FIRST UNITED BANCSHARES INC /AR/, S-8, 1999-07-01

FIRST UNITED BANCSHARES INC /AR/
S-8, 1999-07-01
STATE COMMERCIAL BANKS

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<PAGE> 1

As filed with the Securities and Exchange Commission on a July 1, 1999
Registration No.
------------

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

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT
Under The Securities Act of 1933
----------------------------

FIRST UNITED BANCSHARES, INC.
(Exact name of Registrant as specified in its charter)

Arkansas 71-0538646
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

MAIN AND WASHINGTON STREETS
EL DORADO, ARKANSAS 71730
(870) 863-3181
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

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

FIRST UNITED BANCSHARES, INC. 1999
EMPLOYEES' LONG-TERM INCENTIVE PLAN
(Full Title of the Plan)

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

<TABLE>
<S> <C>
John G. Copeland Copies of Communications to:
Senior Vice President and Stan D. Smith, Esquire
Chief Financial Officer Mitchell, Williams, Selig, Gates
Main and Washington Streets & Woodyard, P.L.L.C.
El Dorado, Arkansas 71730 425 West Capitol Ave., Suite 1800
(8870) 863-3181 Little Rock, Arkansas 72201
(Name, address, including zip code, and telephone (501) 688-8800
number, including area code, of agent for service)
</TABLE>

CALCULATION OF REGISTRATION FEE

================================================================================

<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Per Aggregate Offering Amount of
to be Registered Registered(1) Share(2) Price(2) Registration Fee
- ------------------- -------------- ------------------ ------------------ ----------------

<S> <C> <C> <C> <C>
Common Stock 1,011,771 Shares $ 16.8125 $ 17,010,400 $ 4,729.00
(par value $1.00)
</TABLE>
================================================================================

(1) Pursuant to Rule 416(c) under the Securities Act of 1933 (the
"Securities Act"), this registration statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the
employee benefit plan described herein, plus such indeterminate number
of additional shares as may be authorized in the event of an adjustment
as a result of an increase in the number of issued shares of Common
Stock resulting from the payment of stock dividends or stock splits or
certain other capital adjustments.

(2) This Registration Statement covers 1,011,771 shares of Registrant's
Common Stock, consisting of 4% of Registrant's 25,294,296 shares of
Common Stock as of the date of filing, issued and outstanding calculated
pursuant to paragraphs (c) and (h) of Rule 457 of Regulation C based
upon the average of the high and low price for the shares of Common
Stock on June 25, 1999, which is a date within five business days prior
to the date of filing this Registration Statement.

<PAGE> 2

PART I

INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

ITEM 1. PLAN INFORMATION*

ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*

* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the registration statement in accordance
with Rule 428 under the Securities Act of 1933 and the Note to Part 1
of Form S-8.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by First United Bancshares, Inc.
("Registrant" or "Company") with the Securities and Exchange Commission are
incorporated by reference in this registration statement:

(1) Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (the "Form 10-K") filed pursuant to Section 13(a) of the
Securities Exchange Act of 1934 (the "Exchange Act"); and

(2) Quarterly Report on Form 10-Q for the quarter ended March 31,
1999.

(3) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act, since the end of the fiscal year covered by the Form 10-K referred
to above.

(4) The description of Registrant's Common Stock contained in
Registrant's registration statement filed under the Exchange Act with respect to
the Common Stock, and any amendment or report filed for the purpose of updating
such description.

In addition, all documents subsequently filed by Registrant pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing
of a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this registration statement and to be
a part hereof from the date of filing such documents.

ITEM 4. DESCRIPTION OF SECURITIES

The class of securities being registered on this Form S-8 are
currently registered under Section 12 of the Securities Exchange Act of 1934, as
amended, and, therefore, this item is not applicable.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL

Not applicable.

2
<PAGE> 3

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Arkansas Business Corporation Act of 1987 (the "Act") codified at
Ark. Code Ann. Section 4-27-101 et. seq. and more specifically at Ark. Code Ann.
Section 4-27-850 permits an Arkansas corporation to indemnify directors,
officers, employees and agents under some circumstances, and mandates
indemnification under certain limited circumstances. The Act permits a
corporation to indemnify a director, officer, employee, or agent for expenses
(including attorneys' fees), judgements, fines and amounts paid in settlement
actually and reasonably incurred if such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation. Indemnification against expenses incurred by a director,
officer, employee or agent in connection with his defense of a proceeding
against such person for actions in such capacity is mandatory to the extent that
such person has been successful on the merits. If a director, officer, employee,
or agent is determined to be liable to the corporation, indemnification for
expenses is not allowable, subject to limited exceptions where a court deems the
award of expenses appropriate. The Act grants express power to an Arkansas
corporation to purchase liability insurance for its directors, officers,
employees and agents, regardless of whether any such person is otherwise
eligible for indemnification by the corporation. Advancement of expenses is
permitted, but a person receiving such advances must repay those expenses if it
is ultimately determined that he is not entitled to indemnifications.

The Amended and Restated Articles of Incorporation and the Bylaws of
First United provides that the directors, officers, employees and agents of
First United shall be indemnified as set forth below.

AMENDED AND RESTATED ARTICLES OF INCORPORATION

ARTICLE TWELFTH. The corporation may indemnify any person who was, or
is, a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding to the fullest extent permitted by the
Arkansas Business Corporation Act as it now exists or may hereafter be amended.

BY-LAWS

Section 6 of ARTICLE VII. INDEMNIFICATION. Every person who was or is
a party or is threatened to be made a party to or is involved in any action,
suit, proceeding, whether civil, criminal, administrative, or investigative, by
reason of the fact that he is or was a director or officer of the Corporation or
is or was serving at the request of the Corporation as a director or officer of
another corporation, or as its representative in a partnership, joint venture,
trust, or other enterprise, shall be indemnified and held harmless to the
fullest extent legally permissible under and pursuant to any procedure specified
in the Arkansas Business Corporation Act of the State of Arkansas, as amended
and as the same may be amended hereafter, against all expenses, liabilities, and
losses (including attorney's fees, judgments, fines and amounts paid or to be
paid in settlement) reasonably incurred or suffered by him in connection
therewith. Such right of indemnification shall be a contract right that may be
enforced in any lawful manner by such person. Such right of indemnification
shall not be exclusive of any other right which such director or officer may
have or hereafter acquire and, without limiting the generality of such
statement, he shall be entitled to his rights of indemnification under any
agreement, vote of stockholders, provisions of law, or otherwise, as well as his
rights under this paragraph.

The board of directors may cause the Corporation to purchase and
maintain insurance on behalf of any person who is or was a director or officer
of the Corporation, or is or was serving at the request of the Corporation as a
director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out of
such status, whether or not the Corporation would have power to indemnify such
person.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED

Not applicable.

3
<PAGE> 4

ITEM 8. EXHIBITS

<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
----------- ----------------------

<S> <C>
5 Opinion of Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C.

23(a) Consent of Arthur Andersen LLP, independent public accountants

23(b) Consent of Axley & Rode LLP, certified public accountants

23(c) Consent of Frazer, Minchew, Robinson, Gardner and Langston, CPAs, certified
public accountants

23(d) Consent of Moore Stephens Frost, independent public accountants

23(e) Consent of Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C. (included as
part of Exhibit 5)

24 Power of Attorney (included as part of Signature Page)

99 First United Bancshares, Inc. 1999 Employees' Long-Term Incentive Plan
</TABLE>

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:

(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933 ("Securities Act");

(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement;

(iii) 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;

Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3 (Section 239.13
of this chapter) or Form S-8 (Section 239.16b of this chapter), and
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
registration statement.

(2) That, for the purpose of determining any liability under the
Securities 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.

4
<PAGE> 5

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

(c) Insofar as indemnification for liabilities arising under the
Securities 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
Securities 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 of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

5
<PAGE> 6

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 El Dorado, State of Arkansas, on June 30, 1999.

FIRST UNITED BANCSHARES, INC.

/s/ James V. Kelley
-------------------------------------------
James V. Kelley
Chairman, President and Chief Executive
Officer

/s/ John G. Copeland
-------------------------------------------
John G. Copeland
Senior Vice President and Chief Financial
Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS: That the undersigned, a Director or
Officer, or both, of First United Bancshares, Inc. (the "Company"), acting
pursuant to authorization of the Board of Directors of the Company, hereby
appoints James V. Kelley and John G. Copeland, attorney-in-fact and agents for
me and in my name and on my behalf, individually and as a Director or Officer,
or both, of the Company, to sign a Registration Statement on Form S-8 and any
amendments (including post effective amendments) and supplements thereto, of the
Company to be filed with the Securities and Exchange Commission pursuant to any
applicable Rule under the Securities Act of 1933, as amended (the "Act") with
respect to the continuous issuance of the Company's Common Stock pursuant to the
Company's Employees' Long-Term Incentive Plan, and generally to do and perform
all things necessary to be done in connection with the foregoing as fully in all
respects as I could do personally.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

IN WITNESS WHEREOF, I have hereunto set my hand this 30th day of
June, 1999.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----

<S> <C> <C>
/s/ JAMES V. KELLEY Chairman of the Board, President, June 30, 1999
- --------------------------- Chief Executive Officer
James V. Kelley

/s/ JOHN G. COPELAND Senior Vice President and Chief June 30, 1999
- --------------------------- Financial Officer
John G. Copeland

Director June __, 1999
- ---------------------------
E. Larry Burrow

/s/ CLAIBORNE P. DEMING Director June 30, 1999
- ---------------------------
Claiborne P. Deming
</TABLE>

6
<PAGE> 7

<TABLE>
<CAPTION>
<S> <C> <C>
/s/ AL GRAVES, JR. Director June 30, 1999
- ---------------------------
Al Graves, Jr.

/s/ TOMMY HILLMAN Director June 30, 1999
- ---------------------------
Tommy Hillman

/s/ ROY E. LEDBETTER Director June 30, 1999
- ---------------------------
Roy E. Ledbetter

/s/ MICHAEL F. MAHONY Director June 30, 1999
- ---------------------------
Michael F. Mahony

/s/ RICHARD H. MASON Director June 30, 1999
- ---------------------------
Richard H. Mason

/s/ JACK W. MCNUTT Director June 30, 1999
- ---------------------------
Jack W. McNutt

/s/ GEORGE MIDDLEBROOK, III Director June 30, 1999
- ---------------------------
George Middlebrook, III

Director June __, 1999
- ---------------------------
R. Madison Murphy

/s/ ROBERT C. NOLAN Director June 30, 1999
- ---------------------------
Robert C. Nolan

/s/ CAL PARTEE, JR. Director June 30, 1999
- ---------------------------
Cal Partee, Jr.

/s/ CAROLYN TENNYSON Director June 30, 1999
- ---------------------------
Carolyn Tennyson

/s/ JOHN D. TRIMBLE, JR. Director June 30, 1999
- ---------------------------
John D. Trimble, Jr.
</TABLE>

7
<PAGE> 8
INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------

<S> <C>
5 Opinion of Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C.

23(a) Consent of Arthur Andersen LLP, independent public accountants

23(b) Consent of Axley & Rode LLP, certified public accountants

23(c) Consent of Frazer, Minchew, Robinson, Gardner and Langston, CPAs, certified
public accountants

23(d) Consent of Moore Stephens Frost, independent public accountants

23(e) Consent of Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C. (included as
part of Exhibit 5)

24 Power of Attorney (included as part of Signature Page)

99 First United Bancshares, Inc. 1999 Employees' Long-Term Incentive Plan
</TABLE>

<PAGE> 1
EXHIBIT 5

June 30, 1999

First United Bancshares, Inc.
Main and Washington Streets
El Dorado, Arkansas 71730

RE: First United Bancshares, Inc. Form S-8 Registration Statement -
First United Bancshares, Inc. 1999 Employees' Long-Term Incentive Plan

Ladies and Gentlemen:

We have acted as counsel for First United Bancshares, Inc. (the
"Company") in connection with the Registration on Form S-8 under the Securities
Act of 1933, as amended, of 1,011,771 shares of the Company's Common Stock,
$1.00 par value, to be issued pursuant to the Company's 1999 Employees'
Long-Term Incentive Plan.

It is our opinion that the Common Stock has been duly and validly
authorized by the Company and, when issued, and when the certificates
representing the shares are duly executed and delivered to holders, will be
validly and legally issued, fully paid and non-assessable shares of the
Company's Common Stock.

We hereby consent to the use of this opinion as an Exhibit to the
referenced Registration Statement.

Very truly yours,

MITCHELL, WILLIAMS, SELIG,
GATES & WOODYARD, P.L.L.C.

/s/ Mitchell, Williams, Selig, Gates
& Woodyard, P.L.L.C.

<PAGE> 1
EXHIBIT 23(a)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 filed for the First United
Bancshares, Inc. 1999 Employees' Long-Term Incentive Plan of our report dated
JANUARY 19, 1999 included in the First United Bancshares, Inc.'s Form 10-K for
the year ended December 31, 1998 and to all references to our Firm included in
this registration statement.

/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP

Jackson, Mississippi
June 25, 1999

<PAGE> 1
EXHIBIT 23(b)

CONSENT OF INDEPENDENT AUDITORS

As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 filed for the First United
Bancshares, Inc. 1999 Employees' Long-Term Incentive Plan of our report dated
FEBRUARY 20, 1997 included in the First United Bancshares, Inc.'s Form 10-K for
the year ended December 31, 1998 and to all references to our Firm included in
this registration statement.

/s/ Axley & Rode LLP
----------------------------------
CERTIFIED PUBLIC ACCOUNTANTS

Lufkin, Texas
June 28, 1999

<PAGE> 1

EXHIBIT 23(c)

CONSENT OF FRAZER, MINCHEW, ROBINSON, GARDNER AND LANGSTON, CPAS

As certified public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 filed for the First United
Bancshares, Inc. 1999 Employees' Long-Term Incentive Plan of our report dated
FEBRUARY 14, 1997 included in the First United Bancshares, Inc.'s Form 10-K for
the year ended December 31, 1998, and to all references to our Firm included in
this registration statement.

/s/ Frazer, Minchew, Robinson, Gardner & Langston
FRAZER, MINCHEW, ROBINSON, GARDNER & LANGSTON, CPAS

Monroe, Louisiana
June 28, 1999

<PAGE> 1

EXHIBIT 23(d)

CONSENT OF MOORE STEPHENS FROST

As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 filed for the First United
Bancshares, Inc. 1999 Employees' Long-Term Incentive Plan of our report dated
JANUARY 16, 1998 included in the First United Bancshares, Inc.'s Form 10-K for
the year ended December 31, 1998, and to all references to our Firm included in
this registration statement.

/s/ Moore Stephens Frost

Moore Stephens Frost

Little Rock, Arkansas
June 25, 1999

<PAGE> 1
EXHIBIT 99

FIRST UNITED BANCSHARES, INC.

1999 EMPLOYEES' LONG-TERM INCENTIVE PLAN

<PAGE> 2

FIRST UNITED BANCSHARES, INC.

1999 EMPLOYEES' LONG-TERM INCENTIVE PLAN

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE

<S> <C>
SECTION 1 - PURPOSE ............................................. 1

SECTION 2 - DEFINITIONS ......................................... 1

SECTION 3 - ADMINISTRATION ...................................... 2
Composition ............................................... 2
Power and Authority ....................................... 2
Hold Harmless ............................................. 3

SECTION 4 - ELIGIBILITY ......................................... 3

SECTION 5 - SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS ....... 3
Number of Shares .......................................... 3
Type of Common Stock ...................................... 3
Cancellation .............................................. 3

SECTION 6 - STOCK OPTIONS ....................................... 3
Special Definition ........................................ 3
General Provisions ........................................ 3
Incentive Stock Options ................................... 4
Performance Goals ......................................... 4
Vesting ................................................... 5
Dividend Equivalents ...................................... 5
Manner of Exercise ........................................ 5
Rights as Stockholder ..................................... 5

SECTION 7 - RESTRICTED STOCK .................................... 6
Special Definition ........................................ 6
General Provisions ........................................ 6
Performance Goals ......................................... 6
Vesting ................................................... 6
Enforcement of Restrictions ............................... 6
Lapse of Restrictions ..................................... 6
Shareholder Rights ........................................ 7

SECTION 8 - PERFORMANCE SHARES .................................. 7
Special Definition ........................................ 7
General Provisions ........................................ 7
Satisfaction Performance Objectives ....................... 7
Not a Stockholder ......................................... 7
No Adjustments ............................................ 8
Dividend Equivalent Payments .............................. 8

SECTION 9 - PHANTOM SHARES ...................................... 8
Special Definition ........................................ 8
Grants .................................................... 8
Phantom Share Account ..................................... 8
Distribution from Phantom Share Account ................... 8
Not a Stockholder ......................................... 8
</TABLE>

i
<PAGE> 3

<TABLE>
<S> <C>
SECTION 10 - STOCK APPRECIATION RIGHTS .......................... 9
Special Definition ........................................ 9
General Provisions ........................................ 9
Manner of Exercise ........................................ 9
Payment ................................................... 9

SECTION 11 - GENERAL ............................................ 10
Adoption and Effective Date ............................... 10
Duration .................................................. 10
Transferability of Incentives ............................. 10
Effect of Termination of Employment ....................... 10
Additional Legal Requirements ............................. 11
Adjustment ................................................ 11
Written Agreements ........................................ 12
Withholding ............................................... 12
No Continued Employment ................................... 12
Amendment and Termination of the Plan ..................... 12
Immediate Acceleration of Incentives ...................... 12
Governing Law ............................................. 12
Other Benefits ............................................ 12
Deferral .................................................. 12
</TABLE>

ii
<PAGE> 4

FIRST UNITED BANCSHARES, INC.

1999 EMPLOYEES' LONG-TERM INCENTIVE PLAN

First United Bancshares, Inc., a corporation organized and existing
under the laws of the State of Arkansas (the "CORPORATION"), hereby establishes
the 1999 Employees' Long-Term Incentive Plan (the "PLAN"). This Plan is intended
to replace the First United Bancshares, Inc. 1994 Equity Participation Plan,
except that outstanding grants and awards made under such predecessor plan shall
remain in effect until exercised or expired in accordance with their terms.

SECTION 1
PURPOSE

This Plan is established to optimize the profitability and growth of
the Corporation through the use of compensation incentives that link the
financial interests of executives and other key employees with the interests of
the Corporation and its shareholders. This Plan is further intended to provide
flexibility to the Corporation in connection with its compensation practices and
policies and to attract, retain and motivate officers, executives and other key
employees through the grant of nonqualified stock options, incentive options,
restricted stock, phantom and performance shares, and stock appreciation rights,
all as more fully set forth below.

SECTION 2
DEFINITIONS

2.1 "ACT" means the Securities Exchange Act of 1934, as amended,
including any rule, regulation or interpretation promulgated thereunder.

2.2 "BOARD OF DIRECTORS" or "BOARD" means the Board of Directors of
the Corporation.

2.3 "CHANGE IN CONTROL" means and shall be deemed to occur if:

a. Any "person," including any "group," determined in accordance
with Section 13(d)(3) of the Act, other than a qualified employee
benefit plan maintained by the Corporation or a Subsidiary, is or
becomes the beneficial owner, directly or indirectly, of Common
Stock of the Corporation or a Subsidiary representing more than
50% of the combined voting power of the Corporation's or
Subsidiary's then outstanding securities, other than as a result
of an issuance of securities initiated by the Corporation or open
market purchases approved by the Board, as long as a majority of
the Board approving the purchases are directors at the time the
purchases are made.

b. As a result of, or in connection with, any tender or exchange
offer, merger or other business combination, sale of assets or
contested election or any combination of the foregoing, a change
in the members of the Board of Directors of the Corporation
occurs which results in the exclusion of a majority of the
"continuing board." For this purpose, the term "continuing board"
means the members of the Board of Directors determined as of the
effective date of this Plan and subsequent members of such Board
who are elected by or on the recommendation of a majority of such
"continuing board."

The Board of Directors shall, in good faith, determine whether a Change in
Control hereunder has occurred.

2.4 "CODE" means the Internal Revenue Code of 1986, as amended.

2.5 "COMMON STOCK" means $1.00 par value voting common stock issued
by the Corporation.

1
<PAGE> 5

2.6 "EMPLOYEE" means a common law employee of the Corporation and/or
its Subsidiaries, determined in accordance with the Corporation's standard
personnel policies and practices.

2.7 "FAIR MARKET VALUE" means the mean of the closing bid and asked
prices of Common Stock as quoted on the National Association of Securities
Dealers Automated Quotation System (NASDAQ) national market or other exchange on
which Common Stock is regularly traded on the date of the grant, the exercise of
an Incentive or the lapse of restrictions applicable to an Incentive granted
hereunder, as the case may be. If no Common Stock is traded on such date, then
Fair Market Value shall be the mean of the closing bid and asked prices on the
date Common Stock last traded on such system or exchange. If Common Stock is not
regularly traded, then Fair Market Value shall be determined by the Board of
Directors in good faith in accordance with generally accepted methods of
valuation.

2.8 "INCENTIVE" means a right to purchase or receive shares of Common
Stock in accordance with the terms of this Plan. An Incentive may be granted in
the form of stock options, restricted stock, stock appreciation rights, phantom
or performance shares, or any combination thereof.

2.9 "PARTICIPANT" means an Employee who is granted or awarded an
Incentive under this Plan.

2.10 "PLAN" means this 1999 Employees' Long-Term Incentive Plan, as
the same may be amended from time to time.

2.11 "SUBSIDIARY" means any corporation of which the Corporation
owns, directly or indirectly, more than 50% of the total combined voting power
of all classes of stock.

2.12 OTHER DEFINITIONS. The term "non-employee director" is defined
in Section 3.1 hereof; the terms "stock option" and "option" are defined in
Section 6.1 hereof; the term "nonqualified stock option" is defined in Section
6.1 hereof; the term "incentive stock option" is defined in Section 6.1 hereof;
the term "restricted stock" is defined in Section 7.1 hereof; the term
"performance share" is defined in Section 8.1 hereof; the term "phantom share"
is defined in Section 9.1 hereof; the term "stock appreciation right" or "SAR"
is defined in Section 10.1 hereof; the term "Cause" is defined in Section 11.4
hereof; and the term "Effective Date" is defined in Section 11.1 hereof.

SECTION 3
ADMINISTRATION

3.1 COMPOSITION. This Plan shall be administered by the Board of
Directors; provided, however, that the Board, in its discretion, may delegate
the administrative power and authority granted to it hereunder to a committee
appointed by the Board, which committee shall consist solely of "non-employee
directors" and be comprised of not less than two members. For this purpose, the
term "NON-EMPLOYEE DIRECTOR" shall have the meaning ascribed to it in Rule 16b-3
promulgated under the Act or any successor thereto. In the event of any such
delegation, all references to the Board of Directors hereunder shall be deemed
to include such committee.

3.2 POWER AND AUTHORITY. The Board of Directors shall have the
discretionary power and authority to award Incentives under the Plan, including
determination of the terms and conditions thereof, to construe and interpret the
provisions of the Plan and any form or agreement related thereto, to establish
and adopt rules, regulations, and procedures relating to the Plan and to
interpret, apply and construe such rules, regulations and procedures, and to
make any other determination which it believes necessary or advisable for the
proper administration of the Plan.

Decisions, interpretations and actions of the Board of Directors
concerning matters related to the Plan shall be final and conclusive on the
Corporation, its Subsidiaries and stockholders and Participants and
beneficiaries hereunder. Determinations hereunder need not be uniform, and the
Board may make determinations selectively among the Participants who receive or
are eligible to receive Incentives, whether or not such Participants are
similarly situated.

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3.3 HOLD HARMLESS. The Corporation shall indemnify and hold harmless
the members of the Board of Directors and the individuals, including Employees
of the Corporation or a Subsidiary, performing services on behalf of the Board
of Directors hereunder, against any liability, cost or expense arising as a
result of any claim asserted by any person or entity under the laws of any state
or of the United States with respect to any action or failure to act of such
individuals taken in connection with the Plan, except claims or liabilities
arising on account of the willful misconduct or bad faith of any such
individual.

SECTION 4
ELIGIBILITY

Employees of the Corporation and its Subsidiaries shall be eligible to
receive Incentives under this Plan, when designated by the Board of Directors.
Employees may be designated for participation hereunder individually or by
groups or categories, in the discretion of the Board of Directors.

SECTION 5
SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS

5.1 NUMBER OF SHARES. Subject to adjustment as provided in Section
11.6 hereof, the number of shares of Common Stock which may be issued under the
Plan shall not exceed four percent (4%) of the total number of shares of Common
Stock which may be issued and outstanding, from time to time. Except as provided
in this Section 5, the number of shares available for grant, transfer or
issuance under the Plan shall be reduced by the number of shares actually
granted, transferred or issued hereunder.

5.2 TYPE OF COMMON STOCK. Common Stock issued in connection with the
grant or award of an Incentive hereunder may be authorized and unissued shares
or issued shares held as treasury shares or shares acquired on the open market
or through private purchase.

5.3 CANCELLATION. Shares of Common Stock covered by Incentives which
are not earned or which are canceled, forfeited, terminated, expired or
otherwise lapsed for any reason and options or stock appreciation rights which
expire unexercised, are canceled or forfeited or which are exchanged for other
forms of options or Incentives hereunder, shall again be available for grant as
an Incentive under the Plan, to the extent permitted under Rule 16b-3
promulgated under the Act or any successor thereto.

SECTION 6
STOCK OPTIONS

6.1 SPECIAL DEFINITION. The term "STOCK OPTION" or "OPTION" means a
right to purchase shares of Common Stock pursuant to an Incentive granted
hereunder. Stock options granted hereunder may be nonqualified stock options or
incentive stock options. A "NONQUALIFIED STOCK OPTION" is an option which is
designated as nonqualified and is not intended to meet the requirements of
Section 422 of the Code; an "INCENTIVE STOCK OPTION" is an option which is
designated as such and which is intended to comply with the requirements imposed
under Section 422 of the Code. All stock options shall comply with the
provisions of Section 6.2 hereof, and incentive stock options shall comply with
the provisions of Section 6.3 hereof.

6.2 GENERAL PROVISIONS. All stock options granted under this Plan
shall be granted by the Board of Directors, in its discretion, subject to the
following general terms and conditions:

a. The number of shares of Common Stock subject to an option shall
be determined by the Board of Directors at the time of grant.

b. Except as provided in Section 6.3 hereof, the exercise price per
share shall be determined by the Board of Directors, in its
discretion.

c. Subject to earlier termination as provided in Section 11.4
hereof, the term of each stock option shall be determined by the
Board of Directors.

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d. The exercise of an option granted hereunder may be subject to
such performance goals and objectives as the Board of Directors
deems appropriate, in accordance with the provisions of Section
6.4 hereof.

e. Each stock option shall be exercisable at such time or times
during its term as may be determined by the Board of Directors,
in accordance with the provisions of Section 6.5 hereof;
provided, however, that no option shall be exercisable later than
10 years after its date of grant.

Stock options granted hereunder shall be evidenced by a written agreement
between the Board of Directors and each affected Participant. Any such agreement
shall identify the grant of the option as an incentive stock option or as a
nonqualified stock option.

6.3 INCENTIVE STOCK OPTIONS. In addition to the provisions of Section
6.2 hereof, each incentive stock option granted hereunder shall be subject to
the following:

a. The aggregate Fair Market Value (determined as of the time the
option is granted) of the shares of Common Stock with respect to
which incentive stock options are exercisable for the first time
by any Participant during any calendar year (under all plans of
the Corporation), shall not exceed $100,000. If and to the extent
Fair Market Value exceeds $100,000, the affected portion of any
incentive stock option shall be treated as a nonstatutory stock
option.

b. Incentive stock options must be granted within 10 years from the
date on which this Plan is adopted.

c. Unless sooner exercised, all incentive stock options shall expire
no later than 10 years after the date of grant.

d. Incentive stock options granted to a Participant hereunder shall
be exercisable during his or her lifetime only by such
Participant.

e. No incentive stock option shall be granted to any Participant who
at the time such option is granted would own (within the meaning
of Section 422 of the Code) stock possessing more than 10% of the
total combined voting power of all classes of stock of the
Corporation, determined in accordance with Section 422(b)(6) of
the Code, unless the exercise price of such option is not less
than 110% of the Fair Market Value of Common Stock determined at
the time of grant.

f. No incentive stock option shall be granted to any Participant who
is not an employee (within the meaning of Section 3401 of the
Code) of the Corporation or its Subsidiaries during the period
described under Section 422(a)(2) of the Code.

g. Notwithstanding any provision of this Plan to the contrary, the
exercise price of an option granted hereunder shall not be less
than Fair Market Value at the date of grant.

Any certificate or agreement evidencing an incentive stock option granted under
the Plan shall contain such other provisions as the Board of Directors shall
deem advisable, but shall in all events be consistent with and contain all
provisions required in order to qualify the options as incentive stock options
under Section 422 of the Code.

6.4 PERFORMANCE GOALS. The Board of Directors, in its discretion, may
impose performance goals as a condition of exercise with respect to an option
granted hereunder. Such performance goals may relate to the Corporation, a
Subsidiary, a division, department or unit of the Corporation or a Subsidiary or
any Participant or Employee or group of Participants or Employees hereunder.
Such performance goals shall be achieved during the period designated by the
Board of Directors.

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If the performance goals designated by the Board of Directors are
achieved, options granted to each affected Participant shall be exercisable at
such times as may be designated by the Board. In the event such objectives are
not satisfied due to circumstances that, in the determination of the Board of
Directors, are outside the control of the Corporation, a Subsidiary, or the
Participant, the Board, in its sole discretion, may provide for the exercise, in
full, of the option, a lesser exercise or the cancellation of the option.

6.5 VESTING. Unless otherwise provided in any agreement evidencing an
option granted hereunder, subject to any additional limitations imposed under
Section 6.4 hereof, and subject to earlier termination as provided in Section
11.4 hereof, any such option shall vest and be exercisable over a four-year
period, as follows:

a. 25% of the aggregate number of shares of Common Stock subject to
such option shall vest and be exercisable on the first
anniversary date of the grant of such option;

b. An additional 25% of the aggregate number of shares of Common
Stock subject to such option shall vest and be exercisable on the
second anniversary date of the grant of such option;

c. An additional 25% of the aggregate number of shares of Common
Stock subject to such option shall vest and be exercisable on the
third anniversary date of the grant of such option; and

d. An additional 25% of the aggregate number of shares of Common
Stock subject to such option shall vest and be exercisable on the
fourth anniversary date of the grant of such option.

To the extent not exercised, such installments shall cumulate and be exercisable
during the term of the affected option.

6.6 DIVIDEND EQUIVALENTS. The Board of Directors, in its discretion,
may grant dividend equivalents in connection with an option granted hereunder.
Dividend equivalents may be granted in cash or in the form of Common Stock and
shall be subject to such additional terms and conditions as the Board of
Directors, in its sole discretion, deems appropriate.

6.7 MANNER OF EXERCISE. A stock option may be exercised, in whole or
in part, by providing written notice to the Board of Directors, specifying the
number of shares of Common Stock to be purchased and accompanied by the full
purchase price for such shares.

The option price shall be payable to the Corporation in the form of
cash (including cash equivalents) or, if permitted under the terms and
conditions applicable to a specific option grant, by delivery of previously
acquired shares of Common Stock held by the Participant, or in such other manner
as may be authorized, from time to time, by the Board of Directors. Common Stock
tendered to the Corporation in payment of the option price shall be valued at
its Fair Market Value as of the date of exercise.

A Participant or group of Participants may exercise stock options and
contemporaneously sell the shares of Common Stock acquired thereby pursuant to a
brokerage or similar arrangement, provided that the proceeds thereof are applied
to the payment of the purchase price of the shares. Any such transaction shall
be with the consent of the Board of Directors.

As soon as practicable after the receipt of written notification or
exercise and payment of the option price in full, the Board of Directors shall
cause the Corporation to deliver to the Participant, registered in the
Participant's name, certificates representing shares of Common Stock in the
appropriate amount.

6.8 RIGHTS AS STOCKHOLDER. Prior to the issuance of shares of Common
Stock upon the exercise of a stock option, a Participant shall have no rights as
a stockholder with respect to the shares subject to such option.

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SECTION 7
RESTRICTED STOCK

7.1 SPECIAL DEFINITION. The term "RESTRICTED STOCK" means shares of
Common Stock which are sold or transferred by the Corporation to a Participant
at a price which may be below Fair Market Value, or for no payment, but subject
to restrictions on sale or other transfer by the Participant.

7.2 GENERAL PROVISIONS. The Board of Directors may grant shares of
restricted stock, in its discretion, subject to the following terms and
conditions:

a. The number of shares to be transferred or sold by the Corporation
to a Participant as restricted stock shall be determined by the
Board of Directors.

b. The Board of Directors shall determine the price, if any, at
which shares of restricted stock hall be sold, which may vary
from time to time and which may be below the Fair Market Value of
such shares as of the date of sale.

c. All shares of restricted stock transferred or sold to a
Participant hereunder shall be subject to such terms, conditions
and restrictions for such period or periods as the Board of
Directors, in its discretion, may determine, subject to the
provisions of Section 7.3 and 7.4 hereof (including, without
limitation, restrictions on transfer, forfeiture provisions, and
restrictions based upon the achievement of specified performance
goals and objectives), and subject to earlier forfeiture as
described in Section 11.4 hereof.

Each grant of restricted stock hereunder shall be evidenced by a written
agreement between the Board of Directors and each affected Participant.

7.3 PERFORMANCE GOALS. The Board of Directors, in its discretion,
may impose performance goals as a condition to the grant of restricted stock
hereunder. Such performance goals may relate to the Corporation, a Subsidiary, a
division, department or unit of the Corporation or a Subsidiary or any
Participant or Employee or group of Participants or Employees hereunder. Such
performance goals shall be achieved during the period designated by the Board of
Directors.

If the performance goals designated by the Board of Directors are
achieved, restricted stock granted hereunder shall be transferable by the
affected Participant in the manner designated by the Board. In the event such
objectives are not satisfied due to circumstances that, in the determination of
the Board of Directors, are outside the control of the Corporation, a
Subsidiary, or the Participant, the Board, in its sole discretion, may provide
for the transferability of a lesser number of shares of restricted stock or the
forfeiture of the restricted stock, in its entirety.

7.4 VESTING. Unless otherwise provided in any agreement evidencing
the grant of restricted stock hereunder, subject to any additional limitations
imposed in accordance with Section 7.3 hereof, and subject to early termination
as provided in Section 11.4 hereof, shares of restricted stock granted hereunder
shall vest and become transferable upon the fifth anniversary of the date of
grant hereunder.

7.5 ENFORCEMENT OF RESTRICTIONS. In order to enforce any restrictions
imposed by the Board of Directors pursuant to Sections 7.3 or 7.4 hereof, a
Participant receiving a grant of restricted stock hereunder shall enter into an
agreement with the Corporation setting forth the conditions of the grant. Each
certificate issued with respect to restricted shares shall bear such legends as
the Board of Directors, in its sole discretion, shall deem necessary or
appropriate. The Board, in its discretion, may additionally require that shares
of restricted stock registered in the name of the Participant be deposited,
together with a stock power endorsed in blank, with the Corporation.

7.6 LAPSE OF RESTRICTIONS. At the end of any period during which the
shares of restricted stock are subject to forfeiture or restriction on transfer,
such restrictions shall lapse and a certificate representing the

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number of shares of Common Stock with respect to which the restrictions have
lapsed shall be delivered to the Participant free of restriction, except as may
be imposed by applicable law or as provided herein.

7.7 SHAREHOLDER RIGHTS. Subject to any restrictions or limitations
imposed by the Board of Directors, each Participant receiving restricted stock
hereunder shall have the full voting rights of a stockholder with respect to
such shares during any period in which the shares are subject to forfeiture or
restriction on transfer. During any period of restriction hereunder, dividends
paid in cash or property with respect to the underlying shares of restricted
stock shall be paid to the Participant currently, accrued by the Corporation as
a contingent obligation or converted to additional shares of stock, in the
discretion of the Board of Directors.

SECTION 8
PERFORMANCE SHARES

8.1 SPECIAL DEFINITION. The term "PERFORMANCE SHARE" means the right
to receive or purchase (at a price which may be below Fair Market Value) Common
Stock upon the completion of certain performance objectives.

8.2 GENERAL PROVISIONS. The Board of Directors may grant performance
shares, in its discretion, subject to the following terms and conditions:

a. The number of shares granted to a Participant shall be determined
by the Board of Directors.

b. Each performance share shall be subject to performance objectives
established by the Board of Directors. Performance objectives may
relate to the Corporation, a Subsidiary, a division, department
or unit of the Corporation or a Subsidiary or any Participant or
group of Participants. Such performance objectives shall be
achieved during the period designated by the Board of Directors.

c. All performance shares shall be subject to such additional
restrictions for such period or periods as the Board of
Directors, in its discretion, may determine, and shall be subject
to early termination as provided in Section 11.4 hereof.

d. The Board of Directors, in its discretion, may establish a
purchase price for the acquisition of shares of Common Stock upon
the completion of the performance objectives, if any, which price
may be below Fair Market Value.

Each grant of performance shares shall be evidenced by a written agreement
between the Board of Directors and each affected Participant.

8.3 SATISFACTION PERFORMANCE OBJECTIVES. If the performance
objectives designated by the Board of Directors are achieved, each affected
Participant shall be paid in the manner designated by the Board of Directors.
Payment shall be made in the form of (a) the number of shares of Common Stock
equal to the number of performance shares initially granted to that Participant,
(b) the right to purchase Common Stock at a price designated by the Board of
Directors, which price may be below Fair Market Value, (c) a cash payment of the
Fair Market Value of Common Stock in an amount equal to the number of
performance shares granted to the Participant, or (d) a combination thereof.

If such objectives are not satisfied due to circumstances that, in the
determination of the Board of Directors, are outside the control of the
Corporation or the Participant, the Board of Directors, in its discretion, may
provide for payment in full of the Incentive, lesser payment or cancellation.

8.4 NOT A STOCKHOLDER. The award of performance shares shall not
entitle a Participant to exercise the rights of a stockholder of the Corporation
with respect to such shares, until the transfer of shares of Common Stock with
respect to such award.

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8.5 NO ADJUSTMENTS. No adjustment shall be made in performance shares
awarded to account for cash dividends paid or other rights issued to the holders
of Common Stock prior to the end of any period with respect to which performance
objectives are applicable.

8.6 DIVIDEND EQUIVALENT PAYMENTS. The Board of Directors, in its
discretion, may award to a Participant granted performance shares hereunder
dividend equivalent payments or similar rights. If so granted, an adjustment
shall be made in the number of performance shares.

SECTION 9
PHANTOM SHARES

9.1 SPECIAL DEFINITION. The term "PHANTOM SHARE" means a bookkeeping
entry to the credit of a Participant which represents a share of Common Stock.

9.2 GRANTS. Phantom shares shall be granted in the discretion of the
Board of Directors, subject to the following terms and conditions.

a. The number of phantom shares granted to a Participant shall be
determined by the Board of Directors.

b. The price for such shares, if any, shall be determined by the
Board of Directors and may be less than the fair market value of
Common Stock at the time of grant.

c. Phantom shares shall be subject to such restrictions for such
time or times as the Board of Directors shall determine,
including the early termination provisions described in Section
11.4 hereof.

Grants of phantom shares shall be evidenced by a written agreement between the
Board of Directors and each affected Participant.

9.3 PHANTOM SHARE ACCOUNT. Phantom shares granted to a Participant
shall be credited to a "phantom share account" established and maintained for
such Participant on the books and records of the Corporation or a Subsidiary
thereof, as the case may be. Such account shall be a bookkeeping entry only and
shall not require the Corporation or any Subsidiary to segregate or otherwise
earmark assets. No shares of Common Stock shall be issued or issuable at the
time a phantom share is credited to a Participant's phantom share account.

An amount equal to dividends payable with respect to Common Stock
represented by the credit of phantom shares to a Participant's phantom share
account shall be credited to such account. Any stock dividend, stock split or
other recapitalization shall be reflected in the credits made to a Participant's
phantom share account.

9.4 DISTRIBUTION FROM PHANTOM SHARE ACCOUNT. All phantom shares
granted to a Participant shall be distributable in accordance with the terms and
conditions imposed by the Board of Directors. When any such share is or becomes
distributable, the affected Participant shall be entitled to receive a
distribution from the Corporation in such form (which may include shares of
Common Stock, cash or a combination thereof) as the Board of Directors shall
determine.

9.5 NOT A STOCKHOLDER The credit of phantom shares to a Participant
shall not entitle such Participant to exercise the rights of a stockholder of
the Corporation, until the issuance of shares of Common Stock with respect to
such credit.

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SECTION 10
STOCK APPRECIATION RIGHTS

10.1 SPECIAL DEFINITION. The term "STOCK APPRECIATION RIGHT" or "SAR"
means a right to receive, without payment, shares of Common Stock, cash or a
combination thereof, determined in accordance with the provisions of this
Section 10. Stock appreciation rights granted hereunder may relate to an option
granted under the Plan (whether an outstanding option or an option granted
contemporaneous with the SAR) or stock appreciation rights may be granted
separately, without regard to any other Incentive.

10.2 GENERAL PROVISIONS. All stock appreciation rights shall be
granted by the Board of Directors, in its discretion, subject to the following
general terms and conditions:

a. Each SAR granted hereunder shall relate to the number of shares
of Common Stock determined by the Board of Directors. Unless
otherwise provided by the Board, if a SAR is granted in tandem
with an option, the number of shares of Common Stock to which the
SAR relates shall be reduced in the same proportion that the
option related to the SAR is exercised or the option shall be
reduced in the same proportion that the SAR is exercised, as the
case may be.

b. Subject to earlier termination as provided in Section 11.4
hereof, the term of each SAR shall be determined by the Board of
Directors.

c. Each SAR granted hereunder shall be exercisable at such time or
times during its term as may be determined by the Board of
Directors; provided, however, that no SAR shall be exercisable
later than 10 years after the date of grant. Unless otherwise
provided by the Board of Directors, each SAR granted in tandem
with an option shall be exercisable at such times, to the extent
and upon such terms and conditions as the stock option to which
it relates is exercisable.

Stock appreciation rights granted hereunder shall be evidenced by a written
agreement between the Board of Directors and each affected Participant.

10.3 MANNER OF EXERCISE. A SAR may be exercised, in whole or in part,
by giving written notice to the Corporation, specifying the number of SARs that
the holder thereof intends to exercise. The date that the Corporation receives
such written notice shall be referred to herein as the "exercise date." The
Corporation shall, promptly after the exercise date, deliver to the exercising
Participant certificates for shares of Common Stock or cash or a combination
thereof in an amount determined in accordance with Section 10.4 hereof;
provided, however, that any payment hereunder may be delayed for any period
necessary to comply with the requirements of the Act.

10.4 PAYMENT. Subject to the right of the Board of Directors to
deliver cash in lieu of shares of Common Stock or for fractional shares, the
number of shares of Common Stock that shall be issuable upon the exercise of an
SAR shall be determined by dividing:

a. The number of shares of Common Stock as to which the SAR is
exercised, multiplied by the amount of the appreciation in such
shares; by

b. The Fair Market Value of a share of Common Stock on the exercise
date.

For this purpose, "appreciation" shall be the amount by which the Fair Market
Value of the shares of Common Stock subject to the SAR on the exercise date
exceeds (a) in the case of a SAR related to a stock option, the option price of
the shares of Common Stock subject to the option, or (b) in the case of a SAR
granted alone, without reference to a related stock option, an amount equal to
the Fair Market Value of a share of Common Stock on the date of grant.

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SECTION 11
GENERAL

11.1 ADOPTION AND EFFECTIVE DATE. This Plan was adopted by the Board
of Directors on March 15, 1999 (its "EFFECTIVE DATE"), subject to its approval
by the affirmative vote of the holders of a majority of the Common Stock of the
Corporation present or represented at the immediately succeeding annual meeting
of its shareholders. Unless approved within one year after the date of the
Plan's adoption by the Board of Directors of the Corporation, the Plan shall not
be effective for any purpose. Prior to the approval of the Plan by the
shareholders of the Corporation, the Board of Directors may award Incentives
hereunder, but if such approval is not received in the specified period, such
awards shall be void and of no effect.

11.2 DURATION. The Plan shall commence on its Effective Date and
shall remain in effect, subject to the right of the Board of Directors to amend
or terminate the Plan pursuant to Section 11.10 hereof, until all Incentives
granted under the Plan have been satisfied by the issuance of shares of Common
Stock or terminated and all restrictions imposed on shares of Common Stock in
connection with their issuance under the Plan have lapsed. No Incentive shall be
granted under the Plan after the 10th anniversary of the date on which the Plan
is approved by the Corporation's stockholders.

11.3 TRANSFERABILITY OF INCENTIVES. Except as expressly provided in
this Section 11.3, no Incentive granted hereunder may be transferred, pledged,
assigned, hypothecated, alienated or otherwise encumbered or sold by the holder
thereof whether by operation of law or otherwise and whether voluntarily or
involuntarily (except in the event of the holder's death by will or the laws of
descent and distribution) and neither the Board of Directors nor the Corporation
shall be required to recognize any attempted assignment of such rights by any
Participant. During a Participant's lifetime, an Incentive may be exercised only
by the Participant or by the Participant's guardian or legal representative.

Notwithstanding the foregoing, the Board of Directors, in its sole
discretion, may provide that any nonqualified option, restricted stock,
performance share or unit or SAR awarded hereunder may be transferred by a
Participant to members of such Participant's immediate family, any trust for the
benefit of such family members, and/or partnerships whose partners are such
family members, but such transferees may not transfer such Incentives to third
parties. For purposes of this Section 11.3, the term "immediate family" shall
have the meaning ascribed to such term in Rule 16a-1(e) promulgated under the
Act.

Each transferee shall be subject to the terms and conditions
applicable to the Incentive prior to such transfer and, prior to any transfer
hereunder, each such transferee and the related Participant shall enter into a
written agreement with the Board of Directors acknowledging such terms and
conditions, including, but not limited to, the conditions with regard to the
liability for payment of any and all taxes, as well as any other restriction
determined to be reasonably necessary by the Board of Directors. To the extent
the Board of Directors determines that any transfer hereunder would result in
the loss of the exemption provided under Rule 16b-3 of the Act or a similar
provision, such transfer shall be deemed invalid.

11.4 EFFECT OF TERMINATION OF EMPLOYMENT. In the event that a
Participant ceases to be an Employee of the Corporation or a Subsidiary on
account of death, disability, retirement or a voluntary or involuntary
termination, other than for Cause (as defined below), an Incentive granted
hereunder shall be exercised or expire at such times as may be expressly
determined by the Board of Directors; provided, however, that any extension of
the exercise term by the Board of Directors hereunder shall not exceed the
original term of the Incentive. In the absence of any such express
determination, the following rules shall apply:

a. If any such termination occurs on account of retirement on or
after the date on which a Participant attains age 65 or on
account of retirement prior to such date with the consent of the
Corporation, all restrictions on all shares of restricted stock
shall immediately lapse, all outstanding options shall be
immediately exercisable, and all other performance objectives or
other restrictions on Incentives granted under the Plan shall be
deemed to be satisfied or lapsed. All such Incentives shall be
and remain exercisable until the earlier of 24 months from the
date of such retirement or the expiration of the original term of
the Incentive. For purposes

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of this subsection a, the Board of Directors shall determine
whether a termination constitutes a retirement hereunder.

b. In the event any such termination is on account of disability (as
determined in the discretion of the Board of Directors), the
provisions of Section 11.4a shall apply, but such Incentives
shall be and remain exercisable during the 12-month period
following the date of such termination or the original term of
the Incentive, if shorter.

c. In the event of a voluntary or involuntary termination, other
than for Cause (as defined below), the affected Participant shall
be entitled to exercise the vested and nonforfeitable portion of
any Incentive granted hereunder during the 120-day period
following such termination or the original term of any such
Incentive, if shorter.

d. If a Participant hereunder dies while employed by the Corporation
or a Subsidiary, the executors or administrators of such
Participant's estate shall be entitled to exercise the vested
portion of any Incentive granted hereunder during the 12-month
period following such Participant's death or the original term of
the Incentive, if shorter.

If a Participant's employment with the Corporation or a Subsidiary is
terminated for "Cause," all rights of such Participant under any Incentive shall
expire, be terminated or forfeited upon receipt by such Participant of written
notice of such termination. For this purpose, the term "CAUSE" shall mean (a)
the willful and continued failure to a Participant hereunder to perform his or
her duties, as established by the Board of Directors of the Corporation or a
Subsidiary, (b) a material breach by a Participant of his or her fiduciary
duties of loyalty and care to the Corporation (or a Subsidiary), (c) a
Participant's conviction of a felony, or (d) the willful, flagrant, deliberate
and repeated infraction of material published policies and regulations of the
Corporation (or a Subsidiary) of which a Participant has actual knowledge. The
Board of Directors shall determine whether Cause exists hereunder, in good
faith. If the Board determines that Cause has occurred, the Board of Directors
shall provide the affected Participant with written notice of its decision,
including a description of the circumstances constituting such Cause. The
affected Participant shall be provided with a 30-day period (measured from the
date of such notice) within which to cure such Cause. If such Cause is timely
cured (determined in good faith by the Board of Directors), Incentives awarded
to the affected Participant shall be subject to the expiration provisions of
Section 11.4c hereof, unless otherwise specified in the grant or award
evidencing such Incentives.

The Board of Directors may provide with respect to any Incentive
granted hereunder that if a Participant ceases to be an Employee of the
Corporation or a Subsidiary for any reason and then "competes" with the business
or operations of the Corporation or a Subsidiary, such Participant shall forfeit
any stock options not yet exercised, any restricted stock with respect to which
the restrictions have not yet lapsed, and any credits to such Participant's
phantom share account. The Board of Directors shall determine, in accordance
with applicable law, whether a Participant's activity constitutes competition
for purposes of this Section 11.4

11.5 ADDITIONAL LEGAL REQUIREMENTS. The obligation of the Corporation
or any of its Subsidiaries to deliver Common Stock to any Participant hereunder
shall be subject to all applicable laws, regulations, rules and approvals deemed
necessary or appropriate by the Corporation. Certificates for shares of Common
Stock issued pursuant to this Plan may be legended as the Board of Directors
shall deem appropriate.

11.6 ADJUSTMENT. In the event of any merger, consolidation or
reorganization of the Corporation with any other corporation or corporations,
there shall be substituted for each of the shares of Common Stock then subject
to the Plan the number and kind of shares of stock or other securities to which
the holders of the shares of Common Stock will be entitled pursuant to the
transaction.

In the event of any recapitalization, stock dividend, stock split,
combination of shares or other change in the number of shares of Common Stock
then outstanding for which the Corporation does not receive consideration, the
number of shares of Common Stock then subject to the Plan shall be adjusted in
proportion to the change in outstanding shares of Common Stock. In the event of
any such substitution or adjustment, the

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purchase price of any option, the performance objectives applicable to any
Incentive, and the shares of Common Stock issuable pursuant to any Incentive
shall be adjusted to the extent necessary to prevent the dilution or enlargement
of any right granted hereunder, determined in the discretion of the Board of
Directors.

11.7 WRITTEN AGREEMENTS. The terms of each Incentive shall be stated
in a plan or agreement approved by the Board of Directors. Neither the Board of
Directors nor the Corporation shall be required to grant any Incentive hereunder
to any Participant, unless such Participant executes such agreements or provides
such representations as the Board of Directors deems appropriate.

11.8 WITHHOLDING. The Corporation shall have the right to withhold
from any payment made under the Plan or to collect as a condition of payment,
any taxes required by law to be withheld.

If permitted under the terms and conditions of any specific Incentive
granted hereunder, a Participant required to pay to the Corporation an amount
required to be withheld under applicable income tax laws in connection with a
distribution of Common Stock may satisfy this obligation, in whole or in part,
by electing to have the Corporation withhold from the distribution shares of
Common Stock having a Fair Market Value equal to the amount required to be
withheld. The value of the shares to be withheld shall be based on the Fair
Market Value on the date that the amount of tax to be withheld shall be
determined. Subject to the specific terms and conditions of any Incentive
granted hereunder, the Board of Directors may disapprove of any such election,
may suspend or terminate the right to make elections or may provide with respect
to any Incentive that the right to make elections shall not apply. Once
delivered to the Board of Directors, an election shall be irrevocable. Any such
election shall comply with such additional restrictions as may be imposed under
Rule 16b-3 promulgated under the Act.

11.9 NO CONTINUED EMPLOYMENT. No Participant under the Plan shall
have any right to continue in the employ of the Corporation or a Subsidiary for
any period of time or to any right to continue his or her present or any other
rate of compensation on account of participation in the Plan.

11.10 AMENDMENT AND TERMINATION OF THE PLAN. The Board of Directors
may amend or discontinue the Plan at any time, in its sole discretion; provided,
however, that no such amendment or discontinuance shall materially change or
impair, without the consent of each affected Participant, the terms and
conditions of an Incentive previously granted hereunder.

11.11 IMMEDIATE ACCELERATION OF INCENTIVES. Notwithstanding any
provision in the Plan or in any Incentive to the contrary and subject to any
limitation imposed under the Act (a) the restrictions on all shares of
restricted stock awarded under the Plan shall immediately lapse, (b) all
outstanding options shall become exercisable immediately, and (c) all
performance objectives or other restrictions on Incentives granted under the
Plan shall be deemed to be satisfied or lapsed and payment made immediately,
upon the occurrence of a Change in Control. Incentives subject to the provisions
of this Section 11.11 shall be and remain exercisable for the 24-month period
following any such Change in Control.

11.12 GOVERNING LAW. The Plan and any Incentive granted under the Plan
shall be governed by the laws of the State of Arkansas.

11.13 OTHER BENEFITS. Incentives granted to a Participant under the
terms of the Plan shall not impair or otherwise reduce such Participant's
compensation, life insurance or other benefits provided by the Corporation or
its Subsidiaries; provided, however, that the value of Incentives shall not be
treated as compensation for purposes of computing the value or amount of any
such benefit.

11.14 DEFERRAL. If permitted by the Board of Directors, a Participant
may elect to enter into a written agreement with the Corporation providing for
the deferral of any form of payment hereunder (whether in the form of cash or
Common Stock), subject to such terms and conditions as the Board of Directors
may deem appropriate.

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THIS PLAN was adopted by the Board of Directors of First United
Bancshares, Inc. on March 15, 1999, to be effective as of the time determined
under Section 11.1 hereof.

FIRST UNITED BANCSHARES, INC.