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                                                                    EXHIBIT 10.4


                           BEVERLY ENTERPRISES, INC.
                      1993 LONG-TERM INCENTIVE STOCK PLAN
                    (AS AMENDED BY PROPOSED AMENDMENT NO. 1)


                                   ARTICLE I.

                      ESTABLISHMENT, PURPOSE AND DURATION


         1.1     ESTABLISHMENT OF THE PLAN.  Beverly Enterprises, Inc.
(hereinafter referred to as the "Company"), a Delaware corporation, hereby
establishes an incentive compensation plan to be known as the "1993 Long Term
Incentive Stock Plan" (hereinafter referred to as the "Plan"), as set forth in
this document.  Unless otherwise defined herein, all capitalized terms shall
have the meanings set forth in Section 2.1 herein.  The Plan permits the grant
of Nonqualified Stock Options, Incentive Stock Options, Restricted Stock,
Performance Awards in the form of Performance Units, or Performance Shares and
Other Stock Unit Awards.

         The Plan was adopted by the Board of Directors on March 17, 1993, and
shall become effective as of July 1, 1993 (the "Effective Date"), subject to
the approval by vote of stockholders of the Company in accordance with
applicable laws.  Awards may be granted prior to stockholder approval of the
Plan, but each such Award shall be subject to the approval of the Plan by the
stockholders.

         1.2     PURPOSE OF THE PLAN.  The purpose of the Plan is to promote
the success of the Company and its Subsidiaries by providing incentives to Key
Employees that will promote the identification of their personal interest with
the long-term financial success of the Company and with growth in stockholder
value.  The Plan is designed to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Key Employees upon
whose judgment, interest, and special effort the successful conduct of its
operation is largely dependent.

         1.3     DURATION OF THE PLAN.  The Plan shall commence on the
Effective Date, as described in Section 1.1 herein, and shall remain in effect,
subject to the right of the Board of Directors to terminate the Plan at any
time pursuant to Article 12 herein, until June 30, 2003, at which time it shall
terminate except with respect to Awards made prior to, and outstanding on, that
date, which shall remain valid in accordance with their terms.


                                  ARTICLE II.

                                  DEFINITIONS

         2.1     DEFINITIONS.  Except as otherwise defined in the Plan, the
following terms shall have the meanings set forth below:

         (a)     "AFFILIATE" shall have the meaning ascribed to such term in
Rule 12b-2 under the Exchange Act.

         (b)     "AGREEMENT" means a written agreement implementing the grant
of each Award signed by an authorized officer of the Company and by the
Participant.





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         (c)     "AWARD" means individually or collectively, a grant under this
Plan of Nonqualified Stock Options, Incentive Stock Options, Restricted Stock,
Performance units, Performance Shares, or Other Stock Unit Awards.

         (d)     "AWARD DATE" or "GRANT DATE" means the date on which an Award
is made by the Committee under this Plan.

         (e)     "BENEFICIAL OWNER" shall have the meaning ascribed to such
term in Rule 13d-3 under the Exchange Act.

         (f)     "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors
of the Company.

         (g)     "CHANGE IN CONTROL" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:

         (i)     Any person, corporation or other entity or group, including
         any "group" as defined in Section 13(d)(3) of the Exchange Act,
         becomes the beneficial owner of shares of the Company having 30% or
         more of the total number of votes that may be cast for the election of
         directors of the Company; or

         (ii)    As the result of, or in connection with, any tender or
         exchange offer, merger or other business combination, sale of assets
         or contested election, or any combination of the foregoing (a
         "Transaction"), the persons who were directors of the Company before
         the Transaction shall cease to constitute a majority of the Board of
         Directors of the Company or any successor to the Company or its
         assets; or

         (iii)   If at any time, (w) the Company shall consolidate with, or
         merge with, any other Person and the Company shall not be the
         continuing or surviving corporation, (x) any Person shall consolidate
         with, or merge with, the Company, and the Company shall be the
         continuing or surviving corporation and in connection therewith, all
         or part of the outstanding Stock shall be changed into or exchanged
         for stock or other securities of any other Person or cash or any other
         property, (y) the Company shall be a party to a statutory share
         exchange with any other Person after which the Company is subsidiary
         of any other Person, or (z) the Company shall sell or otherwise
         transfer 50% or more of the assets or earning power of the Company and
         its Subsidiaries (taken as a whole) to any Person or Persons.

         (h)     "CODE" means the Internal Revenue Code of 1986, as amended
from time to time.

         (i)     "COMMITTEE" means the Compensation Committee of the Board
which will administer the Plan pursuant to Article 3 herein.

         (j)     "COMPANY" means Beverly Enterprises, Inc., including all
Affiliates and wholly-owned Subsidiaries, or any successor thereto as provided
in Article 14 herein.

         (k)     "CONTINUING DIRECTOR" means an individual who was a member of
the Board of Directors on the Effective Date or whose subsequent nomination for
election or reelection of the Board of Directors was recommended or approved by
the affirmative vote of two-thirds of the Continuing Directors then in office.





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         (l)     "COVERED PARTICIPANT" means a Participant who is a "covered
employee" as defined in Section 162(m)(3) of the Code, and the regulations
promulgated thereunder, or who the Committee believes will be such a covered
employee for a Performance Period, and who the Committee believes will have
renumeration in excess of $1,000,000 for the Performance Period, as provided in
Section 162(m) of the Code.

         (m)     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as 
amended.

         (n)     "FAIR MARKET VALUE" means, on any given date, the closing
price of Stock as reported on the New York Stock Exchange composite tape on
such day or, if no Shares were traded on the New York Stock Exchange on such
day, then on the next preceding day that Stock was traded on such exchange, all
as reported by such source as the Committee may select.

         (o)     "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase
Stock, granted under Article 6 herein, which is designated as an incentive
stock option and is intended to meet the requirements of Section 422A of the
Code.

         (p)     "KEY EMPLOYEE" means an officer or other key employee of the
Company or its Subsidiaries, who, in the opinion of the Committee, can
contribute significantly to the growth and profitability of, or perform
services of major importance to, the Company and its Subsidiaries.  Key
Employee does not include directors of the Company who are not also employees
of the Company or its Subsidiaries.

         (q)     "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to
purchase Stock, granted under Article 6 herein, which is not intended to be an
Incentive Stock Option.

         (r)     "OPTION" means an Incentive Stock Option or a Nonqualified
Stock Option.

         (s)     "OTHER STOCK UNIT AWARD" means awards of Stock or other awards
that are valued in whole or in part by reference to, or are otherwise based on,
Shares or other securities of the Company.

         (t)     "PARTICIPANT" means a Key Employee who has been granted an
Award under the Plan.

         (u)     "PERFORMANCE AWARD" means a performance-based Award, which may
be in the form of either Performance Shares or Performance Units.

         (v)     "PERFORMANCE PERIOD" means the time period designated by the
Committee during which performance goals must be met, which period shall be the
calendar year.

         (w)     "PERFORMANCE SHARE" means an Award, designated as a
performance share, granted to a Participant pursuant to Article 8 herein, the
value of which is determined, in whole or in part, by the value of Stock in a
manner deemed appropriate by the Committee and described in the Agreement.

         (x)     "PERFORMANCE UNIT" means an Award, designated as a performance
unit, granted to a Participant pursuant to Article 8 herein, the value of which
is determined, in whole or in part, by the attainment of preestablished goals
relating to Company





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financial or operating performance as deemed appropriate by the Committee and
described in the Agreement.

         (y)     "PERIOD OF RESTRICTION" means the period during which the
transfer of Shares of Restricted Stock is restricted, pursuant to Article 7
herein.

         (z)     "PERSON" shall have the meaning ascribed in such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a "group" as defined in Section 13(d).

         (aa)    "PLAN" means the Beverly Enterprises, Inc. 1993 Long-Term
Incentive Stock Plan as herein described and as hereafter from time to time
amended.

         (bb)    "RESTRICTED STOCK" means an Award of Stock granted to a
Participant pursuant to Article 7 herein.

         (cc)    "SECRETARY" means the officer designated as the Secretary of
the Company.

         (dd)    "STOCK" or "SHARES" means the common stock of the Company.

         (ee)    "SUBSIDIARY" shall mean a corporation at least 50% of the
total combined voting power of all classes of stock of which is owned by the
Company, either directly or through one or more of its Subsidiaries.


                                  ARTICLE III.

                                 ADMINISTRATION

         3.1     THE COMMITTEE. The Plan shall be administered by the Committee
which shall have all powers necessary or desirable for such administration.
The express grant in this Plan of any specific power to the Committee shall not
be construed as limiting any power or authority of the Committee.  In addition
to any other powers and, subject to the provisions of the Plan, the Committee
shall have the following specific powers: (i) to determine the terms and
conditions upon which the Awards may be made and exercised; (ii) to determine
all terms and provisions of each Agreement, which need not be identical; (iii)
to construe and interpret the Agreements and the Plan; (iv) to establish,
amend, or waive rules or regulations for the Plan's administration; (v) to
accelerate the exercisability of any Award, the end of a Performance Period or
termination of any Period of Restriction; and (vi) to make all other
determinations and take all other actions necessary or advisable for the
administration of the Plan.

         3.2     SELECTION OF PARTICIPANTS. The Committee shall have the
authority to grant Awards under the Plan, from time to time, to such Key
Employees as may be selected by it.  Each Award shall be evidenced by an
Agreement.

         3.3     DECISIONS BINDING.  All determinations and decisions made by
the Committee pursuant to the provisions of the Plan shall be final,
conclusive, and binding.

         3.4     RULE 16b-3 REQUIREMENTS.  Notwithstanding any other provision
of the Plan, the  Committee may impose such conditions on any Award, and the
Board amend the Plan in any such respects, as may be required to satisfy the
requirements of Rule 16b-3, as amended (or any successor or similar rule),
under the Exchange Act.





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         3.5     INDEMNIFICATION OF COMMITTEE. In addition to such other rights
of indemnification as they may have as directors or as members of the
Committee, the members of the Committee shall he indemnified by the Company
against reasonable expenses, including attorneys' fees, actually and reasonably
incurred in connection with the defense of any action, suit or proceeding, or
in connection with any appeal therein, to which they or any of them may be a
party by reason of any action taken or failure to act under or in connection
with the Plan or any Award granted or made hereunder, and against all amounts
reasonably paid by them in settlement thereof or paid by them in satisfaction
of a judgment in any such action, suit or proceeding, if such members acted in
good faith and in a manner which they believed to be in, and not opposed to,
the best interests of the Company and its Subsidiaries.


                                  ARTICLE IV.

                           STOCK SUBJECT TO THE PLAN

         4.1     NUMBER OF SHARES.  Subject to adjustment as provided in
Section 4.4 herein, the maximum aggregate number of Shares that may be issued
pursuant to Awards made under the Plan shall not exceed 3,000,000.  No more
than one-half of the aggregate number of such Shares shall be issued in
connection with Restricted Stock Awards, Performance Awards, or Other Stock
Unit Awards.  Except as provided in Sections 4.2 and 4.3 herein, the issuance
of Shares in connection with the exercise of, or as other payment for, Awards
under the Plan shall reduce the number of Shares available for future Awards
under the Plan.

         4.2     LAPSED AWARDS OR FORFEITED SHARES.  If any Award granted under
this Plan terminates, expires, or lapses for any reason other than by virtue of
exercise of the Award, or if Shares issued pursuant to Awards are forfeited,
any Stock subject to such Award again shall be available for the grant of an
Award under the Plan.

         4.3     DELIVERY OF SHARES AS PAYMENT.  In the event a Participant
pays the Option Price for Shares pursuant to the exercise of an Option with
previously acquired Shares, the number of Shares available for future Awards
under the Plan shall be reduced only by the net number of new Shares issued
upon the exercise of the option.

         4.4     CAPITAL ADJUSTMENTS.  The number and class of Shares subject
to each outstanding Award, the Option Price and the aggregate number and class
of Shares for which Awards thereafter may be made shall be subject to such
adjustment, if any, as the Committee deems appropriate, such that:

         (a)     If the outstanding Shares are increased, decreased or
exchanged, through merger, consolidation, sale of all or substantially all of
the property of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split or other distribution in respect
of such Shares, for a different number of kind of Shares, or if additional
Shares or new or different Shares are distributed in respect of such Share, an
appropriate and proportionate adjustment shall be made in: (i) the maximum
number of Shares as provided in Section 4.1 herein; (ii) the number of Shares
subject to then outstanding Awards; and (iii) the price for each Share subject
to such Awards, but without change in the aggregate purchase price as to which
such Options remain exercisable or Restricted Stock releasable.

         (b)     Adjustments under this Section 4.4 shall be made by the
Committee, subject to the approval of the Board of Directors, whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive.  No fractional





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interests shall be issued under the Plan on account of such adjustments.


                                   ARTICLE V.

                                  ELIGIBILITY

         Persons eligible to participate in the Plan include all employees of
the Company and its Subsidiaries who, in the opinion of the Committee, are Key
Employees.  Key Employees may not include directors of the Company who are not
employees of the Company or its Subsidiaries.


                                  ARTICLE VI.

                                 STOCK OPTIONS

         6.1     GRANT OF OPTIONS TO KEY EMPLOYEES.  Subject to the terms and
provisions of the Plan, Options may be granted to Key Employees at any time and
from time to time as shall be determined by the Committee.  The Committee shall
have complete discretion in determining the number of Shares subject to Options
granted to each Key Employee, provided, however, that the aggregate Fair Market
Value (determined at the time the Award is made) of Shares with respect to
which a Key Employee may first exercise ISOs granted under the Plan during any
calendar year may not exceed $100,000 or such amount as shall be specified in
Section 422A of the Code and rules and regulation thereunder.

         6.2     OPTION AGREEMENT.  Each Option grant shall be evidenced by an
Agreement that shall specify the type of Option granted, the Option Price (as
hereinafter defined), the duration of the Option, the number of Shares to which
the Option pertains, any conditions imposed upon the exercisability of Options
in the event of retirement, death, disability, or other termination of
employment, and such other provisions as the Committee shall determine.  The
Agreement shall specify whether the Option is intended to be an Incentive Stock
Option within the meaning of Section 422A of the Code, or a Nonqualified Stock
Option not intended to be within the provisions of Section 422A of the Code.

         6.3     OPTION PRICE.   The exercise price per share of Stock covered
by an Option ("Option Price") shall be determined by the Committee subject to
the following limitations.  The Option Price shall be not less than 100% of the
Fair Market Value of such Stock on the Grant Date, except that the Option Price
for a NQSO may be set at not less than 85 percent of the Fair Market Value of
the Stock on the Grant Date if the Committee grants the amount of the discount
from 100% of the Fair Market Value of such Stock in lieu of a cash payment.

         6.4     DURATION OF OPTIONS.  Each Option shall expire at such time as
the Committee shall determine at the time of grant provided, however, that no
option shall be exercisable later than the tenth (10th) anniversary of its
Award Date.

         6.5     EXERCISABILITY.  Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall determine, which need not be the same for all Participants.
No Option, however, shall be exercisable until the expiration of at least
twelve months after the Award Date, except that such limitation shall not apply
in the case of death or disability of the Participant.

         6.6     METHOD OF EXERCISE.  Options shall be exercised by the
delivery of a written notice to the Company in the form prescribed by the
Committee setting forth the number of Shares with respect to which the Option
is to be exercised, accompanied by full payment for the Shares.  The Option
Price shall be payable to the Company in full either in cash, by delivery of
Shares of Stock valued a





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Fair Market Value at the time of exercise or by a combination of the foregoing.
As soon as practicable, after receipt of written notice and payment, the
Company shall deliver to the Participant, stock certificates in an appropriate
amount based upon the number of Shares with respect to which the Option is
exercised, issued in the Participant's name.  No Participant who is awarded an
Option shall have rights as a stockholder until the date of exercise of the
Option.

         6.7     CASHLESS EXERCISE.  To the extent permitted under the
applicable laws and regulations, at the request of the Participant, the Company
agrees to cooperate in a "cashless exercise" of the Option.

         6.8     OPTIONS AWARDED UPON STOCK DELIVERY EXERCISE.  The Committee,
in its discretion, may provide in the Agreement that, in the event a
Participant pays the Option Price for an Option by delivery of previously
acquired Shares, the Participant will be granted a new Option ("Replacement
Option") for that number of Shares delivered in payment of the Option Price of
the original Option ("Original Option").  The Committee shall determine the
terms and conditions of the Replacement Option, provided, however, that the
Option Price of the Replacement Option shall be the Fair Market Value of Shares
on its Award Date and the term of the Replacement Option shall expire upon the
expiration date of the Original Option.

         6.9     NONTRANSFERABILITY OF OPTIONS.  No Option granted under the
Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, otherwise than by will or by the laws of descent and
distribution.  Further, all Options granted to a Participant under the Plan
shall be exercisable during his lifetime only by such Participant or his
guardian or legal representative.


                                  ARTICLE VII.

                                RESTRICTED STOCK

         7.1     GRANT OF RESTRICTED STOCK.  Subject to the terms and
provisions of the plan, the Committee, at any time and from time to time, may
grant shares of Restricted Stock Plan under the Plan to such Participants and
in such amounts as it shall determine.  Participants receiving Restricted Stock
Awards are not required to pay the Company therefor (except for applicable tax
withholding) other than the rendering of services and/or until other conditions
are satisfied as determined by the Committee in its sole discretion.

         7.2     RESTRICTED STOCK AGREEMENT.  Each Restricted Stock grant shall
be evidenced by an Agreement that shall specify the Period of Restriction; the
conditions which must be satisfied prior to removal of the restriction; the
number of Shares of Restricted Stock granted; and such other provisions as the
Committee shall determine.

         7.3     TRANSFERABILITY.  Except as provided in this Article 7 and
subject to the limitation in the next sentence, the Shares of Restricted Stock
granted hereunder may not be sold, transferred, pledged, assigned or otherwise
alienated or hypothecated until the termination of the applicable Period of
Restriction or upon earlier satisfaction of other conditions as specified by
the Committee in its sole discretion and set forth in the Agreement.  No
restriction shall be removed until the expiration of at least twelve months
after the Award Date, except that such limitation shall not apply in the case
of death or disability of the Participant.  All rights with respect to the
Restricted Stock granted to a Participant under the Plan shall be exercisable
during his lifetime only by such Participant or his guardian or legal
representative.

         7.4     OTHER RESTRICTIONS.   The Committee shall impose such other
restrictions on any Restricted Stock granted pursuant to the Plan as it may
deem advisable including, without limitation, restrictions under applicable
Federal





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or state securities laws, and may legend the certificates representing
Restricted Stock to give appropriate notice of such restrictions.
Alternatively, the Committee, in its sole discretion, may have Restricted Stock
issued without legend and held by the Secretary until such time all
restrictions are satisfied.

         7.5     CERTIFICATE LEGEND.  In the event the Committee elects to
legend the certificates representing Restricted Stock, and in addition to any
legends placed on certificates pursuant to Section 7.4 herein, each certificate
representing shares of Restricted Stock granted pursuant to the Plan shall bear
the following legend:

         The sale of other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer set forth in the Beverly
Enterprises, Inc. 1993 Long-Term Incentive Stock Plan, in the rules and
administrative procedures adopted pursuant to such Plan, and in an Agreement
dated XXXXXXXXXX.  A copy of the Plan, such rules and procedures, and such
Agreement may be obtained from the Secretary of Beverly Enterprises, Inc.

         7.6     REMOVAL OF RESTRICTIONS.  Except as otherwise provided in this
Article 7, Restricted Stock covered by each Award made under the Plan shall be
provided and become freely transferable by the Participant after the last day
of the Period of Restriction and/or upon the satisfaction of other conditions
as determined by the Committee.  Once the Shares are released from the
restrictions, the Participant shall be entitled to have removed any legend that
may have been placed on certificates pursuant to Section 7.4 and 7.5 herein.
Except: as specifically provided in this Article 7, the Committee shall have no
authority to reduce or remove the restrictions or to reduce or remove the
Period of Restriction without the express consent of the stockholders of the
Company.  Any shares of Restricted Stock issued pursuant to this Article 7
shall provide that the minimum Period of Restriction shall be three (3) years,
which Period of Restriction would permit the removal of restrictions on no more
than one-third (1/3) of the shares of Restricted Stock at the end of the first
year following the Grant Date, and the removal of the restrictions on an
additional one subsequent year.  In no event shall any restrictions be removed
from shares of Restricted Stock during the first year following the Grant Date.
If the grant of Restricted Stock is performance based, the total Period of
Restriction for any or all shares of Restricted Stock so granted shall be no
less than one (1) year.

         7.7     VOTING RIGHTS.  During the Period of Restriction, Participants
in whose name Restricted Stock is granted hereunder may exercise full voting
rights with respect to those Shares.

         7.8     DIVIDENDS AND OTHER DISTRIBUTIONS.  During the Period of
Restriction, Participants in whose name Restricted Stock is granted hereunder
shall be entitled to receive all dividends and other distribution paid with
respect to those Shares.  If any such dividends or distributions are paid in
Shares, the Shares shall be subject to the same restrictions on transferability
as the Restricted Stock with respect to which they were distributed.

         7.9     TERMINATION OF EMPLOYMENT DUE TO RETIREMENT.  Unless otherwise
provided in the Agreement, in the event that a Participant terminates his
employment with the Company or one of its Subsidiaries due to the earlier of
attaining age 65 or normal retirement (as defined in the rules of the Company
in effect at the time) , any remaining Period of Restriction applicable to the
Restricted Stock pursuant to section 7.3 herein shall automatically terminate
and, except as otherwise provided in Section 7.4 herein, the Restricted Stock
shall thereby be delivered to such Participant and be free of restrictions.

         7.10    TERMINATION OF EMPLOYMENT DUE TO DEATH OR DISABILITY.  In the
event a Participant's employment is terminated because of death or disability
during the Period of Restriction, any remaining Period of Restriction
applicable to the Restricted Stock pursuant to Section 7.3 herein shall
automatically terminate





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and, except as otherwise provided in Section 7.4 herein, the Restricted Stock
shall thereby be released and free of restrictions.

         7.11    TERMINATION OF EMPLOYMENT FOR OTHER REASONS.  Unless otherwise
provided in the Agreement, in the event that a Participant terminates his
employment with the Company for any reason other than for death, disability, or
retirement, as set forth in Section 7.9 and 7.10 herein, during the Period of
Restriction, then any Restricted Stock still subject to restrictions as of the
date of such termination shall automatically be forfeited and, if held by the
Participant, returned to the Company.


                                 ARTICLE VIII.

                               PERFORMANCE AWARDS

         8.1     GRANT OF PERFORMANCE AWARDS.  Subject to the terms and
provisions of the Plan, Performance Awards in the form of either Performance
Units or Performance Shares may be granted to Participants at any time and from
time to time as shall be determined by the Committee.  The Committee shall have
complete discretion in determining the number of Performance Units or
Performance Shares granted to each Participant.  Participants receiving
Performance Awards are not required to pay the Company therefore (except for
applicable tax withholding) other than the rendering of services.

         8.2     VALUE OF PERFORMANCE AWARDS.  The Committee shall determine
the number of Performance Units or Performance Shares granted to each
Participant as a Performance Award.  The Committee shall set performance goals
in its discretion for each Participant who is granted a Performance Award.  The
extent to which such performance goals are met will determine the value of the
Performance Unit or Performance Share to the Participant.  Such performance
goals may be particular to a Participant, may relate to the performance of the
Subsidiary which employs him, may be based on the performance of the Company
generally, or a combination of the foregoing.  The performance goals may be
based on achievement of balance sheet or income statement objectives, or any
other objectives established by the Committee.  The performance goals may be
absolute in their terms or measured against or in relationship to other
companies comparably, similarly or otherwise situated.  The terms and
conditions of each Performance Award shall be set forth in an Agreement.

         8.3.    SETTLEMENT OF PERFORMANCE AWARDS.  After a Performance Period
has ended, the holder of a Performance Unit or Performance Share shall be
entitled to receive the value thereof based on the degree to which the
performance goals established by the Committee and set forth in the Agreement
have been satisfied.

         8.4.    FORM OF PAYMENT.  Payment of the amount to which a Participant
shall be entitled upon the settlement of a Performance Award shall be made in
cash, Stock, or a combination thereof as determined by the Committee.  Payment
may be made in a lump sum or installments as prescribed by the Committee.

         8.5.    NONTRANSFERABILITY.  No Performance Units or Performance
Shares granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, otherwise than by will or by the laws of
descent and distribution.   All rights with respect to Performance Units and
Performance Shares granted to a Participant under the Plan shall not be
exercisable until the expiration of twelve months after the Award Date and
thereafter during his lifetime only by such Participant or his guardian or
personal representative.





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                                  ARTICLE IX.

                            OTHER STOCK UNIT AWARDS

         9.1     GRANT.  The Committee is authorized to grant to Participants,
either alone or in addition to other Awards made under the Plan, Other Stock
Unit Awards, in lieu of cash payments, to be issued at such times, subject to
or based upon achievement of such performance or other goals and on such other
terms and conditions as the Committee shall deem appropriate and specify in the
Agreement relating thereto, which need not be the same with respect to each
Participant.  Stock or other securities granted pursuant to Other Stock Unit
Awards may be issued for no cash consideration or for such minimum
consideration as may be required by applicable law.  Stock or other securities
purchased pursuant to Other Stock Unit Awards may be purchased for such
purchase price as the Committee shall determine, which price shall not be less
than 75% of the Fair Market Value of the Stock or other securities on the Award
Date.

         9.2     SALE AND TRANSFERABILITY.  Stock or other securities issued
pursuant to Other Stock Unit Awards may not be sold by a Participant until the
expiration of at least twelve months from the Award Date, except that such
limitation shall not apply in the case of death or disability of a Participant.
To the extent Other Stock Unit Awards are deemed to be derivative securities
within the meaning of Rule 16b-3 under the Exchange Act, a Participant's rights
with respect to such Awards shall not vest or be exercisable until the
expiration of at least twelve months from the Award Date.  To the extent an
Other Stock Unit Award granted under the Plan is deemed to be a derivative
security within the meaning of Rule 16b-3 under the Exchange Act, it may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution.  All rights
with respect to such Other Stock Unit Awards granted to a Participant under the
Plan shall be exercisable during his lifetime only by such Participant or his
guardian or personal representative.


                                   ARTICLE X.

                               CHANGE IN CONTROL

         In the event of a Change in Control of the Company, the Committee
shall ensure the following actions: (i) all Options then outstanding under the
Plan shall become fully exercisable and remain so for the duration of the
Option as specified in the Agreement; and (ii) all restrictions or conditions
related to grants of Restricted Stock shall be deemed immediately and fully
satisfied and all certificates representing such Restricted Stock shall be
released or have any legend removed by the Secretary, and thereby become freely
transferable.


                                  ARTICLE XI.

                 MODIFICATION, EXTENSION, AND RENEWAL OF AWARDS

         Subject to the terms and conditions and within the limitations of the
Plan, the Committee may modify, extend, or renew outstanding Awards, or accept
the surrender of outstanding Awards (to the extent not yet exercised) granted
under the Plan and authorize the granting of new Awards pursuant to the Plan in
substitution therefor, and the substituted Awards may specify a longer term
than the surrendered Awards or may contain any other provisions that are
authorized by the Plan, provided, however, that the Committee may not modify
outstanding Awards or grant new Awards in substitution for outstanding Awards
that specify a lower exercise price.  Except as limited by the foregoing
sentence, the Committee may also modify the terms of an outstanding Agreement.
Notwithstanding the foregoing, however, no modification of an Award shall,
without the consent of the Participant, adversely affect the rights or
obligations of the Participant.





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<PAGE>   11
                                  ARTICLE XII.

              AMENDMENT, MODIFICATION, AND TERMINATION OF THE PLAN

         12.1    AMENDMENT, MODIFICATION, AND TERMINATION.  At any time and
from time to time, the Board may terminate, amend, or modify the Plan.  Such
amendment or modification may be without shareholder approval except to the
extent that such approval is required by the Code, pursuant to the rules under
Section 16 of the Exchange Act, by any national securities exchange or system
on which the Stock is then listed or reported, by any regulatory body having
jurisdiction with respect thereto or under any other applicable laws, rules, or
regulations.

         12.2    AWARDS PREVIOUSLY GRANTED.  No termination, amendment, or
modification of the Plan, other than pursuant to Section 4.4 herein, shall in
any manner adversely affect any Award theretofore granted under the Plan,
without the written consent of the Participant.


                                 ARTICLE XIII.

                                  WITHHOLDING

         13.1    TAX WITHHOLDING.  The Company shall have the power and the
right to deduct or withhold, or require a Participant to remit to the Company,
an amount sufficient to satisfy Federal, State, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any grant, exercise, or payment under or as a result of this Plan.

         13.2    STOCK WITHHOLDING.  With respect to withholding required upon
the exercise of Nonqualified Stock Options, or upon the lapse of restrictions
on Restricted Stock, or upon the occurrence of any other similar taxable event,
participants may elect, subject to the approval of the Committee, to satisfy
the withholding requirement, in whole or in part, by having the Company
withhold Shares having a Fair Market Value equal to the amount required to be
withheld.  The value of the Shares to be withheld shall be based on Fair Market
Value of the Shares on the date that the amount of tax to be withheld is to be
determined.  All elections shall be irrevocable and be made in writing, signed
by the Participant on forms approved by the Committee in advance of the day
that the transaction becomes taxable.


                                  ARTICLE XIV.

                                   SUCCESSORS

         All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether
the existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the
business and/or assets of the Company.


                                  ARTICLE XV.

                                    GENERAL

         15.1    REQUIREMENTS OF LAW.  The granting of Awards and the issuance
of Shares under this Plan shall he subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies as may be
required.  No Shares shall be issued or transferred pursuant to this Plan
unless and until all legal requirements applicable to such issuance or transfer
have, in the opinion of counsel to the Company, been complied with.  In
connection with any such issuance or transfer, the person acquiring the Shares
shall, if requested by the Company, give assurances satisfactory to counsel to
the Company





                                      A-11
<PAGE>   12
in respect to such matters as the Company may deem desirable to assure
compliance with all applicable legal requirements.

         15.2    EFFECT OF PLAN.  The establishment of the Plan shall not
confer upon any Participant any legal or equitable right against the Company, a
Subsidiary, or the Committee, except as expressly provided in the Plan.  The
Plan does not constitute an inducement or consideration for the employment of
any Participant, nor is it a contract between the Company or any of its
Subsidiaries and any Participant.  Participation in the Plan shall not give any
Participant any right to be retained in the service of the Company or any of
its Subsidiaries.  No award and no right under the Plan, contingent or
otherwise, shall be assignable or subject to any encumbrance, pledge or charge
of any nature except that, under such rules and regulations as the Committee
may establish pursuant to the terms of the Plan, a beneficiary may be
designated in respect to the Award in the event of the death of the holder of
the Award and except, also, that if the beneficiary shall be the executor or
administrator of the estate of the holder of the Award, any rights in respect
to such Award may be transferred to the person or persons or entity (including
a trust) entitled thereto under the will of the holder of such Award or under
the laws relating to descent and distribution.

         15.3    CREDITORS.  The interests of any Participant under the Plan or
any Agreement are not subject to the claims of creditors and may not, in any
way, be assigned, alienated, or encumbered.

         15.4    GOVERNING LAW.  The Plan, and all Agreements hereunder,  shall
be governed, construed, and administered in accordance with and governed by the
laws of the State of Arkansas and the intention of the Company is that ISOs
granted under the Plan quality as such under Section 422A of the Code.

         15.5    SEVERABILITY.  In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.


                                  ARTICLE XVI.

             SPECIAL PROVISIONS APPLICABLE TO COVERED PARTICIPANTS

         Notwithstanding any other provision of this Plan to the contrary, any
Awards paid to Covered Participants under this Plan shall be subject to the
following conditions:

         (a)     All performance measures, goals, standards, formulas, or
         criteria relating to Covered Participants ("Performance Measures") 
         for a relevant Performance Period shall be established by the 
         Committee in writing prior to the beginning of the Performance 
         Period, or by such other later date for the Performance Period as may 
         be permitted under Section 162(m) of the Code.  Performance Measures 
         may include alternate and multiple Performance Measures and may be 
         based on one or more business criteria.  In establishing Performance 
         Measures, the Committee shall consider an internal budget for factors
         such as earnings per share, return on equity, revenue growth, cash
         flow, income and operating margins.

         (b)     The Performance Measures must be objective and must satisfy
         the third party "objectivity" standards under Section 162(m) of the 
         Code, and the regulations promulgated thereunder.





                                      A-12
<PAGE>   13
         (c)     The Performance Measures shall not allow for any discretion by
         the Committee as to an increase in any Award, but discretion to lower 
         an Award is permissible.

         (d)     The award and payment of any Award under this Plan to a
         Covered Participant with respect to a relevant Performance Period 
         shall be contingent upon the attainment of the Performance Measures 
         that are applicable to such Covered Participant.  The Committee shall 
         certify in writing prior to the payment of any such Award that such 
         applicable Performance Measures relating to the Award are satisfied.  
         Approved minutes of a meeting of the Committee may be used for this 
         purpose.

         (e)     The maximum Award that may be paid to any Covered Participant
         under the Plan pursuant to Articles VIII and IX for any Performance 
         Period is 100 percent of the Covered Participant's base salary as of 
         the first day of that Performance Period.  The maximum number of 
         shares of Stock subject to Options or Restricted Stock granted to any 
         Covered Participant for any Performance Period shall be 300,000, and 
         any grant of a NQSO at less than 100 percent of Fair Market Value 
         shall be subject to the attainment of Performance Measures as 
         provided herein.

         (f)     All Awards to Covered Participants under this Plan shall be
         further subject to such other conditions, restrictions, and 
         requirements as the Committee may determine to be necessary to carry 
         out the purposes of this Article XVI.





                                      A-13
