OWENS CORNING KEY
EMPLOYEE EMERGENCE INCENTIVE PLAN

1.

        Purpose. This Owens Corning Key Employee Emergence Incentive Plan has
been established by Owens Corning for designated key employees of the Company.
The purpose of the Plan is to provide an incentive to Participants to remain in
the employ of the Company through the date of the Company’s emergence from
Chapter 11 bankruptcy, and to expedite its emergence to the greatest extent
possible.

2.

        Definitions. For purposes of this Plan:

              a.

“Board” shall mean the Board of Directors of Owens Corning.

              b.

“Cause” shall mean acts of gross misconduct, gross insubordination,
embezzlement, fraud, misappropriation of funds, property or trade secrets (in
each case as determined by the Committee), or the commission of any felony under
state or federal law.

      

              c.

“Committee” shall mean the Compensation Committee of the Board.

              d.

“Company” shall mean Owens Corning, a Delaware Corporation, and each of its
subsidiaries.

              e.

“Disability” shall mean the Participant’s entitlement to benefits under any long
term disability plan or program of the Company.

              f.

“Effective Date” means January 1, 2002.

              g.

“Emergence” shall mean the effective date of a Plan of Reorganization confirmed
in the Chapter 11 proceedings.

              h.

“Emergence Amount” shall mean, with respect to each Participant, the amount
payable under the Plan in accordance with Section 5(a) hereof.

              i.

“Emergence Date” shall mean the date of Emergence, as defined.

              j.

“Nonqualifying Severance” shall mean any termination of a Participant’s
employment with the Company after the Effective Date and before the earlier of
the Emergence Date or December 31, 2003, in other than a Qualifying Severance.

              k.

“Participant” shall mean an employee of the Company who participates in the Plan
in accordance with Section 4 hereof.

              l.

“Plan” shall mean this Owens Corning Key Employee Emergence Incentive Plan, as
amended from time to time.

              m.

“Qualifying Severance” shall mean the termination of a Participant’s employment
with the Company after the Effective Date and before the earlier of the
Emergence Date or December 31, 2003: (i) by the Company other than for Cause, or
(ii) by reason of death or Disability.

3.

        Administration.

              a.

The Plan shall be administered by the Committee, which shall have complete
authority to determine who shall participate herein and the Emergence Amount
applicable to each Participant, to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to it, and to make all other
determinations necessary or advisable for the administration of the Plan.

              b.

The Committee is authorized, on behalf of the Plan, to engage accountants, legal
counsel and such other personnel as it deems necessary or advisable to assist it
in the performance of its duties under the Plan. All reasonable expenses thereof
shall be borne by the Company.

              c.

All decisions made by the Committee pursuant to the provisions of the Plan shall
be final, conclusive and binding on all persons, including the Company and the
Participants. No member of the Board or the Committee, nor any officer or
employee of the Company acting on behalf of the Board or the Committee, shall be
personally liable for any action, determination, or interpretation taken or made
in good faith with respect to the Plan, and all members of the Board or the
Committee and each and any officer or employee of the Company acting on their
behalf shall, to the extent permitted by law, be fully indemnified and protected
in respect of any such action, determination or interpretation.

              d.

The Committee may delegate any of its duties hereunder to such person or persons
as it may designate from time to time.

4.

        Participation. The Committee shall, in its sole discretion, select the
employees of the Company who shall participate in the Plan. As a condition to
participation in the Plan, each such employee shall execute an agreement, in
such form as the Committee may require, acknowledging his or her participation
in the Plan and his or her intent to remain employed by the Company through the
Emergence Date.

5.

        Payments.

              a.

In General. Each Participant who remains employed by the Company through the
earlier of the Emergence Date or December 31, 2003 shall receive a cash payment
from the Company equal to the Emergence Amount established by the Committee for
the Participant, as set forth in the letter informing the Participant of his or
her participation in the Key Employee Emergence Incentive Plan (dated May 29,
2001). There shall be no requirement of uniformity of Emergence Amount among
Participants.

              b.

Qualifying Severance. Each Participant who terminates employment with the
Company under a Qualifying Severance shall receive a cash payment from the
Company equal to his or her Emergence Amount multiplied by a fraction, the
numerator of which is the number of calendar months (including fractional
months) from the Effective Date until the date of the Qualifying Severance, and
the denominator of which is 24.

              c.

Nonqualifying Severance. No payment shall be made under the Plan in respect of a
Participant who incurs a Nonqualifying Severance.

              d.

Form and Timing of Payment. In general, payments under this Section 5 shall be
made in a lump sum. In the case of a payment pursuant to subsection (a) above,
such payment shall be made as soon as practicable following the earlier of the
Emergence Date or December 31, 2003 (but in any case not sooner than January 1,
2003), and in the case of a payment pursuant to subsection (b) above, such
payment shall be made as soon as practicable following the date of the
Qualifying Severance.

6.

        General Provisions.

              a.

Compliance with Legal Requirements. The Plan, the payment of amounts hereunder,
and the other obligations of the Company under the Plan shall be subject to all
applicable federal and state laws, rules and regulations, and to such approvals
by any regulatory or governmental agency as may be required.

              b.

Nontransferability. No Participant shall have the right to alienate, anticipate,
commute, pledge, encumber or assign any of the benefits or payments which he or
she may expect to receive, contingently or otherwise, under this Plan.

              c.

No Right To Continued Employment. Nothing in the Plan shall confer upon any
Participant the right to continue in the employ of the Company or to be entitled
to any remuneration or benefits not set forth in the Plan or to interfere with
or limit in any way the right of the Company to terminate such Participant’s
employment, which remains “at will.”

              d.

Effect on Other Benefits. Amounts paid or payable hereunder shall not be treated
as compensation for purposes of determining benefit amounts or accruals under
any employee pension or benefit plan, program or arrangement maintained by the
Company.

              e.

Severability. If any provision of this Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof, and this Plan shall be construed and enforced as if such
provisions had not been included.

              f.

Successors. This Plan shall be binding upon the heirs, executors,
administrators, successors and assigns of the parties, including each
Participant and any successor to the Company.

              g.

Construction. The headings and captions herein are provided for reference and
convenience only, shall not be considered part of the Plan, and shall not be
used in the construction of the Plan.

              h.

Withholding Taxes. All amounts to be paid hereunder to Participants shall be
paid net of any taxes that the Company may be required to withhold therefrom in
respect of any federal, state, local or other taxes.

              i.

Amendment, Termination and Duration of the Plan. The Committee may at any time
and from time to time alter, amend, suspend, or terminate the Plan in whole or
in part. The Plan shall terminate on the earlier of the Emergence Date or
December 31, 2003, provided that all amounts not yet paid on the Emergence Date
shall be paid thereafter in accordance with the terms hereof.

              j.

Unfunded Plan. The Plan is intended to constitute an “unfunded” plan for
incentive compensation. With respect to any payments not yet made to a
Participant hereunder, nothing contained in the Plan shall give any such
Participant any rights in any assets of the Company that are greater than those
of a general creditor of the Company.

              k.

Beneficiary. A Participant may file with the Committee a written designation of
a beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. If no designated beneficiary
survives the Participant, the executor or administrator of the Participant’s
estate shall be deemed to be the Participant’s beneficiary.

              l.

Governing Law. The Plan and all determinations made and actions taken pursuant
hereto shall be governed by the laws of the State of Delaware without giving
effect to the conflict of laws principles thereof.