Nextlink Communications Inc/DE – ‘DEFS14C’ for 11/12/99

On:  Monday, 11/22/99   ·   For:  11/12/99   ·   Accession #:  912057-99-6981   ·   File #:  0-22939

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Definitive Proxy Information Statement — Special Meeting   —   Schedule 14C
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Document/Exhibit                   Description                      Pages   Size 

 1: DEFS14C     Definitive Proxy Information Statement -- Special     26    129K 
                          Meeting                                                

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SCHEDULE 14C INFORMATION

Definitive Information Statement
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934 

Check the appropriate box:                                              
/ /  Preliminary Information Statement                                  
/ /  Confidential, for Use of the Commission Only (as permitted by Rule 
14c-5(d)(2))                                                  
/X/  Definitive Information Statement                                   

             NEXTLINK COMMUNICATIONS, INC.
--------------------------------------------------------------------------------
(Name of Registrant As Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):                              

/X/  No fee required                                                            
/ /  Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11       
(1) Title of each class of securities to which transaction applies:   
N/A                                                             
        ------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:      
N/A                                                             
        ------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed  
     pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):      
N/A                                                             
        ------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:                  
N/A                                                             
        ------------------------------------------------------------------------
(5) Total fee paid:                                                   
N/A                                                             
        ------------------------------------------------------------------------

/ /  Fee paid previously with preliminary materials.                            

/ /  Check box if any part of the fee is offset as provided by Exchange Act     
  Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
 paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.           

(1) Amount Previously Paid:                                           
N/A                                                             
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(2) Form, Schedule or Registration Statement No.:                     
N/A                                                             
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(3) Filing Party:                                                     
N/A                                                             
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(4) Date Filed:                                                       
N/A                                                             
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NEXTLINK COMMUNICATIONS, INC. 
500 - 108(TH) AVENUE N.E., SUITE 2200 
BELLEVUE, WASHINGTON 98004
(425) 519-3953

INFORMATION STATEMENT 

    We have sent you this information statement to inform you of an amendment to
the NEXTLINK Communications, Inc. Stock Option Plan. The amendment authorizes an
additional 5,000,000 shares of our Class A common stock to be issued under the  
Stock Option Plan, increasing the maximum number of shares authorized for       
issuance under the plan to 41,000,000, as adjusted for NEXTLINK's recent 100%   
stock dividend. The amendment also provides that the maximum number of shares of
Class A common stock with respect to which options may be granted to any        
individual in any calendar year is limited to the maximum number of shares      
authorized for issuance under the plan. Our Board of Directors has unanimously  
approved the amendment. In addition, the amendment was approved by written      
consent of a stockholder that holds shares of NEXTLINK common stock with a      
majority of the total voting power of all shares of outstanding common stock.   
Because we are a corporation organized under the laws of the State of Delaware, 
our stockholders may take action by written consent without a meeting.          

    This information statement is designed to inform you of the amendment to the
Stock Option Plan. It also summarizes information that we are required to       
provide to you under the rules of the Securities and Exchange Commission. In    
addition, this information statement serves as the notice that we are required  
to provide to you under the laws of Delaware that action has been taken by less 
than all stockholders of NEXTLINK by a written consent without a meeting of     
stockholders.                                                                   

 This information statement is being mailed on or about November 23, 1999.
The amendment will become effective 20 days after the date on which we mail this
information statement to all stockholders of NEXTLINK.                          

INFORMATION ABOUT VOTES NECESSARY TO APPROVE THE AMENDMENT                      

    Eagle River Investments, LLC approved the amendment to the Stock Option Plan
by a written consent dated October 19, 1999. Eagle River holds 37,743,574 shares
of Class B common stock, which represent approximately 57% of the total votes   
attributable to all shares of common stock on that date.                        

  Approval of the amendment to the Stock Option Plan requires an affirmative
vote of the majority of the total votes attributable to NEXTLINK's common stock.
NEXTLINK has issued two classes of common stock, Class A and Class B common     
stock. We use the term "common stock" when referring to Class A and Class B     
common stock together. Each share of Class A common stock is entitled to one    
vote. As of October 19, 1999, there were 74,212,578 shares of Class A common    
stock outstanding. Each share of Class B common stock is entitled to ten votes. 
As of October 19, 1999, there were 58,906,550 shares of Class B common stock    
outstanding. The holders of NEXTLINK's 14% Senior Exchangeable Redeemable       
Preferred Stock and 6 1/2% Cumulative Convertible Preferred Stock are not       
entitled to vote on matters such as the amendment to the Stock Option Plan.     

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. 

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AMENDMENT OF STOCK OPTION PLAN

In January 1997, the stockholders approved the Stock Option Plan. We    
presently are authorized to issue 36,000,000 shares of Class A common stock upon
the exercise of options granted under the Stock Option Plan, as adjusted for    
NEXTLINK's 100% stock dividend paid on August 27, 1999. Effective October 19,   
1999, our Board of Directors amended the Stock Option Plan to increase by       
5,000,000 the number of shares that may be issued under the plan, increasing the
maximum number of shares authorized for issuance under the plan to 41,000,000.  
The amendment also provides that the maximum number of shares of Class A common 
stock with respect to which options may be granted to any individual in any     
calendar year is limited to the maximum number of shares authorized for issuance
under the plan. Following the Board's action, Eagle River Investments, LLC,     
which holds shares of common stock with a majority of the voting power          
attributable to all shares of outstanding common stock, approved the amendment  
by written consent.                                                             

The purpose of the Stock Option Plan is to promote company success by   
providing a performance incentive for certain officers, employees, and          
individuals who provide services to us, and to enable these individuals to      
acquire or increase their proprietary interest in our success. Currently, the   
Board feels that granting options to substantially all employees of NEXTLINK    
provides an important incentive that is intended to promote company success. The
Board believes that the number of shares previously available for issuance were 
insufficient to achieve the purpose of the Stock Option Plan over the term of   
the plan and that the additional shares authorized are necessary to carry out   
the purpose of the Stock Option Plan.                                           

DESCRIPTION OF THE STOCK OPTION PLAN                                            

The Board has appointed and authorized the Compensation Committee of the
Board to administer the Stock Option Plan, and its members currently are        
Dennis M. Weibling and William A. Hoglund. When the Compensation Committee is   
acting in its capacity as administrator of the Stock Option Plan, we refer to it
as the Plan Administrator. The Board may remove members from, or add members to,
the Compensation Committee at any time. The Board fills all vacancies on the    
Compensation Committee, however caused.                                         

Within the parameters established by the Stock Option Plan, the Plan    
Administrator has the sole discretion to determine all terms and conditions of  
options granted under the Stock Option Plan. These determinations include:      

- selection of the individuals receiving option grants,                 

- the number of shares available under each option,                     

- the exercise price,                                                   

- the time or times at which options may be exercised, and              

    - whether all of the options may be exercisable at one time or in increments
over time.                                                          

   Separate option grants under the Stock Option Plan need not be identical in
any respect, even when made simultaneously. The Plan Administrator provides each
optionee with an option agreement, which describes the relevant terms of the    
option.                                                                         

The Plan Administrator acts as the manager of the Stock Option Plan, and
possesses discretionary authority to determine all matters relating to the      
options to be granted. The Plan Administrator has the sole authority to         
interpret the provisions of the Stock Option Plan, any option issued under the  
Stock Option Plan, and any rule or regulation applicable to the Stock Option    
Plan. The Plan Administrator's interpretation is conclusive and binding on all  
interested parties, so long as the interpretation and                           

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construction with respect to incentive stock options corresponds to the         
requirements of the Internal Revenue Code of 1986 and related Internal Revenue  
Service regulations.                                                            

    The Plan Administrator may modify or amend outstanding options granted under
the Stock Option Plan. A modification or amendment, however, may not impair or  
diminish any of the rights of any optionee or any of the obligations of NEXTLINK
without the consent of the optionee. Except as otherwise provided in the Stock  
Option Plan, no outstanding option shall be terminated without the consent of   
the optionee. Unless the optionee agrees otherwise, any change or adjustment to 
an outstanding incentive stock option shall be made so as not to cause the      
option to cease qualifying as an incentive stock option.                        

  The Stock Option Plan terminates on January 15, 2007. No stock options may
be granted under the Stock Option Plan on or after January 15, 2007.            

 The Board has reserved the right to terminate, modify, or amend the Stock
Option Plan. The Board, however, must obtain stockholder approval for any       
amendment that:                                                                 

    - increases the number of shares of Class A common stock available under the
Stock Option Plan,                                                  

- changes the determination of who is eligible to receive an option, or 

- requires stockholder approval under applicable law.                   

  The stock available for issuance under the Stock Option Plan are shares of
our authorized but unissued Class A common stock. As a consequence of the       
amendment to the Stock Option Plan, a total of 41,000,000 shares may be issued  
under the plan. The maximum number of shares with respect to which options may  
be granted to any one individual may not exceed the total number of shares      
authorized for issuance under the plan. When an option expires or terminates for
any reason, the number of unexercised or forfeited shares subject to the option 
may again become available for grant under the Stock Option Plan.               

    With respect to grants of the shares authorized under the amendment, because
the officers and employees of NEXTLINK who may participate and the amount of    
their options are determined by the Plan Administrator in its discretion, it is 
not possible to state the names or positions of, or the number of options that  
may be granted to, NEXTLINK's officers and employees in the future. As a        
consequence, we have omitted the New Plan Benefits table.                       

  Incentive stock options may be granted only to employees of NEXTLINK (or a
parent or subsidiary corporation of NEXTLINK), including Board members who also 
are employees of NEXTLINK (or employees of a parent or subsidiary corporation of
NEXTLINK). Nonqualified options may be granted to employees and non-employee    
consultants of NEXTLINK (or a corporate or non-corporate parent or subsidiary), 
including non-employee Board members. Certain limitations apply to 10%          
stockholders. NEXTLINK currently employs approximately 3,300 persons, each of   
whom is eligible to receive options under the Stock Option Plan.                

   The Stock Option Plan requires that the purchase price per share of Class A
common stock under each incentive stock option be not less than the fair market 
value of the Class A common stock on the date the option is granted, except     
where the option is a substituted or assumed option from another plan, and the  
exercise price relates to the original exercise price, in accordance with       
applicable provisions of the Internal Revenue Code. Certain additional          
limitations apply to the grant of incentive stock options to 10% stockholders.  

The aggregate shares of Class A common stock available to an optionee   
through incentive stock options that are exercisable for the first time during a
calendar year may not exceed $100,000 in value. For purposes of this limit, the 
Class A common stock must be valued at its fair market value as of the option   
grant date. To the extent an incentive stock option exceeds this limitation, it 
shall be considered a nonqualified stock option.                                

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An option holder desiring to exercise an option must notify NEXTLINK in 
writing of his or her intention to exercise an option for the number of shares  
specified in the notice and pay to NEXTLINK the full purchase price provided in 
the option. Payment of the purchase price may be by any method provided for in  
an optionee's individual option agreement, which may provide that payments may  
be made in cash, by check, by delivering a properly executed exercise notice    
together with irrevocable instructions to a broker to promptly deliver to       
NEXTLINK the amount of sale proceeds necessary to pay the exercise price, or    
under the cashless exercise procedures set forth in the Stock Option Plan.      

For tax purposes, NEXTLINK is required to withhold from the optionee's  
compensation or collect from the optionee an amount for federal, state and local
taxes resulting from the optionee's compensation income, if any, at the time of 
exercise. See "Federal Income Tax Consequences Relating to the Stock Option     
Plan" below. At its discretion, NEXTLINK may require an optionee who receives   
shares of stock to reimburse NEXTLINK for any such taxes required to be withheld
and may withhold any distribution in whole or in part until NEXTLINK is so      
reimbursed. In lieu of such withholding or reimbursement, NEXTLINK has the right
to withhold from any other cash amounts due or to become due from NEXTLINK to   
the optionee an amount equal to such taxes or to retain and withhold a number of
shares that have a market value not less than the amount of such taxes required 
to be withheld as reimbursement for any such taxes and cancel any such shares so
withheld.                                                                       

  An optionee must exercise his or her option, if at all, before it expires.
Each individual option agreement specifies a term after which such option       
expires. Such term shall not exceed ten years with respect to incentive stock   
options, 15 years with respect to nonqualified options and five years in the    
case of a 10% stockholder. Notwithstanding an individual option agreement's     
stated term, in most cases, an option expires three months after termination of 
the employment of the individual to whom the option was granted (unless the     
termination is for cause, as defined in the Stock Option Plan, in which case the
option shall expire immediately). Special rules apply in the event of an        
optionee's death or disability. In addition, options shall terminate if the     
stockholders of NEXTLINK receive cash, stock, or other property in exchange for 
or in connection with their shares of Class A common stock as a result of a     
merger, consolidation, acquisition of property or stock, separation,            
reorganization, or liquidation of NEXTLINK (other than a mere reincorporation,  
creation of a holding company, or merger in which NEXTLINK's stockholders       
maintain a proportionate ownership interest in the survivor corporation). Prior 
to such an event, the optionee shall have the right to exercise his or her      
option, in whole or in part, to the extent vested.                              

 Options granted under the Stock Option Plan and the rights and privileges
conferred thereby may not be transferred, assigned, pledged, or hypothecated in 
any manner (whether by operation of law or otherwise), other than by will or    
applicable laws of descent and distribution. Nonqualified stock options,        
however, may be transferred to a revocable trust established by the optionee for
his or her descendants, to an immediate family member, or to a partnership in   
which only immediate family members or such estate-planning trusts are partners.
Options shall not be subject to execution, attachment, or similar process. Upon 
any attempt to transfer, assign, pledge, hypothecate, or otherwise dispose of   
any option under the Stock Option Plan, or any rights or privileges conferred by
the Stock Option Plan, contrary to the provisions of the Stock Option Plan, or  
upon the sale or levy or any attachment or similar process upon the rights and  
privileges conferred by the Stock Option Plan, such option shall thereupon      
terminate and become void. No person may create a lien on any funds, securities,
or other property held under the Stock Option Plan.                             

The issuance of the additional shares of Class A common stock upon the  
exercise of options is subject to registration with the Securities and Exchange 
Commission of such shares.                                                      

The closing price of NEXTLINK's Class A common stock as reported on the 
Nasdaq Stock Market on November 18, 1999 was $56.9375.                          

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FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE STOCK OPTION PLAN               

 The federal income tax consequences of an employee's participation in the
Stock Option Plan are complex and subject to change. The following discussion is
only a summary of the general rules applicable to the Stock Option Plan as of   
the date hereof. The application of state and local income taxes and other      
federal taxes is not discussed.                                                 

INCENTIVE STOCK OPTIONS                                                 

   If an option granted under the Stock Option Plan is treated as an incentive
stock option, the optionee will not recognize any income upon either the grant  
or the exercise of the option, and NEXTLINK will not be allowed a deduction for 
federal tax purposes upon such a grant or exercise. Upon a sale of the shares,  
the tax treatment to the optionee and NEXTLINK will depend primarily upon       
whether the optionee has met certain holding period requirements at the time he 
or she sells the shares. In addition, as discussed below, the exercise of an    
incentive stock option may subject the optionee to alternative minimum tax      
liability.                                                                      

  If an optionee exercises an incentive stock option and does not dispose of
the shares received within two years after the date of grant of such option or  
within one year after the transfer of the shares to him or her, any gain        
realized upon the disposition will be treated as a gain from the sale of stock  
and taxed at capital gain rates. The capital gain rates are subject to change   
and vary depending on how long the shares have been held.                       

If the optionee disposes of the shares either within two years after the
date the option is granted or within one year after the transfer of the shares  
to him or her, such disposition will be treated as a disqualifying disposition  
and an amount equal to the lesser of (i) the fair market value of the shares on 
the date of exercise minus the purchase price, or (ii) the amount realized on   
the disposition minus the purchase price, will be taxed as ordinary income to   
the optionee in the taxable year in which the disposition occurs. However, in   
the case of gifts, sales to related parties, and certain other transactions, the
full difference between the fair market value of the stock and the purchase     
price will be treated as compensation income. The excess, if any, of the amount 
realized upon disposition over the fair market value at the time of the exercise
of the option will be treated as gain from the sale of stock and taxed at       
capital gain rates if the optionee has held the shares for more than one year   
following the exercise of the option. The capital gain rates are subject to     
change and vary depending on how long the shares have been held. In the event of
a disqualifying disposition, NEXTLINK may withhold income taxes from the        
optionee's compensation with respect to the ordinary income realized by the     
optionee as a result of the disqualifying disposition.                          

In general, there will be no federal income tax deductions allowed to   
NEXTLINK upon the grant, exercise, or termination of an incentive stock option. 
However, in the event an optionee sells or disposes of stock received on the    
exercise of an incentive stock option in a disqualifying disposition, NEXTLINK  
will be entitled to a deduction for federal income tax purposes in an amount    
equal to the ordinary income, if any, recognized by the optionee upon           
disposition of the shares, provided that the deduction is not otherwise         
disallowed under the Internal Revenue Code.                                     

The exercise of an incentive stock option may subject an optionee to    
alternative minimum tax liability. The excess of the fair market value of the   
shares at the time an incentive stock option is exercised over the purchase     
price of the shares is included in an optionee's alternative minimum taxable    
income, even though it is not included in taxable income for purposes of        
determining the optionee's regular tax liability. Consequently, an optionee may 
be obligated to pay alternative minimum tax in the year he or she exercises an  
incentive stock option.                                                         

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NONQUALIFIED STOCK OPTIONS                                              

Nonqualified stock options granted under the Stock Option Plan do not   
qualify as "incentive stock options" and will not qualify for any special tax   
benefits to the optionee. An optionee generally will not recognize any taxable  
income at the time he or she is granted a nonqualified option. However, upon its
exercise, the optionee will recognize ordinary income for federal tax purposes  
measured by the excess of the then fair market value of the shares over the     
exercise price. The income realized by the optionee will be subject to income   
and other employee withholding taxes.                                           

  The optionee's basis for determination of gain or loss upon the subsequent
disposition of shares acquired upon the exercise of a nonqualified stock option 
will be the amount paid for such shares plus any ordinary income recognized as a
result of the exercise of such option. Upon disposition of any shares acquired  
pursuant to the exercise of a nonqualified stock option, the difference between 
the sale price and the optionee's basis in the shares will be treated as a gain 
or loss from the sale of stock and taxed at capital gain or loss rates if the   
optionee has held the shares for more than one year following the exercise of   
the option. The capital gain rates are subject to change and vary depending on  
how long the shares have been held.                                             

In general, there will be no federal income tax deduction allowed to    
NEXTLINK upon the grant or termination of a nonqualified stock option or a sale 
or disposition of the shares acquired upon the exercise of a nonqualified stock 
option. However, upon the exercise of a nonqualified stock option, NEXTLINK will
be entitled to a deduction for federal income tax purposes equal to the amount  
of ordinary income that an optionee is required to recognize as a result of the 
exercise, provided that the deduction is not otherwise disallowed under the     
Internal Revenue Code.                                                          

NO APPROVAL REQUIRED                                                            

  The Board has unanimously approved the amendment to the Stock Option Plan.
Eagle River Investments, LLC, which holds a majority of the total number of     
votes attributable to all shares of outstanding common stock, the only class of 
capital stock of NEXTLINK outstanding and entitled to vote on such matters, has 
adopted a resolution approving the amendment by written consent in lieu of a    
meeting pursuant to Section 228(a) of the Delaware General Corporation Law. The 
Board has not solicited any proxies or consents from any other stockholders in  
connection with this action.                                                    

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COMPENSATION OF EXECUTIVE OFFICERS

SUMMARY COMPENSATION TABLE                                                      

The following table sets forth, for the fiscal years ended December 31, 
1998, 1997 and 1996, individual compensation information for the Chief Executive
Officer of NEXTLINK, and each of the four most highly compensated executive     
officers of NEXTLINK who were serving as executive officers at December 31,     
1998, and any former executive officer who was not an executive officer at      
December 31, 1998, but was one of the four most highly compensated individuals  
at NEXTLINK during 1998 (the "Named Executive Officers").                       

                                                        [Enlarge/Download Table]

                                                                                LONG TERM                
                                                                               COMPENSATION              
                                                                               ------------              
                                                      ANNUAL COMPENSATION         AWARDS                 
                                                    ------------------------      ------                 
                                                                                SECURITIES               
                                                                                UNDERLYING    ALL OTHER  
                                                                                 OPTIONS     COMPENSATION
                                            YEAR    SALARY ($)   BONUS($)(1)      (#)(2)        ($)(3)   
                                          --------  ----------   -----------   ------------  ------------
                                                                                                         
Wayne M. Perry..........................    1998        8,023           --             150          --   
  Chief Executive Officer (4)               1997           --           --         882,672          --   
                                            1996           --           --              --          --   

George M. Tronsrue III..................    1998      247,115      223,000             150       5,152   
  President, Chief Operating Officer(5)     1997       43,535       70,000         510,000          --   
                                            1996           --           --              --          --   

Kathleen H. Iskra.......................    1998      180,077       92,874         380,150       8,000   
  Vice President, Chief Financial           1997      126,923       68,100          63,554       6,130   
  Officer and Treasurer                     1996      121,233       62,250         135,490       1,575   

R. Gerard Salemme.......................    1998      212,885      410,000(6)      225,000       8,000   
  Senior Vice President External Affairs    1997      126,154           --         132,400          --   
  and Industry Relations                    1996           --           --              --          --   

Jan Loichle.............................    1998      180,077       92,874         360,150       8,000   
  Vice President, Chief Integration         1997      123,424       65,938          63,554       6,476   
  Officer (7)                               1996      109,075       32,040          75,028       5,498   

James F. Voelker (8)....................    1998      284,615      250,000         500,000      10,000   
                                            1997      218,509      225,000       3,373,012       8,641   
                                            1996      160,600      200,000          30,000       6,523   

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

(1) Includes bonuses for the corresponding fiscal years that were paid          
subsequent to the stated calendar year end.                             

(2) Represents options to acquire shares of Class A common stock. Share figures 
   have been retroactively restated to reflect NEXTLINK's 100% stock dividend,
paid on August 27, 1999 to stockholders of record on August 18, 1999.   
   Effective January 31, 1997, NEXTLINK Communications, L.L.C. was merged with
    and into NEXTLINK Communications, Inc. The information for 1996 presented in
   this table reflects the grant of options for the purchase of Class A Common
    Stock under NEXTLINK's Stock Option Plan in substitution for options granted
previously pursuant to the Amended and Restated Equity Option Plan of   
NEXTLINK Communications, L.L.C.                                         

(3) Represents contributions made by NEXTLINK on behalf of the executive officer
under NEXTLINK's 401(k) Plan.                                           

(4) Mr. Perry became Chief Executive Officer of NEXTLINK on July 21, 1997. Prior
to that date, Mr. Perry was a Director of NEXTLINK since June 1997.     
Effective March 26, 1999, Mr. Perry                                     

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 resigned as Chief Executive Officer, although he retained his position as
Vice Chairman of the Board of Directors. Steven W. Hooper, NEXTLINK's   
  Chairman of the Board of Directors, filled the position of Chief Executive
Officer that was vacated by Mr. Perry. Effective September 21, 1999, the
 Board of Directors appointed Daniel F. Akerson as NEXTLINK's Chairman and
   Chief Executive Officer, at which time Mr. Hooper resigned his positions as
Chairman and Chief Executive Officer and was appointed Vice Chairman.   

(5) Effective October 7, 1999, Mr. Tronsrue resigned as NEXTLINK's President and
Chief Operating Officer.                                                

(6) Includes a signing bonus paid in 1998 at Mr. Salemme's one-year anniversary.

(7) Effective June 9, 1999, Ms. Loichle was appointed Vice President, Chief     
Integration Officer. Prior to that date, Ms. Loichle served as Vice     
President, Chief of Local Exchange Operations.                          

(8) Effective July 17, 1998, Mr. Voelker resigned as President and from         
  NEXTLINK's Board of Directors and the Board of Directors elected George M.
    Tronsrue III, who had been serving as NEXTLINK's Chief Operating Officer, to
fill the position of President vacated by Mr. Voelker.                  

OPTION GRANTS IN LAST FISCAL YEAR 

   Share and per share figures (including exercise or base price figures) have
been retroactively restated to reflect NEXTLINK's 100% stock dividend, paid on  
August 27, 1999 to stockholders of record on August 18, 1999.                   

                                                        [Enlarge/Download Table]

                                                                      INDIVIDUAL GRANTS                                            
                          ---------------------------------------------------------------------------------------------------------
                                         % OF TOTAL                                                                                
                           NUMBER OF      OPTIONS                                          POTENTIAL REALIZABLE VALUE AT ASSUMED   
                          SECURITIES     GRANTED TO                                             ANNUAL RATES OF STOCK PRICE        
                          UNDERLYING    EMPLOYEES IN   EXERCISE OR                           APPRECIATION FOR OPTION TERMS ($)     
                            OPTIONS     FISCAL YEAR    BASE PRICE                        ------------------------------------------
NAME                      GRANTED (#)       (%)          ($/SH)       EXPIRATION DATE         0%             5%            10%     
----                      -----------   ------------   -----------   -----------------   ------------   ------------   ------------
                                                                                                                                   
Wayne M. Perry...........       150(1)         *          11.28      December 16, 2008            0          1,064           2,697 

George M. Tronsrue III...       150(1)         *          11.28      December 16, 2008            0          1,064           2,697 

Kathleen H. Iskra........   200,000(2)      1.30          12.25       January 21, 2008            0      1,540,792       3,904,669 
                            140,000(3)      0.91          18.00        August 14, 2008            0      1,470,792       3,834,669 
                                150(1)         *          11.28      December 16, 2008            0          1,064           2,697 
                             40,000(4)      0.26          11.28      December 16, 2008            0        283,789         719,176 

R. Gerard Salemme........   200,000(5)      1.30         10.625        October 1, 2008            0      1,153,150       3,094,907 
                             25,000(4)      0.16          11.28      December 16, 2008            0        177,368         449,485 

Jan Loichle..............   210,000(6)      1.36          12.25       January 21, 2008            0      1,617,831       4,099,902 
                            110,000(3)      0.71          18.00        August 14, 2008            0      1,155,622       3,012,954 
                                150(1)         *          11.28      December 16, 2008            0          1,064           2,697 
                             40,000(4)      0.26          11.28      December 16, 2008            0        283,789         719,176 

James F. Voelker.........   500,000(7)      3.24          12.25          July 15, 2008    2,500,000      7,924,216      16,246,029 

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

* Represents 0.0009875% of total options granted to employees in 1998.          

(1) Granted on December 17, 1998 and is fully exercisable as of the date of     
grant.                                                                  

(2) Granted on January 22, 1998 and becomes exercisable ratably over four years 
at 25% per year.                                                        

(3) Granted on August 14, 1998 and becomes exercisable over four years, 10% as  
  of December 31, 1998, and 22.5% as of the first through fourth anniversary
of the date of grant.                                                   

(4) Granted on December 17, 1998 and becomes exercisable ratably over four years
at 25% per year.                                                        

(5) Granted on October 2, 1998 and becomes exercisable ratably over four years  
at 25% per year.                                                        

(6) Granted on January 22, 1998 and becomes exercisable ratably over two years  
at 50% per year.                                                        

(7) Granted on July 16, 1998 and becomes exercisable ratably over four years at 
25% per year. Market value on the date of grant was $17.25.             

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AGGREGATED FISCAL YEAR END OPTION VALUES

 Share figures have been retroactively restated to reflect NEXTLINK's 100%
stock dividend, paid on August 27, 1999 to stockholders of record on August 18, 
1999.                                                                           

                                                        [Enlarge/Download Table]

                                                         NUMBER OF SECURITIES        VALUE OF UNEXERCISED IN-THE- 
                           SHARES                   UNDERLYING UNEXERCISED OPTIONS   MONEY OPTIONS AT FISCAL YEAR 
                         ACQUIRED ON                           AT FISCAL                        END ($)           
                          EXERCISE       VALUE      -------------------------------  -----------------------------
NAME                         (#)      REALIZED ($)   EXERCISABLE     UNEXERCISABLE    EXERCISABLE    UNEXERCISABLE
----                     -----------  ------------  --------------   --------------  -------------   -------------
                                                                                                                  
Wayne M. Perry..........        --            --         220,818         662,004        2,256,215      6,767,336  
George M. Tronsrue                                                                                                
  III...................   127,500     1,036,416         102,150         280,500        1,043,131      2,867,411  
R. Gerard Salemme.......        --            --          33,100         324,300          338,365      1,800,251  
Kathleen H. Iskra.......    21,702       327,075          36,356         468,176          279,378      1,750,083  
Jan Loichle.............     4,412        41,034          51,328         444,136          515,497      1,664,998  
James F. Voelker........   725,218     9,378,616       1,352,420         848,658       19,064,689      5,254,045  

EMPLOYMENT AGREEMENTS AND OTHER ARRANGEMENTS                                    

We have entered into an employment agreement with James F. Voelker,     
NEXTLINK's former President, expiring on December 31, 1999, subject to earlier  
termination under certain conditions. Under this agreement, Mr. Voelker will    
receive a base salary at a rate equivalent to an annual salary of $275,000 from 
July 16, 1998 to December 31, 1999. Mr. Voelker will also receive an annual     
bonus of $250,000 for each of 1998 and 1999. In the event that NEXTLINK         
terminates Mr. Voelker's employment without cause, he is entitled to his salary 
and bonus for the remainder of the term of the agreement. All stock options     
which had been granted to Mr. Voelker prior to the date we entered into the     
employment agreement will continue to vest according to their original vesting  
schedules through December 31, 2000. On December 31, 2000, all unvested options 
will then immediately vest. Mr. Voelker's employment agreement also contains    
non-competition and confidentiality provisions.                                 

 We have entered into an employment agreement with George M. Tronsrue III,
expiring on October 6, 2001, subject to earlier termination. The agreement      
provides for a base salary of $235,000 and $255,000 for the first and second    
years of employment, respectively, and no less than $255,000 for each year      
thereafter, subject to negotiation. The agreement also provides for a bonus     
payment of $140,000 in the first year of employment, and bonuses thereafter to  
be determined based upon the performance of Mr. Tronsrue and NEXTLINK. In       
addition, in connection with the execution of this employment agreement,        
NEXTLINK granted Mr. Tronsrue options to purchase 510,000 shares of Class A     
Common Stock, 25% of which vested immediately and the remainder of which vest in
tranches over the four years following Mr. Tronsrue's employment date. The      
options have an exercise price of $3.965 per share. Mr. Tronsrue's employment   
agreement also contains confidentiality provisions. Effective October 7, 1999,  
Mr. Tronsrue resigned as President and Chief Operating Officer of NEXTLINK, and 
his employment with NEXTLINK was terminated. In connection with Mr. Tronsrue's  
resignation, we amended his employment agreement to provide, upon termination of
his employment, a lump sum payment of $255,000, acceleration of vesting of      
options to purchase 25,000 shares of Class A common stock and medical and dental
benefits for one year, or, if earlier, until he commences employment with a     
third party.                                                                    

 We have entered into an agreement with Jan Loichle in connection with her
appointment as Vice President, Chief Integration Officer. The agreement provides
that, if Ms. Loichle is employed with NEXTLINK as of December 31, 2000, then as 
of that date all of stock options that remain unvested will vest immediately. In
addition, if Ms. Loichle's employment is terminated by NEXTLINK without cause,  
NEXTLINK will pay to her compensation that she would otherwise receive under the
agreement through December 31, 2000 and all of her stock options will           
immediately become fully vested. Under certain circumstances and subject to     
certain conditions, in the event of a change of control of                      

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NEXTLINK, the following options to purchase shares of Class A common stock      
granted to Ms. Loichle shall vest in full: an option to purchase 75,028 shares  
granted in August 1996, an option to purchase 17,654 shares granted in          
January 1997, an option to purchase 28,246 shares granted in June 1997, an      
option to purchase 17,654 shares granted in July 1997, an option to purchase    
110,000 shares granted in August 1998, and an option to purchase 40,000 shares  
granted in December 1998.                                                       

The vesting of certain options granted to some Named Executive Officers 
accelerate under certain circumstances. The vesting of an option to purchase    
882,672 shares of Class A Common Stock granted to Mr. Perry in June 1997, an    
option to purchase 132,400 shares of Class A Common Stock granted to            
Mr. Salemme in June 1997, and an option to purchase 200,000 shares of Class A   
Common Stock granted to Mr. Salemme in October 1998 accelerates in the event    
that Craig O. McCaw, or an entity or entities he controls, no longer has control
of a majority of the votes of NEXTLINK. In addition, the option to purchase     
200,000 shares of Class A Common Stock granted to Mr. Salemme in October 1998   
provides for acceleration of vesting upon the happening of certain mergers,     
sales of substantially all of NEXTLINK's assets, acquisitions of voting power of
NEXTLINK, and changes in the composition of NEXTLINK's Board of Directions, or  
upon liquidation or dissolution of NEXTLINK. In all other cases, these options  
become fully vested over four years.                                            

COMPENSATION OF DIRECTORS                                                       

Each director is entitled to reimbursement for out-of-pocket expenses   
incurred for each Board or Committee meeting attended. Mr. Hooper received      
$8,023 in 1998 for services as Chairman of the Board. No other compensation was 
paid to any directors in 1998.                                                  

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information, as of October 1, 1999, with 
respect to the beneficial ownership of NEXTLINK's common stock of persons known 
to NEXTLINK to be the beneficial owners of more than five percent of a class of 
NEXTLINK common stock (other than officers and directors). Share figures have   
been retroactively restated to reflect NEXTLINK's 100% stock dividend paid on   
its common stock on August 27, 1999. The information below has been derived from
reports filed with the Securities and Exchange Commission by, or representations
received from, the holders.                                                     

                                                        [Enlarge/Download Table]

                                                                            SHARES BENEFICIALLY OWNED             
                                                                --------------------------------------------------
                                                                                          PERCENT OF    PERCENT OF
                                                                                             TOTAL        TOTAL   
                                                                AMOUNT AND     PERCENT      SHARES        VOTING  
NAME AND ADDRESS OF                                   TITLE OF   NATURE OF       OF       OUTSTANDING     POWER   
BENEFICIAL OWNER                                       CLASS     OWNERSHIP    CLASS (%)       (%)          (%)    
----------------------------------------------------  --------  -----------   ---------   -----------   ----------
                                                                                                                  
Eagle River Investments, LLC(1).....................  Class A            0          0                             
  2300 Carillon Point                                 Class B   37,743,574      64.25        28.45        57.07   
  Kirkland, WA 98033                                                                                              

Ampersand Telecom, LLC..............................  Class A            0          0                             
  1332 Anacapa, Suite 200                             Class B   19,445,298      33.10        14.66        29.40   
  Santa Barbara, CA 93101                                                                                         

The Ampersand Telecom Trust(2)......................  Class A            0          0                             
  1332 Anacapa, Suite 200                             Class B    19,445,298     33.10        14.66        29.40   
  Santa Barbara, CA 93101                                                                                         

Wendy P. McCaw(3)...................................  Class A            0          0                             
  1332 Anacapa, Suite 200                             Class B   19,445,298       3.10        14.66        29.40   
  Santa Barbara, CA 93101                                                3                                        

Putnum(4)...........................................  Class A   13,569,264      18.35                             
  One Post Office Square                              Class B            0          0        10.23         2.05   
  Boston, MA 02109                                                                                                

Janus Capital.......................................  Class A    9,427,540    12.75 0                             
  100 Filmore Street                                  Class B            0                    7.11         1.43   
  Denver, CO 80206                                                                                                

FMR Capital(5)......................................  Class A   5,077,120 0      6.87                             
  82 Devonshire Street                                Class B                       0         3.83            *   
  Boston, MA 02109                                                                                                

BWP, Inc............................................  Class A    3,939,800       5.33                             
  707 S.W. Washington, 8(th) Floor                    Class B            0          0         2.97            *   
  Portland, OR 97205                                                                                              

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

(1) Eagle River has pledged substantially all of its shares of NEXTLINK stock to
secure a credit arrangement.                                            

(2) The Ampersand Telecom Trust is the Managing Member of Ampersand Telecom, LLC
   and has sole right to vote on all matters affecting Ampersand Telecom, LLC.

(3) Wendy P. McCaw is the sole beneficiary of The Ampersand Telecom Trust, a    
   revocable trust. The trustee of the Trust, Gregory Parker, may exercise his
  duties under the trust only pursuant to the written directions of Wendy P.
McCaw.                                                                  

(4) Of this amount, 2,300,990 shares are beneficially held by Putnam Voyage     
 Fund, and 4,916,800 shares are held by Putnam OTC & Emerging Growth Fund.

(5) Of this amount, 5,026,442 shares are beneficially held by: Fidelity         
    Management & Research Company, a wholly-owned subsidiary of FMR, as a result
  of acting as an investment advisor, Edward C. Johnson 3d, Chairman of FMR,
  and owner of 12.0% of its outstanding voting stock, and Abigail Johnson, a
director of FMR, and owner of 24.5% of its outstanding voting stock.    

*  Less than 1%.                                                              

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The following table sets forth information, as of October 1, 1999, with 
respect to the beneficial ownership of NEXTLINK's common stock by               
(1) NEXTLINK's Board of Directors, (2) each of the Named Executive Officers, and
(3) all directors and executive officers as a group. In general, "beneficial    
ownership" includes those shares a director or executive officer has the power  
to vote, or the power to transfer, and stock options that are exercisable       
currently or become exercisable within 60 days. Except as otherwise noted, the  
persons named in the table below have sole voting and investment power with     
respect to all shares shown as beneficially owned by them. Share figures have   
been retroactively restated to reflect NEXTLINK's 100% stock dividend paid on   
its common stock on August 27, 1999.                                            

                                                        [Enlarge/Download Table]

                                                                          SHARES BENEFICIALLY OWNED (1)           
                                                                --------------------------------------------------
                                                                                          PERCENT OF    PERCENT OF
                                                                                             TOTAL        TOTAL   
                                                                AMOUNT AND     PERCENT      SHARES        VOTING  
NAME AND ADDRESS OF                                   TITLE OF   NATURE OF       OF       OUTSTANDING     POWER   
BENEFICIAL OWNER                                       CLASS     OWNERSHIP    CLASS (%)       (%)          (%)    
----------------------------------------------------  --------  -----------   ---------   -----------   ----------
                                                                                                                  
Dan Akerson.........................................  Class A            0          0                             
                                                      Class B            0          0            *            *   

William A. Hoglund..................................  Class A       16,800(2)       *                             
                                                      Class B            0          0            *            *   

Steven W. Hooper....................................  Class A      312,818(3)       *                             
                                                      Class B      117,650          *            *            *   

Nicolas Kauser......................................  Class A          150          *                             
                                                      Class B            0          0            *            *   

Craig O. McCaw......................................  Class A       13,240          *                             
                                                      Class B   38,588,068(4)   65.69        29.09        58.34   

Sharon L. Nelson....................................  Class A       22,066          *                             
                                                      Class B            0          0            *            *   

Gregory Parker......................................  Class A        4,000          *                             
                                                      Class B   19,445,298(5)   33.10        14.66        29.40   

Wayne M. Perry......................................  Class A      516,766(6)       *                             
                                                      Class B      117,650          *            *            *   

Jeffrey S. Raikes...................................  Class A      122,066          *                             
                                                      Class B            0          0            *            *   

Dennis Weibling.....................................  Class A        3,000          *                             
                                                      Class B   37,743,574(7)   64.25        28.45        57.07   

George M. Tronsrue III..............................  Class A      116,038          *                             
                                                      Class B            0          0            *            *   

Kathleen H. Iskra...................................  Class A      168,380          *                             
                                                      Class B            0          0            *            *   

R. Gerard Salemme...................................  Class A      131,350          *                             
                                                      Class B            0          0            *            *   

Jan Loichle.........................................  Class A      280,480          *                             
                                                      Class B            0          0            *            *   

James F. Voelker (8)................................  Class A    1,803,453(9)    2.43                             
                                                      Class B      289,716(10)       *        1.57            *   

All directors and executive officers as a group.....  Class A    1,909,230(11)    2.53                            
(18 persons)                                          Class B   58,268,666(11)   98.70       44.76        87.81   

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

(1) In accordance with Commission rules, each beneficial owner's holdings have  
    been calculated assuming full exercise of outstanding options exercisable by
such owner within 60 days after October 1, 1999, but no exercise of     
outstanding options held by any other person.                           

(2) Includes 6,500 shares of Class A common stock that Mr. Hoglund holds as     
trustee of trusts for the benefit of his children. Mr. Hoglund disclaims
beneficial ownership of such shares.                                    

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(3) Includes 42,000 shares of Class A common stock held by Mr. Hooper as trustee
of trusts for the benefit of his children and 50,000 shares of stock    
Class A common stock held by irrevocable trusts for the benefit of      
Mr. Perry's four children, for which Mr. Perry exercises no voting or   
investment control.                                                     

(4) Includes 37,743,574 shares of Class B common stock held beneficially by     
    Mr. McCaw as a result of his ownership interests in Eagle River. Pursuant to
the terms of the Stock Distribution Agreement between Mr. McCaw and     
Wendy P. McCaw, Mr. McCaw holds a proxy to vote the number of shares of 
NEXTLINK stock held by Wendy P. McCaw that, when added to all NEXTLINK  
   capital stock held by Mr. McCaw or any of his affiliates or over which they
 have voting rights, are necessary for Mr. McCaw to hold 51% of the voting
power of NEXTLINK. No shares owned or controlled by Wendy P. McCaw are  
included in the beneficial holdings of Mr. McCaw.                       

(5) Mr. Parker is a member of Ampersand Telecom, LLC. Mr. Parker disclaims      
  beneficial ownership of such shares, except to the extent of his pecuniary
interest therein.                                                       

(6) Includes 7,280 shares of Class A common stock held by Mr. Perry's children. 
Mr. Perry disclaims beneficial ownership of such shares.                

(7) Mr. Weibling, who is President of Eagle River, Inc., an affiliate of Eagle  
    River, disclaims beneficial ownership in all securities held by Eagle River,
 except to the extent of his pecuniary interest therein. Mr. Weibling is a
member of Eagle River.                                                  

(8) Effective July 17, 1998, Mr. Voelker resigned from NEXTLINK's Board of      
Directors and as President of NEXTLINK.                                 

(9) Includes 180,000 shares of Class A common stock that Mr. Voelker holds as   
trustee of trusts for the benefit of his children.                      

(10) Includes shares of Class B common stock that are eligible for acquisition  
upon exercise of a currently exercisable stock option, which has been   
exercised in part, resulting in the issuance of 2,862,628 shares (all of
which have been converted into Class A common stock).                   

(11) See notes above.                                                           

*  Less than 1%.                                                              

                                       By Order of the Board of Directors,

         [SIG]

                                  R. Bruce Easter, Jr. Secretary

Bellevue, Washington                                                            
November 19, 1999                                                               

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NEXTLINK COMMUNICATIONS, INC. 
STOCK OPTION PLAN 
(as amended on September 30, 1997, December 31, 1997, February 5, 1998, 
 February 4, 1999, May 3, 1999 and October 19, 1999)

   SECTION 1.  PURPOSE.  The purpose of this Stock Option Plan (this "Plan")
is to provide a means whereby Nextlink Communications, Inc. (the "Company") or  
any parent or subsidiary of the Company, as defined in Subsection 5.9 (the      
"related entities"), may continue to attract, motivate and retain selected      
employees, officers and independent contractors who can materially contribute to
the Company's growth and success, and to encourage stock ownership in the       
Company through granting incentive stock options or nonqualified stock options, 
or both, to purchase the Class A Common Stock of the Company (as defined in     
Section 3), so that such key employees and other persons and entities will more 
closely identify their interests with those of the Company and its shareholders.
In addition, options under this Plan may serve as replacement options for       
options issued under the Equity Option Plan sponsored by the Company's          
predecessor.                                                                    

   SECTION 2.  ADMINISTRATION.  This Plan shall be administered by the Board
of Directors of the Company (the "Board") or, in the event the Board shall      
appoint or authorize a committee to administer this Plan, by such committee.    
The administrator of this Plan shall hereinafter be referred to as the "Plan    
Administrator."                                                                 

       2.1  PROCEDURES.  The Board may designate one of the members of the
Plan Administrator as chairperson.  The Plan Administrator may hold meetings at 
such times and places as it shall determine.  The acts of a majority of the     
members of the Plan Administrator present at meetings at which a quorum exists, 
or acts reduced to or approved in writing by all Plan Administrator members,    
shall be valid acts of the Plan Administrator.                                  

          2.2  RESPONSIBILITIES.  Except for the terms and conditions explicitly
required in this Plan, the Plan Administrator shall have the authority, in its  
discretion, to determine all matters relating to the options to be granted under
this Plan, including selection of the individuals to be granted options, the    
number of shares to be subject to each option, the exercise price, and all other
terms and conditions of the options.  Grants under this Plan need not be        
identical in any respect, even when made simultaneously.  The interpretation and
construction by the Plan Administrator of any terms or provisions of this Plan  
or any option issued under this Plan, or of any rule or regulation promulgated  
in connection with this Plan, shall be conclusive and binding on all interested 
parties, so long as such interpretation and construction with respect to        
incentive stock options correspond to the requirements of Section 422 of the    
Internal Revenue Code (the "Code"), as amended, and the regulations thereunder. 

        2.3  SECTION 16(b) COMPLIANCE AND BIFURCATION OF PLAN.  In the event
the Company registers any of its equity securities pursuant to Section 12(b) or 
12(g) of the Exchange Act, it is the intention of the Company that this Plan,   
and options granted under this Plan, comply in all respects with Rule 16b-3     
under the Exchange Act and, if any Plan provision is later found not to be in   
compliance with such Section, the provision shall be deemed null and void, and  
in all events this Plan shall be construed in favor of its meeting the          
requirements of Rule 16b-3.                                                     

Page 1 - STOCK OPTION PLAN                                                      

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Notwithstanding anything in this Plan to the contrary, the Board, in its        
absolute discretion, may bifurcate this Plan so as to restrict, limit or        
condition the use of any provision of this Plan to participants who are         
officers and directors subject to Section 16(b) of the Exchange Act without     
so restricting, limiting or conditioning other Plan participants.               

 SECTION 3.  STOCK SUBJECT TO THIS PLAN.  The stock subject to this Plan
shall be the Company's Class A Common Stock (the "Class A Common Stock"),       
presently authorized but unissued or now held or subsequently acquired by the   
Company as treasury shares.  Subject to adjustment as provided in Section 7 of  
this Plan, the aggregate amount of Class A Common Stock to be delivered upon the
exercise of all options granted under this Plan shall not exceed 41,000,000     
shares (the "Plan Maximum") as such Class A Common Stock was constituted on the 
effective date of this Plan.  If any option granted under this Plan expires or  
is surrendered, canceled, terminated or exchanged for another option for any    
reason without having been exercised in full, the unpurchased shares subject to 
such option shall again be available for purposes of this Plan, including use as
replacement options that may be granted in exchange for such surrendered,       
canceled or terminated options.                                                 

    SECTION 4.  ELIGIBILITY.  An incentive stock option may be granted only to
an individual who, at the time the option is granted, is an employee of the     
Company (or a corporate related entity, as described in Section 5.9) and who the
Board may from time to time select for participation in this Plan.  Members of  
the Board shall not be eligible for grants of incentive stock options unless    
they are also employees of the Company.  At the discretion of the Plan          
Administrator, employees and independent contractors of the Company (including  
nonemployee directors) or any related entity may receive nonqualified stock     
options.  Notwithstanding anything to the contrary herein, the maximum number of
shares of Class A Common Stock with respect to which options may be granted to  
any individual in any calendar year shall not exceed the Plan Maximum, as such  
number may change from time to time.  Any party to whom an option is granted    
under this Plan shall be referred to in this Plan as an "Optionee."             

  SECTION 5.  TERMS AND CONDITIONS OF OPTIONS.  Options granted under this
Plan shall be evidenced by written agreements that contain such terms,          
conditions, limitations and restrictions as the Plan Administrator shall deem   
advisable and which are not inconsistent with this Plan.  Notwithstanding the   
foregoing, options shall include or incorporate by reference the following terms
and conditions:                                                                 

    5.1  NUMBER OF SHARES.  The maximum number of shares that may be
purchased pursuant to the exercise of each option, which number shall be as     
established by the Plan Administrator.                                          

      5.2  PRICE OF SHARES.  The price per share at which each option is
exercisable (the "exercise price") shall be as established by the Plan          
Administrator, provided that the Plan Administrator shall act in good faith to  
establish the exercise price as follows:                                        

            5.2.1  INCENTIVE STOCK OPTIONS AND NONQUALIFIED STOCK OPTIONS.
With respect to incentive stock options intended to qualify under Section 422 of
the Code, and subject to Subsection 5.2.2 below, the exercise price shall be not
less than the fair market value per share                                       

Page 2 - STOCK OPTION PLAN                                                      

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of the Class A Common Stock at the time the option is granted, except with      
respect to the substitution of a new option for an old option, or an            
assumption of an old option, in accordance with Code Section 424(a).  With      
respect to nonqualified stock options, the exercise price shall be the amount   
set by the Plan Administrator.                                                  

              5.2.2  INCENTIVE STOCK OPTIONS TO GREATER THAN 10% SHAREHOLDERS.
With respect to incentive stock options granted to greater than 10% shareholders
of the Company, the exercise price shall be as required by Section 6.           

              5.2.3  FAIR MARKET VALUE. The fair market value per share of the
Class A Common Stock for the purpose of determining the exercise price under    
this Section 5.2 shall be determined as follows:                                

         (a)  if the Common Stock is listed on any established stock
exchange or a national market system including without limitation the           
National Market System of the National Association of Securities Dealers,       
Inc. Automated Quotation ("NASDAQ") System, the fair market value shall be      
the closing sales price for such stock (or the closing bid, if no sales were    
reported), as quoted on such system or exchange for the last market trading     
date prior to the time of determination as reported in The Wall Street          
Journal or such other source as the Plan Administrator deems reliable;          

          (b)  if the Common Stock is quoted on the NASDAQ System (but
not on the National Market System thereof) or regularly quoted by a             
recognized securities dealer but selling prices are not reported, the fair      
market value shall be the mean between the high and low asked prices for the    
Common Stock on the last market trading date prior to the day of                
determination, as reported in The Wall Street Journal or such other source as   
the Plan Administrator deems reliable; or                                       

         (c)  In the absence of an established market for the Common
Stock, fair market value shall be determined by the Plan Administrator in       
good faith at the time the option is granted.                                   

     5.3  TERM AND MATURITY.  Subject to the restrictions contained in
Section 6 with respect to granting incentive stock options to greater than 10%  
shareholders of the Company, the term of each incentive stock option shall be 10
years from the date it is granted unless a shorter period of time is established
by the Plan Administrator, but in no event shall the term of any incentive stock
option exceed 10 years.  The term of each nonqualified stock option shall be 15 
years from the date it is granted, unless a shorter period of time is           
established by the Plan Administrator in the individual option agreement.  To   
ensure that the Company or related entities will achieve the purpose and receive
the benefits contemplated in this Plan, any option granted under this Plan      
shall, unless this condition is waived or modified by the Plan Administrator in 
the agreement evidencing the option, or by subsequent resolution of the Plan    
Administrator, be exercisable according to the following schedule:              

Page 3 - STOCK OPTION PLAN                                                      

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                                                                [Download Table]

Period of Optionee's Continuous                 Portion of Total Option
Relationship With the Company or                 Which is Exercisable  
Related Entity from the Date the                                       
Option is Granted                                                      
                                                                       
After one year                                            25%          
After two years                                           50%          
After three years                                         75%          
After four years                                         100%          

5.4  EXERCISE.  Subject to the vesting schedule described in
subsection 5.3 above, if any, and to any additional holding period required by  
applicable law, each option may be exercised in whole or in part; provided,     
however, that only whole shares will be issued pursuant to the exercise of any  
option and that the exercise price shall not be less than the par value per     
share of the Class A Common Stock at the time the option is exercised.  During  
an Optionee's lifetime, any stock options granted under this Plan are personal  
to him or her and are exercisable solely by such Optionee, except as provided in
Section 5.8.  Options shall be exercised by delivery to the Company of notice of
the number of shares with respect to which the option is exercised, together    
with payment of the exercise price.                                             

         5.5  PAYMENT OF EXERCISE PRICE.  Payment of the option exercise price
shall be made in full at the time the notice of exercise of the option is       
delivered to the Company and shall be in cash, bank certified or cashier's check
or personal check (unless at the time of exercise the Plan Administrator in a   
particular case determines not to accept a personal check) for the Class A      
Common Stock being purchased.                                                   

            The Plan Administrator can determine at the time the option is
granted for incentive stock options, or at any time before exercise for         
nonqualified stock options, that additional forms of payment will be permitted, 
including installment payments on such terms and over such period as the Plan   
Administrator may determine in its discretion.  To the extent permitted by the  
Plan Administrator and applicable laws and regulations (including, but not      
limited to, federal tax and securities laws and regulations and state corporate 
law), an option may be exercised by:                                            

        (a)  delivery of shares of stock of the Company held by an
Optionee having a fair market value equal to the exercise price, such fair      
market value to be determined in good faith by the Plan Administrator;          

              (b)  delivery of a full-recourse promissory note executed by the
Optionee, provided that (i) such note delivered in connection with an incentive 
stock option shall, and such note delivered in connection with a nonqualified   
stock option may, in the sole discretion of the Plan Administrator, bear        
interest at a rate specified by the Plan Administrator but in no case less than 
the rate required to avoid imputation of interest (taking into account any      
exceptions to the imputed interest rules) for federal income tax purposes; (ii) 
the Plan Administrator in its sole discretion shall specify the term and other  
provisions of such note at the time an incentive stock                          

Page 4 - STOCK OPTION PLAN                                                      

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option is granted or at any time prior to exercise of a nonqualified stock      
option; (iii) the Plan Administrator may require that the Optionee pledge the   
Optionee's shares to the Company for the purpose of securing the payment of     
such note and may require that the certificate representing such shares be      
held in escrow in order to perfect the Company's security interest; (iv) the    
note provides that 90 days following the Optionee's termination of employment   
with the Company or a related entity, the entire outstanding balance under      
the note shall become due and payable, if not previously due and payable; and   
(v) the Plan Administrator in its sole discretion may at any time restrict or   
rescind this right upon notification to the Optionee;                           

            (c)  delivery of a properly executed exercise notice, together
with irrevocable instructions to a broker, all in accordance with the           
regulations of the Federal Reserve Board, to promptly deliver to the Company the
amount of sale or loan proceeds to pay the exercise price and any federal, state
or local withholding tax obligations that may arise in connection with the      
exercise; provided, that the Plan Administrator, in its sole discretion, may at 
any time determine that this Subparagraph (c), to the extent the instructions to
the broker call for an immediate sale of the shares, shall not be applicable to 
any Optionee who is subject to Section 16(b) of the Exchange Act if such        
transaction would result in a violation of Section 16(b), or is not an employee 
at the time of exercise;                                                        

            (d)  delivery of a properly executed exercise notice, together
with a request by the Optionee for the Company to pay the exercise price by     
withholding from the shares that would otherwise be issued that number of shares
having a fair market value equal to the option exercise price; provided, the    
Plan Administrator retains complete discretion to honor or deny the Optionee's  
request for such a method of exercise.                                          

     5.6  SHAREHOLDERS' AGREEMENT.  To the extent required by the Plan
Administrator upon exercise of an option the Optionee shall agree to enter into 
and be bound by the agreement then in effect, if any, between the Company and   
its shareholders relating to the repurchase by the Company of its outstanding   
Class A Common Stock.                                                           

        5.7  WITHHOLDING TAX REQUIREMENT.  The Company or any related entity
shall have the right to retain and withhold from any payment of cash or Class A 
Common Stock under this Plan the amount of taxes required by any government to  
be withheld or otherwise deducted and paid with respect to such payment.  At its
discretion, the Company may require an Optionee receiving shares of Class A     
Common Stock to reimburse the Company or a related entity for any such taxes    
required to be withheld and may withhold any distribution in whole or in part   
until the Company, or related entity, is so reimbursed.  In lieu of such        
withholding or reimbursement, the Company (or related entity) shall have the    
right to withhold from any other cash amounts due or to become due from the     
Company (or related entity) to the Optionee an amount equal to such taxes or to 
retain and withhold a number of shares having a market value not less than the  
amount of such taxes required to be withheld as reimbursement for any such taxes
and cancel (in whole or in part) any such shares so withheld.                   

       5.8  NONTRANSFERABILITY OF OPTION.  Options granted under this Plan
and the rights and privileges conferred by this Plan may not be transferred,    
assigned, pledged or hypothecated in any manner (whether by operation of law or 
otherwise) other than by will or by the applicable                              

Page 5 - STOCK OPTION PLAN                                                      

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laws of descent and distribution; provided, with respect to a non-qualified     
stock option, an Optionee may transfer the option to a revocable trust          
created by the Optionee for the benefit of his or her descendants, to an        
immediate family member or to a partnership in which only immediate family      
members or such trusts are partners. Options under this Plan shall not be       
subject to execution, attachment or similar process.  Any attempt to            
transfer, assign, pledge, hypothecate or otherwise dispose of any option        
under this Plan or of any right or privilege conferred by this Plan, contrary   
to the Code or to the provisions of this Plan, or the sale or levy or any       
attachment or similar process upon the rights and privileges conferred by       
this Plan shall be null and void.  Notwithstanding the foregoing, an Optionee   
may during the Optionee's lifetime, designate a person who may exercise the     
option after the Optionee's death by giving written notice of such              
designation to the Plan Administrator.  Such designation may be changed from    
time to time by the Optionee by giving written notice to the Plan               
Administrator revoking any earlier designation and making a new designation.    

   5.9  TERMINATION OF RELATIONSHIP.  If the Optionee's employment
relationship with the Company or any related entity ceases for any reason other 
than termination for cause, death or permanent and total disability, and unless 
by its terms the option sooner terminates or expires, then the Optionee may     
exercise, for a period of three months after such cessation, that portion of the
Optionee's option which is exercisable at the time of such cessation.  The      
Optionee's option, however, shall terminate at the end of the three month period
following such cessation as to all Shares for which it has not been exercised,  
unless such provision is waived in the agreement evidencing the option or by    
resolution adopted by the Plan Administrator.  If, in the case of an incentive  
stock option, an Optionee's relationship with the Company or related entity     
changes (i.e., from employee to nonemployee, such as a consultant), such change 
shall constitute a termination of an Optionee's employment with the Company or  
related entity and the Optionee's incentive stock option shall terminate in     
accordance with this subsection.  Upon the expiration of the three month period 
following cessation of employment, the Plan Administrator shall have sole       
discretion in a particular circumstance to extend the exercise period following 
such cessation beyond that specified above.  If, however, in the case of an     
incentive stock option, the Optionee does not exercise the Optionee's option    
within three months after cessation of employment, the option will no longer    
qualify as an incentive stock option under the Code.                            

            Upon an Optionee's termination of employment for cause, all of
the optionee's outstanding (i.e., unexercised) options issued under this Plan   
shall immediately expire and no longer be available for exercise.  For purposes 
of this Plan, a termination shall be considered for "cause" if the termination  
is attributable to the Optionee's:  (a) Embezzlement; (b) use of illegal drugs  
or alcohol that materially impairs the Optionee's ability to fulfill his or her 
duties as an employee or independent contractor; (c) willful disclosure of trade
secrets or confidential information of the Company; (d) dishonesty which results
in substantial harm to the Company; or (e) conviction or confession of a        
criminal felony.                                                                

           If an Optionee's relationship with the Company or any related
entity ceases because of a permanent and total disability, the Optionee's option
shall not terminate, and in the case of an incentive stock option, shall not    
cease to be treated as an incentive stock option, until the end of the 12-month 
period following such cessation (unless by its terms it sooner terminates       

Page 6 - STOCK OPTION PLAN                                                      

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and expires).  As used in this Plan, the term "permanent and total              
disability" has the same meaning provided in Code Section 22(e)(3).             

             For purposes of this subsection 5.9, a transfer of relationship
between or among the Company and/or any related entity shall not be deemed to   
constitute a cessation of relationship with the Company or any of its related   
entities.  For purposes of this subsection 5.9, with respect to incentive stock 
options, employment shall be deemed to continue while the Optionee is on        
military leave, sick leave or other bona fide leave of absence (as determined by
the Plan Administrator).  The foregoing notwithstanding, employment shall not be
deemed to continue beyond the first 90 days of such leave, unless the Optionee's
reemployment rights are guaranteed by statute or by contract.                   

             As used in this Plan, the term "related entity," when referring
to a subsidiary, shall mean any business entity (other than the Company) which, 
at the time of the granting of the option, is in an unbroken chain of entities  
ending with the Company, if stock or voting interests possessing 50% or more of 
the total combined voting power of all classes of stock or other ownership      
interests of each of the entities other than the Company is owned by one of the 
other entities in such chain.  When referring to a parent entity, the term      
"related entity" shall mean any entity in an unbroken chain of entities ending  
with the Company if, at the time of the granting of the option, each of the     
entities other than the Company owns stock or other ownership interests         
possessing 50% or more of the total combined voting power of all classes of     
stock (or other ownership interests) in one of the other entities in such chain.
In addition, with respect to an incentive stock option, the definition of       
"related entity" as used in this Plan shall apply by only considering entities  
that are corporations.                                                          

      5.10 DEATH OF OPTIONEE.  If an Optionee dies while he or she has a
relationship with the Company or any related entity or dies within the three    
month period (or 12-month period in the case of totally disabled Optionees)     
following cessation of such relationship, any option held by such Optionee to   
the extent that the Optionee would have been entitled to exercise such option,  
may be exercised within one year after his or her death by the personal         
representative of his or her estate or by the person or persons to whom the     
Optionee's rights under the option shall pass by will or by the applicable laws 
of descent and distribution.                                                    

       5.11 STATUS OF SHAREHOLDER.  Neither the Optionee nor any  party to
which the Optionee's rights and privileges under the option may pass shall be,  
or have any of the rights or privileges of, a shareholder of the Company with   
respect to any of the shares issuable upon the exercise of any option granted   
under this Plan unless and until such option has been exercised.                

    5.12 CONTINUATION OF EMPLOYMENT.  Nothing in this Plan or in any
option granted pursuant to this Plan shall confer upon any Optionee any right to
continue in the employ of the Company or of a related entity, or to interfere in
any way with the right of the Company or of any related entity to terminate his 
or her employment or other relationship with the Company or a related entity at 
any time.                                                                       

5.13 MODIFICATION AND AMENDMENT OF OPTION.  Subject to the  
requirements of Code Section 422 with respect to incentive stock options and to 
the terms and conditions and within                                             

Page 7 - STOCK OPTION PLAN                                                      

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the limitations of this Plan, the Plan Administrator may modify or amend        
outstanding options granted under this Plan. The modification or amendment of   
an outstanding option shall not, without the consent of the Optionee, impair    
or diminish any of his or her rights or any of the obligations of the Company   
under such option.  Except as otherwise provided in this Plan, no outstanding   
option shall be terminated without the consent of the Optionee.  Unless the     
Optionee agrees otherwise, any changes or adjustments made to outstanding       
incentive stock options granted under this Plan shall be made in such a         
manner so as not to constitute a "modification" as defined in Code Section      
424(h) and so as not to cause any incentive stock option issued hereunder to    
fail to continue to qualify as an incentive stock option as defined in Code     
Section 422(b).                                                                 

    5.14 LIMITATION ON VALUE FOR INCENTIVE STOCK OPTIONS.  As to all
incentive stock options granted under the terms of this Plan, to the extent that
the aggregate fair market value (determined at the time the incentive stock     
option is granted) of the stock with respect to which incentive stock options   
are exercisable for the first time by the Optionee during any calendar year     
(under this Plan and all other incentive stock option plans of the Company, a   
related entity or a predecessor corporation) exceeds $100,000, those options (or
the portion of an option) beyond the $100,000 threshold shall be treated as     
nonqualified stock options.  The previous sentence shall not apply if the       
Internal Revenue Service publicly rules, issues a private ruling to the Company,
any Optionee, or any legatee, personal representative or distributee of an      
Optionee or issues regulations changing or eliminating such annual limit.       

SECTION 6.  GREATER THAN 10% SHAREHOLDERS.                            

          6.1  EXERCISE PRICE AND TERM OF INCENTIVE STOCK OPTIONS.  If incentive
stock options are granted under this Plan to employees who own more than 10% of 
the total combined voting power of all classes of stock of the Company or any   
related entity, the term of such incentive stock options shall not exceed five  
years and the exercise price shall be not less than 110% of the fair market     
value of the Class A Common Stock at the time the incentive stock option is     
granted.  This provision shall control notwithstanding any contrary terms       
contained in an option agreement or any other document.                         

          6.2  ATTRIBUTION RULE.  For purposes of subsection 6.1, in determining
stock ownership, an employee shall be deemed to own the stock owned, directly or
indirectly, by or for his brothers, sisters, spouse, ancestors and lineal       
descendants.  Stock owned, directly or indirectly, by or for a corporation,     
partnership, estate or trust shall be deemed to be owned proportionately by or  
for its shareholders, partners or beneficiaries.  If an employee or a person    
related to the employee owns an unexercised option or warrant to purchase stock 
of the Company, the stock subject to that portion of the option or warrant which
is unexercised shall not be counted in determining stock ownership.  For        
purposes of this Section 6, stock owned by an employee shall include all stock  
actually issued and outstanding immediately before the grant of the incentive   
stock option to the employee.                                                   

SECTION 7.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.  The aggregate
number and class of shares for which options may -be granted under this Plan,   
the number and class of shares covered by each outstanding option and the       
exercise price per share thereof (but not the total                             

Page 8 - STOCK OPTION PLAN                                                      

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price), and each such option, shall all be proportionately adjusted for any     
increase or decrease in the number of issued shares of Class A Common Stock     
of the Company resulting from a split-up or consolidation of shares or any      
like capital adjustment, or the payment of any stock dividend.                  

    7.1  EFFECT OF LIQUIDATION, REORGANIZATION OR CHANGE IN CONTROL.

        7.1.1  CASH, STOCK OR OTHER PROPERTY FOR STOCK.  Except as
provided in subsection 7.1.2, upon a merger (other than a merger of the         
Company in which the holders of Class A Common Stock immediately prior to the   
merger have the same proportionate ownership of Class A Common Stock in the     
surviving corporation immediately after the merger), consolidation,             
acquisition of property or stock, separation, reorganization (other than a      
mere reincorporation or the creation of a holding company) or liquidation of    
the Company, as a result of which the shareholders of the Company receive       
cash, stock or other property in exchange for or in connection with their       
shares of Class A Common Stock, any option granted under this Plan shall        
terminate.  Notwithstanding the foregoing, the Optionee shall have the right    
immediately prior to any such merger, consolidation, acquisition of property    
or stock, separation, reorganization or liquidation to exercise such option     
in whole or in part, to the extent the vesting requirements set forth in this   
Plan have been satisfied, unless stated otherwise in the Optionee's             
individual option agreement.                                                    

           7.1.2  CONVERSION OF OPTIONS ON STOCK FOR STOCK EXCHANGE.  If
the shareholders of the Company receive capital stock of another corporation    
("Exchange Stock") in exchange for their shares of Class A Common Stock in      
any transaction involving a merger (other than a merger of the Company in       
which the holders of Class A Common Stock immediately prior to the merger       
have the same proportionate ownership of common stock in the surviving          
corporation immediately after the merger), consolidation, acquisition of        
property or stock, separation or reorganization (other than a mere              
reincorporation or the creation of a holding company), all options granted      
under this Plan shall be converted into options to purchase shares of           
Exchange Stock unless the Company and the corporation issuing the Exchange      
Stock, in their sole discretion, determine that any or all such options         
granted under this Plan shall not be converted into options to purchase         
shares of Exchange Stock, but instead shall terminate in accordance with the    
provisions of subsection 7.1.1.  The amount and price of converted options      
shall be determined by adjusting the amount and price of the options granted    
under this Plan in the same proportion as used for determining the number of    
shares of Exchange Stock the holders of the Class A Common Stock receive in     
such merger, consolidation, acquisition of property or stock, separation or     
reorganization.  Unless accelerated by the Board, the vesting schedule set      
forth in the option agreement shall continue to apply for the Exchange Stock.   

     7.1.3  CHANGE IN CONTROL.  In the event of a "Change in
Control," as defined in Section 7.1.4 below, of the Company after the Company   
has registered any of its equity securities pursuant to Section 12(b) or        
12(g) of the Exchange Act, unless otherwise determined by the Board prior to    
the occurrence of such Change in Control, any options or portions of such       
options outstanding as of the date such Change in Control is determined to      
have occurred that are not yet fully vested shall not become fully vested       
merely by the occurrence of a Change in Control.                                

Page 9 - STOCK OPTION PLAN                                                      

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            7.1.4  DEFINITION OF "CHANGE IN CONTROL." For purposes of this
Plan, a "Change in Control" shall mean (a) the first approval by the Board or   
by the stockholders of the Company of an Extraordinary Event, (b) a Purchase,   
or (c) a Board Change.                                                          

      For purposes of the Plan, an  "Extraordinary Event" shall mean any
of the following actions:                                                       

(i)  any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which     
shares of Class A Common Stock would be converted into cash, securities or      
other property, other than a merger of the Company in which the holders of      
common stock immediately prior to the merger have substantially the same        
proportionate ownership of common stock of the surviving corporation            
immediately after the merger;                                                   

(ii)  any sale, lease, exchange or other transfer (in one   
transaction or a series of related transactions) of all, or substantially       
all, the assets of the Company; or                                              

  (iii)  the adoption of any plan or proposal for liquidation or
dissolution of the Company.                                                     

     For purposes of the Plan, a "Purchase" shall mean the acquisition
by any person (as such term is defined in Section 13(d) of the Exchange Act)    
of any shares of Class A Common Stock or securities convertible into Class A    
Common Stock) without the prior approval of a majority of the Continuing        
Directors (as defined below) of the Company, if after making such acquisition   
such person is the beneficial owner (as such term is defined in Rule 13d-3      
under the Exchange Act) directly or indirectly of securities of the Company     
representing 20% or more of the combined voting power of the Company's then     
outstanding securities (calculated as provided in paragraph (d) of such Rule    
13d-3).                                                                         

     For purposes of the Plan, a "Board Change" shall have occurred if
individuals who constitute the Board of the Company at the time of adoption     
of this Plan (the "Continuing Directors") cease for any reason to constitute    
at least a majority of the Board, provided that any person becoming a           
Director subsequent to the date of adoption of this Plan whose nomination for   
election was approved by a vote of at least a majority of the Continuing        
Directors (other than a nomination of an individual whose initial assumption    
of office is in connection with an actual threatened election contest           
relating to the election of the Directors of the Company, as such terms are     
used in Rule 14a-11 of Regulation 14A under the Exchange Act) shall be deemed   
to be a Continuing Director.                                                    

         7.2  FRACTIONAL SHARES.  In the event of any adjustment in the number
of shares covered by any option, any fractional shares resulting from such      
adjustment shall be disregarded and each such option shall cover only the number
of full shares resulting from such adjustment.                                  

       7.3  DETERMINATION OF BOARD TO BE FINAL.  All Section 7 adjustments
shall be made by the Board, and its determination as to what adjustments shall  
be made, and the extent of such adjustments, shall be final, binding and        
conclusive.  Unless an Optionee agrees otherwise, any                           

Page 10 - STOCK OPTION PLAN                                                     

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change or adjustment to an incentive stock option shall be made in such a       
manner so as not to constitute a "modification" as defined in Code Section      
424(h) and so as not to cause his or her incentive stock option issued under    
this Plan to fail to continue to qualify as an incentive stock option as        
defined in Code Section 422(b).                                                 

SECTION 8.  SECURITIES REGULATION.  Shares shall not be issued with   
respect to an option granted under this Plan unless the exercise of such option 
and the issuance and delivery of such shares pursuant to the exercise of such   
option shall comply with all relevant provisions of law, including, without     
limitation, any applicable state securities laws, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the shares may then be listed,
and shall be further subject to the approval of counsel for the Company with    
respect to such compliance, including the availability of an exemption from     
registration for the issuance and sale of any shares under this Plan.  Inability
of the Company to obtain from any regulatory body having jurisdiction, the      
authority deemed by the Company's counsel to be necessary for the lawful        
issuance and sale of any shares under this Plan or the unavailability of an     
exemption from registration for the issuance and sale of any shares under this  
Plan shall relieve the Company of any liability in respect of the nonissuance or
sale of such shares as to which such requisite authority shall not have been    
obtained.                                                                       

          As a condition to the exercise of an option, the Company may
require the Optionee to represent and warrant at the time of any such exercise  
that the shares are being purchased only for investment and without any present 
intention to sell or distribute such shares if, in the opinion of counsel for   
the Company, such a representation is required by any relevant provision of the 
aforementioned laws.  At the option of the Company, a stop-transfer order       
against any shares of stock may be placed on the official stock books and       
records of the Company, and a legend indicating that the stock may not be       
pledged, sold or otherwise transferred unless an opinion of counsel is provided 
(concurred in by counsel for the Company) stating that such transfer is not in  
violation of any applicable law or regulation, may be stamped on stock          
certificates in order to assure exemption from registration.  The Plan          
Administrator may also require such other action or agreement by the Optionees  
as may from time to time be necessary to comply with the federal and state      
securities laws.  THIS PROVISION SHALL NOT OBLIGATE THE COMPANY TO UNDERTAKE    
REGISTRATION OF THE OPTIONS OR STOCK HEREUNDER.                                 

            Should any of the Company's capital stock of the same class as
the stock subject to options granted under this Plan be listed on a national    
securities exchange, all stock issued under this Plan if not previously listed  
on such exchange shall be authorized by that exchange for listing on such       
exchange prior to the issuance of such stock.                                   

SECTION 9.  AMENDMENT AND TERMINATION.                                

   9.1  BOARD ACTION.  The Board may at any time suspend, amend or
terminate this Plan, provided that except as set forth in Section 7, the        
approval of the Company's shareholders is necessary within 12 months before or  
after the adoption by the Board of any amendment which will:                    

Page 11 - STOCK OPTION PLAN                                                     

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             (a)  increase the number of shares which are to be reserved
for the issuance of options under this Plan;                                    

         (b)  permit the granting of stock options to a class of
persons other than those presently permitted to receive stock options under this
Plan; or                                                                        

         (c)  require shareholder approval under applicable law,
including Section 16(b) of the Exchange Act.                                    

               Any amendment to this Plan that would constitute a "modification"
to incentive stock options outstanding on the date of such amendment shall not  
be applicable to outstanding incentive stock options, but shall have prospective
effect only, unless individual Optionees agree otherwise.                       

       9.2  AUTOMATIC TERMINATION.  Unless sooner terminated by the Board,
this Plan shall terminate ten years from the earlier of (a) the date on which   
this Plan is adopted by the Board or (b) the date on which this Plan is approved
by the shareholders of the Company.  No option may be granted after such        
termination or during any suspension of this Plan.  The amendment or termination
of this Plan shall not, without the consent of the option holder, alter or      
impair any rights or obligations under any option previously granted under this 
Plan.                                                                           

    SECTION 10.   EFFECTIVENESS OF THIS PLAN. This Plan shall become effective
upon adoption by the Board so long as it is approved by the Company's           
shareholders any time within 12 months before or after the adoption of this     
Plan.                                                                           

Page 12 - STOCK OPTION PLAN                                                     

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘DEFS14C’ Filing		Date		First		Last			Other Filings
		1/15/07		4
		10/6/01		10
		12/31/00		10
		12/31/99		10					10-K,  11-K
		11/23/99		2
Filed on:		11/22/99
		11/19/99		14
		11/18/99		5					8-K
For Period End:		11/12/99
		10/19/99		2		15
		10/7/99		9		10
		10/1/99		12		13
		9/21/99		9
		8/27/99		3		13			S-8
		8/18/99		8		10
		6/9/99		9					SC 13G
		5/3/99		15					S-3
		3/26/99		8
		2/4/99		15					S-4
		12/31/98		8		9			10-K
		12/17/98		9
		10/2/98		9
		8/14/98		9					10-Q
		7/17/98		9		14			8-K
		7/16/98		9		10
		2/5/98		15
		1/22/98		9
		12/31/97		8		15			10KSB
		9/30/97		15					10QSB
		7/21/97		8
		1/31/97		8
		12/31/96		8					10KSB40
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