the 1933 Act 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 1933 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 1933 Act and will be governed by the final adjudication of such issue.</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
</FONT><P><HR></P>
<B><FONT SIZE=2><P ALIGN="CENTER">SIGNATURES</P>
</B><P ALIGN="JUSTIFY">&nbsp;</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=648>
<TR><TD VALIGN="TOP" COLSPAN=2>
<P ALIGN="JUSTIFY"><FONT SIZE=2>Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of 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 Alcoa, State of Tennessee, on the 30<SUP>th</SUP> day of June, 1999.</FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="36%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="JUSTIFY">CLAYTON HOMES, INC.</B></FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="36%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="36%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">By: <U>/s/ Kevin T. Clayton</U></FONT></TD>
</TR>
<TR><TD WIDTH="64%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="36%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Kevin T. Clayton, President</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P>
<B><P ALIGN="RIGHT">&nbsp;</P>
</B><P ALIGN="JUSTIFY">&nbsp;</P>
<U><P ALIGN="CENTER">&nbsp;</P>
</U><P ALIGN="RIGHT">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<B><P ALIGN="CENTER">POWER OF ATTORNEY</P>
</B><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Kevin T. Clayton and Amber W. Krupacs and each of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Registration Statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and
necessary fully to all intents and purposes as he might or could do in person thereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by
virtue hereof. </P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the date indicated.</P>
<P ALIGN="JUSTIFY">&nbsp;</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=8 WIDTH=684>
<TR><TD WIDTH="30%" VALIGN="MIDDLE">
<P ALIGN="CENTER"><B><U><FONT SIZE=2>Name</B></U></FONT></TD>
<TD WIDTH="45%" VALIGN="MIDDLE">
<B><U><FONT SIZE=2><P ALIGN="CENTER">Title</B></U></FONT></TD>
<TD WIDTH="25%" VALIGN="MIDDLE">
<B><U><FONT SIZE=2><P ALIGN="CENTER">Date</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="MIDDLE" ROWSPAN=3 HEIGHT=18>
<FONT SIZE=2><P><U>/s/ James L. Clayton</U></P>
<P>James L. Clayton </FONT></TD>
<TD WIDTH="45%" VALIGN="TOP" HEIGHT=18>
<FONT SIZE=2><P>Chairman of the Board of Directors</FONT></TD>
<TD WIDTH="25%" VALIGN="MIDDLE" ROWSPAN=3 HEIGHT=18>
<FONT SIZE=2><P ALIGN="CENTER">June 30, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" HEIGHT=19>
<FONT SIZE=2><P>Chief Executive Officer and Director </FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" HEIGHT=19>
<FONT SIZE=2><P>(Principal Executive Officer)</FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="MIDDLE" ROWSPAN=2 HEIGHT=29>
<FONT SIZE=2><P><U>/s/ Kevin T. Clayton</U></P>
<P>Kevin T. Clayton </FONT></TD>
<TD WIDTH="45%" VALIGN="TOP" HEIGHT=29>
<FONT SIZE=2><P>President</FONT></TD>
<TD WIDTH="25%" VALIGN="MIDDLE" ROWSPAN=2 HEIGHT=29>
<FONT SIZE=2><P ALIGN="CENTER">June 30, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" HEIGHT=29>
<FONT SIZE=2><P>Chief Operating Officer and Director</FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="MIDDLE" ROWSPAN=2 HEIGHT=29>
<FONT SIZE=2><P><U>/s/ Amber W. Krupacs</U></P>
<P>Amber W. Krupacs</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP" HEIGHT=29>
<FONT SIZE=2><P>Vice President and Secretary </FONT></TD>
<TD WIDTH="25%" VALIGN="MIDDLE" ROWSPAN=2 HEIGHT=29>
<FONT SIZE=2><P ALIGN="CENTER">June 30, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" HEIGHT=29>
<FONT SIZE=2><P>(Principal Financial Officer)</FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="MIDDLE" ROWSPAN=2 HEIGHT=29>
<FONT SIZE=2><P><U>/s/ Gregory A. Hamilton</U></P>
<P>Gregory A. Hamilton</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP" HEIGHT=29>
<FONT SIZE=2><P>Vice President and Controller</FONT></TD>
<TD WIDTH="25%" VALIGN="MIDDLE" ROWSPAN=2 HEIGHT=29>
<FONT SIZE=2><P ALIGN="CENTER">June 30, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" HEIGHT=29>
<FONT SIZE=2><P>(Principal Accounting Officer)</FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="45%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="25%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="MIDDLE">
<FONT SIZE=2><P><U>/s/ B. Joe Clayton</U></P>
<P>B. Joe Clayton</FONT></TD>
<TD WIDTH="45%" VALIGN="MIDDLE">
<FONT SIZE=2><P>Director</FONT></TD>
<TD WIDTH="25%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="CENTER">June 30, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
<TD WIDTH="45%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
<TD WIDTH="25%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="MIDDLE">
<FONT SIZE=2><P><U>/s/ Dan W. Evins</U></P>
<P>Dan W. Evins</FONT></TD>
<TD WIDTH="45%" VALIGN="MIDDLE">
<FONT SIZE=2><P>Director</FONT></TD>
<TD WIDTH="25%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="CENTER">June 30, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="MIDDLE" HEIGHT=12>
<FONT SIZE=2><P>&nbsp;</FONT></TD>
<TD WIDTH="45%" VALIGN="MIDDLE" HEIGHT=12>
<P>&nbsp;</TD>
<TD WIDTH="25%" VALIGN="MIDDLE" HEIGHT=12>
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="MIDDLE">
<FONT SIZE=2><P><U>/s/ Wilma H. Jordan</U></P>
<P>Wilma H. Jordan</FONT></TD>
<TD WIDTH="45%" VALIGN="MIDDLE">
<FONT SIZE=2><P>Director</FONT></TD>
<TD WIDTH="25%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="CENTER">June 30, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
<TD WIDTH="45%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
<TD WIDTH="25%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="MIDDLE">
<FONT SIZE=2><P><U>/s/ John J. Kalec</U></P>
<P>John J. Kalec</FONT></TD>
<TD WIDTH="45%" VALIGN="MIDDLE">
<FONT SIZE=2><P>Director</FONT></TD>
<TD WIDTH="25%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="CENTER">June 30, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
<TD WIDTH="45%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
<TD WIDTH="25%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="MIDDLE">
<FONT SIZE=2><P><U>/s/ Thomas N. McAdams</U></P>
<P>Thomas N. McAdams</FONT></TD>
<TD WIDTH="45%" VALIGN="MIDDLE">
<FONT SIZE=2><P>Director</FONT></TD>
<TD WIDTH="25%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="CENTER">June 30, 1999</FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
<TD WIDTH="45%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
<TD WIDTH="25%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="MIDDLE">
<FONT SIZE=2><P><U>/s/ C. Warren Neel</U></P>
<P>C. Warren Neel</FONT></TD>
<TD WIDTH="45%" VALIGN="MIDDLE">
<FONT SIZE=2><P>Director</FONT></TD>
<TD WIDTH="25%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="CENTER">June 30, 1999</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="JUSTIFY">&#9;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
</FONT><P><HR></P>
<U><FONT SIZE=2><P ALIGN="CENTER">EXHIBIT 5</P>
<P ALIGN="CENTER">OPINION AND CONSENT OF BAKER, DONELSON, BEARMAN &amp; CALDWELL</P>
</U></FONT><P><HR></P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=637>
<TR><TD WIDTH="52%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="48%" VALIGN="TOP">
<FONT SIZE=2><P>June 30, 1999</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=642>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY"><FONT SIZE=2>Clayton Homes, Inc.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">5000 Clayton Road</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Maryville, Tennessee 37804</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">RE:&#9;Clayton Homes, Inc. 1991 Employee Stock Incentive Plan</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=639>
<TR><TD VALIGN="TOP" COLSPAN=5>
<P ALIGN="JUSTIFY"><FONT SIZE=2>Gentlemen:</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5 HEIGHT=78>
<FONT SIZE=2><P ALIGN="JUSTIFY">We have acted as securities counsel for Clayton Homes, Inc., a Delaware corporation (the "Company"), in connection with the Company's Registration Statement on Form S-8 (the "Registration Statement"), pursuant to the
Securities Act of 1933, as amended, relating to the Company's 1997 Employee Stock Incentive Plan (the "Plan"). This opinion is being furnished in response to Item 601 of Regulation S-K and the instructions to Form S-8.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5 HEIGHT=66>
<FONT SIZE=2><P ALIGN="JUSTIFY">We are familiar with the proceedings to date with respect to the proposed offering and have examined such records, documents and matters of law and satisfied ourselves as to such matters of fact as we have considered
relevant for purposes of this opinion.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5>
<FONT SIZE=2><P ALIGN="JUSTIFY">On the basis of the foregoing, we are of the opinion that:</FONT></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">1. </FONT></TD>
<TD WIDTH="74%" VALIGN="TOP" COLSPAN=4>
<FONT SIZE=2><P ALIGN="JUSTIFY">The Company is a corporation duly organized and existing under the laws of the State of Delaware.</FONT></TD>
</TR>
<TR><TD WIDTH="26%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">2. </FONT></TD>
<TD WIDTH="74%" VALIGN="TOP" COLSPAN=4>
<FONT SIZE=2><P ALIGN="JUSTIFY">The Plan has been duly and validly authorized and adopted, and the shares of Common Stock of the Company (the "Shares") that may be issued and sold from time to time in accordance with the Plan have been duly authorized for
issuance and will, when issued, sold and paid for in accordance with the Plan, be validly issued, fully paid and non-assessable.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5>
<FONT SIZE=2><P ALIGN="JUSTIFY">The foregoing opinion is limited to the federal laws of the United States and the laws of the State of Delaware, and we are expressing no opinion as to the effect of the laws of any other jurisdiction.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5>
<FONT SIZE=2><P ALIGN="JUSTIFY">In rendering the foregoing opinion, we have relied to the extent we deem such reliance appropriate as to certain matters on statements, representations and other information obtained from public officials, officers of the
Company and other sources believed by us to be responsible.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5>
<FONT SIZE=2><P ALIGN="JUSTIFY">We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7
of the Act.</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=309>
<TR><TD VALIGN="TOP">
<P><FONT SIZE=2>Very truly yours,</FONT></TD>
</TR>
<TR><TD VALIGN="BOTTOM" HEIGHT=85>
<FONT SIZE=2><P>BAKER, DONELSON, BEARMAN &amp; CALDWELL,</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P>a Professional Corporation</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P>
</FONT><P><HR></P>
<U><FONT SIZE=2><P ALIGN="CENTER">EXHIBIT 10.1</P>
</U><P ALIGN="CENTER">CLAYTON HOMES, INC. </P>
<P ALIGN="CENTER">1991 EMPLOYEE STOCK INCENTIVE PLAN</FONT>&#9;</P>
<P><HR></P>
<B><FONT SIZE=2><P ALIGN="CENTER">CLAYTON HOMES</P>
<P ALIGN="CENTER">1991 EMPLOYEE STOCK INCENTIVE PLAN</P>
</B></FONT><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<B><FONT SIZE=2><P ALIGN="JUSTIFY">SECTION 1.</B> <B><I>Purpose; Definitions.</B></I> The purpose of the Clayton Homes, Inc. 1991 Employee Stock Incentive Plan (the "Plan") is to enable Clayton Homes, Inc. (the "Company") to attract, retain and reward key
employees of the Company and its Subsidiaries and Affiliates, and strengthen the mutuality of interests between such key employees and the Company's shareholders, by offering such key employees performance-based stock incentives and/or other equity
interests or equity-based incentives in the Company, as well as performance-based incentives payable in cash.</P>
<P ALIGN="JUSTIFY">For purposes of the Plan, the following terms shall be defined as set forth below:</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">A.&#9;"Affiliate" means any entity other than the Company and its Subsidiaries that is designated by the Board as a participating employer under the Plan, provided that the Company directly or indirectly owns at least 20% of the
combined voting power of all classes of stock of such entity or at least 20% of the ownership interests in such entity.</P>
<P ALIGN="JUSTIFY">B.&#9;"Board" means the Board of Directors of the Company.</P>
<P ALIGN="JUSTIFY">C.&#9;"Book Value" means, as of any given date, on a per share basis (i) the Shareholders' Equity in the Company as of the end of the immediately preceding fiscal year as reflected in the Company's consolidated balance sheet, subject to
such adjustments as the Committee shall specify at or after grant, divided by (ii) the number of then outstanding shares of Stock as of such year-end date (as adjusted by the Committee for subsequent events).</P>
<P ALIGN="JUSTIFY">D.&#9;"Code" means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto</P>
<P ALIGN="JUSTIFY">E.&#9;"Committee" means the Committee referred to in Section 2 of the Plan. If at any time no Committee shall be in office, then the functions of the Committee specified in the Plan shall be exercised by the Board.</P>
<P ALIGN="JUSTIFY">F.&#9;"Company" means Clayton Homes, Inc., a corporation organized under the laws of the State of Tennessee or any successor corporation.</P>
<P ALIGN="JUSTIFY">G.&#9;"Deferred Stock" means an award made pursuant to Section 8 of the right to receive Stock at the end of a specified deferral period.</P>
<P ALIGN="JUSTIFY">H.&#9;"Disability" means disability as determined under procedures established by the Committee for purposes of this Plan.</P>
<P ALIGN="JUSTIFY">I.&#9;"Disinterested Person" shall have the meaning set forth in Rule 16b-3(d)(3) as promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, or any successor definition adopted by the Commission.
</P>
<P ALIGN="JUSTIFY">J.&#9;"Early Retirement" means retirement, with the express consent for purposes of this Plan of the Company at or before the time of such retirement, from active employment with the Company and any Subsidiary or Affiliate pursuant to
the early retirement provisions of the applicable pension plan of such entity.</P>
<P ALIGN="JUSTIFY">K.&#9;"Fair Market Value" means, as of any given date, unless otherwise determined by the Committee in good faith, the reported closing price of the Stock on the New York Stock Exchange composite index or, if no such sale of Stock is
reported on the New York Stock Exchange or other national reporting exchange system on such date, the fair market value of the Stock as determined by the Committee in good faith.</P>
<P ALIGN="JUSTIFY">L.&#9;"Incentive Stock Option" means any Stock Option intended to be and designated as an "Incentive Stock Option" within the meaning of Section 422A of the Code.</P>
<P ALIGN="JUSTIFY">M.&#9;"Non-Qualified Stock Option" means any Stock Option that is not an Incentive Stock Option.</P>
<P ALIGN="JUSTIFY">N.&#9;"Normal Retirement" means retirement from active employment with the Company and any Subsidiary or Affiliate on or after age 65.</P>
<P ALIGN="JUSTIFY">O.&#9;"Other Stock-Based Award" means an award under Section 9 that is valued in whole or in part by reference to, or is otherwise based on, Stock.</P>
<P ALIGN="JUSTIFY">P.&#9;"Plan" means this Clayton Homes, Inc. 1991 Employee Stock Incentive Plan, as hereinafter amended from time to time.</P>
<P ALIGN="JUSTIFY">Q.&#9;"Restricted Stock" means an award of shares of Stock that is subject to restrictions under Section 7.</P>
<P ALIGN="JUSTIFY">R.&#9;"Retirement" means normal or early retirement.</P>
<P ALIGN="JUSTIFY">S.&#9;"Stock" means the Common Stock, $.10 par value per share, of the Company.</P>
<P ALIGN="JUSTIFY">T.&#9;"Stock Appreciation Right" means the right pursuant to an award granted under Section 6 to surrender to the Company all (or a portion) of a Stock Option in exchange for an amount equal to the difference between (i) the Fair Market
Value, as of the date such Stock Option (or such portion thereof) is surrendered, of the shares of Stock covered by such Stock Option (or such portion thereof), subject, where applicable, to the pricing provisions in Section 6(b)(ii); and (ii) the
aggregate exercise price of such Stock Option (or such portion thereof).</P>
<P ALIGN="JUSTIFY">U.&#9;"Stock Option" or "Option" means any option to purchase shares of Stock (including Restricted Stock and Deferred Stock, if the Committee so determines) granted pursuant to Section 5.</P>
<P ALIGN="JUSTIFY">V.&#9;"Subsidiary" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.</P></DIR>
</DIR>

<P ALIGN="JUSTIFY">In addition, the term "Cause" shall have the meaning set forth in Section 5(i) below.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<B><P ALIGN="JUSTIFY">SECTION 2. <I>Administration.</B></I> The Plan shall be administered by a Committee of not less than three Disinterested Persons who shall be appointed by the Board of Directors of the Company (the "Board") and who shall serve at the
pleasure of the Board. The functions of the Committee specified in the Plan shall be exercised by the Board, if and to the extent that no Committee exists which has the authority to so administer the Plan.</P>
<P ALIGN="JUSTIFY">The Committee shall have full authority to grant, pursuant to the terms of the Plan, to officers and other key employees eligible under Section 4 (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, (iv) Deferred
Stock and/or (v) Other Stock-Based Awards.</P>
<P ALIGN="JUSTIFY">In particular, the Committee shall have the authority:</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">(i)&#9;to select the officers and other key employees of the Company and its Subsidiaries and Affiliates to whom Stock Options, Stock Appreciation Rights, Restricted Stock, Deferred Stock and/or Other Stock-Based Awards may from time to
time be granted hereunder;</P>
<P ALIGN="JUSTIFY">(ii)&#9; to determine whether and to what extent Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock, Deferred Stock and/or Other Stock-Based Awards, or any combination thereof, are to be
granted hereunder to one or more eligible employees;</P>
<P ALIGN="JUSTIFY">(iii)&#9;to determine the number of shares to be covered by each such award granted hereunder;</P>
<P ALIGN="JUSTIFY">(iv)&#9;to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder (including, but not limited to, the share price and any restriction or limitation, or any vesting acceleration or
waiver or forfeiture restrictions regarding any Stock Option or other award and/or the shares of Stock relating thereto, based in each case on such factors as the Committee shall determine, in its sole discretion);</P>
<P ALIGN="JUSTIFY">(v)&#9;to determine whether and under what circumstances a Stock Option may be settled in cash, Restricted Stock and/or Deferred Stock under Section 5(k) or (l), as applicable, instead of Stock;</P>
<P ALIGN="JUSTIFY">(vi)&#9;to determine whether, to what extent and under what circumstances Option grants and/or other cash awards made by the Company are to be made, and operate, on a tandem basis vis-a'-vis other awards under the Plan and/or cash
awards made outside of the Plan, or on an additive basis;</P>
<P ALIGN="JUSTIFY">(vii)&#9;to determine whether, to what extent and under what circumstances Stock and other amounts payable with respect to an award under this Plan shall be deferred either automatically or at the election of the participant (including
providing for and determining the amount (if any) of any deemed earnings on any deferred amount during any deferral period); and</P>
<P ALIGN="JUSTIFY">(viii)&#9;to determine the terms and restrictions applicable to the Stock purchased by exercising such Rights.</P></DIR>
</DIR>

<P ALIGN="JUSTIFY">The Committee shall have the authority to adopt, alter and repeal such guidelines and practices governing the Plan as it shall, from time to time, deem advisable, to interpret the terms and provisions of the Plan and any award issued
under the Plan (and any agreements relating thereto); and to otherwise supervise the administration of the Plan.</P>
<P ALIGN="JUSTIFY">All decisions made by the Committee pursuant to the provisions of the Plan shall be made in the Committee's sole discretion and shall be final and binding on all persons, including the Company and Plan participants.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<B><P ALIGN="JUSTIFY">SECTION 3. <I>Stock Subject to Plan.</B></I> The total number of shares of Stock reserved and available for distribution under the Plan shall be one million (1,000,000) shares. Such shares may consist, in whole or in part, of
authorized and unissued shares.</P>
<P ALIGN="JUSTIFY">Subject to Section 6(b)(iv) below, if any shares of Stock that have been optioned cease to be subject to a Stock Option, or if any such shares of Stock that are subject to any Restricted Stock or Deferred Stock award, or Other
Stock-Based Award granted hereunder are forfeited or any such award otherwise terminates without a payment being made to the participant in the form of Stock, such shares shall again be available for distribution in connection with future awards under the
Plan.</P>
<P ALIGN="JUSTIFY">In the event of any merger, reorganization, consolidation, recapitalization, Stock dividend, Stock split or other change in corporate structure affecting the Stock, such substitution or adjustment shall be made in the aggregate number
of shares reserved for issuance under the Plan, in the number and option and/or purchase price of shares subject to outstanding Options and other awards granted under the Plan, as may be determined to be appropriate by the Committee, in its sole
discretion, provided that the number of shares subject to any award shall always be a whole number. Such adjusted option price shall also be used to determine the amount payable by the Company upon the exercise of any Stock Appreciation Right associated
with any Stock Option.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<B><P ALIGN="JUSTIFY">SECTION 4. <I>Eligibility.</B></I> Officers and other key employees of the Company and its Subsidiaries and Affiliates (but excluding members of the Committee and any person who serves only as a director) who are responsible for or
contribute to the management, growth and/or profitability of the business of the Company and/or its subsidiaries and Affiliates are eligible to be granted awards under the Plan.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<B><P ALIGN="JUSTIFY">SECTION 5. <I>Stock Options.</B></I> Stock Options may be granted alone, in addition to or in tandem with other awards granted under the Plan and/or case awards made outside of the Plan. Any Stock Option granted under the Plan shall
be in such form as the Committee may from time to time approve.</P>
<P ALIGN="JUSTIFY">Stock Options granted under the Plan may be of two types: (i) Incentive Stock Options and (ii) Non-Qualified Stock Options.</P>
<P ALIGN="JUSTIFY">The Committee shall have the authority to grant to any optionee Incentive Stock Options, Non-Qualified Stock Options, or both types of Stock Options (in each case with or without Stock Appreciation Rights).</P>
<P ALIGN="JUSTIFY">Options granted under the Plan shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable.</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">(a)&#9;<I>Option Price. </I>The option price per share of Stock purchasable under a Stock Option shall be determined by the Committee at the time of grant but shall be not less than 100% (or, in the case of an employee who owns stock
possessing more than 10 percent of the total combined voting power of all classes of stock of the Company or of any of its subsidiary or parent corporations, not less than 110%) of the Fair Market Value of the Stock at grant, in the case of Incentive
Stock Options, and not less than 85% of the Fair Market Value of the Stock at grant, in the case of Non-Qualified Stock Options.</P>
<P ALIGN="JUSTIFY">(b)&#9;<I>Option Term.</I> The term of each Stock Option shall be fixed by the Committee, but no Stock Option shall be exercisable more than ten years (or, in the case of an employee who owns stock possessing more than 10 percent of the
total combined voting power of all classes of stock of the Company or any of its subsidiary or parent corporations, more than five years) after the date the Option is granted.</P>
<P ALIGN="JUSTIFY">(c)&#9;<I>Exercisability.</I> Stock Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee at or after grant; provided, however, that, except as provided in
Section 5(f) and (g), unless otherwise determined by the Committee at or after grant, no Stock Option shall be exercisable prior to the first anniversary date of the granting of the Option. If the Committee provides, in its sole discretion, that any Stock
Option is exercisable only in installments, the Committee may waive such installment exercise provisions at any time at or after grant in whole or in part, based on such factors as the Committee shall determine, in its sole discretion.</P>
<P ALIGN="JUSTIFY">(d)&#9;<I>Method of Exercise.</I> Subject to whatever installment exercise provisions apply under Section 5(c), Stock Options may be exercised in whole or in part at any tie during the option period, by giving written notice of exercise
to the Company specifying the number of shares to be purchased.</P>
<P ALIGN="JUSTIFY">Such notice shall be accompanied by payment in full of the purchase price, either by check, note, or such other instrument as the Committee may accept. As determined by the Committee, in its sole discretion, at or after grant, payment
in full or in part also may be made in the form of unrestricted Stock already owned by the optionee or, in the case of the exercise of a Non-Qualified Stock Option, Restricted Stock or Deferred Stock subject to an award hereunder (based, in each case, on
the Fair Market Value of the Stock on the date the option is exercised, as determined by the Committee).</P>
<P ALIGN="JUSTIFY">If payment of the option exercise price of a Non-Qualified Stock Option is made in whole or in part in the form of Restricted Stock or Deferred Stock, such Restricted Stock or Deferred Stock (and any replacement shares relating thereto)
shall remain (or be) restricted or deferred, as the case may be, in accordance with the original terms of the Restricted Stock award or Deferred Stock award in question, and any additional Stock received upon the exercise shall be subject to the same
forfeiture restrictions or deferral limitations, unless otherwise determined by the Committee, in its sole discretion, at or after grant.</P>
<P ALIGN="JUSTIFY">No shares of Stock shall be issued until full payment therefor has been made. An optionee generally shall have the rights to dividends or other rights of a shareholder with respect to shares subject to the Option when the optionee has
given written notice of exercise, has paid in full for such shares, and, if requested, has given the representation described in Section 12(a).</P>
<P ALIGN="JUSTIFY">(e)&#9;<I>Non-Transferability of Options.</I> No Stock Option shall be transferable by the options otherwise than by will or by the laws of descent and distribution, and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee or the optionee's guardian or legal representative.</P>
<P ALIGN="JUSTIFY">(f)&#9;<I>Termination by Death.</I> Subject to Section 5(j), if an optionee's employment by the Company and any Subsidiary or Affiliate terminates by reason of death, any Stock Option held by such optionee may thereafter be exercised,
to the extent such option was exercisable at the time of death, by the legal representative of the estate or by the legatee of the optionee under the will of the optionee, for a period of one year from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.</P>
<P ALIGN="JUSTIFY">(g)&#9;<I>Termination by Reason of Disability.</I> Subject to Section 5(j), if an optionee's employment by the Company and any Subsidiary or Affiliate terminates by reason of Disability, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the time of termination for a period of one year from the date of such termination of employment or until the expiration of the stated term of such Stock Option, whichever period
is the shorter; provided, however, that, if the optionee dies within such one-year period, any unexercised Stock Option held by such optionee shall thereafter be exercisable to the extent to which it was exercisable at the time of death for a period of
one year from the date of such death or until the expiration of the stated term of such Stock Option, whichever period is the shorter. In the event of termination of employment by reason of Disability, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422A of the Code, such Stock Option will thereafter be treated as a Non-Qualified Stock Option.</P>
<P ALIGN="JUSTIFY">(h)&#9;<I>Termination by Reason of Retirement.</I> Subject to Section 5(j), if an optionee's employment by the Company and any Subsidiary or Affiliate terminates by reason of Normal or Early Retirement, any Stock Option held by such
optionee may thereafter be exercised by the optionee, to the extent it was exercisable at the time of such Retirement, for a period of one year from the date of such termination of employment or the expiration of the stated term of such Stock Option,
whichever period is the shorter, provided, however, that, if the optionee dies within such one-year period any unexercised Stock Option held by such optionee shall thereafter be exercisable, to the extent to which it was exercisable at the time of death,
for a period of one year from the date of such death or until the expiration of the stated term of such Stock Option, whichever period is the shorter. In the event of termination of employment by reason of Retirement, if an Incentive Stock Option is
exercised after the expiration of the exercise periods that apply for purposes of Section 422A of the Code, the option will thereafter be treated as a Non-Qualified Stock Option.</P>
<I><P ALIGN="JUSTIFY">(i) Other Termination.</I> If an optionee's employment by the Company and any Subsidiary or Affiliate terminates for any reason other than death, Disability or Normal or Early Retirement, the Stock Option shall thereupon terminate,
except that such Stock Option may be exercised, to the extent otherwise then exercisable, for the lesser of 30 days or the balance of such Stock Option's term if the optionee is involuntarily terminated by the Company and any Subsidiary or Affiliate
without Cause or resigns. For purposes of this Plan, "Cause" means a felony conviction of a participant or the failure of a participant to contest prosecution for a felony, or a participant's willful misconduct or dishonesty, any of which is directly and
materially harmful to the business or reputation of the Company or any Subsidiary or Affiliate.</P></DIR>
</DIR>

<P ALIGN="JUSTIFY">&nbsp;</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">(j)&#9;<I>Incentive Stock Options</I>. Anything in the Plan to the contrary notwithstanding, no term of this Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be so exercised, so as to disqualify the Plan under Section 422A of the Code, or, without the consent of the optionee(s) affected, to disqualify any Incentive Stock Option under such Section 422A.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">To the extent permitted under Section 422A of the Code or the applicable regulations thereunder or any applicable Internal Revenue Service pronouncement if (A) a participant's employment is terminated by reason of death, Disability or
Retirement and (B) the portion of any Incentive Stock Option that is otherwise exercisable during the post-termination period specified under Section 5(f), (g) or (h), applied without regard to the $100,000 limitation contained in Section 422A(b)(7) of
the Code, is greater than the portion of such option that is immediately exercisable as an "incentive stock option" during such post-termination period under Section 422A, such excess shall be treated as a Non-Qualified Stock Option.</P>
<P ALIGN="JUSTIFY">(k)&#9;<I>Buyout Provisions</I>. The Committee may at any time offer to buy out for a payment in cash, Stock, Deferred Stock or Restricted Stock an option previously granted, based on such terms and conditions as the Committee shall
establish and communicate to the optionee at the time that such offer is made.</P>
<P ALIGN="JUSTIFY">(l)&#9;<I>Settlement Provisions.</I> If the option agreement so provides at grant or is amended after grant and prior to exercise to so provide (with the optionee's consent), the Committee may require that all or part of the shares to
be issued with respect to the spread value of an exercised Option take the form of Deferred or Restricted Stock, which shall be valued on the date of exercise on the basis of the Fair Market Value (as determined by the Committee) of such Deferred or
Restricted Stock determined without regard to the deferral limitations and/or forfeiture restrictions involved.</P>
<P ALIGN="JUSTIFY">&nbsp;</P></DIR>
</DIR>

<P ALIGN="JUSTIFY">Section 6.&#9;<I>Stock Appreciation Rights</I>. (a) <I>Grant and Exercise.</I> Stock Appreciation Rights may be granted in conjunction with all or part of any Stock Option granted under the Plan. In the case of a Non-Qualified Stock
Option, such rights may be granted either at or after the time of the grant of such Stock Option. In the case of an Incentive Stock Option, such rights may be granted only at the time of the grant of such Stock Option.</P>
<P ALIGN="JUSTIFY">A Stock Appreciation Right or applicable portion thereof granted with respect to a given Stock Option shall terminate and no longer be exercisable upon the termination or exercise of the related Stock Option, subject to such provisions
as the Committee may specify at grant where a Stock Appreciation Right is granted with respect to less than the full number of shares covered by a related Stock Option.</P>
<P ALIGN="JUSTIFY">A Stock Appreciation Right may be exercised by an optionee, subject to Section 6(b), in accordance with the procedures established by the Committee for such purpose. Upon such exercise, the optionee shall be entitled to receive an
amount determined in the manner prescribed in Section 6(b). Stock Options relating to exercised Stock Appreciation Rights shall no longer be exercisable to the extent that the related Stock Appreciation Rights have been exercised.</P>
<P ALIGN="JUSTIFY">(b)&#9;<I>Terms and Conditions.</I> Stock Appreciation Rights shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be determined form time to time by the Committee, including the
following:</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">(i)&#9;Stock Appreciation Rights shall be exercisable only at such time or times and to the extent that the Stock Options to which they relate shall be exercisable in accordance with the provisions of Section 5 and this Section 6 of the
Plan; provided, however, that any Stock Appreciation Right granted to an optionee subject to Section 16(b) of the Securities Exchange Act of 1934 (the "Exchange Act") subsequent to the grant of the related Stock Option shall not be exercisable during the
first six months of its term, except that this special limitation shall not apply in the event of death or Disability of the optionee prior to the expiration of the six-month period. The exercise of Stock Appreciation Rights held by optionees who are
subject to Section 16(b) of the Exchange Act shall comply with Rule 16(b)-3 thereunder, to the extent applicable.</P>
<P ALIGN="JUSTIFY">(ii)&#9;Upon the exercise of a Stock Appreciation Right, an optionee shall be entitled to receive an amount in cash and/or shares of Stock equal in value to the excess of the Fair Market Value of one share of Stock over the option price
per share specified in the related Stock Option multiplied by the number of shares in respect of which the Stock Appreciation Right shall have been exercised, with the Committee having the right to determine the form of payment. When payment is to be made
in shares, the number of shares to be paid shall be calculated on the basis of the Fair Market Value of the shares on the date of exercise. When payment is to be made in cash, such amount shall be calculated on the basis of the average of the highest and
lowest quoted selling price, regular way, of the Stock on the New York Stock Exchange during the applicable period referred to in Rule 16b-3(e) under the Exchange Act.</P>
<P ALIGN="JUSTIFY">(iii)&#9;Stock Appreciation Rights shall be transferable only when and to the extent that the underlying Stock Option would be transferable under Section 5(e) of the Plan.</P>
<P ALIGN="JUSTIFY">(iv)&#9;Upon the exercise of a Stock Appreciation Right, the Stock Option or part thereof to which such Stock Appreciation Right is related shall be deemed to have been exercised for the purpose of the limitation set forth in Section 3
of the Plan on the number of shares of Stock to be issued under the Plan, but only to the extent of the number of shares issued under the Stock Appreciation Right at the time of exercised based on the value of the Stock Appreciation Right at such time.</P>
<P ALIGN="JUSTIFY">&nbsp;</P></DIR>
</DIR>

<P ALIGN="JUSTIFY">Section 7.&#9;<I>Restricted Stock.</I> (a) <I>Administration.</I> Shares of Restricted Stock may be issued either alone, in addition to or in tandem with other awards granted under the Plan and/or cash awards made outside the Plan. The
Committee shall determine the eligible persons to whom, and the time or times at which, grants of Restricted Stock will be made, the number of shares to be awarded, the price (if any) to be paid by the recipient of Restricted Stock (subject to Section
7(b)), the time or times within which such awards may be subject to forfeiture, and all other terms and conditions of the awards.</P>
<P ALIGN="JUSTIFY">The Committee may condition the grant of Restricted Stock upon the attainment of specified performance goals or such other factors as the Committee may determine, in its sole discretion.</P>
<P ALIGN="JUSTIFY">The provisions of restricted Stock awards need not be the same with respect to each recipient.</P>
<P ALIGN="JUSTIFY">(b)&#9;<I>Awards and Certificates</I>. The prospective recipient of a Restricted Stock award shall not have any rights with respect to such award, unless and until such recipient has executed an agreement evidencing the award and has
delivered a fully executed copy thereof to the Company, and has otherwise complied with the applicable terms and conditions of such award.</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">(i)&#9;The purchase price for shares of Restricted Stock shall be equal to or less than their par value and may be zero.</P>
<P ALIGN="JUSTIFY">(ii)&#9;Awards of Restricted Stock must be accepted within a period of 60 days (or such shorter period as the Committee may specify at grant) after the award date, by executing a Restricted Stock Award Agreement and paying whatever
price (if any) is required under Section 7(b)(i).</P>
<P ALIGN="JUSTIFY">(iii)&#9;Each participant receiving a Restricted Stock award shall be issued a stock certificate in respect of such shares of Restricted Stock. Such certificate shall be registered in the name of such participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions applicable to such award.</P>
<P ALIGN="JUSTIFY">(iv)&#9;The Committee shall require that the stock certificates evidencing such shares be held in custody by the Company until the restrictions thereon shall have lapsed, and that, as a condition of any Restricted Stock award, the
participant shall have delivered a stock power, endorsed in blank, relating to the Stock covered by such award.</P>
<P ALIGN="JUSTIFY">&nbsp;</P></DIR>
</DIR>

<P ALIGN="JUSTIFY">(c)&#9;<I>Restrictions and Conditions.</I> The shares of Restricted Stock awarded pursuant to this Section 7 shall be subject to the following restrictions and conditions:</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">(i)&#9;Subject to the provisions of this Plan and the award agreement, during a period set by the Committee commencing with the date of such award (the "Restriction Period"), the participant shall not be permitted to sell, transfer,
pledge or assign shares of Restricted Stock awarded under the Plan. Within these limits, the Committee, in its sole discretion, may provide for the lapse of such restrictions in installments and may accelerate or waive such restrictions in whole or in
part, based on service, performance and/or such other factors or criteria as the Committee may determine, in its sole discretion.</P>
<P ALIGN="JUSTIFY">(ii)&#9;Except as provided in this paragraph (ii) and Section 7(c)(i), the participant shall have, with respect to the shares of Restricted Stock, all of the rights of a shareholder of the Company, including the right to vote the
shares, and the right to receive any cash dividends. The Committee, in its sole discretion, as determined at the time of award, may permit or require the payment of cash dividends to be deferred and, if the Committee so determines, reinvested, subject to
Section 12(e), in additional Restricted Stock to the extent shares are available under Section 3, or otherwise reinvested. Pursuant to Section 3 above, Stock dividends issued with respect to Restricted Stock shall be treated as additional shares of
Restricted Stock that are subject to the same restrictions and other terms and conditions that apply to the shares with respect to which such dividends are issued.</P>
<P ALIGN="JUSTIFY">(iii)&#9;Subject to the applicable provisions of the award agreement and this Agreement 7, upon termination of a participant's employment with the Company and any Subsidiary or Affiliate for any reason during the Restriction Period, all
shares still subject to restriction will vest, or be forfeited, in accordance with the terms and conditions established by the Committee at or after grant.</P>
<P ALIGN="JUSTIFY">(iv)&#9;If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock subject to such Restriction Period, certificates for an appropriate number of unrestricted shares shall be delivered to the
participant promptly.</P></DIR>
</DIR>

<I><P ALIGN="JUSTIFY">(d) Minimum Value Provisions.</I> In order to better ensure that award payments actually reflect the performance of the Company and service of the participant, the Committee may provide, in its sole discretion, for a tandem
performance-based or other award designed to guarantee a minimum value, payable in cash or Stock to the recipient of a restricted stock award, subject to such performance, future service, deferral and other terms and conditions as may be specified by the
Committee.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">Section 8. <I>Deferred Stock.</I> (a) <I>Administration.</I> Deferred Stock may be awarded either alone, in addition to or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan. The Committee
shall determine the eligible persons to whom and the time or times at which Deferred Stock shall be awarded, the number of shares of Deferred Stock to be awarded to any person, the duration of the period (the "Deferral Period") during which, and the
conditions under which, receipt of the Stock will be deferred, and the other terms and conditions of the award in addition to those set forth in Section 8(b).</P>
<P ALIGN="JUSTIFY">The Committee may condition the grant of Deferred Stock upon the attainment of specified performance goals or such other factors or criteria as the Committee shall determine, in its sole discretion.</P>
<P ALIGN="JUSTIFY">The provisions of Deferred Stock awards need not be the same with respect to each recipient.</P>
<P ALIGN="JUSTIFY">(b)&#9;<I>Terms and Conditions.</I> The shares of Deferred Stock awarded pursuant to this Section 8 shall be subject to the following terms and conditions:</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">(i)&#9;Subject to the provisions of this Plan and the award agreement referred to in Section 8(b)(vi) below, Deferred Stock awards may not be sold, assigned, transferred, pledged or otherwise encumbered during the Deferral Period. At
the Deferred Period (or the Elective Deferral Period referred to in Section 8(b)(v), where applicable), share certificates shall be delivered to the participant, or his legal representative, in a number equal to the shares covered by the Deferred Stock
award.</P>
<P ALIGN="JUSTIFY">(ii)&#9;Unless otherwise determined by the Committee at grant, amounts equal to any dividends declared during the Deferral Period with respect to the number of shares covered by a Deferred Stock award will be paid to the participant
currently, or deferred and deemed to be reinvested in additional Deferred Stock, or otherwise reinvested, all as determined at or after the time of the award by the Committee, in its sole discretion.</P>
<P ALIGN="JUSTIFY">(iii)&#9;Subject to the provisions of the award agreement and this Section 8, upon termination of a participant's employment with the Company and any Subsidiary or Affiliate for any reason during the Deferral Period for a given award,
the Deferred Stock in question will vest, or be forfeited, in accordance with the terms and conditions established by the Committee at or after grant.</P>
<P ALIGN="JUSTIFY">(iv)&#9;Based on service, performance and/or such other factors or criteria as the Committee may determine, the Committee may, at or after grant, accelerate the vesting of all or any part of any Deferred Stock award and/or waive the
deferral limitations for all or any part of such award.</P>
<P ALIGN="JUSTIFY">(v)&#9;A participant may elect to further defer receipt of an award (or an installment of an award) for a specified period or until a specified event (the "Elective Deferral Period"), subject in each case to the Committee's approval and
to such terms as are determined by the Committee, all in its sole discretion. Subject to any exceptions adopted by the Committee, such election generally must be made at least 12 months prior to completion of the Deferral Period for such Deferred Stock
award (or such installment).</P>
<P ALIGN="JUSTIFY">(vi)&#9;Each award shall be confirmed by, and subject to the terms of, a Deferred Stock agreement executed by the Company and the participant.</P></DIR>
</DIR>

<P ALIGN="JUSTIFY">(c)&#9;<I>Minimum Value Provisions</I>. In order to better ensure that award payments actually reflect the performance of the Company and the service of the participant, the Committee may provide, in its sole discretion, for a tandem
performance-based or other award designed to guarantee a minimum value, payable in cash or Stock to the recipient of a deferred stock award, subject to such performance, future service, deferral and other terms and conditions as may be specified by the
Committee.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">Section 9. <I>Other Stock-Based Awards</I>. (a) <I>Administration.</I> Other awards of Stock and other awards that are valued in whole or in part by reference to, or are otherwise based on, Stock ("Other Stock-Based Awards"), including,
without limitation, performance shares, convertible preferred stock, convertible debentures, exchangeable securities and Stock awards or options valued by reference to Book Value or subsidiary performance, may be granted either alone or in addition to or
in tandem with Stock Options, Stock Appreciation Rights, Restricted Stock, or Deferred Stock granted under the Plan and/or cash awards made outside of the Plan.</P>
<P ALIGN="JUSTIFY">Subject to the provisions of the Plan, the Committee shall have authority to determine the persons to whom and the time or times at which such awards shall be made, the number of shares of Stock to be awarded pursuant to such awards,
and all other conditions of the awards. The Committee may also provide for the grant of Stock upon the completion of a specified performance period.</P>
<P ALIGN="JUSTIFY">The provisions of other Stock-Based Awards need not be the same with respect to each recipient.</P>
<P ALIGN="JUSTIFY">(b)&#9;<I>Terms and Conditions.</I> Other Stock-Based Awards made pursuant to this Section 9 shall be subject to the following terms and conditions:</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">(i)&#9;Subject to the provisions of this Plan and the award agreement referred to in Section 9(b)(v) below, shares subject to awards made under this Section 9 may not be sold, assigned, transferred, pledged or otherwise encumbered prior
to the date on which the shares are issued, or, if later, the date on which any applicable restriction, performance or deferral period lapses.</P>
<P ALIGN="JUSTIFY">(ii)&#9;Subject to the provisions of this Plan and the award agreement and unless otherwise determined by the Committee at grant, the recipient of an award under this Section 9 shall be entitled to receive, currently or on a deferred
basis, interest or dividends or interest or dividend equivalents with respect to the number of shares covered by the award, as determined at the time of the award by the Committee, in its sole discretion, and the Committee may provide that such amounts
(if any) shall be deemed to have been reinvested in additional Stock or otherwise reinvested.</P>
<P ALIGN="JUSTIFY">(iii)&#9;Any award under this Section 9 and any Stock covered by any such award shall vest or be forfeited to the extent so provided in the award agreement, as determined by the Committee, in its sole discretion.</P>
<P ALIGN="JUSTIFY">(iv)&#9;In the event of the participant's Retirement, Disability or death, or in cases of special circumstances, the Committee may, in its sole discretion, waive in whole or in part any or all of the remaining limitations imposed
hereunder (if any) with respect to any or all of an award under this Section 9.</P>
<P ALIGN="JUSTIFY">(v)&#9;Each award under this section 9 shall be confirmed by, and subject to the terms of, an agreement or other instrument by the Company and by the participant.</P>
<P ALIGN="JUSTIFY">(vi)&#9;Stock (including securities convertible into Stock) issued on a bonus basis under this Section 9 may be issued for no cash consideration. Stock (including securities convertible into Stock) purchased pursuant to a purchase right
awarded under this Section 9 shall be priced at least 50% of the Fair Market Value of the Stock on the date of grant.</P>
<P ALIGN="JUSTIFY">&nbsp;</P></DIR>
</DIR>

<P ALIGN="JUSTIFY">Section 10. <I>Amendments and Termination.</I> The Board may amend, alter, or discontinue the Plan, but no amendment, alteration, or discontinuation shall be made which would impair the rights of an optionee or participant under a Stock
Option, Stock Appreciation Right, Restricted or Deferred Stock award or Other Stock-Based Award theretofore granted, without the optionee's or participant's consent or which, without the approval of the Company's shareholders, would:</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">(a)&#9;except as expressly provided in this Plan, increase the total number of shares reserved for the purpose of the Plan;</P>
<P ALIGN="JUSTIFY">(b)&#9;change the pricing terms of Section 5(a);</P>
<P ALIGN="JUSTIFY">(c)&#9;change the employees or class of employees eligible to participate in the Plan; or</P>
<P ALIGN="JUSTIFY">(d)&#9;extend the maximum term under Section 14 of the Plan.</P></DIR>
</DIR>

<P ALIGN="JUSTIFY">The Committee may amend the terms of any Stock Option or other award theretofore granted, prospectively or retroactively, but, subject to Section 3 above, no such amendment shall impair the rights of any holder without the holder's
consent. The Committee also may substitute new Stock Options for previously granted Stock Options (on a one for one or other basis), including previously granted Stock Options having higher option exercise prices.</P>
<P ALIGN="JUSTIFY">Subject to the above provisions, the Board shall have broad authority to amend the Plan to take into account changes in applicable securities and tax laws and accounting rules, as well as other developments.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">Section 11. <I>Unfunded Status of Plan.</I> The Plan is intended to constitute an "unfunded" plan for incentive and deferred compensation. With respect to any payments not yet made to a participant or optionee by the Company, nothing
contained herein shall give any such participant or optionee any rights that are greater than those of a general creditor of the Company. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the
obligations created under the Plan to deliver Stock or payments in lieu of or with respect to awards hereunder; provided, however, that, unless the Committee otherwise determines with the consent of the affected participant, the existence of such trusts
or other arrangements is consistent with the "unfunded" status of the Plan.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">Section 12. <I>General Provisions.</I> (a) The Committee may require each person purchasing shares pursuant to a Stock Option or other award under the Plan to represent to and agree with the Company in writing that the optionee or
participant is acquiring the shares without a view to distribution thereof. The certificates for such shares may include any legend which the Committee deems appropriate to reflect any restrictions on transfer.</P>
<P ALIGN="JUSTIFY">All certificates for shares of Stock or other securities delivered under the Plan shall be subject to such stock-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon which the Stock is then listed, and any applicable Federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.</P>
<P ALIGN="JUSTIFY">(b)&#9;Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases.</P>
<P ALIGN="JUSTIFY">(c)&#9;The adoption of the Plan shall not confer upon any employee of the Company or any Subsidiary or Affiliate any right to continued employment with the Company or a Subsidiary or Affiliate, as the case may be, nor shall it interfere
in any way with the right of the Company or a Subsidiary or Affiliate to terminate the employment of any of its employees at any time.</P>
<P ALIGN="JUSTIFY">(d)&#9;No later than the date as of which an amount first becomes includible in the gross income of the participant for Federal income tax purposes with respect to any award under the Plan, the participant shall pay to the Company, or
make arrangements satisfactory to the Committee regarding the payment of, any Federal, state, or local taxes of any kind required by law to be withheld with respect to such amount. Unless otherwise determined by the Committee, withholding obligations may
be settled with Stock, including Stock that is part of the award that gives rise to the withholding requirement. The obligations of the Company under the Plan shall be conditional on such payment or arrangements and the Company and its Subsidiaries or
Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the participant.</P>
<P ALIGN="JUSTIFY">(e)&#9;The actual or deemed reinvestment of dividends or dividend equivalents in additional Restricted Stock (or in Deferred Stock or other types of Plan awards) at the time of any dividend payment only shall be permissible if
sufficient shares of Stock are available under Section 3 for such reinvestment (taking into account then outstanding Stock Options and other Plan awards).</P>
<P ALIGN="JUSTIFY">(f)&#9;The Plan and all awards made and actions taken thereunder shall be governed by and construed in accordance with the laws of the State of Tennessee.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">Section 13. <I>Effective Date of Plan.</I> The Plan shall be effective as of November 12, 1991, upon the approval of the Plan by a majority of the votes cast by the holders of the Company's Common Stock at the 1991 annual shareholders'
meeting.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">Section 14. <I>Term of Plan.</I> No Stock Option, Stock Appreciation Right, Restricted Stock award, Deferred Stock award or Other Stock-Based Award shall be granted pursuant to the Plan on or after the tenth anniversary of the date of
shareholder approval, but awards granted prior to such tenth anniversary may extend beyond that date.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
</FONT><P><HR></P>
<FONT SIZE=2><P ALIGN="CENTER"><U>EXHIBIT 24.2</U></P>
<P ALIGN="CENTER"><U>CONSENT OF PRICEWATERHOUSECOOPERS LLP</U></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER"><U>Accountants' Consent</U></P>
<P ALIGN="JUSTIFY">&nbsp;We hereby consent to the incorporation by reference in this registration statement of Clayton Homes, Inc. on Form S-8 of our report dated August 5, 1998, relating tothe consolidated financial statements of Clayton Homes, Inc. as
of June 30, 1998 and 1997, and for the years ended June 30, 1998, 1997 and 1996, which report appears in the Annual Report on Form 10-K filed September 22, 1998.</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P ALIGN="RIGHT">PricewaterhouseCoopers LLP</P>
<P>&nbsp;</P>
<P>Knoxville, Tennessee</P>
<P>July 20, 1999</P>
<P>&nbsp;</P></FONT></BODY>
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{"company-data": {"conformed-name": "CLAYTON HOMES INC", "cik": "0000719547", "assigned-sic": "2451", "irs-number": "621671360", "state-of-incorporation": "DE", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-83565", "film-number": "99669246"}, "business-address": {"street1": "5000 CLAYTON ROAD", "city": "MARYVILLE", "state": "TN", "zip": "37804", "phone": "4233803000X5206"}, "mail-address": {"street1": "PO BOX 15169", "city": "KNOXVILLE", "state": "TN", "zip": "37912"}}
1991
As filed with the Securities and Exchange Commission on July 22,1999
Registration No. 333-______________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
CLAYTON HOMES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
62-1671360
(State of Incorporation)
(I.R.S. Employer Identification No.)
5000 Clayton Road
Maryville, Tennessee 37804
(Address of principal executive offices)
CLAYTON HOMES, INC.
1991 EMPLOYEE STOCK INCENTIVE PLAN
(Full Title of the Plan)
KEVIN T. CLAYTON
5000 Clayton Road
Maryville, Tennessee 37804
(423) 380-3000
(Name, address and telephone number of agent for service)
(with copies to:)
ROBERT G. MCCULLOUGH
Baker, Donelson, Bearman & Caldwell
1700 Nashville City Center
511 Union Street
Nashville, Tennessee 37219
CALCULATION OF REGISTRATION FEE
Title of Securities to be Registered
Amount to be Registered
Proposed Maximum Offering Price Per Share
Proposed Maximum Aggregate Offering Price
Amount of Registration Fee
Common Stock
2,000,000
1
$10.78125
2
$21,562,500
2
$5,994
1
The number of shares being registered under the Plan represents the number of shares presently anticipated to be purchased if eligible individuals elected to purchase such shares authorized under such Plan.
2
Based on the average high and low prices of the Common Stock on the New York Stock Exchange on July 19, 1999, pursuant to Rule 457(h). The Plan provides for the purchase of Common Stock at the fair market value on the dates of grants of
incentive stock options or not less than 85% of the fair market value in the case of nonqualified stock options, which prices are presently indeterminable.
PART II
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission are incorporated herein by reference:
1.
The Registrant's Annual Report on Form 10-K for the year ended June 30, 1998.
2.
The Registrant's Quarterly Reports on Form 10-Q for the quarters ended September 30, 1998, December 31, 1998 and March 31, 1999.
3.
The description of the Registrant's Common Stock contained in its Registration Statement on Form 8-B, filed with the Commission on March 31, 1997.
All documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which
registers all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part thereof from the date of filing of such documents.
Item 4. DESCRIPTION OF SECURITIES
No response is required to this item.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
No response is required to this item.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is incorporated under the laws of the State of Delaware. Section 145 of the General Corporation Law of the State of Delaware ("Section 145") provides that a Delaware corporation may indemnify any person who is,
or is threatened to be made, a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that
such person was an officer, director, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses
(including attorneys fees), judgments, fines and amount paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such person acted in good faith and in a manner he reasonably believed
to be in or not opposed to the corporation's best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his conduct was illegal. A Delaware corporation may indemnify any person who is, or is threatened
to be made, a party to any threatened, pending or completed action or suit by or in the right of the corporation by reason of the fact that such person was a director, officer, employee or agent of such corporation, or is or was serving at the request of
such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of
such action or suit, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation's best interests except that no indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or
director has actually and reasonably incurred.
The Company's Certificate of Incorporation provides for the indemnification of directors of the Company to the fullest extent permitted by the Delaware General Corporation Law as is currently effective or may hereafter be
amended from time to time, a director of the Corporation shall not be liable to the Corporation or its shareholders for monetary damages for breach of fiduciary duty as a director. If after filing of this Certificate of Incorporation, the Delaware General
Corporation Law is amended or a successor statute is enacted further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the
Delaware General Corporation Law or any successor statute, as so amended from time to time. Any repeal or modification of this paragraph by the shareholders of the Corporation shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification or with respect to events occurring prior to such time.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
No response is required to this item.
Item 8. EXHIBITS
Exhibit Number
Description
5
Opinion and Consent of Baker, Donelson, Bearman & Caldwell
10.1
Clayton Homes, Inc. 1991 Employee Stock Incentive Plan
24.1
Consent of Baker, Donelson, Bearman & Caldwell (contained in Exhibit 5)
24.2
Consent of PricewaterhouseCoopers, LLP
25
Power of Attorney (Included on signature page)
Item 9. UNDERTAKINGS
(a) 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 (the "1933 Act"), each such post-effective amendment 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.
(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.
(b)
The undersigned registrant hereby undertakes that, for the purposes of determining any liability under the 1933 Act, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the 1934 Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Act) 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.
(c) Insofar as indemnification for liabilities arising under the 1933 Act 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 1933 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 1933 Act and will be governed by the final adjudication of such issue.
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 of 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 Alcoa, State of Tennessee, on the 30
th
day of June, 1999.
CLAYTON HOMES, INC.
By:
/s/ Kevin T. Clayton
Kevin T. Clayton, President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Kevin T. Clayton and Amber W. Krupacs and each of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Registration Statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and
necessary fully to all intents and purposes as he might or could do in person thereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the date indicated.
Name
Title
Date
/s/ James L. Clayton
James L. Clayton
Chairman of the Board of Directors
June 30, 1999
Chief Executive Officer and Director
(Principal Executive Officer)
/s/ Kevin T. Clayton
Kevin T. Clayton
President
June 30, 1999
Chief Operating Officer and Director
/s/ Amber W. Krupacs
Amber W. Krupacs
Vice President and Secretary
June 30, 1999
(Principal Financial Officer)
/s/ Gregory A. Hamilton
Gregory A. Hamilton
Vice President and Controller
June 30, 1999
(Principal Accounting Officer)
/s/ B. Joe Clayton
B. Joe Clayton
Director
June 30, 1999
/s/ Dan W. Evins
Dan W. Evins
Director
June 30, 1999
/s/ Wilma H. Jordan
Wilma H. Jordan
Director
June 30, 1999
/s/ John J. Kalec
John J. Kalec
Director
June 30, 1999
/s/ Thomas N. McAdams
Thomas N. McAdams
Director
June 30, 1999
/s/ C. Warren Neel
C. Warren Neel
Director
June 30, 1999
EXHIBIT 5
OPINION AND CONSENT OF BAKER, DONELSON, BEARMAN & CALDWELL
June 30, 1999
Clayton Homes, Inc.
5000 Clayton Road
Maryville, Tennessee 37804
RE:	Clayton Homes, Inc. 1991 Employee Stock Incentive Plan
Gentlemen:
We have acted as securities counsel for Clayton Homes, Inc., a Delaware corporation (the "Company"), in connection with the Company's Registration Statement on Form S-8 (the "Registration Statement"), pursuant to the
Securities Act of 1933, as amended, relating to the Company's 1997 Employee Stock Incentive Plan (the "Plan"). This opinion is being furnished in response to Item 601 of Regulation S-K and the instructions to Form S-8.
We are familiar with the proceedings to date with respect to the proposed offering and have examined such records, documents and matters of law and satisfied ourselves as to such matters of fact as we have considered
relevant for purposes of this opinion.
On the basis of the foregoing, we are of the opinion that:
1.
The Company is a corporation duly organized and existing under the laws of the State of Delaware.
2.
The Plan has been duly and validly authorized and adopted, and the shares of Common Stock of the Company (the "Shares") that may be issued and sold from time to time in accordance with the Plan have been duly authorized for
issuance and will, when issued, sold and paid for in accordance with the Plan, be validly issued, fully paid and non-assessable.
The foregoing opinion is limited to the federal laws of the United States and the laws of the State of Delaware, and we are expressing no opinion as to the effect of the laws of any other jurisdiction.
In rendering the foregoing opinion, we have relied to the extent we deem such reliance appropriate as to certain matters on statements, representations and other information obtained from public officials, officers of the
Company and other sources believed by us to be responsible.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7
of the Act.
Very truly yours,
BAKER, DONELSON, BEARMAN & CALDWELL,
a Professional Corporation
EXHIBIT 10.1
CLAYTON HOMES, INC.
1991 EMPLOYEE STOCK INCENTIVE PLAN
CLAYTON HOMES
1991 EMPLOYEE STOCK INCENTIVE PLAN
SECTION 1.
Purpose; Definitions.
The purpose of the Clayton Homes, Inc. 1991 Employee Stock Incentive Plan (the "Plan") is to enable Clayton Homes, Inc. (the "Company") to attract, retain and reward key
employees of the Company and its Subsidiaries and Affiliates, and strengthen the mutuality of interests between such key employees and the Company's shareholders, by offering such key employees performance-based stock incentives and/or other equity
interests or equity-based incentives in the Company, as well as performance-based incentives payable in cash.
For purposes of the Plan, the following terms shall be defined as set forth below:
A.	"Affiliate" means any entity other than the Company and its Subsidiaries that is designated by the Board as a participating employer under the Plan, provided that the Company directly or indirectly owns at least 20% of the
combined voting power of all classes of stock of such entity or at least 20% of the ownership interests in such entity.
B.	"Board" means the Board of Directors of the Company.
C.	"Book Value" means, as of any given date, on a per share basis (i) the Shareholders' Equity in the Company as of the end of the immediately preceding fiscal year as reflected in the Company's consolidated balance sheet, subject to
such adjustments as the Committee shall specify at or after grant, divided by (ii) the number of then outstanding shares of Stock as of such year-end date (as adjusted by the Committee for subsequent events).
D.	"Code" means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto
E.	"Committee" means the Committee referred to in Section 2 of the Plan. If at any time no Committee shall be in office, then the functions of the Committee specified in the Plan shall be exercised by the Board.
F.	"Company" means Clayton Homes, Inc., a corporation organized under the laws of the State of Tennessee or any successor corporation.
G.	"Deferred Stock" means an award made pursuant to Section 8 of the right to receive Stock at the end of a specified deferral period.
H.	"Disability" means disability as determined under procedures established by the Committee for purposes of this Plan.
I.	"Disinterested Person" shall have the meaning set forth in Rule 16b-3(d)(3) as promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, or any successor definition adopted by the Commission.
J.	"Early Retirement" means retirement, with the express consent for purposes of this Plan of the Company at or before the time of such retirement, from active employment with the Company and any Subsidiary or Affiliate pursuant to
the early retirement provisions of the applicable pension plan of such entity.
K.	"Fair Market Value" means, as of any given date, unless otherwise determined by the Committee in good faith, the reported closing price of the Stock on the New York Stock Exchange composite index or, if no such sale of Stock is
reported on the New York Stock Exchange or other national reporting exchange system on such date, the fair market value of the Stock as determined by the Committee in good faith.
L.	"Incentive Stock Option" means any Stock Option intended to be and designated as an "Incentive Stock Option" within the meaning of Section 422A of the Code.
M.	"Non-Qualified Stock Option" means any Stock Option that is not an Incentive Stock Option.
N.	"Normal Retirement" means retirement from active employment with the Company and any Subsidiary or Affiliate on or after age 65.
O.	"Other Stock-Based Award" means an award under Section 9 that is valued in whole or in part by reference to, or is otherwise based on, Stock.
P.	"Plan" means this Clayton Homes, Inc. 1991 Employee Stock Incentive Plan, as hereinafter amended from time to time.
Q.	"Restricted Stock" means an award of shares of Stock that is subject to restrictions under Section 7.
R.	"Retirement" means normal or early retirement.
S.	"Stock" means the Common Stock, $.10 par value per share, of the Company.
T.	"Stock Appreciation Right" means the right pursuant to an award granted under Section 6 to surrender to the Company all (or a portion) of a Stock Option in exchange for an amount equal to the difference between (i) the Fair Market
Value, as of the date such Stock Option (or such portion thereof) is surrendered, of the shares of Stock covered by such Stock Option (or such portion thereof), subject, where applicable, to the pricing provisions in Section 6(b)(ii); and (ii) the
aggregate exercise price of such Stock Option (or such portion thereof).
U.	"Stock Option" or "Option" means any option to purchase shares of Stock (including Restricted Stock and Deferred Stock, if the Committee so determines) granted pursuant to Section 5.
V.	"Subsidiary" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.
In addition, the term "Cause" shall have the meaning set forth in Section 5(i) below.
SECTION 2.
Administration.
The Plan shall be administered by a Committee of not less than three Disinterested Persons who shall be appointed by the Board of Directors of the Company (the "Board") and who shall serve at the
pleasure of the Board. The functions of the Committee specified in the Plan shall be exercised by the Board, if and to the extent that no Committee exists which has the authority to so administer the Plan.
The Committee shall have full authority to grant, pursuant to the terms of the Plan, to officers and other key employees eligible under Section 4 (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, (iv) Deferred
Stock and/or (v) Other Stock-Based Awards.
In particular, the Committee shall have the authority:
(i)	to select the officers and other key employees of the Company and its Subsidiaries and Affiliates to whom Stock Options, Stock Appreciation Rights, Restricted Stock, Deferred Stock and/or Other Stock-Based Awards may from time to
time be granted hereunder;
(ii)	 to determine whether and to what extent Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock, Deferred Stock and/or Other Stock-Based Awards, or any combination thereof, are to be
granted hereunder to one or more eligible employees;
(iii)	to determine the number of shares to be covered by each such award granted hereunder;
(iv)	to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder (including, but not limited to, the share price and any restriction or limitation, or any vesting acceleration or
waiver or forfeiture restrictions regarding any Stock Option or other award and/or the shares of Stock relating thereto, based in each case on such factors as the Committee shall determine, in its sole discretion);
(v)	to determine whether and under what circumstances a Stock Option may be settled in cash, Restricted Stock and/or Deferred Stock under Section 5(k) or (l), as applicable, instead of Stock;
(vi)	to determine whether, to what extent and under what circumstances Option grants and/or other cash awards made by the Company are to be made, and operate, on a tandem basis vis-a'-vis other awards under the Plan and/or cash
awards made outside of the Plan, or on an additive basis;
(vii)	to determine whether, to what extent and under what circumstances Stock and other amounts payable with respect to an award under this Plan shall be deferred either automatically or at the election of the participant (including
providing for and determining the amount (if any) of any deemed earnings on any deferred amount during any deferral period); and
(viii)	to determine the terms and restrictions applicable to the Stock purchased by exercising such Rights.
The Committee shall have the authority to adopt, alter and repeal such guidelines and practices governing the Plan as it shall, from time to time, deem advisable, to interpret the terms and provisions of the Plan and any award issued
under the Plan (and any agreements relating thereto); and to otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the Plan shall be made in the Committee's sole discretion and shall be final and binding on all persons, including the Company and Plan participants.
SECTION 3.
Stock Subject to Plan.
The total number of shares of Stock reserved and available for distribution under the Plan shall be one million (1,000,000) shares. Such shares may consist, in whole or in part, of
authorized and unissued shares.
Subject to Section 6(b)(iv) below, if any shares of Stock that have been optioned cease to be subject to a Stock Option, or if any such shares of Stock that are subject to any Restricted Stock or Deferred Stock award, or Other
Stock-Based Award granted hereunder are forfeited or any such award otherwise terminates without a payment being made to the participant in the form of Stock, such shares shall again be available for distribution in connection with future awards under the
Plan.
In the event of any merger, reorganization, consolidation, recapitalization, Stock dividend, Stock split or other change in corporate structure affecting the Stock, such substitution or adjustment shall be made in the aggregate number
of shares reserved for issuance under the Plan, in the number and option and/or purchase price of shares subject to outstanding Options and other awards granted under the Plan, as may be determined to be appropriate by the Committee, in its sole
discretion, provided that the number of shares subject to any award shall always be a whole number. Such adjusted option price shall also be used to determine the amount payable by the Company upon the exercise of any Stock Appreciation Right associated
with any Stock Option.
SECTION 4.
Eligibility.
Officers and other key employees of the Company and its Subsidiaries and Affiliates (but excluding members of the Committee and any person who serves only as a director) who are responsible for or
contribute to the management, growth and/or profitability of the business of the Company and/or its subsidiaries and Affiliates are eligible to be granted awards under the Plan.
SECTION 5.
Stock Options.
Stock Options may be granted alone, in addition to or in tandem with other awards granted under the Plan and/or case awards made outside of the Plan. Any Stock Option granted under the Plan shall
be in such form as the Committee may from time to time approve.
Stock Options granted under the Plan may be of two types: (i) Incentive Stock Options and (ii) Non-Qualified Stock Options.
The Committee shall have the authority to grant to any optionee Incentive Stock Options, Non-Qualified Stock Options, or both types of Stock Options (in each case with or without Stock Appreciation Rights).
Options granted under the Plan shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable.
(a)
Option Price.
The option price per share of Stock purchasable under a Stock Option shall be determined by the Committee at the time of grant but shall be not less than 100% (or, in the case of an employee who owns stock
possessing more than 10 percent of the total combined voting power of all classes of stock of the Company or of any of its subsidiary or parent corporations, not less than 110%) of the Fair Market Value of the Stock at grant, in the case of Incentive
Stock Options, and not less than 85% of the Fair Market Value of the Stock at grant, in the case of Non-Qualified Stock Options.
(b)
Option Term.
The term of each Stock Option shall be fixed by the Committee, but no Stock Option shall be exercisable more than ten years (or, in the case of an employee who owns stock possessing more than 10 percent of the
total combined voting power of all classes of stock of the Company or any of its subsidiary or parent corporations, more than five years) after the date the Option is granted.
(c)
Exercisability.
Stock Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee at or after grant; provided, however, that, except as provided in
Section 5(f) and (g), unless otherwise determined by the Committee at or after grant, no Stock Option shall be exercisable prior to the first anniversary date of the granting of the Option. If the Committee provides, in its sole discretion, that any Stock
Option is exercisable only in installments, the Committee may waive such installment exercise provisions at any time at or after grant in whole or in part, based on such factors as the Committee shall determine, in its sole discretion.
(d)
Method of Exercise.
Subject to whatever installment exercise provisions apply under Section 5(c), Stock Options may be exercised in whole or in part at any tie during the option period, by giving written notice of exercise
to the Company specifying the number of shares to be purchased.
Such notice shall be accompanied by payment in full of the purchase price, either by check, note, or such other instrument as the Committee may accept. As determined by the Committee, in its sole discretion, at or after grant, payment
in full or in part also may be made in the form of unrestricted Stock already owned by the optionee or, in the case of the exercise of a Non-Qualified Stock Option, Restricted Stock or Deferred Stock subject to an award hereunder (based, in each case, on
the Fair Market Value of the Stock on the date the option is exercised, as determined by the Committee).
If payment of the option exercise price of a Non-Qualified Stock Option is made in whole or in part in the form of Restricted Stock or Deferred Stock, such Restricted Stock or Deferred Stock (and any replacement shares relating thereto)
shall remain (or be) restricted or deferred, as the case may be, in accordance with the original terms of the Restricted Stock award or Deferred Stock award in question, and any additional Stock received upon the exercise shall be subject to the same
forfeiture restrictions or deferral limitations, unless otherwise determined by the Committee, in its sole discretion, at or after grant.
No shares of Stock shall be issued until full payment therefor has been made. An optionee generally shall have the rights to dividends or other rights of a shareholder with respect to shares subject to the Option when the optionee has
given written notice of exercise, has paid in full for such shares, and, if requested, has given the representation described in Section 12(a).
(e)
Non-Transferability of Options.
No Stock Option shall be transferable by the options otherwise than by will or by the laws of descent and distribution, and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee or the optionee's guardian or legal representative.
(f)
Termination by Death.
Subject to Section 5(j), if an optionee's employment by the Company and any Subsidiary or Affiliate terminates by reason of death, any Stock Option held by such optionee may thereafter be exercised,
to the extent such option was exercisable at the time of death, by the legal representative of the estate or by the legatee of the optionee under the will of the optionee, for a period of one year from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.
(g)
Termination by Reason of Disability.
Subject to Section 5(j), if an optionee's employment by the Company and any Subsidiary or Affiliate terminates by reason of Disability, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the time of termination for a period of one year from the date of such termination of employment or until the expiration of the stated term of such Stock Option, whichever period
is the shorter; provided, however, that, if the optionee dies within such one-year period, any unexercised Stock Option held by such optionee shall thereafter be exercisable to the extent to which it was exercisable at the time of death for a period of
one year from the date of such death or until the expiration of the stated term of such Stock Option, whichever period is the shorter. In the event of termination of employment by reason of Disability, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422A of the Code, such Stock Option will thereafter be treated as a Non-Qualified Stock Option.
(h)
Termination by Reason of Retirement.
Subject to Section 5(j), if an optionee's employment by the Company and any Subsidiary or Affiliate terminates by reason of Normal or Early Retirement, any Stock Option held by such
optionee may thereafter be exercised by the optionee, to the extent it was exercisable at the time of such Retirement, for a period of one year from the date of such termination of employment or the expiration of the stated term of such Stock Option,
whichever period is the shorter, provided, however, that, if the optionee dies within such one-year period any unexercised Stock Option held by such optionee shall thereafter be exercisable, to the extent to which it was exercisable at the time of death,
for a period of one year from the date of such death or until the expiration of the stated term of such Stock Option, whichever period is the shorter. In the event of termination of employment by reason of Retirement, if an Incentive Stock Option is
exercised after the expiration of the exercise periods that apply for purposes of Section 422A of the Code, the option will thereafter be treated as a Non-Qualified Stock Option.
(i) Other Termination.
If an optionee's employment by the Company and any Subsidiary or Affiliate terminates for any reason other than death, Disability or Normal or Early Retirement, the Stock Option shall thereupon terminate,
except that such Stock Option may be exercised, to the extent otherwise then exercisable, for the lesser of 30 days or the balance of such Stock Option's term if the optionee is involuntarily terminated by the Company and any Subsidiary or Affiliate
without Cause or resigns. For purposes of this Plan, "Cause" means a felony conviction of a participant or the failure of a participant to contest prosecution for a felony, or a participant's willful misconduct or dishonesty, any of which is directly and
materially harmful to the business or reputation of the Company or any Subsidiary or Affiliate.
(j)
Incentive Stock Options
. Anything in the Plan to the contrary notwithstanding, no term of this Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be so exercised, so as to disqualify the Plan under Section 422A of the Code, or, without the consent of the optionee(s) affected, to disqualify any Incentive Stock Option under such Section 422A.
To the extent permitted under Section 422A of the Code or the applicable regulations thereunder or any applicable Internal Revenue Service pronouncement if (A) a participant's employment is terminated by reason of death, Disability or
Retirement and (B) the portion of any Incentive Stock Option that is otherwise exercisable during the post-termination period specified under Section 5(f), (g) or (h), applied without regard to the $100,000 limitation contained in Section 422A(b)(7) of
the Code, is greater than the portion of such option that is immediately exercisable as an "incentive stock option" during such post-termination period under Section 422A, such excess shall be treated as a Non-Qualified Stock Option.
(k)
Buyout Provisions
. The Committee may at any time offer to buy out for a payment in cash, Stock, Deferred Stock or Restricted Stock an option previously granted, based on such terms and conditions as the Committee shall
establish and communicate to the optionee at the time that such offer is made.
(l)
Settlement Provisions.
If the option agreement so provides at grant or is amended after grant and prior to exercise to so provide (with the optionee's consent), the Committee may require that all or part of the shares to
be issued with respect to the spread value of an exercised Option take the form of Deferred or Restricted Stock, which shall be valued on the date of exercise on the basis of the Fair Market Value (as determined by the Committee) of such Deferred or
Restricted Stock determined without regard to the deferral limitations and/or forfeiture restrictions involved.
Section 6.
Stock Appreciation Rights
. (a)
Grant and Exercise.
Stock Appreciation Rights may be granted in conjunction with all or part of any Stock Option granted under the Plan. In the case of a Non-Qualified Stock
Option, such rights may be granted either at or after the time of the grant of such Stock Option. In the case of an Incentive Stock Option, such rights may be granted only at the time of the grant of such Stock Option.
A Stock Appreciation Right or applicable portion thereof granted with respect to a given Stock Option shall terminate and no longer be exercisable upon the termination or exercise of the related Stock Option, subject to such provisions
as the Committee may specify at grant where a Stock Appreciation Right is granted with respect to less than the full number of shares covered by a related Stock Option.
A Stock Appreciation Right may be exercised by an optionee, subject to Section 6(b), in accordance with the procedures established by the Committee for such purpose. Upon such exercise, the optionee shall be entitled to receive an
amount determined in the manner prescribed in Section 6(b). Stock Options relating to exercised Stock Appreciation Rights shall no longer be exercisable to the extent that the related Stock Appreciation Rights have been exercised.
(b)
Terms and Conditions.
Stock Appreciation Rights shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be determined form time to time by the Committee, including the
following:
(i)	Stock Appreciation Rights shall be exercisable only at such time or times and to the extent that the Stock Options to which they relate shall be exercisable in accordance with the provisions of Section 5 and this Section 6 of the
Plan; provided, however, that any Stock Appreciation Right granted to an optionee subject to Section 16(b) of the Securities Exchange Act of 1934 (the "Exchange Act") subsequent to the grant of the related Stock Option shall not be exercisable during the
first six months of its term, except that this special limitation shall not apply in the event of death or Disability of the optionee prior to the expiration of the six-month period. The exercise of Stock Appreciation Rights held by optionees who are
subject to Section 16(b) of the Exchange Act shall comply with Rule 16(b)-3 thereunder, to the extent applicable.
(ii)	Upon the exercise of a Stock Appreciation Right, an optionee shall be entitled to receive an amount in cash and/or shares of Stock equal in value to the excess of the Fair Market Value of one share of Stock over the option price
per share specified in the related Stock Option multiplied by the number of shares in respect of which the Stock Appreciation Right shall have been exercised, with the Committee having the right to determine the form of payment. When payment is to be made
in shares, the number of shares to be paid shall be calculated on the basis of the Fair Market Value of the shares on the date of exercise. When payment is to be made in cash, such amount shall be calculated on the basis of the average of the highest and
lowest quoted selling price, regular way, of the Stock on the New York Stock Exchange during the applicable period referred to in Rule 16b-3(e) under the Exchange Act.
(iii)	Stock Appreciation Rights shall be transferable only when and to the extent that the underlying Stock Option would be transferable under Section 5(e) of the Plan.
(iv)	Upon the exercise of a Stock Appreciation Right, the Stock Option or part thereof to which such Stock Appreciation Right is related shall be deemed to have been exercised for the purpose of the limitation set forth in Section 3
of the Plan on the number of shares of Stock to be issued under the Plan, but only to the extent of the number of shares issued under the Stock Appreciation Right at the time of exercised based on the value of the Stock Appreciation Right at such time.
Section 7.
Restricted Stock.
(a)
Administration.
Shares of Restricted Stock may be issued either alone, in addition to or in tandem with other awards granted under the Plan and/or cash awards made outside the Plan. The
Committee shall determine the eligible persons to whom, and the time or times at which, grants of Restricted Stock will be made, the number of shares to be awarded, the price (if any) to be paid by the recipient of Restricted Stock (subject to Section
7(b)), the time or times within which such awards may be subject to forfeiture, and all other terms and conditions of the awards.
The Committee may condition the grant of Restricted Stock upon the attainment of specified performance goals or such other factors as the Committee may determine, in its sole discretion.
The provisions of restricted Stock awards need not be the same with respect to each recipient.
(b)
Awards and Certificates
. The prospective recipient of a Restricted Stock award shall not have any rights with respect to such award, unless and until such recipient has executed an agreement evidencing the award and has
delivered a fully executed copy thereof to the Company, and has otherwise complied with the applicable terms and conditions of such award.
(i)	The purchase price for shares of Restricted Stock shall be equal to or less than their par value and may be zero.
(ii)	Awards of Restricted Stock must be accepted within a period of 60 days (or such shorter period as the Committee may specify at grant) after the award date, by executing a Restricted Stock Award Agreement and paying whatever
price (if any) is required under Section 7(b)(i).
(iii)	Each participant receiving a Restricted Stock award shall be issued a stock certificate in respect of such shares of Restricted Stock. Such certificate shall be registered in the name of such participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions applicable to such award.
(iv)	The Committee shall require that the stock certificates evidencing such shares be held in custody by the Company until the restrictions thereon shall have lapsed, and that, as a condition of any Restricted Stock award, the
participant shall have delivered a stock power, endorsed in blank, relating to the Stock covered by such award.
(c)
Restrictions and Conditions.
The shares of Restricted Stock awarded pursuant to this Section 7 shall be subject to the following restrictions and conditions:
(i)	Subject to the provisions of this Plan and the award agreement, during a period set by the Committee commencing with the date of such award (the "Restriction Period"), the participant shall not be permitted to sell, transfer,
pledge or assign shares of Restricted Stock awarded under the Plan. Within these limits, the Committee, in its sole discretion, may provide for the lapse of such restrictions in installments and may accelerate or waive such restrictions in whole or in
part, based on service, performance and/or such other factors or criteria as the Committee may determine, in its sole discretion.
(ii)	Except as provided in this paragraph (ii) and Section 7(c)(i), the participant shall have, with respect to the shares of Restricted Stock, all of the rights of a shareholder of the Company, including the right to vote the
shares, and the right to receive any cash dividends. The Committee, in its sole discretion, as determined at the time of award, may permit or require the payment of cash dividends to be deferred and, if the Committee so determines, reinvested, subject to
Section 12(e), in additional Restricted Stock to the extent shares are available under Section 3, or otherwise reinvested. Pursuant to Section 3 above, Stock dividends issued with respect to Restricted Stock shall be treated as additional shares of
Restricted Stock that are subject to the same restrictions and other terms and conditions that apply to the shares with respect to which such dividends are issued.
(iii)	Subject to the applicable provisions of the award agreement and this Agreement 7, upon termination of a participant's employment with the Company and any Subsidiary or Affiliate for any reason during the Restriction Period, all
shares still subject to restriction will vest, or be forfeited, in accordance with the terms and conditions established by the Committee at or after grant.
(iv)	If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock subject to such Restriction Period, certificates for an appropriate number of unrestricted shares shall be delivered to the
participant promptly.
(d) Minimum Value Provisions.
In order to better ensure that award payments actually reflect the performance of the Company and service of the participant, the Committee may provide, in its sole discretion, for a tandem
performance-based or other award designed to guarantee a minimum value, payable in cash or Stock to the recipient of a restricted stock award, subject to such performance, future service, deferral and other terms and conditions as may be specified by the
Committee.
Section 8.
Deferred Stock.
(a)
Administration.
Deferred Stock may be awarded either alone, in addition to or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan. The Committee
shall determine the eligible persons to whom and the time or times at which Deferred Stock shall be awarded, the number of shares of Deferred Stock to be awarded to any person, the duration of the period (the "Deferral Period") during which, and the
conditions under which, receipt of the Stock will be deferred, and the other terms and conditions of the award in addition to those set forth in Section 8(b).
The Committee may condition the grant of Deferred Stock upon the attainment of specified performance goals or such other factors or criteria as the Committee shall determine, in its sole discretion.
The provisions of Deferred Stock awards need not be the same with respect to each recipient.
(b)
Terms and Conditions.
The shares of Deferred Stock awarded pursuant to this Section 8 shall be subject to the following terms and conditions:
(i)	Subject to the provisions of this Plan and the award agreement referred to in Section 8(b)(vi) below, Deferred Stock awards may not be sold, assigned, transferred, pledged or otherwise encumbered during the Deferral Period. At
the Deferred Period (or the Elective Deferral Period referred to in Section 8(b)(v), where applicable), share certificates shall be delivered to the participant, or his legal representative, in a number equal to the shares covered by the Deferred Stock
award.
(ii)	Unless otherwise determined by the Committee at grant, amounts equal to any dividends declared during the Deferral Period with respect to the number of shares covered by a Deferred Stock award will be paid to the participant
currently, or deferred and deemed to be reinvested in additional Deferred Stock, or otherwise reinvested, all as determined at or after the time of the award by the Committee, in its sole discretion.
(iii)	Subject to the provisions of the award agreement and this Section 8, upon termination of a participant's employment with the Company and any Subsidiary or Affiliate for any reason during the Deferral Period for a given award,
the Deferred Stock in question will vest, or be forfeited, in accordance with the terms and conditions established by the Committee at or after grant.
(iv)	Based on service, performance and/or such other factors or criteria as the Committee may determine, the Committee may, at or after grant, accelerate the vesting of all or any part of any Deferred Stock award and/or waive the
deferral limitations for all or any part of such award.
(v)	A participant may elect to further defer receipt of an award (or an installment of an award) for a specified period or until a specified event (the "Elective Deferral Period"), subject in each case to the Committee's approval and
to such terms as are determined by the Committee, all in its sole discretion. Subject to any exceptions adopted by the Committee, such election generally must be made at least 12 months prior to completion of the Deferral Period for such Deferred Stock
award (or such installment).
(vi)	Each award shall be confirmed by, and subject to the terms of, a Deferred Stock agreement executed by the Company and the participant.
(c)
Minimum Value Provisions
. In order to better ensure that award payments actually reflect the performance of the Company and the service of the participant, the Committee may provide, in its sole discretion, for a tandem
performance-based or other award designed to guarantee a minimum value, payable in cash or Stock to the recipient of a deferred stock award, subject to such performance, future service, deferral and other terms and conditions as may be specified by the
Committee.
Section 9.
Other Stock-Based Awards
. (a)
Administration.
Other awards of Stock and other awards that are valued in whole or in part by reference to, or are otherwise based on, Stock ("Other Stock-Based Awards"), including,
without limitation, performance shares, convertible preferred stock, convertible debentures, exchangeable securities and Stock awards or options valued by reference to Book Value or subsidiary performance, may be granted either alone or in addition to or
in tandem with Stock Options, Stock Appreciation Rights, Restricted Stock, or Deferred Stock granted under the Plan and/or cash awards made outside of the Plan.
Subject to the provisions of the Plan, the Committee shall have authority to determine the persons to whom and the time or times at which such awards shall be made, the number of shares of Stock to be awarded pursuant to such awards,
and all other conditions of the awards. The Committee may also provide for the grant of Stock upon the completion of a specified performance period.
The provisions of other Stock-Based Awards need not be the same with respect to each recipient.
(b)
Terms and Conditions.
Other Stock-Based Awards made pursuant to this Section 9 shall be subject to the following terms and conditions:
(i)	Subject to the provisions of this Plan and the award agreement referred to in Section 9(b)(v) below, shares subject to awards made under this Section 9 may not be sold, assigned, transferred, pledged or otherwise encumbered prior
to the date on which the shares are issued, or, if later, the date on which any applicable restriction, performance or deferral period lapses.
(ii)	Subject to the provisions of this Plan and the award agreement and unless otherwise determined by the Committee at grant, the recipient of an award under this Section 9 shall be entitled to receive, currently or on a deferred
basis, interest or dividends or interest or dividend equivalents with respect to the number of shares covered by the award, as determined at the time of the award by the Committee, in its sole discretion, and the Committee may provide that such amounts
(if any) shall be deemed to have been reinvested in additional Stock or otherwise reinvested.
(iii)	Any award under this Section 9 and any Stock covered by any such award shall vest or be forfeited to the extent so provided in the award agreement, as determined by the Committee, in its sole discretion.
(iv)	In the event of the participant's Retirement, Disability or death, or in cases of special circumstances, the Committee may, in its sole discretion, waive in whole or in part any or all of the remaining limitations imposed
hereunder (if any) with respect to any or all of an award under this Section 9.
(v)	Each award under this section 9 shall be confirmed by, and subject to the terms of, an agreement or other instrument by the Company and by the participant.
(vi)	Stock (including securities convertible into Stock) issued on a bonus basis under this Section 9 may be issued for no cash consideration. Stock (including securities convertible into Stock) purchased pursuant to a purchase right
awarded under this Section 9 shall be priced at least 50% of the Fair Market Value of the Stock on the date of grant.
Section 10.
Amendments and Termination.
The Board may amend, alter, or discontinue the Plan, but no amendment, alteration, or discontinuation shall be made which would impair the rights of an optionee or participant under a Stock
Option, Stock Appreciation Right, Restricted or Deferred Stock award or Other Stock-Based Award theretofore granted, without the optionee's or participant's consent or which, without the approval of the Company's shareholders, would:
(a)	except as expressly provided in this Plan, increase the total number of shares reserved for the purpose of the Plan;
(b)	change the pricing terms of Section 5(a);
(c)	change the employees or class of employees eligible to participate in the Plan; or
(d)	extend the maximum term under Section 14 of the Plan.
The Committee may amend the terms of any Stock Option or other award theretofore granted, prospectively or retroactively, but, subject to Section 3 above, no such amendment shall impair the rights of any holder without the holder's
consent. The Committee also may substitute new Stock Options for previously granted Stock Options (on a one for one or other basis), including previously granted Stock Options having higher option exercise prices.
Subject to the above provisions, the Board shall have broad authority to amend the Plan to take into account changes in applicable securities and tax laws and accounting rules, as well as other developments.
Section 11.
Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for incentive and deferred compensation. With respect to any payments not yet made to a participant or optionee by the Company, nothing
contained herein shall give any such participant or optionee any rights that are greater than those of a general creditor of the Company. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the
obligations created under the Plan to deliver Stock or payments in lieu of or with respect to awards hereunder; provided, however, that, unless the Committee otherwise determines with the consent of the affected participant, the existence of such trusts
or other arrangements is consistent with the "unfunded" status of the Plan.
Section 12.
General Provisions.
(a) The Committee may require each person purchasing shares pursuant to a Stock Option or other award under the Plan to represent to and agree with the Company in writing that the optionee or
participant is acquiring the shares without a view to distribution thereof. The certificates for such shares may include any legend which the Committee deems appropriate to reflect any restrictions on transfer.
All certificates for shares of Stock or other securities delivered under the Plan shall be subject to such stock-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon which the Stock is then listed, and any applicable Federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(b)	Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases.
(c)	The adoption of the Plan shall not confer upon any employee of the Company or any Subsidiary or Affiliate any right to continued employment with the Company or a Subsidiary or Affiliate, as the case may be, nor shall it interfere
in any way with the right of the Company or a Subsidiary or Affiliate to terminate the employment of any of its employees at any time.
(d)	No later than the date as of which an amount first becomes includible in the gross income of the participant for Federal income tax purposes with respect to any award under the Plan, the participant shall pay to the Company, or
make arrangements satisfactory to the Committee regarding the payment of, any Federal, state, or local taxes of any kind required by law to be withheld with respect to such amount. Unless otherwise determined by the Committee, withholding obligations may
be settled with Stock, including Stock that is part of the award that gives rise to the withholding requirement. The obligations of the Company under the Plan shall be conditional on such payment or arrangements and the Company and its Subsidiaries or
Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the participant.
(e)	The actual or deemed reinvestment of dividends or dividend equivalents in additional Restricted Stock (or in Deferred Stock or other types of Plan awards) at the time of any dividend payment only shall be permissible if
sufficient shares of Stock are available under Section 3 for such reinvestment (taking into account then outstanding Stock Options and other Plan awards).
(f)	The Plan and all awards made and actions taken thereunder shall be governed by and construed in accordance with the laws of the State of Tennessee.
Section 13.
Effective Date of Plan.
The Plan shall be effective as of November 12, 1991, upon the approval of the Plan by a majority of the votes cast by the holders of the Company's Common Stock at the 1991 annual shareholders'
meeting.
Section 14.
Term of Plan.
No Stock Option, Stock Appreciation Right, Restricted Stock award, Deferred Stock award or Other Stock-Based Award shall be granted pursuant to the Plan on or after the tenth anniversary of the date of
shareholder approval, but awards granted prior to such tenth anniversary may extend beyond that date.
EXHIBIT 24.2
CONSENT OF PRICEWATERHOUSECOOPERS LLP
Accountants' Consent
We hereby consent to the incorporation by reference in this registration statement of Clayton Homes, Inc. on Form S-8 of our report dated August 5, 1998, relating tothe consolidated financial statements of Clayton Homes, Inc. as
of June 30, 1998 and 1997, and for the years ended June 30, 1998, 1997 and 1996, which report appears in the Annual Report on Form 10-K filed September 22, 1998.
PricewaterhouseCoopers LLP
Knoxville, Tennessee
July 20, 1999