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Published: 2008-03-26

1995 Stock Option Plan - HealthSouth Corp.



                             HEALTHSOUTH Corporation

                             1995 STOCK OPTION PLAN


         1.  Purpose of the Plan.  The  purpose of the 1995  Stock  Option  Plan
(hereinafter  called  the  'Plan')  of  HEALTHSOUTH   Corporation,   a  Delaware
corporation (hereinafter called the 'Corporation'),  is to provide incentive for
future  endeavor  and to  advance  the  interests  of the  Corporation  and  its
stockholders  by encouraging  ownership of the Common Stock,  par value $.01 per
share  (hereinafter  called  the  'Common  Stock'),  of the  Corporation  by its
Directors, executives and other key employees, upon whose judgment, interest and
continuing  special  efforts  the  Corporation  is  largely  dependent  for  the
successful  conduct of its operations,  and to enable the Corporation to compete
effectively  with other  enterprises  for the  services  of such new  Directors,
executives  and employees as may be needed for the continued  improvement of the
Corporation's  business,  through the grant of options to purchase shares of the
Common Stock.  It is intended that certain  Options issued under the Plan and so
designated  pursuant  to Section  6(c)  hereof by the  Committee  (as defined in
Section 5 hereof) shall qualify as 'incentive stock options' (hereinafter called
'ISOs')  under Section  422(b) of the Internal  Revenue Code of 1986, as amended
from time to time (hereinafter  called the 'Code'),  and, where applicable,  the
terms of the Plan shall be interpreted in accordance with such intention.  Other
Options may be issued  under the Plan and  designated  by the  Committee or such
Independent Stock Option Committee,  as the case may be, as non-qualified  stock
options  (hereinafter called 'NQSOs').  Any Option issued under the Plan and not
expressly designated as an ISO shall be conclusively deemed to be an NQSO.

         2. Participants.  Options may be granted under the Plan to Directors of
the  Corporation and to such executives and key employees of the Corporation and
its subsidiaries as shall be determined by the Committee  appointed by the Board
of Directors as set forth in Section 5 of the Plan; provided,  however,  that no
Option may be granted to any person if such grant  would cause the Plan to cease
to be an  'employee  benefit  plan'  as  defined  in Rule  405 of  Regulation  C
promulgated  under the Securities Act of 1933; and provided  further that no ISO
may be granted to any person  ineligible to be granted ISOs under Section 422(b)
of the Code.

         3. Term of the Plan.  The Plan  shall  become  effective  as of June 6,
1995,  subject to the  approval  by the  holders of a majority  of the shares of
issued  and  outstanding  Common  Stock of the  Corporation  at the 1995  Annual
Meeting of  Stockholders  of the  Corporation.  The Plan shall  terminate on the
earliest  of (a) June 5,  2005,  (b) such time as all  shares  of  Common  Stock
reserved for issuance under the Plan have been acquired  through the exercise of
Options  granted  under  the  Plan,  or (c) such  earlier  time as the  Board of
Directors of the Corporation  may determine.  Any Option  outstanding  under the
Plan at the time of its  termination  shall remain in effect in accordance  with
its terms and conditions and those of the Plan. No Option shall be granted under
the Plan after June 5, 2005.

         4. Stock Subject to the Plan.  (a) Subject to the provisions of Section
13, the  aggregate  number of shares of Common  Stock for which  Options  may be
granted  under the Plan shall not exceed  3,500,000  shares  plus such number of
shares as is added pursuant to Section 4(b), and the maximum number of shares of
Common  Stock for which any  individual  may be granted  Options  under the Plan
during any calendar year is 1,000,000. If, on or prior to the termination of the
Plan as  provided  in  Section  3, an Option  granted  under the Plan shall have
expired or terminated  for any reason without having been exercised in full, the
unpurchased shares covered thereby shall again become available for the grant of
Options under the Plan. Shares covered by Options surrendered in connection with
the





exercise of other Options pursuant to Section 9(e) shall be deemed, for purposes
of this  Section  4, to have been  exercised,  and such  shares  shall not again
become available for the grant of Options under the Plan.

         The shares to be  delivered  upon  exercise  of Options  under the Plan
shall be made  available,  at the  discretion of the Board of Directors,  either
from  authorized but previously  unissued shares as permitted by the Certificate
of  Incorporation  of  the  Corporation  or  from  shares   re-acquired  by  the
Corporation,  including shares of Common Stock purchased in the open market, and
shares held in the treasury of the Corporation.

                  (b) The number of shares of Common Stock for which Options may
be granted under the Plan shall automatically  increase on the first trading day
of each  calendar  year  during  the term of the Plan,  beginning  with the 1996
calendar  year,  by an  amount  equal  to 0.9% of the  shares  of  Common  Stock
outstanding on December 31 of the  immediately  preceding  year.  However,  such
additional  shares shall be available only for the grant of NQSOs under the Plan
and not for the grant of ISOs.

         5.  Administration  of the Plan. With respect to the  participation  of
executives and key employees of the Corporation and its subsidiaries who are not
also Directors of the  Corporation,  the Plan shall be administered by the Audit
and  Compensation  Committee  of the  Board  of  Directors  of  the  Corporation
(hereinafter  called the 'Committee').  The acts of a majority of the Committee,
at any  meeting  thereof  at which a quorum is  present,  or acts  reduced to or
approved in writing by a majority of the members of the Committee,  shall be the
valid acts of the Committee.  The Committee  shall  determine the executives and
key  employees  of the  Corporation  and its  subsidiaries  who shall be granted
Options and the number of shares of Common Stock to be subject to each Option.

         With  respect to the  participation  of  non-employee  Directors of the
Corporation,  each non-employee  Director shall receive,  as an annual grant, an
NQSO to purchase  25,000  shares of Common  Stock on the date of adoption of the
Plan and in each year  thereafter,  such  Option  to be  granted  at the  Annual
Meeting of the Board of  Directors.  The purchase  price of the shares of Common
Stock covered by each such NQSO granted to a non-employee Director shall be 100%
of the fair  market  value  (but in no event  less  than the par  value) of such
shares at the time the Option is granted,  determined in accordance with Section
7(c) hereof.

         The  interpretation and construction of any provision of the Plan or of
any Option  granted under it by the  Committee  shall be final,  conclusive  and
binding  upon all parties,  including  the  Corporation,  its  stockholders  and
Directors,  and  the  executives  and  employees  of  the  Corporation  and  its
subsidiaries.  No member of the Board of  Directors  or the  Committee  shall be
liable to the Corporation,  any stockholder, any optionholder or any employee of
the Corporation or its subsidiaries for any action or determination made in good
faith with respect to the Plan or any Option  granted under it. No member of the
Board of Directors may vote on any Option to be granted to him.

         The  expenses  of  administering   the  Plan  shall  be  borne  by  the
Corporation.

         6. Grant of Options.  (a) Options may be granted  under the Plan by the
Committee in  accordance  with the  provisions of Section 5 at any time prior to
the  termination  of the Plan.  In making  any  determination  as to  Directors,
executives  and key  employees  to whom  Options  shall be granted and as to the
number of shares to be covered by such Options,  the  Committee  shall take into
account the duties of the  respective  Directors,  executives and key employees,
their present and potential contribution

                                      - 2 -




to the success of the Corporation, and such other factors as the Committee shall
deem relevant in connection with the accomplishment of the purposes of the Plan.

         (b) Each Option granted under the Plan shall be granted pursuant to and
subject to the terms and  conditions  of a stock option  agreement to be entered
into between the  Corporation  and the  optionholder  at the time of such grant.
Each such stock option  agreement shall be in a form from  time-to-time  adopted
for use under the Plan by the Committee  (such form being  hereinafter  called a
'Stock Option Agreement').  Any such Stock Option Agreement shall incorporate by
reference  all of the terms and  provisions of the Plan as in effect at the time
of grant and may contain  such other terms and  provisions  as shall be approved
and adopted by the Committee.

         (c) At the time of the  grant  of each  Option  under  this  Plan,  the
Committee shall determine  whether such Option is to be designated as an ISO. If
an Option is to be designated as an ISO, then the  provisions of Sections  6(d),
7(b) and 8(b) shall apply to such Options.  The Stock Option Agreement  relating
to the grant of any option designated as an ISO shall reflect such designation.

         (d) Notwithstanding any contrary provision contained in this Agreement,
the aggregate fair market value  (determined as of the time each ISO is granted)
of the  shares of Common  Stock with  respect  to which  ISOs  issued to any one
person  hereunder  are  exercisable  for the first time during any calendar year
shall not exceed $100,000.

         7. Option Price.  (a) The purchase  price of the shares of Common Stock
covered by each Option granted under the Plan shall be at least 100% of the fair
market  value (but in no event  less than the par  value) of such  shares at the
time the Option is granted, or such higher purchase price as shall be determined
by the Committee.

         (b)  Notwithstanding  any contrary provision  contained in Section 7(a)
hereof,  no Option  granted to any person who, at the time of such grant,  owns,
taking into account the attribution  rules of Section 424(d) of the Code,  stock
possessing  more than 10% of the total  combined  voting power of all classes of
the  Corporation's  stock or of the stock of any of its corporate  subsidiaries,
may be designated as an ISO unless at the time of such grant the purchase  price
of the shares of Common  Stock  covered  by such  Option is at least 110% of the
fair market value (but in no event less than the par value) of such shares.

         (c) If the  Common  Stock  is not  listed  upon a  national  securities
exchange or  exchanges,  such fair market  value shall be as  determined  by the
Board of Directors of the Corporation (which  determination  shall be conclusive
and binding for all purposes) or, if applicable,  shall be deemed to be the last
reported  sale  price for the  Common  Stock as quoted by  brokers  and  dealers
trading in the  Common  Stock in the  over-the-counter  market (or if the Common
Stock  shall  be  quoted  by the  National  Association  of  Securities  Dealers
Automated  Quotation  system,  then such NASDAQ quote)  immediately prior to the
commencement of the meeting of the Committee at which the Option is granted.  If
the Common  Stock is listed upon a national  securities  exchange or  exchanges,
such fair  market  value shall be deemed to be the last  reported  sale price at
which the shares of Common  Stock were  traded on such  securities  exchange  or
exchanges  immediately prior to the commencement of the meeting of the Committee
at which the Option is  granted,  or if no sale of the Common  Stock was made on
any national  securities exchange on such date, then the closing price per share
of the  Common  Stock  on such  securities  exchange  or  exchanges  on the next
preceding day on which there was a sale of the Common Stock.


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         (d) The exercise price of any outstanding  Options shall not be reduced
during the term of such Options  except by reason of an  adjustment  pursuant to
Section 13 hereof,  nor shall the  Committee  or the Board of  Directors  cancel
outstanding  Options  and  reissue  new  Options  at a lower  exercise  price in
substitution for the canceled Options.

         8. Term of Options.  (a) The expiration date of an Option granted under
the Plan shall be as determined by the Committee at the time of grant,  provided
that each such Option  shall  expire not more than ten years after the date such
Option was granted.

         (b)  Notwithstanding  any contrary provision  contained in Section 8(a)
hereof,  no Option  granted to any person who, at the time of such grant,  owns,
taking into account the attribution  rules of Section 424(d) of the Code,  stock
possessing  more than 10% of the total  combined  voting power of all classes of
the  Corporation's  stock or of the stock of any of its corporate  subsidiaries,
may be  designated  as an ISO unless by its terms each such Option  shall expire
not more than five years after the date such Option was granted.

         9.  Exercise of Options.  (a) Each Option shall become  exercisable  in
whole or in part or in  installments  at such time or times as the Committee may
prescribe  at the time the Option is  granted  and  specify in the Stock  Option
Agreement. No Option shall be exercisable after the expiration of ten years from
the date on which it was granted.

         (b)  Notwithstanding  any contrary provision  contained herein,  unless
otherwise  expressly provided in the Stock Option Agreement,  any Option granted
hereunder  which is, by its terms,  exercisable  in  installments  shall  become
immediately  exercisable  in full upon the  occurrence of a Change in Control of
the  Corporation.  For purposes of this Section 9(b),  'Change in Control' shall
mean

                  (i) the  acquisition  (other  than  from the  Company)  by any
         person,  entity or 'group' (within the meaning of Sections  13(d)(3) or
         14(d)(2) of the Securities  Exchange Act of 1934,  but  excluding,  for
         this purpose,  the  Corporation  or its  subsidiaries,  or any employee
         benefit  plan  of  the  Company  or  its  subsidiaries  which  acquires
         beneficial ownership of voting securities of the Company) of beneficial
         ownership  (within  the  meaning  of Rule 13d-3  promulgated  under the
         Securities  Exchange  Act of  1934)  of  25%  or  more  of  either  the
         then-outstanding shares of Common Stock or the combined voting power of
         the  Company's  then-outstanding  voting  securities  entitled  to vote
         generally in the election of Directors; or

                  (ii) individuals who, as of June 6, 1995, constitute the Board
         of  Directors  of the  Corporation  (as of such  date,  the  'Incumbent
         Board')  cease for any reason to  constitute at least a majority of the
         Board of  Directors;  provided,  however,  that any  person  becoming a
         Director  subsequent to such date whose  election,  or  nomination  for
         election,  was  approved  by a  vote  of at  least  a  majority  of the
         Directors then constituting the Incumbent Board (other than an election
         or nomination of an individual whose initial assumption of office is in
         connection with an actual or threatened  election  contest  relating to
         the election of  Directors  of the  Company)  shall be, for purposes of
         this Section  9(b)(ii),  considered as though such person were a member
         of the Incumbent Board; or

                  (iii)  approval  by  the  stockholders  of  the  Company  of a
         reorganization,  merger,  consolidation or share exchange, in each case
         with respect to which persons who

                                      - 4 -




         were  the  stockholders  of  the  Company  immediately  prior  to  such
         reorganization,   merger,  consolidation  or  share  exchange  do  not,
         immediately thereafter,  own more than 75% of the combined voting power
         entitled  to  vote  generally  in  the  election  of  directors  of the
         reorganized,   merged,   consolidated  or  other   surviving   entity's
         then-outstanding voting securities,  or a liquidation or dissolution of
         the Corporation or the sale of all or  substantially  all of the assets
         of the Corporation.

         (c)  Options  may  be  exercised  by  giving   written  notice  to  the
Corporation  of  intention to  exercise,  specifying  the number of shares to be
purchased  pursuant to such exercise in accordance with the procedures set forth
in the Stock Option Agreement.  All shares purchased upon exercise of any Option
shall  be paid  for in full at the  time of  purchase  in  accordance  with  the
procedures  set forth in the Stock  Option  Agreement.  Except  as  provided  in
Sections  9(d) and 9(e) hereof,  such  payment  shall be made in cash or through
delivery of shares of Common Stock or a combination  of cash and Common Stock as
provided in the Stock Option Agreement.  Any shares so delivered shall be valued
at their fair market value  determined  as of the date of exercise of the Option
under the method set forth in Section 7(c) hereof.

         (d) Payment for shares  purchased  upon exercise of any such Option may
be made by delivery to the  Corporation of a properly  executed  exercise notice
together with  irrevocable  instructions to a broker to promptly  deliver to the
Corporation  an amount of sale or loan  proceeds  sufficient to pay the exercise
price.  Additionally,  the  Corporation  will  accept,  in  payment  for  shares
purchased  upon exercise of any such Option,  proceeds of a margin loan obtained
by the  exercising  optionholder  from a broker,  provided  that the  exercising
optionholder  has, at the same time as delivery to the Corporation of a properly
executed exercise notice,  delivered to the Corporation irrevocable instructions
to the  Corporation to deliver share  certificates  directly to such broker upon
payment for such shares.

         (e) With respect to Directors and officers of the  Corporation  who are
subject to reporting requirements under Section 16(a) of the Securities Exchange
Act of 1934,  payment for shares  purchased  upon exercise of any Option granted
hereunder may be made by surrender of outstanding Options issued under this Plan
or any other stock  option plan of the  Corporation  having a Spread (as defined
below) equal to the exercise  price of the Options  sought to be exercised.  For
purposes of this  Section  9(e),  the 'Spread'  with respect to any  unexercised
Option shall be equal to (i) the average  price per share of Common Stock on the
date of  exercise,  as  determined  by the  Corporation  from  any  commercially
available reporting service reflecting trading of the Common Stock on a national
securities exchange, on the National Association of Securities Dealers Automated
Quotation System,  or in the over the counter market,  as applicable,  less (ii)
the exercise  price of the surrender of the Option.  All Options so  surrendered
will be deemed to have been exercised by the optionholder.  Such surrender shall
be evidenced in a form satisfactory to the Secretary of the Corporation.

         10. Nontransferability of Options. Options granted under the Plan shall
be  assignable or  transferable  only by will or pursuant to the laws of descent
and distribution  and shall be exercisable  during the  optionholder's  lifetime
only by him.

         11. Stockholder  Rights of Optionholder.  No holder of any Option shall
have any rights to dividends or other  rights of a  stockholder  with respect to
shares  subject to an Option prior to the purchase of such shares upon  exercise
of the Option.


                                      - 5 -




         12.  Termination  of Option.  With respect to any Option which,  by its
terms, is not exercisable for one year from the date on which it is granted,  if
an optionholder's  employment by, or other relationship with, the Corporation or
any of its subsidiaries terminates within one year after the date an unexercised
Option containing such terms is granted under the Plan for any reason other than
death,  the Option shall terminate on the date of termination of such employment
or other relationship. With respect to all Options granted under the Plan, if an
optionholder's  employment by, or other  relationship  with, the  Corporation is
terminated by reason of his death, the Option shall terminate one year after the
date of  death,  unless  the  Option  otherwise  expires.  If an  optionholder's
employment by, or other  relationship  with, the Corporation  terminates for any
reason  other than as set forth  above in this  Section  12,  the  Option  shall
terminate three months after the date of termination of such employment or other
relationship  unless  the  Option  earlier  expires,  provided  that  (a) if the
optionholder dies within such three-month period, the Option shall terminate one
year  after the date of his death  unless the Option  earlier  expires;  (b) the
Board of Directors may, at any time prior to any  termination of such employment
or other  relationship  under the  circumstances  covered  by this  Section  12,
determine  in its  discretion  that the Option  shall  terminate  on the date of
termination of such employment or other  relationship with the Corporation;  and
(c) the exercise of any Option after  termination  of such  employment  or other
relationship  with the  Corporation  shall be  subject  to  satisfaction  of the
conditions  precedent that the optionholder  refrain from engaging,  directly or
indirectly,  in any  activity  which is  competitive  with any  activity  of the
Corporation or any subsidiary thereof and from otherwise acting, either prior to
or after  termination of such  employment or other  relationship,  in any manner
inimical or in any way  contrary to the best  interests of the  Corporation  and
that the  optionholder  furnish to the Corporation such information with respect
to the  satisfaction  of the  foregoing  condition  precedent  as the  Board  of
Directors  shall  reasonably  request.  For  purposes  of  this  Section  12,  a
'relationship  with the Corporation'  shall be limited to any relationship  that
does not cause the Plan to cease to be an 'employee  benefit plan' as defined in
Rule 405 of Regulation C under the Securities Act of 1933. The mere ownership of
stock in the  Corporation  shall not be deemed  to be a  'relationship  with the
Corporation'.

         Nothing in the Plan or in the Stock Option  Agreement shall confer upon
any  optionholder  the right to continue in the employ of the Corporation or any
of its subsidiaries or in any other relationship thereto or interfere in any way
with  the  right  of the  Corporation  to  terminate  such  employment  or other
relationship at any time.

         A holder of an Option under the Plan may make written  designation of a
beneficiary  on  forms  prescribed  by  and  filed  with  the  Secretary  of the
Corporation.  Such beneficiary, or if no such designation of any beneficiary has
been made, the legal  representative  of such  optionholder or such other person
entitled  thereto  as  determined  by a court  of  competent  jurisdiction,  may
exercise,  in accordance  with and subject to the provisions of this Section 12,
any unterminated  and unexpired Option granted to such  optionholder to the same
extent that the  optionholder  himself could have  exercised such Option were he
alive or able; provided, however, that no Option granted under the Plan shall be
exercisable  for  more  shares  than  the  optionholder   could  have  purchased
thereunder  on the date his  employment  by,  or other  relationship  with,  the
Corporation and its subsidiaries was terminated.

         13. Adjustment of and Changes in Capitalization.  In the event that the
outstanding shares of Common Stock shall be changed in number or class by reason
of split-ups, combinations, mergers, consolidations or recapitalizations,  or by
reason of stock dividends, the number or class of shares which thereafter may be
purchased  through  exercise  of  Options  granted  under the Plan,  both in the
aggregate  and as to any  individual,  and the number  and class of shares  then
subject to Options  theretofore  granted  and the price per share  payable  upon
exercise of such Option shall be adjusted so as to reflect such

                                      - 6 -




change,  all as determined by the Board of Directors of the Corporation.  In the
event there shall be any other  change in the number or kind of the  outstanding
shares of Common  Stock,  or of any stock or other  securities  into  which such
Common Stock shall have been changed, or for which it shall have been exchanged,
then if the Board of Directors  shall,  in its sole  discretion,  determine that
such change equitably requires an adjustment in any Option  theretofore  granted
or which  may be  granted  under  the  Plan,  such  adjustment  shall be made in
accordance with such determination.

         Notice  of any  adjustment  shall be given by the  Corporation  to each
holder of an  Option  which  shall  have been so  adjusted  and such  adjustment
(whether or not such  notice is given)  shall be  effective  and binding for all
purposes of the Plan.

         Fractional  shares resulting from any adjustment in Options pursuant to
this  Section 13 may be settled in cash or  otherwise  as the Board of Directors
may determine.

         14.  Securities Acts  Requirements.  No Option granted  pursuant to the
Plan shall be exercisable in whole or in part, and the Corporation  shall not be
obligated to sell any shares of Common Stock subject to any such Option, if such
exercise and sale would, in the opinion of counsel for the Corporation,  violate
the  Securities  Act of 1933 or other Federal or state  statutes  having similar
requirements,  as they may be in  effect  at that  time.  Each  Option  shall be
subject to the further requirement that, at any time that the Board of Directors
or the  Committee,  as the case may be,  shall  determine,  in their  respective
discretion,  that the listing,  registration or  qualification  of the shares of
Common Stock subject to such Option under any securities  exchange  requirements
or under any  applicable  law, or the  consent or  approval of any  governmental
regulatory  body,  is necessary or desirable as a condition of, or in connection
with,  the  granting of such Option or the issuance of shares  thereunder,  such
Option  may  not  be  exercised  in  whole  or  in  part  unless  such  listing,
registration,  qualification,  consent or approval  shall have been  effected or
obtained free of any  conditions not acceptable to the Board of Directors or the
Committee, as the case may be.

         As a condition to the issuance of any shares upon exercise of an Option
under the Plan, the Board of Directors or the Committee, as the case may be, may
require  the  optionholder  to  furnish  a  written  representation  that  he is
acquiring the shares for investment and not with a view to  distribution  of the
shares to the public and a written agreement  restricting the transferability of
the shares  solely to the  Corporation,  and may affix a  restrictive  legend or
legends  on  the  face  of  the  certificate   representing  such  shares.  Such
representation, agreement and/or legend shall be required only in cases where in
the opinion of the Board of Directors or the Committee,  as the case may be, and
counsel for the Corporation, it is necessary to enable the Corporation to comply
with the  provisions  of the  Securities  Act of 1933 or other  Federal or state
statutes  having  similar  requirements,  and any  stockholder  who  gives  such
representation and agreement shall be released from it and the legend removed at
such time as the  shares to which  they  applied  are  registered  or  qualified
pursuant to the Securities Act of 1933 or other Federal or state statutes having
similar  requirements,  or at such other time as, in the opinion of the Board of
Directors or the Committee, as the case may be, and counsel for the Corporation,
the  representation and agreement and legend cease to be necessary to enable the
Corporation to comply with the provisions of the Securities Act of 1933 or other
Federal or state statutes having similar requirements.

         15.  Amendment  of the Plan.  The Plan may, at any time or from time to
time, be terminated,  modified or amended by the stockholders of the Corporation
by the affirmative  vote of the holders of a majority of the outstanding  shares
of the  Corporation's  Common Stock  entitled to vote. The Board of Directors of
the Corporation may, insofar as permitted by law, from time to time with respect
to any

                                      - 7 -



shares  of  Common  Stock  at the  time  not  subject  to  Options,  suspend  or
discontinue the Plan or revise or amend it in any respect whatsoever;  provided,
however, that, without approval of the stockholders of the Corporation,  no such
revision or amendment  shall  increase the number of shares subject to the Plan,
decrease  the price at which the  Options  may be  granted,  permit  exercise of
Options  unless  full  payment  is made at the time of  exercise  (except  as so
provided in Section 9 hereof),  extend the period  during  which  Options may be
exercised,  or change the  provisions  relating  to  adjustment  to be made upon
changes in capitalization.

         16. Changes in Law.  Subject to the provisions of Section 15, the Board
of Directors shall have the power to amend the Plan and any outstanding  Options
granted thereunder in such respects as the Board of Directors shall, in its sole
discretion,  deem  advisable  in  order to  incorporate  in the Plan or any such
Option any new provision or change  designed to comply with or take advantage of
requirements  or  provisions  of the  Code or any  other  statute,  or  Rules or
Regulations  of the  Internal  Revenue  Service  or any other  Federal  or state
governmental agency enacted or promulgated after the adoption of the Plan.

         17.  Legal  Matters.  Every  right of  action  by or on  behalf  of the
Corporation or by any stockholder  against any past, present or future member of
the Board of Directors, officer or employee of the Corporation arising out of or
in connection with this Plan shall,  irrespective of the place where such action
may be brought and  irrespective of the place of residence of any such Director,
officer or employee,  cease and be barred by the  expiration of three years from
whichever  is the later of (a) the date of the act or  omission  in  respect  of
which such right of action  arises,  or (b) the first date upon which  there has
been  made  generally   available  to  stockholders  an  annual  report  of  the
Corporation  and a  proxy  statement  for the  Annual  Meeting  of  Stockholders
following  the issuance of such annual  report,  which  annual  report and proxy
statement  alone or together set forth,  for the related  period,  the aggregate
number of shares for which Options were granted; and any and all right of action
by any  employee  or  executive  of the  Corporation  (past,  present or future)
against the  Corporation  arising out of or in connection  with this Plan shall,
irrespective of the place where such action may be brought,  cease and be barred
by the expiration of three years from the date of the act or omission in respect
of which such right of action arises.

         This Plan and all determinations made and actions taken pursuant hereto
shall be governed by the law of Delaware,  applied  without giving effect to any
conflicts-of-law principles, and construed accordingly.








































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