<PAGE>   1
                                                                   Exhibit 10.5

                               PENTON MEDIA, INC.
                   1998 EQUITY AND PERFORMANCE INCENTIVE PLAN

                  1. PURPOSE. The purpose of the Penton Media, Inc. 1998 Equity
and Performance Incentive Plan is to attract and retain officers and other
employees for Penton Media, Inc., a Delaware corporation, and its Subsidiaries
and to provide to such persons incentives and rewards for superior performance.


                  2. DEFINITIONS. As used in this Plan,

                  "Appreciation Right" means a right granted pursuant to Section
5 of this Plan, and shall include both Tandem Appreciation Rights and
Free-Standing Appreciation Rights.

                  "Base Price" means the price to be used as the basis for
determining the Spread upon the exercise of a Free-Standing Appreciation Right
and a Tandem Appreciation Right.

                  "Board" means the Board of Directors of the Company and, to
the extent of any delegation by the Board to a committee (or subcommittee
thereof) pursuant to Section 15 of this Plan, such committee (or subcommittee).

                  "Change of Control" shall have the meaning provided in Section
11 of this Plan.

                  "Code" means the Internal Revenue Code of 1986, as amended
from time to time.

                  "Common Stock" means the Common Stock, par value $.01 per
share, of the Company or any security into which such Common Stock may be
changed by reason of any transaction or event of the type referred to in Section
10 of this Plan.

                  "Company" means Penton Media, Inc., a Delaware corporation.

                  "Covered Employee" means a Participant who is, or is
determined by the Board to be likely to become, a "covered employee" within the
meaning of Section 162(m) of the Code (or any successor provision).

                  "Date of Grant" means the date specified by the Board on which
a grant of Option Rights, Appreciation Rights, Performance Shares or Performance
Units or a grant or sale of Restricted Shares or Deferred Shares shall become
effective (which date shall not be earlier than the date on which the Board
takes action with respect thereto).

                  "Deferral Period" means the period of time during which
Deferred Shares are subject to deferral limitations under Section 7 of this
Plan.




<PAGE>   2




                  "Deferred Shares" means an award made pursuant to Section 7 of
this Plan of the right to receive shares of Common Stock at the end of a
specified Deferral Period.

                  "Director" means a member of the Board of Directors of the
Company.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, as such law, rules and
regulations may be amended from time to time.

                  "Free-Standing Appreciation Right" means an Appreciation Right
granted pursuant to Section 5 of this Plan that is not granted in tandem with an
Option Right.

                  "Incentive Stock Options" means Option Rights that are
intended to qualify as "incentive stock options" under Section 422 of the Code
or any successor provision.

                  "Management Objectives" means the measurable performance
objective or objectives established pursuant to this Plan for Participants who
have received grants of Performance Shares or Performance Units or, when so
determined by the Board, Option Rights, Appreciation Rights, Restricted Shares
and dividend credits pursuant to this Plan. Management Objectives may be
described in terms of Company-wide objectives or objectives that are related to
the performance of the individual Participant or of the Subsidiary, division,
department, region or function within the Company or Subsidiary in which the
Participant is employed. The Management Objectives may be made relative to the
performance of other corporations. The Management Objectives applicable to any
award to a Covered Employee shall be based on specified levels of or growth in
one or more of the following criteria:

                  1.       cash flow/net assets ratio;
                  2.       debt/capital ratio;
                  3.       return on total capital;
                  4.       return on equity;
                  5.       earnings per share growth;
                  6.       revenue growth; and
                  7.       total return to shareholders.

                  If the Board determines that a change in the business,
operations, corporate structure or capital structure of the Company, or the
manner in which it conducts its business, or other events or circumstances
render the Management Objectives unsuitable, the Board may in its discretion
modify such Management Objectives or the related minimum acceptable level of
achievement, in whole or in part, as the Board deems appropriate and equitable,
except in the case of a Covered Employee where such action would result in the
loss of the otherwise available exemption of the award under Section 162(m) of
the Code. In such case, the Board shall not make any modification of the
Management Objectives or minimum acceptable level of achievement.




                                        2

<PAGE>   3



                  "Market Value per Share" means, as of any particular date, the
fair market value of the shares of Common Stock as determined by the Board.

                  "Optionee" means the optionee named in an agreement evidencing
an outstanding Option Right.

                  "Option Price" means the purchase price payable on exercise of
an Option Right.

                  "Option Right" means the right to purchase shares of Common
Stock upon exercise of an option granted pursuant to Section 4 of this Plan.

                  "Participant" means a person who is selected by the Board to
receive benefits under this Plan and who is at the time an officer, or other
employee of the Company or any one or more of its Subsidiaries, or who has
agreed to commence serving in any of such capacities within 90 days of the Date
of Grant.

                  "Performance Period" means, in respect of a Performance Share
or Performance Unit, a period of time established pursuant to Section 8 of this
Plan within which the Management Objectives relating to such Performance Share
or Performance Unit are to be achieved.

                  "Performance Share" means a bookkeeping entry that records the
equivalent of one share of Common Stock awarded pursuant to Section 8 of this
Plan.

                  "Performance Unit" means a bookkeeping entry that records a
unit equivalent to $1.00 awarded pursuant to Section 8 of this Plan.

                  "Plan" means this Penton Media, Inc. 1998 Equity and
Performance Incentive Plan.

                  "Reload Option Rights" means additional Option Rights granted
automatically to an Optionee upon the exercise of Option Rights pursuant to
Section 4(g) of this Plan.

                  "Restricted Shares" means shares of Common Stock granted or
sold pursuant to Section 6 of this Plan as to which neither the substantial risk
of forfeiture nor the prohibition on transfers referred to in such Section 6 has
expired.

                  "Rule 16b-3" means Rule 16b-3 under the Exchange Act (or any
successor rule to the same effect) as in effect from time to time.

                  "Spread" means the excess of the Market Value per Share on the
date when an Appreciation Right is exercised, or on the date when Option Rights
are surrendered in payment of the Option Price of other Option Rights, over the
Option Price or Base Price provided for in the related Option Right or
Free-Standing Appreciation Right, respectively.




                                        3

<PAGE>   4



                  "Subsidiary" means a corporation, company or other entity (i)
more than 50 percent of whose outstanding shares or securities (representing the
right to vote for the election of directors or other managing authority) are, or
(ii) which does not have outstanding shares or securities (as may be the case in
a partnership, joint venture or unincorporated association), but more than 50
percent of whose ownership interest representing the right generally to make
decisions for such other entity is, now or hereafter, owned or controlled,
directly or indirectly, by the Company except that for purposes of determining
whether any person may be a Participant for purposes of any grant of Incentive
Stock Options, "Subsidiary" means any corporation in which at the time the
Company owns or controls, directly or indirectly, more than 50 percent of the
total combined voting power represented by all classes of stock issued by such
corporation.

                  "Tandem Appreciation Right" means an Appreciation Right
granted pursuant to Section 5 of this Plan that is granted in tandem with an
Option Right.

                  "Voting Power" means at any time, the total votes relating to
the then-outstanding securities entitled to vote generally in the election of
Directors.


         3. SHARES AVAILABLE UNDER THIS PLAN. (a) Subject to adjustment as
provided in Section 3(b) and Section 10 of this Plan, the number of shares of
Common Stock that may be issued or transferred (i) upon the exercise of Option
Rights or Appreciation Rights, (ii) as Restricted Shares and released from
substantial risks of forfeiture thereof, (iii) as Deferred Shares, (iv) in
payment of Performance Shares or Performance Units that have been earned or (v)
in payment of dividend equivalents paid with respect to awards made under this
Plan shall not exceed in the aggregate 2,500,000 shares of Common Stock, plus
any shares described in Section 3(b). Such shares may be shares of original
issuance or treasury shares or a combination of the foregoing.

                  (b) The number of shares available in Section 3(a) above shall
be adjusted to account for shares relating to awards that expire, are forfeited
or are transferred, surrendered or relinquished upon the payment of any Option
Price by the transfer to the Company of shares of Common Stock or upon
satisfaction of any withholding amount. Upon payment in cash of the benefit
provided by any award granted under this Plan, any shares that were covered by
that award shall again be available for issue or transfer hereunder.

                  (c) Notwithstanding anything in this Section 3, or elsewhere
in this Plan, to the contrary and subject to adjustment as provided in Section
10 of this Plan, (i) the aggregate number of shares of Common Stock actually
issued or transferred by the Company upon the exercise of Incentive Stock
Options shall not exceed 2,500,000 shares of Common Stock; (ii) no Participant
shall be granted Option Rights and Appreciation Rights, in the aggregate, for
more than 200,000 shares of Common Stock during any period of 1 year; and (iii)
the number of shares issued as Restricted Shares shall not in the aggregate
exceed 200,000 shares of Common Stock.

                  (d) Notwithstanding any other provision of this Plan to the
contrary, in no event shall any Participant in any calendar year receive an
award of Performance Shares or



                                        4

<PAGE>   5



Performance Units having an aggregate maximum value as of their respective Dates
of Grant in excess of $1,000,000.


         4. OPTION RIGHTS. The Board may, from time to time and upon such terms
and conditions as it may determine, authorize the granting to Participants of
options to purchase shares of Common Stock. Each such grant may utilize any or
all of the authorizations, and shall be subject to all of the requirements
contained in the following provisions:

                  (a) Each grant shall specify the number of shares of Common
Stock to which it pertains subject to the limitations set forth in Section 3 of
this plan.

                  (b) Each grant shall specify an Option Price per share. The
Option Price of an Incentive Stock Option may not be less than 100% of the
Market Value per Share on the Date of Grant as set by the Board on such date.
The Option Price of all other Option Rights may not be less than 85% of the
Market Value per Share on the Date of Grant as set by the Board on such date and
may not be less than the par value of a share of Common Stock.

                  (c) Each grant shall specify whether the Option Price shall be
payable (i) in cash or by check acceptable to the Company, (ii) by the actual or
constructive transfer to the Company of shares of Common Stock owned by the
Optionee for at least 6 months (or other consideration authorized pursuant to
Section 4(d)) having a value at the time of exercise equal to the total Option
Price, or (iii) by a combination of such methods of payment.

                  (d) The Board may determine, at or after the Date of Grant,
that payment of the Option Price of any Option Right (other than an Incentive
Stock Option) may also be made in whole or in part in the form of Restricted
Shares or other shares of Common Stock that are forfeitable or subject to
restrictions on transfer, Deferred Shares, Performance Shares (based, in each
case, on the Market Value per Share on the date of exercise), other Option
Rights (based on the Spread on the date of exercise) or Performance Units.
Unless otherwise determined by the Board at or after the Date of Grant, whenever
any Option Price is paid in whole or in part by means of any of the forms of
consideration specified in this Section 4(d), the shares of Common Stock
received upon the exercise of the Option Rights shall be subject to such risks
of forfeiture or restrictions on transfer as may correspond to any that apply to
the consideration surrendered, but only to the extent, determined with respect
to the consideration surrendered, of (i) the number of shares or Performance
Shares, (ii) the Spread of any unexercisable portion of Option Rights, or (iii)
the stated value of Performance Units.

                  (e) Any grant may provide for deferred payment of the Option
Price from the proceeds of sale through a broker on a date satisfactory to the
Company of some or all of the shares to which such exercise relates.

                  (f) Any grant may provide for payment of the Option Price, at
the election of the Optionee, in installments, with or without interest, upon
terms determined by the Board.




                                        5

<PAGE>   6



                  (g) Any grant may, at or after the Date of Grant, provide for
the automatic grant of Reload Option Rights to an Optionee upon the exercise of
Option Rights (including Reload Option Rights) using shares of Common Stock or
other consideration specified in Section 4(d). Reload Option Rights shall cover
up to the number of shares of Common Stock, Deferred Shares, Option Rights or
Performance Shares (or the number of shares of Common Stock having a value equal
to the value of any Performance Units) surrendered to the Company upon any such
exercise in payment of the Option Price or to meet any withholding obligations.
Reload Options may have an Option Price that is no less than that which
represents the same percentage of the Market Value per Share at the time of
exercise of the Option Rights that the share Option Price represented of the
Market Value per Share at the time the Option Rights being exercised were
granted and shall be on such other terms as may be specified by the Directors,
which may be the same as or different from those of the original Option Rights.

                  (h) Successive grants may be made to the same Participant
whether or not any Option Rights previously granted to such Participant remain
unexercised.

                  (i) Each grant shall specify the period or periods of
continuous service by the Optionee with the Company or any Subsidiary that is
necessary before the Option Rights or installments thereof will become
exercisable and may provide for the earlier exercise of such Option Rights in
the event of a Change of Control.

                  (j) Any grant of Option Rights may specify Management
Objectives that must be achieved as a condition to the exercise of such rights.

                  (k) Option Rights granted under this Plan may be (i) options,
including, without limitation, Incentive Stock Options, that are intended to
qualify under particular provisions of the Code, (ii) options that are not
intended so to qualify, or (iii) combinations of the foregoing.

                  (l) The Board may, at or after the Date of Grant of any Option
Rights (other than Incentive Stock Options), provide for the payment of dividend
equivalents to the Optionee on either a current or deferred or contingent basis
or may provide that such equivalents shall be credited against the Option Price.

                  (m) The exercise of an Option Right shall result in the
cancellation on a share-for-share basis of any Tandem Appreciation Right
authorized under Section 5 of this Plan.

                  (n) No Option Right shall be exercisable more than 10 years
from the Date of Grant.

                  (o) Each grant of Option Rights shall be evidenced by an
agreement executed on behalf of the Company by an officer and delivered to the
Optionee and containing such terms and provisions, consistent with this Plan, as
the Board may approve.





                                        6

<PAGE>   7



         5. APPRECIATION RIGHTS. (a) The Board may authorize the granting (i) to
any Optionee, of Tandem Appreciation Rights in respect of Option Rights granted
hereunder, and (ii) to any Participant, of Free-Standing Appreciation Rights. A
Tandem Appreciation Right shall be a right of the Optionee, exercisable by
surrender of the related Option Right, to receive from the Company an amount
determined by the Board, which shall be expressed as a percentage of the Spread
(not exceeding 100 percent) at the time of exercise. Tandem Appreciation Rights
may be granted at any time prior to the exercise or termination of the related
Option Rights; provided, however, that a Tandem Appreciation Right awarded in
relation to an Incentive Stock Option must be granted concurrently with such
Incentive Stock Option. A Free-Standing Appreciation Right shall be a right of
the Participant to receive from the Company an amount determined by the Board,
which shall be expressed as a percentage of the Spread (not exceeding 100
percent) at the time of exercise.

                  (b) Each grant of Appreciation Rights may utilize any or all
of the authorizations, and shall be subject to all of the requirements,
contained in the following provisions:

                           (i) Any grant may specify that the amount payable on
         exercise of an Appreciation Right may be paid by the Company in cash,
         in shares of Common Stock or in any combination thereof and may either
         grant to the Participant or retain in the Board the right to elect
         among those alternatives.

                           (ii) Any grant may specify that the amount payable on
         exercise of an Appreciation Right may not exceed a maximum specified by
         the Board at the Date of Grant.

                           (iii) Any grant may specify waiting periods before
         exercise and permissible exercise dates or periods.

                           (iv) Any grant may specify that such Appreciation
         Right may be exercised only in the event of, or earlier in the event
         of, a Change of Control.

                           (v) Any grant may provide for the payment to the
         Participant of dividend equivalents thereon in cash or shares of Common
         Stock on a current, deferred or contingent basis.

                           (vi) Any grant of Appreciation Rights may specify
         Management Objectives that must be achieved as a condition of the
         exercise of such Rights.

                           (vii) Each grant of Appreciation Rights shall be
         evidenced by an agreement executed on behalf of the Company by an
         officer and delivered to and accepted by the Participant, which
         agreement shall describe such Appreciation Rights, identify the related
         Option Rights (if applicable), state that such Appreciation Rights are
         subject to all the terms and conditions of this Plan, and contain such
         other terms and provisions, consistent with this Plan, as the Board may
         approve.



                                        7

<PAGE>   8



                  (c) Any grant of Tandem Appreciation Rights shall provide that
such Rights may be exercised only at a time when the related Option Right is
also exercisable and at a time when the Spread is positive, and by surrender of
the related Option Right for cancellation.

                  (d)      Regarding Free-standing Appreciation Rights only:

                           (i) Each grant shall specify in respect of each
                  Free-standing Appreciation Right a Base Price, which shall be
                  equal to or greater or less than the Market Value per Share on
                  the Date of Grant;

                           (ii) Successive grants may be made to the same
                  Participant regardless of whether any Free-standing
                  Appreciation Rights previously granted to the Participant
                  remain unexercised; and

                           (iii) No Free-standing Appreciation Right granted
                  under this Plan may be exercised more than 10 years from the
                  Date of Grant.


         6. RESTRICTED SHARES. The Board may also authorize the grant or sale of
Restricted Shares to Participants. Each such grant or sale may utilize any or
all of the authorizations, and shall be subject to all of the requirements,
contained in the following provisions:

                  (a) Each such grant or sale shall constitute an immediate
transfer of the ownership of shares of Common Stock to the Participant in
consideration of the performance of services, entitling such Participant to
voting, dividend and other ownership rights, but subject to the substantial risk
of forfeiture and restrictions on transfer hereinafter referred to.

                  (b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is less
than Market Value per Share at the Date of Grant.

                  (c) Each such grant or sale shall provide that the Restricted
Shares covered by such grant or sale shall be subject to a "substantial risk of
forfeiture" within the meaning of Section 83 of the Code for a period to be
determined by the Board at the Date of Grant and may provide for the lapse of
such substantial risk of forfeiture in the event of a Change in Control.

                  (d) Each such grant or sale shall provide that during the
period for which such substantial risk of forfeiture is to continue, the
transferability of the Restricted Shares shall be prohibited or restricted in
the manner and to the extent prescribed by the Board at the Date of Grant (which
restrictions may include, without limitation, rights of repurchase or first
refusal in the Company or provisions subjecting the Restricted Shares to a
continuing substantial risk of forfeiture in the hands of any transferee).

                  (e) Any grant of Restricted Shares may specify Management
Objectives that, if achieved, will result in termination or early termination of
the restrictions applicable to such



                                        8

<PAGE>   9



shares. Each grant may specify in respect of such Management Objectives a
minimum acceptable level of achievement and may set forth a formula for
determining the number of Restricted Shares on which restrictions will terminate
if performance is at or above the minimum level, but falls short of full
achievement of the specified Management Objectives.

                  (f) Any such grant or sale of Restricted Shares may require
that any or all dividends or other distributions paid thereon during the period
of such restrictions be automatically deferred and reinvested in additional
Restricted Shares, which may be subject to the same restrictions as the
underlying award.

                  (g) Each grant or sale of Restricted Shares shall be evidenced
by an agreement executed on behalf of the Company by any officer and delivered
to and accepted by the Participant and shall contain such terms and provisions,
consistent with this Plan, as the Board may approve. Unless otherwise directed
by the Board, all certificates representing Restricted Shares shall be held in
custody by the Company until all restrictions thereon shall have lapsed,
together with a stock power or powers executed by the Participant in whose name
such certificates are registered, endorsed in blank and covering such Shares.


         7. DEFERRED SHARES. The Board may also authorize the granting or sale
of Deferred Shares to Participants. Each such grant or sale may utilize any or
all of the authorizations, and shall be subject to all of the requirements,
contained in the following provisions:

                  (a) Each such grant or sale shall constitute the agreement by
the Company to deliver shares of Common Stock to the Participant in the future
in consideration of the performance of services, but subject to the fulfillment
of such conditions during the Deferral Period as the Board may specify.

                  (b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is less
than the Market Value per Share at the Date of Grant.

                  (c) Each such grant or sale shall be subject to a Deferral
Period, as determined by the Board at the Date of Grant, and may provide for the
lapse or other modification of such Deferral Period in the event of a Change in
Control.

                  (d) During the Deferral Period, the Participant shall have no
right to transfer any rights under his or her award and shall have no rights of
ownership in the Deferred Shares and shall have no right to vote them, but the
Board may, at or after the Date of Grant, authorize the payment of dividend
equivalents on such Shares on either a current or deferred or contingent basis,
either in cash or in additional shares of Common Stock.

                  (e) Each grant or sale of Deferred Shares shall be evidenced
by an agreement executed on behalf of the Company by any officer and delivered
to and accepted by the



                                        9

<PAGE>   10



Participant and shall contain such terms and provisions, consistent with this
Plan, as the Board may approve.


         8. PERFORMANCE SHARES AND PERFORMANCE UNITS. The Board may also
authorize the granting of Performance Shares and Performance Units that will
become payable to a Participant upon achievement of specified Management
Objectives. Each such grant may utilize any or all of the authorizations, and
shall be subject to all of the requirements, contained in the following
provisions:

                  (a) Each grant shall specify the number of Performance Shares
or Performance Units to which it pertains, which number may be subject to
adjustment to reflect changes in compensation or other factors; provided,
however, that no such adjustment shall be made in the case of a Covered Employee
where such action would result in the loss of the otherwise available exemption
of the award under Section 162(m) of the Code.

                  (b) The Performance Period with respect to each Performance
Share or Performance Unit shall be such period of time (not less than 3 years,
except in the event of a Change of Control, if the Board shall so determine;
provided, however, that no such acceleration determination shall be made in the
case of a Covered Employee where such action would result in the loss of the
otherwise available exemption of the award under Section 162(m) of the Code)
commencing with the Date of Grant (as shall be determined by the Board at the
time of grant).

                  (c) Any grant of Performance Shares or Performance Units shall
specify Management Objectives which, if achieved, will result in payment or
early payment of the award, and each grant may specify in respect of such
specified Management Objectives a minimum acceptable level of achievement and
shall set forth a formula for determining the number of Performance Shares or
Performance Units that will be earned if performance is at or above the minimum
level, but falls short of full achievement of the specified Management
Objectives. The grant of Performance Shares or Performance Units shall specify
that, before the Performance Shares or Performance Units shall be earned and
paid, the Board must certify that the Management Objectives have been satisfied.

                  (d) Each grant shall specify the time and manner of payment of
Performance Shares or Performance Units that have been earned. Any grant may
specify that the amount payable with respect thereto may be paid by the Company
in cash, in shares of Common Stock or in any combination thereof and may either
grant to the Participant or retain in the Board the right to elect among those
alternatives.

                  (e) Any grant of Performance Shares may specify that the
amount payable with respect thereto may not exceed a maximum specified by the
Board at the Date of Grant. Any grant of Performance Units may specify that the
amount payable or the number of shares of Common Stock issued with respect
thereto may not exceed maximums specified by the Board at the Date of Grant.




                                       10

<PAGE>   11



                  (f) The Board may, at or after the Date of Grant of
Performance Shares, provide for the payment of dividend equivalents to the
holder thereof on either a current or deferred or contingent basis, either in
cash or in additional shares of Common Stock.

                  (g) Each grant of Performance Shares or Performance Units
shall be evidenced by an agreement executed on behalf of the Company by any
officer and delivered to and accepted by the Participant, which agreement shall
state that such Performance Shares or Performance Units are subject to all the
terms and conditions of this Plan, and contain such other terms and provisions,
consistent with this Plan, as the Board may approve.


         9. TRANSFERABILITY. (a) Except as otherwise determined by the Board, no
Option Right, Appreciation Right or other derivative security granted under this
Plan shall be transferable by a Participant other than by will or the laws of
descent and distribution. Except as otherwise determined by the Board, Option
Rights and Appreciation Rights shall be exercisable during the Optionee's
lifetime only by him or her or by his or her guardian or legal representative.

                  (b) The Board may specify at the Date of Grant that part or
all of the shares of Common Stock that are (i) to be issued or transferred by
the Company upon the exercise of Option Rights or Appreciation Rights, upon the
termination of the Deferral Period applicable to Deferred Shares or upon payment
under any grant of Performance Shares or Performance Units or (ii) no longer
subject to the substantial risk of forfeiture and restrictions on transfer
referred to in Section 6 of this Plan, shall be subject to further restrictions
on transfer.


         10. ADJUSTMENTS. The Board may make or provide for such adjustments in
the numbers of shares of Common Stock covered by outstanding Option Rights,
Appreciation Rights, Deferred Shares, and Performance Shares granted hereunder,
in the Option Price and Base Price provided in outstanding Appreciation Rights,
and in the kind of shares covered thereby, as the Board, in its sole discretion,
exercised in good faith, may determine is equitably required to prevent dilution
or enlargement of the rights of Participants or Optionees that otherwise would
result from (a) any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of the Company, or (b)
any merger, consolidation, spin-off, split- off, spin-out, split-up,
reorganization, partial or complete liquidation or other distribution of assets,
issuance of rights or warrants to purchase securities, or (c) any other
corporate transaction or event having an effect similar to any of the foregoing.
Moreover, in the event of any such transaction or event, the Board, in its
discretion, may provide in substitution for any or all outstanding awards under
this Plan such alternative consideration as it, in good faith, may determine to
be equitable in the circumstances and may require in connection therewith the
surrender of all awards so replaced. The Board may also make or provide for such
adjustments in the numbers of shares specified in Section 3 of this Plan as the
Board in its sole discretion, exercised in good faith, may determine is
appropriate to reflect any transaction or event described in this Section 10;
provided, however, that any such adjustment to the number specified in Section
3(c)(i) shall be made only if and to the extent that such adjustment would not
cause any Option intended to qualify as an Incentive Stock Option to fail so to
qualify.



                                       11

<PAGE>   12




         11. CHANGE OF CONTROL. For purposes of this Plan, a "Change of Control"
shall mean if at any time any of the following events shall have occurred:

                  (a) The Company is merged or consolidated or reorganized into
or with another corporation or other legal person, and as a result of such
merger, consolidation or reorganization less than a majority of the combined
voting power of the then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders of
securities entitled to vote generally in the election of Directors immediately
prior to such transaction;

                  (b) The Company sells or otherwise transfers all or
substantially all of its assets to any other corporation or other legal person,
and less than a majority of the combined voting power of the then-outstanding
securities of such corporation or person immediately after such sale or transfer
is held in the aggregate by the holders of shares of Common Stock immediately
prior to such sale or transfer;

                  (c) There is a report filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form or report), each as promulgated pursuant to the
Exchange Act, disclosing that any person (as the term "person" is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the
beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3 or
any successor rule or regulation promulgated under the Exchange Act) of
securities representing 20% or more of the Voting Power;

                  (d) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act disclosing in
response to Form 8-K or Schedule 14A (or any successor schedule, form or report
or item therein) that a change of control of the Company has or may have
occurred or will or may occur in the future pursuant to any then-existing
contract or transaction; or

                  (e) If during any period of two consecutive years, individuals
who at the beginning of any such period constitute the Directors cease for any
reason to constitute at least a majority thereof, unless the election, or the
nomination for election by the Company's shareholders, of each Director first
elected during such period was approved by a vote of at least two-thirds of the
Directors then still in office who were Directors at the beginning of any such
period.

                  Notwithstanding the foregoing provisions of Section 11(c) and
(d) above, unless otherwise determined in a specific case by majority vote of
the Board, a "Change of Control" shall not be deemed to have occurred for
purposes of this Plan (i) solely because (A) the Company; (B) a Subsidiary; (C)
the Harris Group; or (D) any Company-sponsored employee stock ownership plan or
any other employee benefit plan of the Company or any Subsidiary either files or
becomes obligated to file a report or proxy statement under or in response to
Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor
schedule, form or report or item therein) under the Exchange Act, disclosing
beneficial ownership by it of shares, whether in excess of 20%



                                       12

<PAGE>   13



of the Voting Power or otherwise, or because the Company reports that a change
of control of the Company has or may have occurred or will or may occur in the
future by reason of such beneficial ownership or (ii) solely because of a change
of control of any Subsidiary. For purposes of the preceding sentence, the
"Harris Group" shall mean Messrs. Irving B. Harris, Neison Harris, King Harris,
William W. Harris and Sidney Barrows, and their respective spouses, descendants
and spouses of descendants, trustees of trusts established for the benefit of
such persons (acting in their capacity as trustees of such trusts), and
executors of estates of such persons (acting in their capacity as executors of
such estates), and each person of which any of the foregoing owns (i) more than
fifty percent (50%) of the voting stock or other voting interests and (ii) stock
or other interests representing more than fifty percent (50%) of the total value
of the stock or other interests of such person. For purposes of the preceding
sentence, the term "spouses" includes widows and widowers until first remarried.


         12. FRACTIONAL SHARES. The Company shall not be required to issue any
fractional shares of Common Stock pursuant to this Plan. The Board may provide
for the elimination of fractions or for the settlement of fractions in cash.


         13. WITHHOLDING TAXES. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, and
the amounts available to the Company for such withholding are insufficient, it
shall be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other person make arrangements satisfactory
to the Company for payment of the balance of such taxes required to be withheld,
which arrangements (in the discretion of the Board) may include relinquishment
of a portion of such benefit. The Company and a Participant or such other person
may also make similar arrangements with respect to the payment of any taxes with
respect to which withholding is not required.


         14. FOREIGN EMPLOYEES. In order to facilitate the making of any grant
or combination of grants under this Plan, the Board may provide for such special
terms for awards to Participants who are foreign nationals or who are employed
by the Company or any Subsidiary outside of the United States of America as the
Board may consider necessary or appropriate to accommodate differences in local
law, tax policy or custom. Moreover, the Board may approve such supplements to
or amendments, restatements or alternative versions of this Plan as it may
consider necessary or appropriate for such purposes, without thereby affecting
the terms of this Plan as in effect for any other purpose, and the Secretary or
other appropriate officer of the Company may certify any such document as having
been approved and adopted in the same manner as this Plan. No such special
terms, supplements, amendments or restatements, however, shall include any
provisions that are inconsistent with the terms of this Plan as then in effect
unless this Plan could have been amended to eliminate such inconsistency without
further approval by the shareholders of the Company.





                                       13

<PAGE>   14



         15. ADMINISTRATION OF THIS PLAN. (a) This Plan shall be administered by
the Board, which may from time to time delegate all or any part of its authority
under this Plan to a committee of the Board (or subcommittee thereof) consisting
of not less than two Directors appointed by the Board. The members of the
committee shall be "Non-Employee Directors" within the meaning of Rule 16b-3 and
"outside directors" within the meaning of Section 162(m) of the Code. A majority
of the committee (or subcommittee) shall constitute a quorum, and the action of
the members of the committee (or subcommittee) present at any meeting at which a
quorum is present, or acts unanimously approved in writing, shall be the acts of
the committee (or subcommittee). To the extent of any such delegation,
references in this Plan to the Board shall be deemed to be references to any
such committee or subcommittee.

                  (b) The interpretation and construction by the Board of any
provision of this Plan or of any agreement, notification or document evidencing
the grant of Option Rights, Appreciation Rights, Restricted Shares, Deferred
Shares, Performance Shares or Performance Units and any determination by the
Board pursuant to any provision of this Plan or of any such agreement,
notification or document shall be final and conclusive. No member of the Board
shall be liable for any such action or determination made in good faith.


         16. AMENDMENTS, ETC. (a) The Board may at any time and from time to
time amend this Plan in whole or in part; provided, however, that any amendment
which must be approved by the shareholders of the Company in order to comply
with applicable law or the rules of the New York Stock Exchange or, if the
shares of Common Stock are not traded on the New York Stock Exchange, the
principal national securities exchange upon which the shares of Common Stock are
traded or quoted, shall not be effective unless and until such approval has been
obtained. Presentation of this Plan or any amendment hereof for shareholder
approval shall not be construed to limit the Company's authority to offer
similar or dissimilar benefits under other plans without shareholder approval.

                  (b) The Board may, with the concurrence of the affected
Participant, cancel any agreement evidencing Option Rights or any other award
granted under this Plan. In the event of such cancellation, the Board may
authorize the granting of new Option Rights or other such awards under this Plan
(which may or may not cover the same number of shares of Common Stock that had
been the subject of the prior award) in such manner, at such Option Price and
subject to such other terms, conditions and discretions as would have been
applicable under this Plan had the canceled Option Rights or other awards not
been granted.

                  (c) The Board also may permit Participants to elect to defer
the issuance of shares of Common Stock or the settlement of awards in cash under
this Plan pursuant to such rules, procedures or programs as it may establish for
purposes of this Plan. The Board also may provide that deferred issuances and
settlements include the payment or crediting of dividend equivalents or interest
on the deferral amounts.

                  (d) The Board may condition the grant of any award or
combination of awards authorized under this Plan on the surrender or deferral by
the Participant of his or her right to



                                       14

<PAGE>   15


receive a cash bonus or other compensation otherwise payable by the Company or a
Subsidiary to the Participant.

                  (e) In case of termination of employment by reason of death,
disability or normal or early retirement, or in the case of hardship or other
special circumstances, of a Participant who holds an Option Right or
Appreciation Right not immediately exercisable in full, or any Restricted Shares
as to which the substantial risk of forfeiture or the prohibition or restriction
on transfer has not lapsed, or any Deferred Shares as to which the Deferral
Period has not been completed, or any Performance Shares or Performance Units
which have not been fully earned, or who holds shares of Common Stock subject to
any transfer restriction imposed pursuant to Section 9(b) of this Plan, the
Board may, in its sole discretion, accelerate the time at which such Option
Right or Appreciation Right may be exercised or the time at which such
substantial risk of forfeiture or prohibition or restriction on transfer will
lapse or the time when such Deferral Period will end or the time at which such
Performance Shares or Performance Units will be deemed to have been fully earned
or the time when such transfer restriction will terminate or may waive any other
limitation or requirement under any such award.

                  (f) This Plan shall not confer upon any Participant any right
with respect to continuance of employment or other service with the Company or
any Subsidiary, nor shall it interfere in any way with any right the Company or
any Subsidiary would otherwise have to terminate such Participant's employment
or other service at any time.

                  (g) To the extent that any provision of this Plan would
prevent any Option Right that was intended to qualify as an Incentive Stock
Option from qualifying as such, that provision shall be null and void with
respect to such Option Right. Such provision, however, shall remain in effect
for other Option Rights and there shall be no further effect on any provision of
this Plan.


         17. TERMINATION. No grant shall be made under this Plan more than 10
years after the date on which this Plan is first approved by the shareholders of
the Company, but all grants made on or prior to such date shall continue in
effect thereafter subject to the terms thereof and of this Plan.



                                       15