LONG-TERM INCENTIVE PLAN
The RadioShack  Long-term  Incentive Plan ("Plan") is a long-term incentive plan
for eligible employees of RadioShack and its subsidiaries.  The Plan is intended
to provide  performance-based cash incentive opportunities to executive officers
of the Company and its subsidiaries.  Plan payments, if any, will be conditioned
on attainment of one or more Performance  Measures for one or more Award Periods
as established  by the  Committee.  It is intended that payments made to certain
executive   employees   under  the  Plan  will   qualify  as   performance-based
compensation that is exempt from the limitation on deductions imposed by Section
162(m) of the Internal Revenue Code and that the Plan will be construed, applied
and administered accordingly.
This Plan  constitutes  the long-term  incentive  element of the RadioShack 2004
Annual and Long-Term  Incentive  Compensation  Plan approved by the Committee on
February 20, 2004, and by the Company's stockholders on May 20, 2004.
The purpose of the Plan is to permit the Company to (i)  attract,  motivate  and
retain highly qualified employees,  (ii) obtain from executive officers the best
possible  performance,  (iii)  establish  performance  goals  that  support  the
Company's  long-term business  strategies,  and (iv) provide  consistency in and
alignment  with the  Company's  approach  to  performance-based  pay and overall
executive compensation strategy.
For purposes of the Plan, the following terms shall have the following meanings:
A.  AWARD  PERIOD.  An award  period  under the Plan  shall be a period of three
consecutive fiscal years of the Company.
B. BOARD OF DIRECTORS. The Board of Directors of the Company.
C. CHANGE IN CONTROL.  The occurrence during the term of the Plan and during the
Award Period of any Project Incentive Compensation Award of:
         (a) An acquisition (other than directly from the Company) of any voting
     securities of the Company (the "Voting Securities") by any "Person" (as the
     term person is used for purposes of Section 13(d) or 14(d) of the
     Securities Exchange Act of 1934, as amended (the "1934 Act")) immediately
     after which such Person has "Beneficial Ownership" (within the meaning of
     Rule 13d-3 promulgated under the 1934 Act) of fifteen percent (15%) or more
     of the combined voting power of the Company's then outstanding Voting
     Securities; provided, however, in determining whether a Change in Control
     has occurred, Voting Securities which are acquired in a "Non-Control
     Acquisition" (as hereinafter defined) shall not constitute an acquisition
     which would cause a Change in Control. A "Non-Control Acquisition" shall
     mean an acquisition by (i) an employee benefit plan (or a trust forming a
     part thereof) maintained by (A) the Company or (B) any corporation or other
     Person of which a majority of its voting power or its voting equity
     securities or equity interest is owned, directly or indirectly, by the
     Company (for purposes of this definition, a "Controlled Subsidiary"), (ii)
     the Company or its Controlled Subsidiaries, or (iii) any Person in
     connection with a "Non-Control Transaction" (as hereinafter defined);
         (b) The individuals who, as of the Effective Date, are members of the
     Board (the "Incumbent Board"), cease for any reason to constitute at least
     two-thirds of the Board; provided, however, that if the election, or
     nomination for election by the Company's stockholders, of any new director
     was approved by a vote of at least two-thirds of the Incumbent Board, such
     new director shall, for purposes of this Plan, be considered as a member of
     the Incumbent Board; provided further, however, that no individual shall be
     considered a member of the Incumbent Board if such individual initially
     assumed office as a result of either an actual or threatened "Election
     Contest" (as described in Rule 14a-11 promulgated under the 1934 Act) or
     other actual or threatened solicitation of proxies or consents by or on
     behalf of a Person other than the Board (a "Proxy Contest") including by
     reason of any agreement intended to avoid or settle any Election Contest or
     Proxy Contest; or
         (c) Approval by stockholders of the Company of:
                  (i) A merger, consolidation or reorganization involving the
                      Company, unless
                     (A) the stockholders of the Company, immediately
                  before such merger, consolidation or reorganization, own,
                  directly or indirectly immediately following such merger,
                  consolidation or reorganization, at least sixty percent (60%)
                  of the combined voting power of the outstanding voting
                  securities of the corporation resulting from such merger or
                  consolidation or reorganization (the "Surviving Corporation")
                  in substantially the same proportion as their ownership of the
                  Voting Securities immediately before such merger,
                  consolidation or reorganization,
                     (B) the individuals who were members of the Incumbent
                  Board immediately prior to the execution of the agreement
                  providing for such merger, consolidation or reorganization
                  constitute at least two-thirds of the members of the board of
                  directors of the Surviving Corporation, and
                     (C) no Person other than the Company, any Controlled
                  Subsidiary, any employee benefit plan (or any trust forming a
                  part thereof) maintained by the Company, the Surviving
                  Corporation, or any Controlled Subsidiary, or any Person who,
                  immediately prior to such merger, consolidation or
                  reorganization had Beneficial Ownership of fifteen percent
                  (15%) or more of the then outstanding Voting Securities has
                  Beneficial Ownership of fifteen percent (15%) or more of the
                  combined voting power of the Surviving Corporation's then
                  outstanding voting securities.
                  For purposes hereof, a transaction described in clauses (A)
                  through (C) shall herein be referred to as a "Non-Control
                  (ii) A complete liquidation or dissolution of the Company; or
                  (iii) An agreement for the sale or other disposition of all or
         substantially all of the assets of the Company to any Person (other
         than a transfer to a Controlled Subsidiary).
Notwithstanding the foregoing,  a Change in Control shall not be deemed to occur
solely because any Person (the "Subject Person") acquired  Beneficial  Ownership
of more than the  permitted  amount of the  outstanding  Voting  Securities as a
result of the acquisition of Voting Securities by the Company which, by reducing
the number of Voting Securities  outstanding,  increases the proportional number
of shares Beneficially Owned by the Subject Person, provided that if a Change in
Control would occur (but for the operation of this  sentence) as a result of the
acquisition  of  Voting  Securities  by  the  Company,   and  after  such  share
acquisition by the Company,  the Subject Person becomes the Beneficial  Owner of
any  additional  Voting  Securities  which  increases the percentage of the then
outstanding Voting Securities  Beneficially Owned by the Subject Person,  then a
Change in Control shall occur.
D. COMMITTEE. The Management Development and Compensation Committee of the Board
of Directors of the Company or any successor committee thereto.
E. COMPANY. RadioShack Corporation, a Delaware corporation.
F. LONG-TERM INCENTIVE COMPENSATION AWARD. Any cash-based award paid pursuant to
the Plan.
G.  PARTICIPANT.  An  executive  officer  of the  Company  or one or more of its
subsidiaries, who is designated by the Committee to participate in the Plan.
H.  PAYMENT  DATE.  The date  prescribed  for payment  with  respect to an Award
I. PERFORMANCE  MEASURES.  The performance  measures established with respect to
Long-term Incentive Compensation Awards pursuant to Section V of the Plan.
J.  RETIREMENT.  A  Participant's  voluntary  termination of employment with the
Company or any of its subsidiaries on or after attainment of age 55.
The Plan has been  adopted  effective  as of  January  1, 2004  (the  "Effective
Date").  Long-term Incentive Compensation Awards may be granted through December
31, 2008.
A.  Participants will be eligible to receive  Long-term  Incentive  Compensation
Awards  conditioned on achievement of Performance  Measure(s) as approved by the
B. If the  Performance  Measures are not achieved,  then no Long-term  Incentive
Compensation  Awards  will  be paid  to  Participants  under  the  Plan.  If the
Performance Measures are achieved,  then Long-term Incentive Compensation Awards
will be paid in amounts  and at levels  determined  by the  Committee  under the
Plan. The maximum Long-term Incentive Compensation Award that can be paid to any
one individual with respect to any Award Period is $3,000,000.00.
C. Long-term Incentive  Compensation Awards may be paid following the end of the
Award  Period  to  which  they  relate;  provided,  however,  that no  Long-term
Incentive  Compensation  Awards  shall  be paid  to  Participants  prior  to the
certification  in writing by the Committee  that the  Performance  Measures have
been achieved for the relevant Award Period.
D. The  Committee  will  determine  the final  amounts  of  Long-term  Incentive
Compensation  Awards  that  may be made to  Participants.  Such  determinations,
except in the case of the Long-term  Incentive  Compensation Award for the Chief
Executive  Officer,  shall be made after considering the  recommendations of the
Chief  Executive  Officer  and such other  matters as the  Committee  shall deem
relevant. Such determination in the case of the Long-term Incentive Compensation
Award  for the  Chief  Executive  Officer  shall be made by the  Committee.  The
Committee may, at any time or from time to time,  exercise  discretion to reduce
the amount of, or eliminate,  Long-term  Incentive  Compensation  Awards.  In no
event  may  the  amount  of  the  Long-term  Incentive  Compensation  Awards  be
B. Payment of Long-term  Incentive  Compensation  Awards is  conditioned  on the
attainment of Performance Measures as established by the Committee.  Performance
Measures  applicable to Award Periods for  Participants  shall be established in
writing at the beginning of each year. The Committee will select the Performance
Measures from among the following performance criteria:
       1. earnings per share,
       2. operating income (before income taxes),
       3. gross profit,
       4. sales,
       5. EBITDA,
       6. free cash flow,
       7. return on invested capital,
       8. selling, general and administrative expenses,
       9. stock price compared to a peer group of companies, and
      10. stock price.
B. Further, in establishing Performance Measures for Participants, the Committee
in its sole and  absolute  discretion  may  include  or  exclude at any time the
impact of specific  objective  events that are determined to be extraordinary or
unusual in nature,  infrequent  in  occurrence  or related to the  disposal of a
segment  of a  business  or to a  change  of  accounting  principles;  provided,
however,  such inclusion or exclusion of specific  objective events shall not be
done in such a manner that would  result in the loss of an  otherwise  available
exemption under Section 162(m).
C. The Committee may impose additional Performance Measures that have the effect
of  reducing  awards.  It also may modify  Performance  Measures  applicable  to
Participants  that  have the  effect  of  reducing  awards.  It also may  modify
Performance  Measures  applicable to Participants,  except in the case where the
action  would  result  in the loss of an  otherwise  available  exemption  under
Section  162(m),  if it  determines  that the  Performance  Measures have become
unsuitable as a result of certain events.
Long-term Incentive Compensation Awards shall be paid in cash.
When a Long-term  Incentive  Compensation Award is made, the Company shall cause
the cash to be paid to the  Participant to whom the award is made at the time or
times specified by the Committee, or, if no time or times are specified, as soon
as  practicable  after the award is made;  provided,  however,  that in no event
shall such payment occur more than three months after the Award Period ends.
In connection with any actual or potential Change in Control, the Committee will
take  all  such  actions  hereunder  as it  may  determine  to be  necessary  or
appropriate  to  treat  Participants  equitably  hereunder,   including  without
limitation the modification or waiver of applicable Performance Measures,  Award
Periods or Long-term Incentive Compensation Awards, notwithstanding the terms of
any initial Long-term Incentive  Compensation Award, and whether to establish or
fund a trust or other arrangement intended to secure the payment of such Awards.
A. If a Participant  terminates employment with the Company and its subsidiaries
before the Payment Date due to death or Retirement,  the Participant's Long-term
Incentive  Compensation  Awards  for all Award  Periods in effect at the time of
such  termination  of service  will be prorated on the basis of the ratio of the
number of days of  participation  during each such Award Period to the aggregate
number of days in each such Award  Period.  Payment of such  prorated  Long-term
Incentive  Compensation  Awards  will occur at the end of the  applicable  Award
Periods  on the  dates  that all  other  Participants  receive  payment  of such
Long-term Incentive Compensation Awards.
B.  If a  Participant  voluntarily  terminates  his  or her  employment  or if a
Participant's  employment with the Company and its subsidiaries is terminated by
the  Company or any such  subsidiary  prior to the end of an Award  Period,  the
Participant will not be entitled to any Long-term  Incentive  Compensation Award
for any such Award Period, except as otherwise provided in an Agreement with the
Company or in the sole discretion of the Company.
C. If, prior to the Payment Date, a Participant's duties change prior to the end
of an Award Period, the Participant's  rights to receive any Long-term Incentive
Compensation  for  any  such  Award  Period  will  be  subject  to  revision  or
termination  by the  Committee,  provided that no change will be made that would
cause the award to fail to meet the requirements for deductibility under Section
A.  Nothing  contained  in the Plan  shall  prohibit  the  Company or any of its
subsidiaries from granting special performance or recognition awards, under such
conditions  and in such form and manner as it sees fit, to employees  (including
Participants) for meritorious service of any nature.
B. In addition,  nothing contained in the Plan shall prohibit the Company or any
of  its  subsidiaries  from  establishing  other  incentive  compensation  plans
providing  for the payment of incentive  compensation  to  employees  (including
A. The Board of  Directors  or the  Committee  shall have the right to amend the
Plan from time to time; provided,  however,  that any amendment that changes the
class of eligible  Participants,  modifies the Performance Measures or increases
the maximum  Long-term  Incentive  Compensation  Award a Participant may receive
must be approved by the  stockholders  to the extent  necessary  for the Plan to
continue to meet the  requirements of Section 162(m).  The Board of Directors or
the  Committee  shall  have the  right to  terminate  the Plan at any time or to
direct the  discontinuance  of Long-term  Incentive  Compensation  Awards either
temporarily or  permanently.  Notwithstanding  the foregoing,  in the event this
Plan is terminated before the last day of an Award Period,  Long-term  Incentive
Compensation  Awards payable for such Award Period will be prorated on the basis
of the  ratio  of the  number  of  days  in  such  Award  Period  prior  to such
termination  to the  aggregate  number of days in such Award  Period and will be
paid only after the end of such Award  Period,  which will be deemed to continue
until the expiration thereof as if this Plan had not been terminated.
B. This Plan will be  administered  by the  Committee  in its sole and  absolute
discretion,  and the Committee may interpret the Plan and  establish,  amend and
rescind any rules  relating to the Plan.  The  decision  of the  Committee  with
respect  to any  questions  arising in  connection  with the  administration  or
interpretation of the Plan shall be final, conclusive and binding.
C. The Committee  may delegate its  responsibilities  under the Plan;  provided,
however,  that the  Committee  shall not  delegate  its  authority to select the
Participants,  establish  Performance Measures, or certify that these goals have
been achieved,  to the extent  necessary to satisfy the  requirements of Section
A. All expenses and costs in connection  with the operation of the Plan shall be
borne by the Company.
B. All  Long-term  Incentive  Compensation  Awards under the Plan are subject to
applicable withholding for federal, state and local taxes.
C.  Unless  otherwise  determined  by the  Committee,  all  Long-term  Incentive
Compensation  Awards will be paid from the Company's general assets, and nothing
contained  in this Plan will  require  the Company to set aside or hold in trust
any funds for the  benefit  of any  Participant,  who will have the  status of a
general unsecured creditor of the Company.
D. This Plan will not confer  upon any  Participant  any right  with  respect to
continuance  of employment or other service with the Company or any  subsidiary,
nor will it  interfere  in any way with any right the Company or any  subsidiary
would  otherwise  have to  terminate  or modify the terms of such  Participant's
employment or other service at any time.
E. Except as  otherwise  provided in this Plan,  no right or benefit  under this
Plan will be subject to  anticipation,  alienation,  sale,  assignment,  pledge,
encumbrance,  or charge, and any attempt to anticipate,  alienate, sell, assign,
pledge, encumber, or charge such right or benefit will be void. No such right or
benefit  will in any manner be liable for or subject to the debts,  liabilities,
or torts of a Participant.
F. If any  provision  in this Plan is held to be  invalid or  unenforceable,  no
other provision of this Plan will be affected thereby.
G. This Plan will be governed by and  construed in  accordance  with  applicable
United States  federal law and, to the extent not preempted by such federal law,
in accordance with the laws of the State of Texas,  without giving effect to the
principles of conflict of laws thereof.
                                                                    Exhibit 10.5
                       Description of Long-Term Incentive
                   Performance Measures for Executive Officers
                   for the 2004 through 2006 Performance Cycle
On February 20, 2004,  the  Compensation  Committee  established  the three-year
performance  goals for the 2004 plan cycle. The cash payment under the 2004 plan
cycle will be based on achievement of the following performance measures:
   o   33% of the performance measure is based on the compounded annual growth
       rate of RadioShack's sales revenue, and
   o   67% of the performance measure is based on the compounded annual growth
       rate of RadioShack's operating income.
Payments to an executive officer under this plan cycle are based on a percentage
of that executive officer's 2004 target bonus.
                                                                    Exhibit 10.6
                       Description of Long-Term Incentive
                   Performance Measures for Executive Officers
                   for the 2005 through 2007 Performance Cycle
On February 24, 2005,  the  Compensation  Committee  established  the three-year
performance  goals for the 2005 plan cycle. The cash payment under the 2005 plan
cycle will be based on achievement of the following performance measures:
   o   34% of the performance measure is based on the compounded annual growth
       rate of RadioShack's sales revenue,
   o   33% of the performance measure is based on the compounded annual growth
       rate of RadioShack's operating income, and
   o   33% of the performance measure is based on the compounded annual growth
       rate of RadioShack's operating income compared to a specified peer group.
Payments to an executive officer under this plan cycle are based on a percentage
of that executive officer's 2005 target bonus.





                             INCENTIVE STOCK PLAN(S)
                             STOCK OPTION AGREEMENT
     THIS AGREEMENT, made as of the ____ day of ___________, _______ (the "Grant
Date"), between RadioShack Corporation,  a Delaware corporation (the "Company"),
and the person named (the  "Optionee")  on one or more of the Notice(s) of Grant
of Stock Options and Option Agreement (the  "Notice(s)")  attached  hereto,  the
provisions of which are incorporated herein by reference.
     WHEREAS,  the Company has adopted one or more Incentive  Stock Plan(s),  as
identified  on the Notice(s)  (the  "Plan(s)") in order to provide an additional
incentive to certain officers of the Company and its Subsidiaries; and
     WHEREAS,  the Committee  responsible for  administration of the Plan(s) has
determined to grant an option to the Optionee as provided herein;
     NOW, THEREFORE, the parties hereto agree as follows:
     1. Grant of Option.
     1.1 The Company  hereby  grants to the  Optionee  the right and option (the
"Option")  to purchase  all or any part of the amount of whole  shares of common
stock,  par value $1.00,  of the Company  ("Shares")  set forth on the Notice(s)
subject to, and in accordance  with,  the terms and conditions set forth in this
     1.2 The portion of this Option,  if any, as  identified on the Notice(s) as
an Incentive  Stock  Option is intended to qualify as an Incentive  Stock Option
within  the  meaning  of  Section  422 of the  Code and  shall be so  construed;
provided,  however,  that nothing in this  Agreement  shall be  interpreted as a
representation,  guarantee or other  undertaking on the part of the Company that
any  portion of the Option is or will be  determined  to be an  Incentive  Stock
Option within the meaning of Section 422 of the Code.
     1.3 This Agreement  shall be construed in accordance  and consistent  with,
and  subject to, the  provisions  of the Plan(s)  (the  provisions  of which are
incorporated  herein by reference) and, except as otherwise  expressly set forth
herein,  the  capitalized  terms  used in this  Agreement  shall  have  the same
definitions as set forth in the Plan(s).
     2. Purchase Price.
     The price at which the Optionee  shall be entitled to purchase  Shares upon
the  exercise  of the Option  shall be  $___________  per Share  (the  "Purchase
     3. Duration of Option.
     The Option shall be exercisable to the extent and in the manner provided in
Section 4 hereof for a period of seven years from the Grant Date (the  "Exercise
Term"); provided, however, that the Option may be earlier terminated as provided
in Section 6 hereof.
     4. Exercisability of Option.
     Unless  otherwise  provided in this  Agreement or the  Plan(s),  the Option
shall  entitle the  Optionee to  purchase,  in whole at any time or in part from
time to time,  one-third  (in the manner as set forth in the  Notice(s))  of the
total number of Shares  covered by the Option after the  expiration of 12 months
from the Grant Date and an  additional  one-third  of the total number of Shares
covered  by the  Option  after the  expiration  of each of the  second and third
anniversaries  of the Grant  Date,  and each  such  right of  purchase  shall be
cumulative and shall continue,  unless sooner  exercised or terminated as herein
provided,  during the  remaining  period of the Exercise  Term.  Any  fractional
number of Shares  resulting from the application of the percentages set forth in
this Section 4 shall be rounded to the next higher whole number of Shares in the
first  (and  second if  necessary)  year,  but no more than the total  number of
Shares granted shall result from the rounding up.
     5. Manner of Exercise and Payment.
     5.1 Subject to the terms and  conditions of this Agreement and the Plan(s),
the Option shall be exercised by timely delivery of written notice in person, by
facsimile,  electronic  means or by certified mail return  receipt  requested to
such person, entity and location as may be designated by the Corporate Secretary
of the  Company.  Such  notice  shall  state that the  Optionee  is  electing to
exercise  the  Option and the number of Shares in respect of which the Option is
being  exercised  and shall be signed or  authorized  by the  person or  persons
exercising  the Option.  If requested by the  Committee,  such person or persons
shall (i) deliver this  Agreement to the Corporate  Secretary of the Company who
shall endorse thereon a notation of such exercise and (ii) provide  satisfactory
proof as to the right of such person or persons to exercise the Option.  As used
in Section 5,  "delivery"  means the notice and payment for the Options  must be
received by the Company, or its specified  designee,  prior to expiration of the
Option as provided in Section 6.1 hereof.
     5.2 The notice of exercise described in Section 5.1 shall be accompanied by
the full  Purchase  Price for the Shares in respect of which the Option is being
exercised,  in  cash  or by  certified  check,  or,  in  the  discretion  of the
Committee,  in whole or in part, by transferring  Shares to the Company having a
Fair Market Value on the day  preceding  the date of exercise  equal to the cash
amount for which such Shares are substituted.
     5.3 Upon  timely  receipt of notice of  exercise  and full  payment for the
Shares in respect of which the Option is being  exercised,  the  Company  shall,
subject to the terms of the  Plan(s),  take such action as may be  necessary  to
effect the  transfer  to the  Optionee  of the number of Shares as to which such
exercise was effective.
     5.4 The Optionee shall not be deemed to be the holder of, or to have any of
the rights of a holder with  respect to any Shares  subject to the Option  until
(i) the Option shall have been exercised pursuant to the terms of this Agreement
and the  Optionee  shall  have paid the full  Purchase  Price for the  number of
Shares in respect of which the Option was exercised,  and (ii) the Company shall
have issued and delivered the Shares to the Optionee or to a broker  approved by
the Company,  whereupon the Optionee shall have full voting and other  ownership
rights with respect to such Shares.
     6. Expiration of Option.
        6.1 This Option shall expire and become null and void upon the happening
of whichever of the following events shall first occur:
        a) expiration of 3 months  after the Optionee  ceases to be employed by
the Company or any of its Subsidiaries for any reason other than termination for
one of the reasons set forth below in Section 6.1 b), c), d) or e) of this
        b) expiration  of 3  years  since  the  Optionee's  (i)  termination  of
employment  by  reason of  death,  (ii) termination  of employment  by reason of
Disability, or (iii) retirement at age 55 or older ("Retirement");
        c) the  first  annual  anniversary  of  the  Optionee's  termination  of
employment following a Change in Control;
        d) the Exercise Term expires; or
        e) the Optionee's employment shall have been terminated for Cause.
     Except as provided in Section 6.2 below, only those portions of this Option
exercisable as of the date of  termination  of the Optionee's  employment may be
     In the event of the Optionee's  death, the Option shall be exercisable,  to
the  extent  provided  in the  Plan(s)  and this  Agreement,  by the  legatee or
legatees under the Optionee's will, or by the Optionee's  legal  representatives
or distributees and such person or persons shall be substituted for the Optionee
each time the Optionee is referred to herein.
     6.2  Notwithstanding  the  provisions  of Section 4 above  relating  to the
exercise of this Option in installments:
        a) upon  the  Optionee's  death  or  Disability  this  Option  shall  be
immediately exercisable, until  the expiration of the period provided in section
6.1 above, for the entire number of Option Shares covered hereby;
        b) upon the  Optionee's  Retirement  this  Option  shall be  immediately
exercisable, until the expiration of the period  provided in  Section 6.1 above,
for the  number of Option  Shares  covered  hereby  that  have  been  held bythe
Optionee for a period of 12 months or more from the Grant Date; and
        c) upon any Change in  Control of the Company this  Option shall  become
exercisable as provided below in Section 7.
     7. Effect of Change in Control.
     7.1 Notwithstanding anything contained in the Agreement to the contrary, in
the event of a Change in Control of the Company, (i) the Option to the extent it
qualifies as an  Incentive  Stock  Option  shall  become  immediately  and fully
exercisable  for the entire  number of  Incentive  Stock Option  Shares  covered
hereby through the expiration of the applicable  period specified in Section 6.1
above and (ii) the Optionee  will be permitted  to  surrender  for  cancellation
within 60 days after such Change in Control,  the Incentive  Stock Option or any
portion of the  Incentive  Stock Option to the extent not yet  exercised and the
Optionee  will be entitled to receive  immediately  a cash  payment in an amount
equal to the excess, if any, of (A) the Fair Market Value, on the date preceding
the date of the surrender, of the Shares constituting the Incentive Stock Option
or portion of the  Incentive  Stock Option  surrendered,  over (B) the aggregate
Purchase  Price for such  Shares  constituting  the  Incentive  Stock  Option or
portion of the Incentive Stock Option surrendered.
     7.2 Notwithstanding anything contained in the Agreement to the contrary, in
the event of a Change in Control of the Company, (i) the Option to the extent it
is a Nonqualified  Stock Option shall become  immediately and fully  exercisable
for the entire number of Nonqualified Stock Option Shares covered hereby through
the expiration of the applicable  period specified in Section 6.1 above and (ii)
the Optionee  will be permitted to  surrender  for  cancellation  within 60 days
after such Change in Control,  the  Nonqualified  Stock Option or any portion of
the  Nonqualified  Stock Option to the extent not yet exercised and the Optionee
will be entitled to receive a cash payment in an amount equal to the excess,  if
any, of (A) the greater of (1) the Fair Market Value,  on the date preceding the
date of the surrender,  of the Shares constituting the Nonqualified Stock Option
or portion of the  Nonqualified  Stock Option  surrendered,  or (2) the Adjusted
Fair Market Value of the Shares  constituting the  Nonqualified  Stock Option or
the portion of the Nonqualified Stock Option surrendered, over (B) the aggregate
Purchase Price for such Shares  constituting  the  Nonqualified  Stock Option or
portion of the Nonqualified Stock Option surrendered.
     8. Non-transferability.
     The Option shall not be  transferable  other than by will or by the laws of
descent and distribution.  During the lifetime of the Optionee, the Option shall
be exercisable only by the Optionee or the Optionee's legal representative.
     9. No Right to Continued Employment.
     Nothing in this  Agreement or the Plan(s) shall be interpreted or construed
to confer upon the Optionee any right with respect to  continuance of employment
by the Company,  nor shall this  Agreement  or the Plan(s)  interfere in any way
with the right of the Company to  terminate  the  Optionee's  employment  at any
     10. Adjustments.
     In the  event  of a  Change  in  Capitalization,  the  Committee  may  make
appropriate  adjustments  to the  number  and class of Shares or other  stock or
securities subject to the Option and the Purchase Price for such Shares or other
stock or securities. The Committee's adjustment shall be made in accordance with
the  provisions  of the Plan(s) and shall be  effective  and final,  binding and
conclusive for all purposes of the Plan(s) and this Agreement.
     11. Effect of Certain Transactions.
     Subject to Section 7 hereof, upon the effective date of (i) the liquidation
or dissolution of the Company or (ii) a merger or  consolidation  of the Company
(a  "Transaction"),  the Option shall continue in effect in accordance  with its
terms and the  Optionee  shall be  entitled  to receive in respect of all Shares
subject to the Option,  upon exercise of the Option, the same number and kind of
stock,  securities,  cash,  property or other  consideration that each holder of
Shares was entitled to receive in the Transaction.
     12. Withholding of Taxes.
     12.1 The Company  shall have the right to deduct from any  distribution  of
cash to the  Optionee,  an amount equal to the  federal,  state and local income
taxes  and  other  amounts  as  may be  required  by  law  to be  withheld  (the
'Withholding  Taxes")  with  respect  to  the  Option.  If  the  Optionee  is to
experience a taxable event in connection  with the receipt of Shares pursuant to
an Option exercise,  the Optionee shall pay the Withholding Taxes to the Company
prior to the issuance,  or release from escrow,  of such Shares. In satisfaction
of the obligation to pay Withholding Taxes to the Company, the Optionee may make
a written  election,  which may be accepted or rejected in the discretion of the
Committee,  to have  withheld  a portion  of the  Shares  then  issuable  to the
Optionee  having an aggregate Fair Market Value,  on the date preceding the date
of such issuance, equal to the Withholding Taxes.
     12.2 If the  Optionee  makes a  disposition,  within the meaning of Section
424(c) of the Code and  regulations  promulgated  thereunder,  of any  Incentive
Stock  Option  Share or Incentive  Stock  Option  Shares  issued to the Optionee
pursuant to the exercise of an Incentive Stock Option within the two-year period
commencing  on the day after  the  Grant  Date or  within  the  one-year  period
commencing on the day after the date of transfer of such Incentive  Stock Option
Share  or  Incentive  Stock  Option  Shares  to the  Optionee  pursuant  to such
exercise,  the Optionee shall,  within 10 days of such  disposition,  notify the
Company  thereof,  by delivery of written notice to the Company at its principal
executive  office,  and  immediately  deliver  to  the  Company  the  amount  of
Withholding Taxes.
     13. Optionee Bound by the Plan(s).
     The  Optionee  hereby  acknowledges  receipt of a copy of the  Plan(s)  and
agrees to be bound by all the terms and provisions thereof.  The Optionee hereby
acknowledges receipt of one or more Prospectuses for the Plan(s).
     14. Modification of Agreement.
     This Agreement may be modified,  amended,  suspended or terminated, and any
terms or conditions may be waived, but only by a written instrument  executed by
the parties hereto.
     15. Severability.
     Should any  provision  of this  Agreement  be held by a court of  competent
jurisdiction  to be  unenforceable  or invalid  for any  reason,  the  remaining
provisions  of this  Agreement  shall not be affected by such  holding and shall
continue in full force in accordance with their terms.
     16. Governing Law.
     The  validity,   interpretation,   construction  and  performance  of  this
Agreement  shall be  governed by the laws of the state of Texas  without  giving
effect to the conflicts of law principles thereof.
     17. Successors in Interest.
     This  Agreement  shall  inure to the  benefit  of and be  binding  upon any
Successor  Corporation.  This  Agreement  shall  inure  to  the  benefit  of the
Optionee's legal representatives.  All obligations imposed upon the Optionee and
all rights granted to the Company under this Agreement  shall be final,  binding
and conclusive upon the Optionee's heirs, executors, administrators, personal
representatives and successors.
     18. Resolution of Disputes.
     Any dispute or disagreement which may arise under, or as a result of, or in
any way relate to,  the  interpretation,  construction  or  application  of this
Agreement shall be determined by the Committee. Any determination made hereunder
by the  Committee  shall be final,  binding and  conclusive  on the Optionee and
Company for all purposes.
     19. Entire Agreement.
     This  Agreement,   together  with  the  documents  incorporated  herein  by
reference,  represents the entire agreement  between the parties with respect to
the subject  matter hereof and this Agreement may not be modified by any oral or
written agreement unless same is in writing, signed by both parties and has been
approved by the Committee.
     20. Effective.
     Unless Optionee  notifies the Company in writing within thirty (30) days of
the date of mailing this Agreement to Optionee that Optionee does not accept the
terms of this Agreement, Optionee shall be deemed to have accepted, and be bound
by, the terms of this Agreement.