WELLS TIMBER REAL ESTATE INVESTMENT TRUST, INC. 2005 LONG-TERM INCENTIVE PLAN

<PAGE>

EXHIBIT 10.3

----------

WELLS TIMBER REAL ESTATE INVESTMENT TRUST, INC.

2005 LONG-TERM INCENTIVE PLAN

----------

<PAGE>

WELLS TIMBER REAL ESTATE INVESTMENT TRUST, INC.

2005 LONG-TERM INCENTIVE PLAN

<TABLE>

<S> <C>

ARTICLE 1 PURPOSE......................................................... 1

1.1 General......................................................... 1

ARTICLE 2 DEFINITIONS..................................................... 1

2.1 Definitions..................................................... 1

ARTICLE 3 EFFECTIVE TERM OF PLAN.......................................... 7

3.1 Effective Date.................................................. 7

3.2 Term of Plan.................................................... 8

ARTICLE 4 ADMINISTRATION.................................................. 8

4.1 Committee....................................................... 8

4.2 Actions and Interpretations by the Committee.................... 8

4.3 Authority of Committee.......................................... 8

4.4 Award Certificates.............................................. 10

ARTICLE 5 SHARES SUBJECT TO THE PLAN...................................... 10

5.1 Number of Shares................................................ 10

5.2 Share Counting.................................................. 10

5.3 Stock Distributed............................................... 11

ARTICLE 6 ELIGIBILITY..................................................... 11

6.1 General......................................................... 11

ARTICLE 7 STOCK OPTIONS................................................... 11

7.1 General......................................................... 11

7.2 Incentive Stock Options......................................... 12

ARTICLE 8 STOCK APPRECIATION RIGHTS....................................... 13

8.1 Grant of Stock Appreciation Rights.............................. 13

ARTICLE 9 PERFORMANCE AWARDS.............................................. 14

9.1 Grant of Performance Awards..................................... 14

9.2 Performance Goals............................................... 14

9.3 Right to Payment................................................ 14

9.4 Other Terms..................................................... 14

ARTICLE 10 RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS............... 15

10.1 Grant of Restricted Stock and Restricted Stock Units............ 15

10.2 Issuance and Restrictions....................................... 15

10.3 Forfeiture...................................................... 15

10.4 Delivery of Restricted Stock.................................... 15

ARTICLE 11 DEFERRED STOCK UNITS............................................ 15

11.1 Grant of Deferred Stock Units................................... 15

ARTICLE 12 DIVIDEND EQUIVALENTS............................................ 16

12.1 Grant of Dividend Equivalents................................... 16

ARTICLE 13 STOCK OR OTHER STOCK-BASED AWARDS............................... 16

</TABLE>

<PAGE>

<TABLE>

<S> <C>

13.1 Grant of Stock or Other Stock-Based Awards...................... 16

ARTICLE 14 PROVISIONS APPLICABLE TO AWARDS................................. 17

14.1 Stand-Alone and Tandem Awards................................... 17

14.2 Term of Awards.................................................. 17

14.3 Form of Payment of Awards....................................... 17

14.4 Limits on Transfer.............................................. 17

14.5 Beneficiaries................................................... 17

14.6 Stock Certificates.............................................. 18

14.7 Acceleration Upon Death or Disability........................... 18

14.8 Treatment upon a Change in Control.............................. 18

14.9 Acceleration For Any Reason..................................... 19

14.10 Termination of Employment....................................... 20

14.11 Forfeiture Events............................................... 20

14.12 Substitute Awards............................................... 20

ARTICLE 15 CHANGES IN CAPITAL STRUCTURE.................................... 20

15.1 General......................................................... 20

ARTICLE 16 AMENDMENT, MODIFICATION AND TERMINATION......................... 21

16.1 Amendment, Modification and Termination......................... 21

16.2 Awards Previously Granted....................................... 21

ARTICLE 17 GENERAL PROVISIONS.............................................. 22

17.1 No Rights to Awards; Non-Uniform Determinations................. 22

17.2 No Shareholder Rights........................................... 22

17.3 Withholding..................................................... 22

17.4 No Right to Continued Service................................... 23

17.5 Unfunded Status of Awards....................................... 23

17.6 Relationship to Other Benefits.................................. 23

17.7 Expenses........................................................ 23

17.8 Titles and Headings............................................. 23

17.9 Gender and Number............................................... 23

17.10 Fractional Shares............................................... 23

17.11 Government and Other Regulations................................ 24

17.12 Governing Law................................................... 24

17.13 Additional Provisions........................................... 24

17.14 No Limitations on Rights of Company............................. 24

17.15 Indemnification................................................. 25

</TABLE>

ii

<PAGE>

WELLS TIMBER REAL ESTATE INVESTMENT TRUST, INC.

2005 LONG-TERM INCENTIVE PLAN

ARTICLE 1

PURPOSE

1.1. GENERAL. The purpose of the Wells Timber Real Estate Investment Trust,

Inc. 2005 Long-Term Incentive Plan (the "PLAN") is to promote the success, and

enhance the value, of Wells Timber Real Estate Investment Trust, Inc. (the

"COMPANY"), by linking the personal interests of employees, officers, directors

and consultants of the Company or any Affiliate (as defined below) to those of

Company stockholders and by providing such persons with an incentive for

outstanding performance. The Plan is further intended to provide flexibility to

the Company in its ability to motivate, attract, and retain the services of

employees, officers, directors and consultants upon whose judgment, interest,

and special effort the successful conduct of the Company's operation is largely

dependent. Accordingly, the Plan permits the grant of incentive awards from time

to time to selected employees, officers, directors and consultants of the

Company and its Affiliates.

ARTICLE 2

DEFINITIONS

2.1. DEFINITIONS. When a word or phrase appears in this Plan with the

initial letter capitalized, and the word or phrase does not commence a sentence,

the word or phrase shall generally be given the meaning ascribed to it in this

Section or in Section 1.1 unless a clearly different meaning is required by the

context. The following words and phrases shall have the following meanings:

(a) "AFFILIATE" means (i) any Subsidiary or Parent, or (ii) an entity

that directly or through one or more intermediaries controls, is controlled

by or is under common control with, the Company, as determined by the

Committee.

(b) "AWARD" means any Option, Stock Appreciation Right, Restricted

Stock Award, Restricted Stock Unit Award, Deferred Stock Unit Award,

Performance Award, Dividend Equivalent Award, Other Stock-Based Award,

Performance-Based Cash Awards, or any other right or interest relating to

Stock or cash, granted to a Participant under the Plan.

(c) "AWARD CERTIFICATE" means a written document, in such form as the

Committee prescribes from time to time, setting forth the terms and

conditions of an Award. Award Certificates may be in the form of individual

award agreements or certificates or a program document describing the terms

and provisions of an Awards or series of Awards under the Plan.

<PAGE>

(d) "BOARD" means the Board of Directors of the Company.

(e) "CAUSE" as a reason for a Participant's termination of employment

shall have the meaning assigned such term in the employment, severance or

similar agreement, if any, between such Participant and the Company or an

Affiliate, provided, however that if there is no such employment, severance

or similar agreement in which such term is defined, and unless otherwise

defined in the applicable Award Certificate, "CAUSE" shall mean any of the

following acts by the Participant, as determined by the Committee or the

Board: (i) the willful and continued failure of the Participant to perform

his or her required duties as an officer or employee of the Company or any

Affiliate, (ii) any action by the Participant that involves willful

misfeasance or gross negligence, (iii) the requirement of or direction by a

federal or state regulatory agency that has jurisdiction over the Company

or any Affiliate to terminate the employment of the Participant, (iv) the

conviction of the Participant of the commission of any criminal offense

that involves dishonesty or breach of trust, or (v) any intentional breach

by the Participant of a material term, condition or covenant of any

agreement between the Participant and the Company or any Affiliate.

(f) "CHANGE IN CONTROL" means and includes the occurrence of any one

of the following events but shall specifically exclude a Public Offering:

(i) individuals who, on the Effective Date, constitute the Board

(the "INCUMBENT DIRECTORS") cease for any reason to constitute at

least a majority of such Board, provided that any person becoming a

director after the Effective Date and whose election or nomination for

election was approved by a vote of at least a majority of the

Incumbent Directors then on the Board shall be an Incumbent Director;

provided, however, that no individual initially elected or nominated

as a director of the Company as a result of an actual or threatened

election contest with respect to the election or removal of directors

("ELECTION CONTEST") or other actual or threatened solicitation of

proxies or consents by or on behalf of any Person other than the Board

("PROXY CONTEST"), including by reason of any agreement intended to

avoid or settle any Election Contest or Proxy Contest, shall be deemed

an Incumbent Director; or

(ii) any person becomes a "beneficial owner" (as defined in Rule

13d-3 under the 1934 Act), directly or indirectly, of either (A) 25%

or more of the then-outstanding shares of common stock of the Company

("COMPANY COMMON STOCK") or (B) securities of the Company representing

25% or more of the combined voting power of the Company's then

outstanding securities eligible to vote for the election of directors

(the "COMPANY VOTING SECURITIES"); provided, however, that for

purposes of this subsection (ii), the following acquisitions of

Company Common Stock or Company Voting Securities shall not constitute

a Change in Control: (w) an acquisition directly from the Company, (x)

an acquisition by the Company or a Subsidiary of the Company, (y) an

acquisition by any employee benefit plan (or related trust) sponsored

or maintained by the

-2-

<PAGE>

Company or any Subsidiary of the Company, or (z) an acquisition

pursuant to a Non-Qualifying Transaction (as defined in subsection

(iii) below); or

(iii) the consummation of a reorganization, merger,

consolidation, statutory share exchange or similar form of corporate

transaction involving the Company or a Subsidiary (a

"REORGANIZATION"), or the sale or other disposition of all or

substantially all of the Company's assets (a "SALE") or the

acquisition of assets or stock of another corporation (an

"Acquisition"), unless immediately following such Reorganization, Sale

or Acquisition: (A) all or substantially all of the individuals and

entities who were the beneficial owners, respectively, of the

outstanding Company Common Stock and outstanding Company Voting

Securities immediately prior to such Reorganization, Sale or

Acquisition beneficially own, directly or indirectly, more than 50%

of, respectively, the then outstanding shares of common stock and the

combined voting power of the then outstanding voting securities

entitled to vote generally in the election of directors, as the case

may be, of the corporation resulting from such Reorganization, Sale or

Acquisition (including, without limitation, a corporation which as a

result of such transaction owns the Company or all or substantially

all of the Company's assets or stock either directly or through one or

more subsidiaries, the "SURVIVING CORPORATION") in substantially the

same proportions as their ownership, immediately prior to such

Reorganization, Sale or Acquisition, of the outstanding Company Common

Stock and the outstanding Company Voting Securities, as the case may

be, and (B) no person (other than (x) the Company or any Subsidiary of

the Company, (y) the Surviving Corporation or its ultimate parent

corporation, or (z) any employee benefit plan (or related trust)

sponsored or maintained by any of the foregoing is the beneficial

owner, directly or indirectly, of 25% or more of the total common

stock or 25% or more of the total voting power of the outstanding

voting securities eligible to elect directors of the Surviving

Corporation, and (C) at least a majority of the members of the board

of directors of the Surviving Corporation were Incumbent Directors at

the time of the Board's approval of the execution of the initial

agreement providing for such Reorganization, Sale or Acquisition (any

Reorganization, Sale or Acquisition which satisfies all of the

criteria specified in (A), (B) and (C) above shall be deemed to be a

"NON-QUALIFYING TRANSACTION"); or

(iv) approval by the stockholders of the Company of a complete

liquidation or dissolution of the Company.

Notwithstanding the foregoing, for any Awards that constitute a

nonqualified deferred compensation plan within the meaning of Section

409A(d) of the Code, Change in Control shall have the same meaning as

set forth in any regulations, revenue procedure or revenue rulings

issued by the Secretary of the United States Treasury applicable to

such plans.

-3-

<PAGE>

(g) "CODE" means the Internal Revenue Code of 1986, as amended from

time to time, and includes a reference to the underlying final regulations.

(h) "COMMITTEE" means the committee of the Board described in Article

4.

(i) "COMPANY" means Wells Timber Real Estate Investment Trust, Inc., a

Maryland corporation, or any successor corporation.

(j) "CONTINUOUS STATUS AS A PARTICIPANT" means the absence of any

interruption or termination of service as an employee, officer, consultant

or director of the Company or any Affiliate, as applicable; provided,

however, that for purposes of an Incentive Stock Option, or a Stock

Appreciation Right issued in tandem with an Incentive Stock Option,

"CONTINUOUS STATUS AS A PARTICIPANT" means the absence of any interruption

or termination of service as an employee of the Company or any Parent or

Subsidiary, as applicable, pursuant to applicable tax regulations.

Continuous Status as a Participant shall continue to the extent provided in

a written severance or employment agreement during any period for which

severance compensation payments are made to an employee, officer,

consultant or director and shall not be considered interrupted in the case

of any short-term disability or leave of absence authorized in writing by

the Company prior to its commencement; provided, however, that for purposes

of Incentive Stock Options, no such leave may exceed 90 days, unless

reemployment upon expiration of such leave is guaranteed by statute or

contract. If reemployment upon expiration of a leave of absence approved by

the Company is not so guaranteed, on the 91st day of such leave any

Incentive Stock Option held by the Participant shall cease to be treated as

an Incentive Stock Option and shall be treated for tax purposes as a

Nonstatutory Stock Option. Notwithstanding the foregoing, for any Awards

that constitute a nonqualified deferred compensation plan within the

meaning of Section 409A(d) of the Code, Continuous Status as a Participant

shall mean the absence of any "separation from service" or similar concept

as set forth in any regulations, revenue procedure or revenue rulings

issued by the Secretary of the United States Treasury applicable to such

plans.

(k) "DEFERRED STOCK UNIT" means a right granted to a Participant under

Article 11.

(l) "DISABILITY" or "DISABLED" has the same meaning as provided in the

long-term disability plan or policy maintained by the Company or if

applicable, most recently maintained, by the Company or if applicable, an

Affiliate, for the Participant, whether or not such Participant actually

receives disability benefits under such plan or policy. If no long-term

disability plan or policy was ever maintained on behalf of Participant or

if the determination of Disability relates to an Incentive Stock Option, or

a Stock Appreciation Right issued in tandem with an Incentive Stock Option,

Disability means Permanent and Total Disability as defined in Section

22(e)(3) of the Code. In the event of a dispute, the determination whether

a Participant is Disabled will be made by the Committee and may be

supported by the advice of a physician competent in the area to which such

Disability relates. Notwithstanding the foregoing, for any Awards that

constitute a nonqualified

-4-

<PAGE>

deferred compensation plan within the meaning of Section 409A(d) of the

Code, Disability shall have the same meaning as set forth in any

regulations, revenue procedure or revenue rulings issued by the Secretary

of the United States Treasury applicable to such plans.

(m) "DIVIDEND EQUIVALENT" means a right granted to a Participant under

Article 12.

(n) "EFFECTIVE DATE" has the meaning assigned such term in Section

3.1.

(o) "ELIGIBLE PARTICIPANT" means an employee, officer, consultant or

director of the Company or any Affiliate.

(p) "FAIR MARKET VALUE", on any date, means(i) if the Stock is listed

on a national securities exchange or is traded on a national market system,

the closing sales price on such exchange or over such system on such date

or, in the absence of reported sales on such date, the closing sales price

on the immediately preceding date on which sales were reported, or (ii) if

the Stock is not listed on a national securities exchange or traded on a

national market system, the mean between the bid and offered prices as

quoted by NASDAQ for such date, provided that if it is determined that the

fair market value is not properly reflected by such NASDAQ quotations or

bid and offered prices for the Shares are not quoted by NASDAQ, Fair Market

Value will be determined by such other method as the Committee determines

in good faith to be reasonable.

(q) "FULL VALUE AWARD" means an Award other than in the form of an

Option or SAR, and which is settled by the issuance of Stock.

(r) "GRANT DATE" of an Award means the first date on which all

necessary corporate action has been taken to approve the grant of the Award

as provided in the Plan, or such later date as is determined and specified

as part of that authorization process. Notice of the grant shall be

provided to the grantee within a reasonable time after the Grant Date.

(s) "INCENTIVE STOCK OPTION" means an Option that is intended to be an

incentive stock option and meets the requirements of Section 422 of the

Code or any successor provision thereto.

(t) "INDEPENDENT DIRECTOR" means a director of the Company who is not

a common law employee of the Company or an Affiliate.

(u) "NONSTATUTORY STOCK OPTION" means an Option that is not an

Incentive Stock Option.

-5-

<PAGE>

(v) "OPTION" means a right granted to a Participant under Article 7 of

the Plan to purchase Stock at a specified price during specified time

periods. An Option may be either an Incentive Stock Option or a

Nonstatutory Stock Option.

(w) "OTHER STOCK-BASED AWARD" means a right, granted to a Participant

under Article 13, that relates to or is valued by reference to Stock or

other Awards relating to Stock.

(x) "PARENT" means a corporation, limited liability company,

partnership or other entity which owns or beneficially owns a majority of

the outstanding voting stock or voting power of the Company.

Notwithstanding the above, with respect to an Incentive Stock Option,

Parent shall have the meaning set forth in Section 424(e) of the Code.

(y) "PARTICIPANT" means a person who, as an employee, officer,

director or consultant of the Company or any Affiliate, has been granted an

Award under the Plan; provided that in the case of the death of a

Participant, the term "PARTICIPANT" refers to a beneficiary designated

pursuant to Section 14.5 or the legal guardian or other legal

representative acting in a fiduciary capacity on behalf of the Participant

under applicable state law and court supervision.

(z) "PERFORMANCE AWARD" means Performance Shares or Performance Units

or Performance-Based Cash Awards granted pursuant to Article 9.

(aa) "PERFORMANCE-BASED CASH AWARD" means a right granted to a

Participant under Article 9 to a cash award to be paid upon achievement of

such performance goals as the Committee establishes with regard to such

Award.

(bb) "PERFORMANCE SHARE" means any right granted to a Participant

under Article 9 to a unit to be valued by reference to a designated number

of Shares to be paid upon achievement of such performance goals as the

Committee establishes with regard to such Performance Share.

(cc) "PERFORMANCE UNIT" means a right granted to a Participant under

Article 9 to a unit valued by reference to a designated amount of cash or

property other than Shares to be paid to the Participant upon achievement

of such performance goals as the Committee establishes with regard to such

Performance Unit.

(dd) "PERSON" means any individual, entity or group, within the

meaning of Section 3(a)(9) of the 1934 Act and as used in Section 13(d)(3)

or 14(d)(2) of the 1934 Act.

(ee) "PLAN" means the Wells Timber Real Estate Investment Trust, Inc.

2005 Long-Term Incentive Plan, as amended from time to time.

-6-

<PAGE>

(ff) "PUBLIC OFFERING" shall occur on the closing date of a firm

commitment underwritten public offering of any class or series of the

Company's equity securities pursuant to a registration statement filed by

the Company under the 1933 Act.

(gg) "RESTRICTED STOCK AWARD" means Stock granted to a Participant

under Article 10 that is subject to certain restrictions and to risk of

forfeiture.

(hh) "RESTRICTED STOCK UNIT AWARD" means the right granted to a

Participant under Article 10 to receive shares of Stock (or the equivalent

value in cash or other property if the Committee so provides) in the

future, which right is subject to certain restrictions and to risk of

forfeiture.

(ii) "SHARES" means shares of the Company's Stock. If there has been

an adjustment or substitution pursuant to Section 15.1, the term "SHARES"

shall also include any shares of stock or other securities that are

substituted for Shares or into which Shares are adjusted pursuant to

Section 15.1.

(jj) "STOCK" means the $.01 par value common stock of the Company and

such other securities of the Company as may be substituted for Stock

pursuant to Article 15.

(kk) "STOCK APPRECIATION RIGHT" or "SAR" means a right granted to a

Participant under Article 8 to receive a payment equal to the difference

between the Fair Market Value of a Share as of the date of exercise of the

SAR over the grant price of the SAR, all as determined pursuant to Article

8.

(ll) "SUBSIDIARY" means any corporation, limited liability company,

partnership or other entity of which a majority of the outstanding voting

stock or voting power is beneficially owned directly or indirectly by the

Company. Notwithstanding the above, with respect to an Incentive Stock

Option, Subsidiary shall have the meaning set forth in Section 424(f) of

the Code.

(mm) "1933 ACT" means the Securities Act of 1933, as amended from time

to time.

(nn) "1934 ACT" means the Securities Exchange Act of 1934, as amended

from time to time.

ARTICLE 3

EFFECTIVE TERM OF PLAN

3.1. EFFECTIVE DATE. The Plan shall be effective as of the date it is

approved by the stockholders of the Company (the "EFFECTIVE DATE").

-7-

<PAGE>

3.2. TERMINATION OF PLAN. The Plan shall terminate on the tenth anniversary

of the Effective Date unless earlier terminated as provided herein. The

termination of the Plan on such date shall not affect the validity of any Award

outstanding on the date of termination.

ARTICLE 4

ADMINISTRATION

4.1. COMMITTEE. The Plan shall be administered by a Committee appointed by

the Board (which Committee shall consist of at least two directors) or, at the

discretion of the Board from time to time, the Plan may be administered by the

Board. It is intended that at least two of the directors appointed to serve on

the Committee shall be "non-employee directors" (within the meaning of Rule

16b-3 promulgated under the 1934 Act) and that any such members of the Committee

who do not so qualify shall abstain from participating in any decision to make

or administer Awards that are made to Eligible Participants who at the time of

consideration for such Award are persons subject to the short-swing profit rules

of Section 16 of the 1934 Act. However, the mere fact that a Committee member

shall fail to qualify under the foregoing requirement or shall fail to abstain

from such action shall not invalidate any Award made by the Committee which

Award is otherwise validly made under the Plan. The members of the Committee

shall be appointed by, and may be changed at any time and from time to time in

the discretion of, the Board. The Board may reserve to itself any or all of the

authority and responsibility of the Committee under the Plan or may act as

administrator of the Plan for any and all purposes. To the extent the Board has

reserved any authority and responsibility or during any time that the Board is

acting as administrator of the Plan, it shall have all the powers of the

Committee hereunder, and any reference herein to the Committee (other than in

this Section 4.1) shall include the Board. To the extent any action of the Board

under the Plan conflicts with actions taken by the Committee, the actions of the

Board shall control.

4.2. ACTION AND INTERPRETATIONS BY THE COMMITTEE. For purposes of

administering the Plan, the Committee may from time to time adopt rules,

regulations, guidelines and procedures for carrying out the provisions and

purposes of the Plan and make such other determinations, not inconsistent with

the Plan, as the Committee may deem appropriate. The Committee's interpretation

of the Plan, any Awards granted under the Plan, any Award Certificate and all

decisions and determinations by the Committee with respect to the Plan are

final, binding, and conclusive on all parties. Each member of the Committee is

entitled to, in good faith, rely or act upon any report or other information

furnished to that member by any officer or other employee of the Company or any

Affiliate, the Company's or an Affiliate's independent certified public

accountants, Company counsel or any executive compensation consultant or other

professional retained by the Company to assist in the administration of the

Plan.

4.3. AUTHORITY OF COMMITTEE. Except as provided below, the Committee has

the exclusive power, authority and discretion to:

(a) Grant Awards;

-8-

<PAGE>

(b) Designate Participants;

(c) Determine the type or types of Awards to be granted to each

Participant;

(d) Determine the number of Awards to be granted and the number of

Shares or dollar amount to which an Award will relate;

(e) Determine the terms and conditions of any Award, not inconsistent

with the provisions of the Plan, granted under the Plan, including but not

limited to, the exercise price, grant price, or purchase price, any

restrictions or limitations on the Award, any schedule for lapse of

forfeiture restrictions or restrictions on the exercisability of an Award,

and accelerations or waivers thereof, based in each case on such

considerations as the Committee in its sole discretion determines;

(f) Determine whether, to what extent, and under what circumstances an

Award may be settled in, or the exercise price of an Award may be paid in,

cash, Stock, other Awards, or other property, or an Award may be canceled,

forfeited, or surrendered;

(g) Prescribe the form of each Award Certificate, which need not be

identical for each Participant;

(h) Decide all other matters that must be determined in connection

with an Award;

(i) Establish, adopt or revise any rules, regulations, guidelines or

procedures as it may deem necessary or advisable to administer the Plan;

(j) Make all other decisions and determinations that may be required

under the Plan or as the Committee deems necessary or advisable to

administer the Plan;

(k) Amend the Plan or any Award Certificate as provided herein; and

(l) Adopt such modifications, procedures, and subplans as may be

necessary or desirable to comply with provisions of the laws of non-U.S.

jurisdictions in which the Company or any Affiliate may operate, in order

to assure the viability of the benefits of Awards granted to participants

located in such other jurisdictions and to meet the objectives of the Plan.

Notwithstanding the foregoing, grants of Awards to Independent Directors

hereunder shall be made only in accordance with the terms, conditions and

parameters of a plan, program or policy for the compensation of Independent

Directors as in effect from time to time, and the Committee may not make

discretionary grants hereunder to Independent Directors.

Notwithstanding the above, the Board or the Committee may, by resolution,

expressly delegate to a special committee, consisting of one or more directors

who are also officers of the

-9-

<PAGE>

Company, the authority, within specified parameters, to (i) designate officers,

employees and/or consultants of the Company or any of its Affiliates to be

recipients of Awards under the Plan, and (ii) to determine the number of such

Awards to be granted to any such Participants; provided that a limit on the

total number or dollar value of Awards to be granted to any such Participants

shall be approved in advance by the Board or the Committee and provided further

that such delegation of duties and responsibilities to such special committee

may not be made with respect to the grant of Awards to eligible participants who

are subject to Section 16(a) of the 1934 Act at the Grant Date. The acts of such

delegates shall be treated hereunder as acts of the Board and such delegates

shall report regularly to the Board and the Committee regarding the delegated

duties and responsibilities and any Awards so granted.

4.4. AWARD CERTIFICATES. Each Award shall be evidenced by an Award

Certificate. Each Award Certificate shall include such provisions, not

inconsistent with the Plan, as may be specified by the Committee.

ARTICLE 5

SHARES SUBJECT TO THE PLAN

5.1. NUMBER OF SHARES. Subject to adjustment as provided in Sections 5.2

and 15.1, the aggregate number of Shares reserved and available for issuance

pursuant to Awards granted under the Plan shall be 500,000. The maximum number

of Shares that may be issued upon exercise of Incentive Stock Options granted

under the Plan shall be 500,000. The maximum number of Shares that may be issued

upon the exercise or grant of an Award granted under the Plan shall not exceed

in the aggregate an amount equal to 10% of the outstanding Shares on the Grant

Date.

5.2. SHARE COUNTING.

(a) To the extent that an Award is canceled, terminates, expires, is

forfeited or lapses for any reason, any unissued Shares from such Award

will again be available for issuance pursuant to Awards granted under the

Plan.

(b) Shares subject to Awards settled in cash will again be available

for issuance pursuant to Awards granted under the Plan.

(c) Shares withheld from an Award to satisfy minimum tax withholding

requirements will again be available for issuance pursuant to Awards

granted under the Plan, but Shares delivered by a Participant (by either

actual delivery or attestation) to satisfy tax withholding requirements

shall not be added back to the number of Shares available for issuance

under the Plan.

(d) If the exercise price of an Option is satisfied by delivering

Shares to the Company (by either actual delivery or attestation), only the

net number of Shares actually issued by the Company shall be considered for

purposes of determining the number of Shares remaining available for

issuance pursuant to Awards granted under the Plan.

-10-

<PAGE>

(e) To the extent that the full number of Shares subject to an Award

is not issued for any reason, only the number of Shares issued and

delivered shall be considered for purposes of determining the number of

Shares remaining available for issuance pursuant to Awards granted under

the Plan. Nothing in this subsection shall imply that any particular type

of cashless exercise of an Option is permitted under the Plan, that

decision being reserved to the Committee or other provisions of the Plan.

5.3. STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may

consist, in whole or in part, of authorized and unissued Stock, treasury Stock

or Stock purchased on the open market.

ARTICLE 6

ELIGIBILITY

6.1. GENERAL. Awards may be granted only to Eligible Participants; except

that Incentive Stock Options may be granted to only to Eligible Participants who

are employees of the Company or a Parent or Subsidiary as defined in Section

424(e) and (f) of the Code.

ARTICLE 7

STOCK OPTIONS

7.1. GENERAL. The Committee is authorized to grant Options to Participants

subject to terms and conditions, not inconsistent with the provisions of the

Plan, as the Committee shall establish, including the following:

(a) EXERCISE PRICE. The exercise price per Share under an Option shall

be determined by the Committee; provided, however, that the exercise price

of an Option shall not be less than the Fair Market Value as of the Grant

Date.

(b) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine the

time or times at which an Option may be exercised in whole or in part,

subject to Section 7.1(d). The Committee shall also determine the

performance or other conditions, if any, that must be satisfied before all

or part of an Option may be exercised or vested. Except under certain

circumstances contemplated by Section 14.8 or 14.9 or as may be set forth

in an Award Certificate with respect to death or Disability of a

Participant, Options will not be exercisable before the expiration of one

year from the Grant Date.

(c) PAYMENT. The Committee shall determine the methods by which the

exercise price of an Option may be paid, the form of payment, including,

without limitation, cash, Shares, or other property (including "cashless

exercise" arrangements), and the methods by which Shares shall be delivered

or deemed to be delivered to Participants; provided, however, that if

Shares are used to pay the exercise price of an Option, such Shares must

have been held by the Participant for at least such period of

-11-

<PAGE>

time, if any, as necessary to avoid the recognition of an expense under

generally accepted accounting principles as a result of the exercise of the

Option.

(d) EXERCISE TERM. In no event may any Option be exercisable for more

than ten years from the Grant Date.

7.2. INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Options

granted under the Plan must comply with the following additional rules:

(a) EXERCISE PRICE. The exercise price of an Incentive Stock Option

shall not be less than the Fair Market Value as of the Grant Date.

(b) LAPSE OF OPTION. Subject to any earlier termination provision

contained in the Award Certificate, an Incentive Stock Option shall lapse

upon the earliest of the following circumstances:

(1) The expiration date set forth in the Award Certificate.

(2) The tenth anniversary of the Grant Date.

(3) Three months after termination of the Participant's

Continuous Status as a Participant for any reason other than the

Participant's Disability or death.

(4) One year after the Participant's Continuous Status as a

Participant by reason of the Participant's Disability.

(5) Two years after the Participant's death if the Participant

dies while employed, or during the three-month period described in

paragraph (3) or during the one-year period described in paragraph (4)

and before the Option otherwise lapses.

Unless the exercisability of the Incentive Stock Option is accelerated

as provided in Article 14, if a Participant exercises an Option after

termination of employment, the Option may be exercised only with respect to

the Shares that were otherwise vested on the Participant's termination of

employment. Upon the Participant's death, any exercisable Incentive Stock

Options may be exercised by the Participant's beneficiary, determined in

accordance with Section 14.5.

(c) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair Market Value

(determined as of the Grant Date) of all Shares with respect to which

Incentive Stock Options are first exercisable by a Participant in any

calendar year may not exceed $100,000.00.

-12-

<PAGE>

(d) TEN PERCENT OWNERS. No Incentive Stock Option shall be granted to

any individual who, at the Grant Date, owns stock possessing more than ten

percent of the total combined voting power of all classes of stock of the

Company or any Parent or Subsidiary unless the exercise price per share of

such Option is at least 110% of the Fair Market Value per Share at the

Grant Date and the Option expires no later than five years after the Grant

Date.

(e) EXPIRATION OF AUTHORITY TO GRANT INCENTIVE STOCK OPTIONS. No

Incentive Stock Option may be granted pursuant to the Plan after the day

immediately prior to the tenth anniversary of the Effectiv