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                                                                    EXHIBIT 10.5

                         FRANK'S NURSERY & CRAFTS, INC.
                             2002 STOCK OPTION PLAN
                         As Amended as of March 24, 2003

                  1. Definitions. As used in this 2002 Stock Option Plan Frank's
Nursery & Craft, Inc., the following terms shall have the following meanings:

                  (a) "Affiliate" means any affiliate of the Company within the
meaning of 17 CFR ss. 230.405.

                  (b) "Board of Directors" or "Board" means the Company's board
of directors.

                  (c) "Change in Control" shall mean:

                  (i) The acquisition, after the Effective Date, by any
         individual, entity or group (within the meaning of Section 13(d)(3) or
         14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership
         (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
         of 35% or more (on a fully diluted basis) of either (A) the then
         outstanding shares of Stock, taking into account as outstanding for
         this purpose such shares issuable upon the exercise of options or
         warrants, the conversion of convertible shares or debt, and the
         exercise of any similar right to acquire shares (the "Outstanding
         Company Common Stock") or (B) the combined voting power of the then
         outstanding voting securities of the Company entitled to vote generally
         in the election of directors or member managers (the "Outstanding
         Company Voting Securities"); provided, however, that for purposes of
         this subsection (i), the following acquisitions shall not constitute a
         Change in Control: (V) any acquisition by the Company or any Affiliate,
         (W) any acquisition by any employee benefit plan (or related trust)
         sponsored or maintained by the Company or any Affiliate of the Company,
         (X) any acquisition by any corporation pursuant to a transaction which
         complies with clauses (A), (B) and (C) of Section 1(c)(iii), (Y) any
         acquisition in connection with any loan or other financing described
         in, pursuant to, as a result of, or in connection with the Plan of
         Reorganization, or (Z) any acquisition by an Existing Shareholder (or
         any Existing Shareholder Affiliate). For purposes of this Section
         (1)(c)(i), "Existing Shareholder" shall be defined as any shareholder
         receiving Stock pursuant to, as a result of, or in connection with the
         Plan of Reorganization and "Existing Shareholder Affiliate" shall be
         defined as any person or entity that, directly or indirectly through
         one or more intermediaries, controls, is controlled by or is under
         common control with the Existing Shareholder; or

                  (ii) Individuals who, as of the Effective Date, constitute the
         Board (the "Incumbent Board") cease for any reason to constitute at
         least a majority of the Board; provided, however, that any individual
         becoming a director subsequent to the Effective Date whose election, or
         nomination for election by the directors then comprising the Incumbent
         Board, was approved by a vote of at least a majority of the Company's
         shareholders shall be considered as though such individual were a
         member of the




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         Incumbent Board, but excluding, for this purpose, any such individual
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest with respect to the election or removal of
         directors or other actual or threatened solicitation of proxies or
         consents by or on behalf of a Person other than the Board; or

                  (iii) Consummation, after the Effective Date, of a
         reorganization, merger or consolidation or sale or other disposition of
         all or substantially all of the assets of the Company (a "Business
         Combination"), in each case, unless, following such Business
         Combination, (A) all or substantially all of the individuals and
         entities who were the beneficial owners, respectively, of the
         Outstanding Company Common Stock and Outstanding Company Voting
         Securities immediately prior to such Business Combination beneficially
         own, directly or indirectly, more than 65% of the then outstanding
         shares of common stock or interests and the combined voting power of
         the then outstanding voting securities entitled to vote generally in
         the election of directors, as the case may be, of the corporation or
         other entity resulting from such Business Combination (including,
         without limitation, a corporation or entity which as a result of such
         transaction owns the Company or all or substantially all of the
         Company's assets either directly or through one or more subsidiaries)
         in substantially the same proportions as their ownership, immediately
         prior to such Business Combination of the Outstanding Company Common
         Stock and Outstanding Company Voting Securities, as the case may be,
         and (B) no Person (excluding any employee benefit plan (or related
         trust) sponsored or maintained by the Company or any Affiliate of the
         Company, or such corporation resulting from such Business Combination
         or any Affiliate of such corporation) beneficially owns, directly or
         indirectly, 35% or more (on a fully diluted basis) of, respectively,
         the then outstanding shares of common stock or interests of the
         corporation or entity resulting from such Business Combination, taking
         into account as outstanding for this purpose such common stock or
         interests issuable upon the exercise of options or warrants, the
         conversion of convertible stock, interests or debt, and the exercise of
         any similar right to acquire such common stock or interests, or the
         combined voting power of the then outstanding voting securities of such
         corporation or other entity except to the extent that such ownership
         existed prior to the Business Combination and (C) at least a majority
         of the members of the board of directors or equivalent governing body
         of the corporation or other entity resulting from such Business
         Combination were members of the Incumbent Board at the time of the
         execution of the initial agreement, or of the action of the Board,
         providing for such Business Combination; or

                  (iv) Approval by the shareholders or equityholders of the
         Company of a complete liquidation or dissolution of the Company.

                  (d) "Code" means the Internal Revenue Code of 1986, as
         amended.

                  (e) "Committee" means the full Board of Directors, the
Compensation Committee of the Board of Directors, or such other committee of at
least two independent people as the Board of Directors may appoint to administer
the Plan.




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                  (f) "Company" means Frank's Nursery & Crafts, Inc., a Delaware
corporation, as reorganized pursuant to the Plan of Reorganization.

                  (g) "Effective Date" shall have the meaning ascribed to it in
Section 21 hereof.

                  (h) "Exchange Act" means the Securities Exchange Act of 1934.

                  (i) "Fair Market Value" on a given date means (i) if the Stock
is listed on a national securities exchange, the mean between the highest and
lowest sale prices reported as having occurred on the primary exchange with
which the Stock is listed and traded on the date prior to such date, or, if
there is no such sale on that date, then on the last preceding date on which
such a sale was reported; (ii) if the Stock is not listed on any national
securities exchange but is quoted in the National Market System of the National
Association of Securities Dealers Automated Quotation System on a last sale
basis, the average between the high bid price and low ask price reported on the
date prior to such date, or, if there is no such sale on that date, then on the
last preceding date on which a sale was reported; or (iii) if the Stock is not
listed on a national securities exchange nor quoted in the National Market
System of the National Association of Securities Dealers Automated Quotation
System on a last sale basis, the amount determined by the Committee to be the
fair market value based upon a good faith attempt to value the Stock accurately
and computed in accordance with applicable regulations of the Internal Revenue
Service; or (iv) in the event of a Change in Control, the same amount received
by the selling shareholders. Notwithstanding anything contained herein to the
contrary, the Fair Market Value as of the consummation date of the Plan of
Reorganization shall be the ascribed value set forth in the Plan of
Reorganization.

                  (j) "Grant Date" means the date on which an Option is granted,
as specified in Section 7.

                  (k) "Incentive Option" means an Option which by its terms is
to be treated as an "incentive stock option" within the meaning of Section 422
of the Code.

                  (l) "Nonemployee Director" means a director of the Company who
is not an officer or employee of the Company and who is (i) a "nonemployee
director" within the meaning of Rule 16b-3 under the Exchange Act, or any
successor rule or regulation and (ii) an "outside director" within the meaning
of Section 162(m) of the Code; provided, however, that clause (ii) shall apply
only with respect to grants of Options intended by the Committee to qualify as
"performance-based compensation" under Section 162(m) of the Code.

                  (m) "Nonstatutory Option" means any Option that is not an
Incentive Option.

                  (n) "Option" means an option to purchase shares of the Stock
granted under the Plan.




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                  (o) "Option Agreement" means an agreement between the Company
and an Optionee, setting forth the terms and conditions of an Option.

                  (p) "Option Period" shall have the meaning ascribed to it in
Section 9 hereof.

                  (q) "Option Price" means the price paid or to be paid by an
Optionee for a share of Stock upon exercise of an Option.

                  (r) "Optionee" means a person eligible to receive an Option,
as provided in Section 6, to whom an Option shall have been granted under the
Plan.

                  (s) "Plan" means this 2002 Stock Option Plan of the Company.

                  (t) "Plan of Reorganization" means the Company's Joint Plan of
Reorganization, dated February __, 2002, as amended.

                  (u) "Securities Act" means the Securities Act of 1933, as
amended.

                  (v) "Stock" means common stock, par value $.001 per share, of
the Company.

                  (w) "Subsidiary" means any subsidiary of the Company as
defined in Section 424(f) of the Code.

                  (x) "Ten Percent Owner" means a person who owns, or is deemed
within the meaning of Section 422(b)(6) of the Code to own, stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company (or its parent or subsidiary corporations). Whether a person is a Ten
Percent Owner shall be determined with respect to each Option based on the facts
existing immediately prior to the Grant Date of such Option.

                  2. Purpose. The Plan is intended to encourage ownership of the
Stock by key employees and Nonemployee Directors of the Company and to provide
additional incentive for them to promote the success of the Company's business.
The Plan is intended to provide for the grant of Incentive Options and
Nonstatutory Options.

                  3. Term of the Plan. The expiration date of the Plan, after
which no Options may be granted hereunder, shall be the date that is ten years
following the Effective Date; provided, however, that the administration of the
Plan shall continue in effect until all matters relating to the payment of
Options previously granted have been settled.

                  4.       Administration.

                  (a) The Plan shall be administered by the Committee. Unless
otherwise determined by the Board of Directors, each member of the Committee
shall, at the time he takes any action with respect to an Option under the Plan,
be a Nonemployee Director. The majority of the members of the Committee shall
constitute a quorum. The acts of a majority of the members




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present at any meeting at which a quorum is present or acts approved in writing
by a majority of the Committee shall be deemed the acts of the Committee.

                  (b) Subject to the provisions of the Plan (including, without
limitation, the provisions of Sections 8 and 9), the Committee shall have
complete authority, in its discretion, to make the following determinations with
respect to each Option to be granted by the Company: (i) the key employee or
Nonemployee Director to receive the Option; (ii) whether the Option (if granted
to an employee) will be an Incentive Option or a Nonstatutory Option; (iii) the
time of granting the Option; (iv) subject to Section 5, the number of shares of
the Stock subject to the Option; (v) the Option Price; (vi) the vesting
schedule, if any, over which the Option shall become exercisable; (vii) the
expiration date of the Option (which may not be more than ten (10) 4 years after
the date of grant thereof); and (viii) the restrictions, if any, to be imposed
upon transfer of shares of the Stock purchased by the Optionee upon the exercise
of the Option. The Committee shall have complete authority to interpret the
Plan, to prescribe, amend and rescind rules and regulations relating to it, to
determine the terms and provisions of the respective Option Agreements (which
need not be identical), and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's determination on
the matters referred to in this Section 4 shall be conclusive.

                  5. Stock Subject to the Plan. The Plan covers 3,652,174 shares
of the Stock, subject, however, to the provisions of Section 11 of the Plan. All
of the shares of the Stock covered by the Plan may be granted, at the
Committee's discretion, as performance based compensation pursuant to Section
162(m) of the Code. The number of shares of the Stock purchased pursuant to the
exercise of Options and the number of shares of the Stock subject to outstanding
Options shall be charged against the shares covered by the Plan; but shares of
the Stock subject to Options which terminate without being exercised shall not
be so charged. Shares of the Stock to be issued upon the exercise of Options may
be either authorized but unissued shares or shares held by the Company in its
treasury. During any calendar year (other than calendar year 2002), no person
other than the Company's Chief Executive Officer may be granted Options with
respect to more than 500,000 shares of Stock; provided, however, that (a) with
respect to calendar year 2002, no person may be granted Options with respect to
more than 2,000,000 shares of Stock and (b) during any calendar year (other than
calendar year 2002), the Company's Chief Executive Officer may not be granted
options with respect to more than 1,000,000 shares of Stock.

                  6. Eligibility. An Option may be granted only to a key
employee or Nonemployee Director of the Company; provided, however, that
Incentive Options may only be granted to employees of the Company.

                  7. Discretionary Grant of Stock Options. The Committee is
authorized to grant one or more Incentive Options or Nonstatutory Options to any
person who meets the eligibility requirements of Section 6. Each Option so
granted shall be subject to the provisions of the Plan, or to such other
conditions as may be reflected in the applicable Option Agreement.




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                  8. Option Price. The Option Price per share of Stock for each
Option shall be set by the Committee at the time of grant but shall not be less
than, in the case of an Incentive Option, 100% of the Fair Market Value of the
Stock on the Grant Date, or not less than 110% of the Fair Market Value of the
Stock on the Grant Date if the Optionee is a Ten Percent Owner; provided,
however, that all Options intended to qualify as "performance-based
compensation" under Section 162(m) of the Code shall have an Option Price per
share of Stock no less than the Fair Market Value of a share of Stock on the
Grant Date.

                  9. Option Period. Options shall vest and become exercisable in
such manner and on such date or dates determined by the Committee and shall
expire after such period, not to exceed ten years, as may be determined by the
Committee (the "Option Period"); provided, however, that no Incentive Option may
be exercised later than the fifth anniversary of the Grant Date if the Optionee
is a Ten Percent Owner; further, provided, however, that notwithstanding any
vesting dates set by the Committee, the Committee may in its sole discretion
accelerate the exercisability of any Option, which acceleration shall not affect
the terms and conditions of any such Option other than with respect to
exercisability. If an Option is exercisable in installments, 5 such installments
or portions thereof which become exercisable shall remain exercisable until the
Option expires.

                  10. $100,000 Per Year Limitation for Incentive Stock Options.
To the extent the aggregate Fair Market Value (determined as of the Grant Date)
of Stock for which Incentive Options are exercisable for the first time by any
Optionee during any calendar year (under all plans of the Company and its
Subsidiaries) exceeds $100,000, such excess Incentive Options shall be treated
as Nonstatutory Options.

                  11. Manner of Exercise and Form of Payment.

                  (a) The Options shall be exercised by delivering written
notice to the Company stating the number of shares of Stock to be purchased, the
person or persons in whose name the shares of Stock are to be registered and
each such person's address and social security number. Such notice shall not be
effective unless accompanied by the full purchase price for all shares to be
purchased, and any applicable withholding (as described below). The purchase
price shall be payable in cash or, in the discretion of the Committee, in shares
of Stock, by any other means or method acceptable to the Committee or any
combination thereof; provided that the Optionee may use Stock in payment of the
exercise price only if the shares so used are considered "mature" for purposes
of generally accepted accounting principles, i.e., (i) have been held by the
Optionee free and clear for at least six months prior to the use thereof to pay
part of an Option exercise price, (ii) have been purchased by the Optionee on
the open market, or (iii) meet any other requirements for "mature" shares as may
exist on the date of the use thereof to pay part of an Option exercise price.
Payment in currency or by certified or cashier's check shall be considered
payment in cash. In the event that all or part of the purchase price is paid in
shares of Stock, the shares used in payment shall be valued at their Fair Market
Value on the date of exercise of the relevant Options. Subject to, and promptly
after, the Optionee's compliance with all of the provisions of this Section 11,
the Company shall deliver or cause to be delivered to the Optionee a certificate
for the number of shares of the Stock then being purchased by him or her.



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If any law or applicable regulation of the Securities and Exchange Commission or
other body having jurisdiction in the premises shall require the Company or the
Optionee to take any action in connection with shares of the Stock being
purchased upon exercise of the Option, exercise of the Option and delivery of
the certificate or certificates for such shares (including, without limitation,
any exercise of the Option and delivery of the certificate or certificate for
such shares in accordance with the procedures set forth in Section 11(c) below)
shall be postponed until completion of the necessary action, which shall be
taken at the Company's expense. The number of shares of Stock subject to each
outstanding Option shall be reduced by one share for each share of the Stock
purchased upon exercise of the Option.

                  (b) The Company's obligation to deliver shares of Stock upon
exercise of an Option shall be subject to the Optionee's satisfaction of all
applicable federal, state and local income and employment tax withholding
obligations. The Optionee shall satisfy such obligations by making a payment of
the requisite amount in cash or by check, unless the Optionee is entitled to and
has elected to effect such payment through a "cashless" exercise in accordance
with Section 11(c) below.

                  (c) In lieu of the methods of exercise described in Section
11(a) above, an Optionee may, unless prohibited by applicable law, elect to
effect payment by including with the written notice of exercise referred to in
Section 11(a) above irrevocable instructions to deliver for sale to a registered
securities broker acceptable to the Company a number of shares of Stock subject
to the Option being exercised sufficient, after brokerage commissions, to cover
the aggregate option price payable with respect to such shares and, if the
Optionee further elects, the Optionee's withholding obligations under Section
11(b) with respect to such exercise, together with irrevocable instructions to
such broker to sell such shares and to remit directly to the Company such
aggregate option price and, if the Optionee has so elected, the amount of such
withholding obligations. The Company shall not be required to deliver to such
securities broker any stock certificate for such shares until it has received
from the broker such aggregate option price and, if the Optionee has so elected,
the amount of such withholding obligations.

                  12. Transferability of Options. Unless specifically allowed by
the Committee and set forth in an Option Agreement, Options shall not be
transferable, otherwise than by will or the laws of descent and distribution,
and may be exercised during the life of the Optionee only by the Optionee.

                  13. Termination of Employment. If an Optionee ceases to be an
employee of the Company or a Subsidiary, or a Nonemployee Director's service
with the Company terminates, for any reason other than retirement (in accordance
with any qualified retirement plan maintained by the Company), in the case of an
employee, or death of an Optionee, any Option held by that Optionee may be
exercised by the Optionee at any time within 90 days after the termination of
such relationship, but only to the extent exercisable at termination and in no
event after the Option Period. If an Optionee that is an employee of the Company
or a Subsidiary enters retirement from employment or any Optionee dies, any
Option held by that Optionee may be exercised by the Optionee or the Optionee's
trustee, executor or administrator, as applicable, at any time within the
shorter of the option period or 12 months after the date of retirement or




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death, but only to the extent exercisable at retirement or death. Options which
are not exercisable at the time of termination of such relationship or which are
so exercisable but are not exercised within the time periods described above
shall terminate. Military or sick leave shall not be deemed a termination under
this Section 13 provided that such leave does not exceed the longer of 90 days
or the period during which the reemployment rights of the absent employee are
guaranteed by statute or by contract.

                  14. Adjustment of Number of Shares; Fractional Shares.

                  (a) Options granted under the Plan and any agreements
evidencing such Options, the maximum number of shares of Stock subject to all
Options and the maximum number of shares of Stock with respect to which any one
person may be granted Options during any year shall be subject to adjustment or
substitution, as determined by the Committee in its sole discretion, reasonably
exercised, as to the number, price or kind of a share of Stock or other
consideration subject to such Options or as otherwise determined by the
Committee to be equitable (i) in the event of changes in the outstanding Stock
or in the capital structure of the Company by reason of stock dividends, stock
splits, reverse stock splits, recapitalizations, reorganizations, mergers,
consolidations, combinations, exchanges, or other relevant changes in
capitalization occurring after the Grant Date of any such Option or (ii) in the
event of any change in applicable laws or any change in circumstances which
results in or would result in any substantial dilution or enlargement of the
rights granted to, or available for, Optionees in the Plan, or which otherwise
warrants equitable adjustment because it interferes with the intended operation
of the Plan. In addition, in the event of any such adjustments or substitution,
the aggregate number of shares of Stock available under the Plan, and the
aggregate number of shares of Stock as to which Options may be granted to any
one person over the term of the Plan, shall be appropriately adjusted by the
Committee, whose determination shall be conclusive. Any adjustment in Incentive
Options under this Section 14 shall be made only to the extent not constituting
a "modification" within the meaning of Section 424(h)(3) of the Code, and any
adjustments under this Section 14 shall be made in a manner which does not
adversely affect the exemption provided pursuant to Rule 16b-3 under the
Exchange Act. Further, with respect to Options intended to qualify as
"performance-based compensation" under Section 162(m) of the Code, such
adjustments or substitutions shall be made only to the extent that the Committee
determines that such adjustments or substitutions may be made without a loss of
deductibility for Options under Section 162(m) of the Code. The Company shall
give each Optionee notice of an adjustment hereunder and, upon notice, such
adjustment shall be conclusive and binding for all purposes.

                  (b) Upon a Change in Control, all outstanding Options that
have not yet become fully vested and exercisable shall become fully vested and
exercisable. Upon a Change in Control, the Committee may, in its discretion and
upon at least 10 days advance notice to the affected persons, provide that an
Option shall terminate, but the Optionee (if at the time an employee or
Nonemployee Director of the Company or a Subsidiary) shall have the right,
immediately prior to such event, to exercise the Option, to the extent then
exercisable by its terms and not theretofore exercised. In the event of a Change
in Control, the Committee may also, in its discretion and upon at least 10 days
advance notice to the affected persons, cancel any




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outstanding Options and pay to the Optionees thereof, in cash or stock, or any
combination thereof, the value of such Options based upon the price per share of
Stock received or to be received by other shareholders of the Company in the
event. The terms of this Section 14 may be varied by the Committee in any
particular Option Agreement. No fraction of a share of the Stock shall be
purchasable or deliverable, but in the event any adjustment of the number of
shares of the Stock covered by the Option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the nearest smaller
whole number of shares. In the event of changes in the outstanding Stock by
reason of any stock dividend, split-up, contraction, reclassification, or change
of outstanding shares of the Stock of the nature contemplated by this Section 14
after the Effective Date, the number of shares of the Stock available for the
purpose of the Plan as stated in Section 5 and the exercise price per share of
each Option shall be correspondingly adjusted.

                  15. Stock Reserved. The Company shall at all times during the
term of the Options reserve and keep available such number of shares of the
Stock as will be sufficient to satisfy the requirements of this Plan and shall
pay all other fees and expenses necessarily incurred by the Company in
connection therewith.

                  16. Limitation of Rights in Option Stock. The Optionee shall
have no rights as a stockholder in respect of shares of the Stock as to which
his or her Option shall not have 8 been exercised, certificates issued and
delivered and payment as herein provided made in full, and shall have no rights
with respect to such shares not expressly conferred by this Plan.

                  17. Purchase for Investment. The Optionee shall make such
representations with respect to investment intent and the method of disposal of
optioned shares of the Stock as the Board of Directors may deem advisable in
order to assure compliance with applicable securities laws.

                  18. Voluntary Surrender. The Committee may permit the
voluntary surrender of all or any portion of any Nonstatutory Option granted
under the Plan to be conditioned upon the granting to the Optionee of a new
Option for the same or a different number of shares as the Option surrendered,
subject to the aggregate maximum number of shares available under the Plan as
set forth in Section 5, or require such voluntary surrender as a condition
precedent to a grant of a new Option to such Optionee. Such new Option shall be
exercisable at an Option Price, during an Option Period, and in accordance with
any other terms or conditions specified by the Committee at the time the new
Option is granted, all determined in accordance with the provisions of the Plan
without regard to the Option Price, Option Period, or any other terms and
conditions of the Nonstatutory Option surrendered.

                  19. Termination and Amendment of Plan. The Board of Directors
may at any time terminate the Plan or make such modifications of the Plan as it
shall deem advisable, provided, that the Board of Directors may not, without the
approval of the Company's shareholders in a manner which complies with the
requirements of Sections 422 and 162(m) of the Code and the requirements of any
exchange on which the Stock may be listed, increase the maximum number of shares
available for option under the Plan (other than as provided in





                                       9
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Section 14). In addition, unless the Committee specifically determines
otherwise, approval of the Company's shareholders in a manner which complies
with the requirements of Sections 422 and 162(m) of the Code shall be required
for any other amendment to the Plan which, without such shareholder approval,
would cause (a) Options intended to be Incentive Options to fail to qualify as
Incentive Options or (b) Options intended to qualify as "performance-based
compensation" under Section 162(m) of the Code to fail to so qualify. No
termination or amendment of the Plan may, without the consent of the Optionee to
whom any Option shall theretofore have been granted, directly and adversely
affect the rights of that Optionee under that Option.

                  20. General

                  (a) Government and Other Regulations. Notwithstanding any
terms or conditions of any Option to the contrary, the Company shall be under no
obligation to offer to sell or to sell and shall be prohibited from offering to
sell or selling any shares of Stock pursuant to an Option unless such shares
have been properly registered for sale pursuant to the Securities Act with the
Securities and Exchange Commission or unless the Company has received an opinion
of counsel, satisfactory to the Company, that such shares may be offered or sold
without such registration pursuant to an available exemption therefrom and the
terms and conditions of such exemption have been fully complied with. The
Company shall be under no obligation to register for sale under the Securities
Act any of the shares of Stock to be offered or sold under the Plan. If the
shares of Stock offered for sale or sold under the Plan are offered or sold 9
pursuant to an exemption from registration under the Securities Act, the Company
may restrict the transfer of such shares and may legend the Stock certificates
representing such shares in such manner as it deems advisable to ensure the
availability of any such exemption.

                  (b) Claim to Options and Employment Rights. No employee,
Nonemployee Director, or other person shall have any claim or right to be
granted an Option under the Plan or, having been selected for the grant of an
Option, to be selected for a grant of any other Option. Neither the Plan nor any
action taken hereunder shall be construed as giving any Optionee any right to be
retained in the employ or service of the Company, a Subsidiary or an Affiliate.

                  (c) No Liability of Committee Members. No member of the
Committee shall be personally liable by reason of any contract or other
instrument executed by such member or on his behalf in his capacity as a member
of the Committee nor for any mistake of judgment made in good faith, and the
Company shall indemnify and hold harmless each member of the Committee and each
other employee, officer or director of the Company to whom any duty or power
relating to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan unless arising out of such person's
own fraud or willful bad faith; provided, however, that approval of the Board
shall be required for the payment of any amount in settlement of a claim against
any such person. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Company's Articles of Incorporation or By-Laws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.





                                       10
<PAGE>


                  (d) Governing law. The Plan shall be governed by and construed
in accordance with the internal laws of the State of Delaware without regard to
the principles of conflicts of law thereof.

                  (e) Funding. No provision of the Plan shall require the
Company, for the purpose of satisfying any obligations under the Plan, to
purchase assets or place any assets in a trust or other entity to which
contributions are made or otherwise to segregate any assets, nor shall the
Company maintain separate bank accounts, books, records or other evidence of the
existence of a segregated or separately maintained or administered fund for such
purposes. Holders shall have no rights under the Plan other than as unsecured
general creditors of the Company, except that insofar as they may have become
entitled to payment of additional compensation by performance of services, they
shall have the same rights as other employees under general law.

                  (f) Relationship to Other Benefits. No payment under the Plan
shall be taken into account in determining any benefits under any pension,
retirement, profit sharing, group insurance or other benefit plan of the Company
or any Subsidiary except as otherwise specifically provided in such other plan.

                  (g) Expenses. The expenses of administering the Plan shall be
borne by the Company and its Subsidiaries and Affiliates.

                  (h) Pronouns. Masculine pronouns and other words of masculine
gender shall refer to both men and women.

                  (i) Titles and Headings. The titles and headings of the
sections in the Plan are for convenience of reference only, and in the event of
any conflict, the text of the Plan, rather than such titles or headings shall
control.

                  21. Effective Date. The Plan is effective as of the effective
date of the Plan of Reorganization. The effectiveness of the Plan and the
validity of any and all Options granted pursuant to the Plan is contingent upon
approval of the Plan by the stockholders of the Company in a manner which
complies with Sections 422(b)(1) and 162(m) of the Code, if applicable. Unless
and until the stockholders approve the Plan in compliance therewith, no Option
granted under the Plan shall be effective.





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