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                                                                 Exhibit 10(vii)

                                     FORM OF
                            1996 UNIT INCENTIVE PLAN
                              FOR KEY EMPLOYEES OF
                       BORDEN, INC. AND ASSOCIATED PERSONS

1.       PURPOSE OF PLAN
         ---------------

                  The 1996 Unit Incentive Plan for Key Employees of Borden, Inc.
and Associated Persons (the "PLAN") is designed:

                  (a) to promote the long term financial interests and growth of
         Borden, Inc. (the "CORPORATION") and its Subsidiaries by attracting and
         retaining management personnel with the training, experience and
         ability to enable them to make a substantial contribution to the
         success of the Corporation's business;

                  (b)  to motivate management personnel by means of
         growth-related incentives to achieve long range goals; and

                  (c) to further the identity of interests of Participants with
         those of the direct and indirect equityholders of the Corporation
         through opportunities to participate in increased value of, or
         distributions by, the Corporation and/or its Associated Persons.

2.       DEFINITIONS
         -----------

                  As used in the Plan, the following words shall have the
following meanings:

                  (a) "ASSOCIATED PERSON" shall mean any Subsidiary of BW
Holdings, including, without limitation, the Corporation, or any other entity
designated by the Board of Directors, which may include, without limitation, a
successor to BW Holdings.

                  (b) "BW HOLDINGS" shall mean BW Holdings, LLC, a Delaware
limited liability company.

                  (c) "BW HOLDINGS UNIT" shall mean a Unit (as defined in the
Limited Liability Company Agreement of BW Holdings) of limited liability company
interest in BW Holdings.

                  (d)  "BOARD OF DIRECTORS" means the Board of Directors
of the Corporation.

                  (e)  "COMMITTEE" means the Compensation Committee of
the Board of Directors.

                  (f) "EMPLOYEE" means a person, including an officer, in the
regular full-time employment of the Corporation or one of its Subsidiaries who,
in the opinion of the Committee, is, or is expected, to be primarily responsible
for the management, growth



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or protection of some part or all of the business of the Corporation.

                  (g) "EQUIVALENT COMPANY" shall mean any Associated Person
that, at the relevant time, owns or operates, directly or indirectly,
substantially all of the business and assets of BW Holdings and its
Subsidiaries.

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

                  (i) "FAIR VALUE" means such value of a BW Holdings Unit or
similar ownership interest in an Equivalent Company as determined in accordance
with any applicable resolutions or regulations of the Committee in effect at the
relevant time and in accordance with the provisions of a Grant Agreement.

                  (j) "GRANT" means an award made to a Participant pursuant to
the Plan and described in Paragraph 5, including, without limitation, an award
of a BW Holdings Unit Option, Unit Appreciation Right, Purchase BW Holdings Unit
or Other Unit-Based Grant, or any combination of the foregoing.

                  (k) "GRANT AGREEMENT" means an agreement between the
Corporation and a Participant that sets forth the terms, conditions and
limitations applicable to a Grant.

                  (l) "PARTICIPANT" means an Employee selected to participate in
the Plan by the Committee in its sole discretion and to whom one or more Grants
have been made and such Grants have not all been forfeited or terminated under
the Plan; PROVIDED, HOWEVER, a non-employee director of the Corporation or one
of its Subsidiaries may not be a Participant.

                  (m) "SUBSIDIARY" means any corporation, partnership or other
entity in an unbroken chain of corporations, partnerships or other entities
beginning with BW Holdings if each of the corporations, partnerships or other
entities, or group of commonly controlled corporations, partnerships or other
entities other than the last corporation, partnership or other entity in the
unbroken chain then owns 50% or more of the voting stock or other ownership
interests in one of the other corporations, partnerships or other entities in
such chain.

3.       ADMINISTRATION OF PLAN
         ----------------------

                  (a) The Plan shall be administered by the Committee. The
Committee may adopt its own rules of procedure, and the action of a majority of
the Committee, taken at a meeting or taken without a meeting by a writing signed
by such majority, shall constitute action by the Committee. The Committee shall
have the power and authority to administer, construe and interpret the Plan, to
make rules for carrying it out and to make changes in such rules. Any such
interpretations, rules, and

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administration shall be consistent with the basic purposes of the Plan.

                  (b) The Committee may delegate to the Chief Executive Officer
and to other senior officers of the Corporation its duties under the Plan
subject to such conditions and limitations as the Committee shall prescribe,
except that only the Committee may designate and make Grants to Participants who
are subject to Section 16 of the Exchange Act.

                  (c) The Committee may employ attorneys, consultants,
accountants, appraisers, brokers or other persons. The Committee, the
Corporation, and the officers and directors of the Corporation shall be entitled
to rely upon the advice, opinions or valuations of any such persons. All actions
taken and all interpretations and determinations made by the Committee in good
faith shall be final and binding upon all Participants, the Corporation and all
other interested persons. No member of the Committee or the Board of Directors,
or the Board of Directors of any Associated Person, and none of the Corporation,
BW Holdings or any Associated Person shall be liable (personally or otherwise)
for any action, determination or interpretation made in good faith with respect
to the Plan or the Grants, and all such persons shall be fully protected by the
Corporation with respect to any such action, determination or interpretation.

4.       ELIGIBILITY
         -----------

                  The Committee may from time to time make Grants under the Plan
to such Employees and in such form and having such terms, conditions and
limitations as the Committee may determine in its sole discretion. No Grants may
be made under this Plan to non-employee directors of Corporation or any of its
Subsidiaries. Grants may be granted singly, in combination or in tandem. The
terms, conditions and limitations of each Grant under the Plan shall be set
forth in a Grant Agreement, in a form approved by the Committee, consistent,
however, with the terms of the Plan; PROVIDED, HOWEVER, such Grant Agreement
shall contain provisions dealing with the treatment of Grants in the event of
the termination, death or disability of a Participant, and may also include
provisions concerning the treatment of Grants in the event of a change of
control of the Corporation.

5.       GRANTS
         ------

                  From time to time, the Committee will determine the forms and
amounts of Grants for Participants. Such Grants may take the following forms in
the Committee's sole discretion:

                  (a) BW HOLDINGS UNIT OPTIONS - These are options to purchase
         BW Holdings Units. At the time of the Grant the Committee shall
         determine, and shall have contained in the Grant Agreement or other
         Plan rules, the option exercise period, the option exercise price, and
         such other conditions

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         or restrictions on the grant or exercise of the option as the Committee
         deems appropriate, which may include the requirement that the grant of
         options is predicated on the acquisition of Purchase BW Holdings Units
         by the optionee.

                  (b) UNIT APPRECIATION RIGHTS - These are rights that entitle
         the holder to receive payments from time to time from the Corporation
         in amounts and at times corresponding to the amounts and times when
         distributions on the BW Holdings Units are made. Generally, Unit
         Appreciation Rights will provide for payments by the Corporation when
         the aggregate distributions on each BW Holdings Unit exceeds a trigger
         price specified in the Grant Agreement. The Committee, in the Grant
         Agreement or by other Plan rules, may impose such conditions or
         restrictions on the Unit Appreciation Rights, may provide for the
         conversion of the Unit Appreciation Rights into BW Holdings Units, or
         options to purchase BW Holdings Units or other ownership interests in
         BW Holdings or any Associated Person, and may provide for such other
         terms and conditions applicable to the Unit Appreciation Rights as it
         deems appropriate. Unit Appreciation Rights may also be called "UARs"
         in a Grant Agreement.

                  (c) PURCHASE BW HOLDINGS UNIT - Purchase BW Holdings Units are
         BW Holdings Units offered to a Participant at such price as determined
         by the Committee, the acquisition of which will make him eligible to
         receive Grants under the Plan; PROVIDED, HOWEVER, that the price of
         such Purchase BW Holdings Units may not be less than 50% of the fair
         market value (as determined by the Committee) of the BW Holdings Units
         on the date such Purchase BW Holdings Units are offered.

                  (d) OTHER UNIT-BASED GRANTS - The Committee may make other
         Grants under the Plan pursuant to which BW Holdings Units (or similar
         ownership interests of an Equivalent Company) are or may in the future
         be acquired, or payments are or may in the future be made, in each
         case, based on the performance or value of the Corporation and its
         Associated Persons. The Committee, in the Grant Agreement or by other
         Plan rules, may impose such conditions or restrictions on any such
         Grant as it deems appropriate, consistent with the purposes of the
         Plan. Such Other Unit-Based Grants may include, without limitation,
         appreciation rights providing for payments to the Employee when a
         specified value of the Units is achieved relative to a value specified
         at the time of the Grant in the Grant Agreement.

6.       LIMITATIONS AND CONDITIONS
         --------------------------

                  (a) The number of BW Holdings Units available for Grants under
this Plan, and the number of such Units on which Grants under this Plan may be
based, shall be _________ but may

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be increased or decreased (but in no event decreased to a number lower than the
number of BW Holdings Units theretofore granted or with respect to which Grants
theretofore have been made under the Plan), by the Committee in its sole
discretion. Unless restricted by applicable law, the number of BW Holdings Units
related to Grants that are forfeited, terminated, cancelled or expire shall
immediately become available for Grants.

                  (b) No Grants shall be made under the Plan beyond ten years
after the effective date of the Plan, but the terms of Grants made on or before
the expiration thereof may extend beyond such expiration. At the time a Grant is
made or amended or the terms or conditions of a Grant are changed, the Committee
may provide for limitations or conditions on such Grant.

                  (c) Nothing contained herein shall affect the right of the
Corporation to terminate any Participant's employment at any time or for any
reason.

                  (d) Deferrals of Grant payouts may be provided for, at the
sole discretion of the Committee, in the Grant Agreements.

                  (e) Except as otherwise prescribed by the Committee, the
amounts of the Grants for any employee of a Subsidiary, along with interest,
dividend and other expenses accrued on deferred Grants shall be charged to the
Participant's employer during the period for which the Grant is made. If the
Participant is employed by more than one Subsidiary or by both the Corporation
and a Subsidiary during the period for which the Grant is made, the
Participant's Grant and related expenses will be allocated between the companies
employing the Participant in a manner prescribed by the Committee.

                  (f) Other than as specifically provided with regard to the
death of a Participant, no Grant or right to payment in respect thereof under
the Plan shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, and any attempt to do so
shall be void. No Grant or right to payment in respect thereof shall, prior to
receipt thereof by the Participant, be in any manner liable for or subject to
the debts, contracts, liabilities, engagements or torts of the Participant.

                  (g) Participants shall not be, and shall not have any of the
rights or privileges of, members of BW Holdings or equity holders in any
Associated Person in respect of any BW Holdings Units or interests in an
Associated Person purchasable in connection with any Grant unless and until such
Participant is registered as the owner thereof and, if applicable, certificates
representing any such BW Holdings Units or such other interests have been issued
by BW Holdings or such Associated Person to such Participants.

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                  (h) No election as to benefits or exercise of BW Holdings Unit
Options, Unit Appreciation Rights or other rights may be made during a
Participant's lifetime by anyone other than the Participant except by a legal
representative appointed for or by the Participant.

                  (i) Absent express provisions to the contrary, any grant under
this Plan shall not be deemed compensation for purposes of computing benefits or
contributions under any retirement plan of the Corporation or its Subsidiaries
and shall not affect any benefits under any other benefit plan of any kind or
subsequently in effect under which the availability or amount of benefits is
related to level of compensation. This Plan is not a "Retirement Plan" or
"Welfare Plan" under the Employee Retirement Income Security Act of 1974, as
amended.

                  (j) Unless the Committee determines otherwise, no benefit or
promise under the Plan shall be secured by any specific assets of the
Corporation or any of its Subsidiaries, nor shall any assets of the Corporation
or any of its Subsidiaries be designated as attributable or allocated to the
satisfaction of the Corporation's obligations under the Plan.

7.       TRANSFERS AND LEAVES OF ABSENCE
         -------------------------------

                  For purposes of the Plan, unless the Committee determines
otherwise: (a) a transfer of a Participant's employment without an intervening
period of separation among the Corporation and any Associated Person shall not
be deemed a termination of employment, and (b) a Participant who is granted in
writing a leave of absence shall be deemed to have remained in the employ of the
Corporation during such leave of absence.

8.       ADJUSTMENTS
         -----------

                  In the event that the Corporation (or any Equivalent Company)
consummates a Public Offering, or any similar event occurs, or there is a change
in the powers, designations, preferences and relative participating, optional or
other rights, if any, or the qualifications, limitations or restrictions of the
outstanding BW Holdings Units or equity interests in an Equivalent Company or a
reclassification, recapitalization or merger, change of control, or similar
event affecting the Corporation, BW Holdings or an Equivalent Company, the
Committee may adjust appropriately the outstanding Grants as it deems to be
equitably required, including without limitation converting the Grants into
common equity of, or grants of options or other rights to purchase ownership
interests in, the Corporation or the Equivalent Company that consummates a
Public Offering on such terms as the Committee deems to be appropriate in its
sole discretion.

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9.       MERGER, CONSOLIDATION, EXCHANGE,
         ACQUISITION, LIQUIDATION OR DISSOLUTION
         ---------------------------------------

                  In its absolute discretion, and on such terms and conditions
as it deems appropriate, coincident with or after the grant of any BW Holdings
Unit Option, Unit Appreciation Right or any Other Unit-Based Grant, the
Committee may provide that such BW Holdings Unit Option, Unit Appreciation Right
or Other Unit-Based Grant cannot be exercised or triggered after the merger or
consolidation of BW Holdings or the Corporation into another corporation, the
exchange of all or substantially all of the assets of BW Holdings or the
Corporation for the securities of another corporation, the sale of all or
substantially all the assets of BW Holdings or the Corporation, the acquisition
by another corporation of 80% or more of BW Holdings' or the Corporation's then
outstanding units or shares of voting stock or the recapitalization,
reclassification, liquidation or dissolution of BW Holdings or the Corporation,
and if the Committee so provides, it shall, on such terms and conditions as it
deems appropriate in its absolute discretion, also provide, either by the terms
of such BW Holdings Unit Option, Unit Appreciation Right or Other Unit-Based
Grant or by a resolution adopted prior to the occurrence of such merger,
consolidation, exchange, acquisition, recapitalization, reclassification,
liquidation or dissolution, that, for some period of time prior to such event,
such BW Holdings Unit Option, Unit Appreciation Right or Other Unit-Based Grant
shall be exercisable or able to be triggered as to all units or shares subject
thereto, notwithstanding anything to the contrary herein (but subject to the
provisions of Paragraph 6(b)) and that, upon the occurrence of such event, such
BW Holdings Unit Option, Unit Appreciation Right or Other Unit-Based Grant shall
terminate and be of no further force or effect; PROVIDED, HOWEVER, that the
Committee may also provide, in its absolute discretion, that even if the BW
Holdings Unit Option, Unit Appreciation Right or Other Unit-Based Grant shall
remain exercisable or able to be triggered after any such event, from and after
such event, any such BW Holdings Unit Option, Unit Appreciation Right or Other
Unit-Based Grant shall be exercisable or able to be triggered only for the kind
and amount of securities and/or other property, or the cash equivalent thereof,
receivable as a result of such event by the holder of Unit Appreciation Rights
immediately prior to such event or a number of units or shares of stock for
which such BW Holdings Unit Option or Other Unit-Based Grant could have been
exercised immediately prior to such event.

10.      AMENDMENT AND TERMINATION
         -------------------------

                  The Committee shall have the authority to make such amendments
to any terms and conditions applicable to outstanding Grants as are consistent
with this Plan provided that, except for adjustments under Paragraph 8 or 9
hereof, no such action shall modify such Grant in a manner adverse to the
Participant without

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the Participant's consent except as such modification is provided for or
contemplated in the terms of the Grant.

                  The Board of Directors may amend, suspend or terminate the
Plan except that no such action, other than an action under Paragraph 8 or 9
hereof, may be taken which would decrease the exercise price or trigger price of
outstanding BW Holdings Unit Options or Unit Appreciation Rights, change the
requirements relating to the Committee or extend the term of the Plan.

11.      FOREIGN OPTIONS AND RIGHTS
         --------------------------

                  The Committee may make Grants to Employees who are subject to
the laws of nations other than the United States, which Grants may have terms
and conditions that differ from the terms thereof as provided elsewhere in the
Plan for the purpose of complying with foreign laws.

12.      WITHHOLDING TAXES
         -----------------

                  The Corporation shall have the right to deduct from any cash
payment made under the Plan any federal, state or local income or other taxes
required by law to be withheld with respect to such payment. It shall be a
condition to the obligation of the Corporation to deliver BW Holdings Units upon
exercise of a BW Holdings Unit Option or exercise or settlement of any Other
Unit-Based Grant that the Participant pay to the Corporation such amount as may
be requested by the Corporation for the purpose of satisfying any liability for
such withholding taxes. Any Grant Agreement may (but is not required to) provide
that the Participant may elect, in accordance with any conditions set forth in
such Grant Agreement, to satisfy a portion or all of such withholding taxes in
the form of a reduced payment by the Corporation (including by reducing the
number of BW Holdings Units to be received upon exercise of a BW Holdings Unit
Option).

13.      EFFECTIVE DATE AND TERMINATION DATES
         ------------------------------------

                  The Plan shall be effective on and as of the date of its
approval by the stockholders of the Corporation and shall terminate ten years
later, subject to earlier termination by the Board of Directors pursuant to
Paragraph 10.

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<PAGE>   9
                                                                 Exhibit 10(vii)



                                     FORM OF
                       1996 STOCK PURCHASE AND OPTION PLAN
                              FOR KEY EMPLOYEES OF
                 BORDEN CHEMICAL HOLDINGS, INC. AND SUBSIDIARIES

1.       PURPOSE OF PLAN
         ---------------

                  The 1996 Stock Purchase and Option Plan for Key Employees of
Borden Chemical Holdings, Inc. and Subsidiaries (the "PLAN") is designed:

                  (a) to promote the long term financial interests and growth of
         Borden Chemical Holdings, Inc. (the "CORPORATION") and its subsidiaries
         by attracting and retaining management personnel with the training,
         experience and ability to enable them to make a substantial
         contribution to the success of the Corporation's business;

                  (b)  to motivate management personnel by means of
         growth-related incentives to achieve long range goals; and

                  (c) to further the identity of interests of participants with
         those of the stockholders of the Corporation through opportunities for
         increased stock, or stock-based, ownership in the Corporation.

2.       DEFINITIONS
         -----------

                  As used in the Plan, the following words shall have the
following meanings:

                  (a) "GRANT" means an award made to a Participant pursuant to
the Plan and described in Paragraph 5, including, without limitation, an award
of an Incentive Stock Option, Stock Option, Stock Appreciation Right, Dividend
Equivalent Right, Restricted Stock, Purchase Stock, Performance Units,
Performance Shares or Other Stock Based Grant, or any combination of the
foregoing.

                  (b) "GRANT AGREEMENT" means an agreement between the
Corporation and a Participant that sets forth the terms, conditions and
limitations applicable to a Grant.

                  (c)  "BOARD OF DIRECTORS" means the Board of Directors
of the Corporation.

                  (d)  "COMMITTEE" means the Compensation Committee of
the Board of Directors.

                  (e) "COMMON STOCK" or "SHARE" means common stock of the
Corporation which may be authorized but unissued, or issued and reacquired.



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                  (f) "EMPLOYEE" means a person, including an officer, in the
regular full-time employment of the Corporation or one of its Subsidiaries who,
in the opinion of the Committee, is, or is expected, to be primarily responsible
for the management, growth or protection of some part or all of the business of
the Corporation.

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

                  (h) "FAIR MARKET VALUE" means such value of a Share as
reported for stock exchange transactions and/or determined in accordance with
any applicable resolutions or regulations of the Committee in effect at the
relevant time.

                  (i) "PARTICIPANT" means an Employee, or other person having a
unique relationship with the Corporation or one of its Subsidiaries, to whom one
or more Grants have been made and such Grants have not all been forfeited or
terminated under the Plan; PROVIDED, HOWEVER, a non-employee director of the
Corporation or one of its Subsidiaries may not be a Participant.

                  (j) "STOCK-BASED GRANTS" means the collective reference to the
grant of Stock Appreciation Rights, Dividend Equivalent Rights, Restricted
Stocks, Performance Units, Performance Shares and Other Stock Based Grants.

                  (k)  "STOCK OPTIONS" means the collective reference to
"Incentive Stock Options" and "Other Stock Options".

                  (l) "SUBSIDIARY" means any corporation other than the
Corporation in an unbroken chain of corporations beginning with the Corporation
if each of the corporations other than the last corporation in the unbroken
chain owns 50% or more of the voting stock in one of the other corporations in
such chain.

3.       ADMINISTRATION OF PLAN
         ----------------------

                  (a) The Plan shall be administered by the Committee. None of
the members of the Committee shall be eligible to be selected for Grants under
the Plan, or have been so eligible for selection within one year prior thereto;
PROVIDED, HOWEVER, that the members of the Committee shall qualify to administer
the Plan for purposes of Rule 16b-3 (and any other applicable rule) promulgated
under Section 16(b) of the Exchange Act to the extent that the Corporation is
subject to such rule. The Committee may adopt its own rules of procedure, and
the action of a majority of the Committee, taken at a meeting or taken without a
meeting by a writing signed by such majority, shall constitute action by the
Committee. The Committee shall have the power and authority to administer,
construe and interpret the Plan, to make rules for carrying it out and to make
changes in such rules. Any such interpretations, rules, and administration shall
be consistent with the basic purposes of the Plan.

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                  (b) The Committee may delegate to the Chief Executive Officer
and to other senior officers of the Corporation its duties under the Plan
subject to such conditions and limitations as the Committee shall prescribe
except that only the Committee may designate and make Grants to Participants who
are subject to Section 16 of the Exchange Act.

                  (c) The Committee may employ attorneys, consultants,
accountants, appraisers, brokers or other persons. The Committee, the
Corporation, and the officers and directors of the Corporation shall be entitled
to rely upon the advice, opinions or valuations of any such persons. All actions
taken and all interpretations and determinations made by the Committee in good
faith shall be final and binding upon all Participants, the Corporation and all
other interested persons. No member of the Committee shall be personally liable
for any action, determination or interpretation made in good faith with respect
to the Plan or the Grants, and all members of the Committee shall be fully
protected by the Corporation with respect to any such action, determination or
interpretation.

4.       ELIGIBILITY
         -----------

                  The Committee may from time to time make Grants under the Plan
to such Employees, or other persons having a unique relationship with
Corporation or any of its Subsidiaries, and in such form and having such terms,
conditions and limitations as the Committee may determine. No Grants may be made
under this Plan to non-employee directors of Corporation or any of its
Subsidiaries. Grants may be granted singly, in combination or in tandem. The
terms, conditions and limitations of each Grant under the Plan shall be set
forth in a Grant Agreement, in a form approved by the Committee, consistent,
however, with the terms of the Plan; PROVIDED, HOWEVER, such Grant Agreement
shall contain provisions dealing with the treatment of Grants in the event of
the termination, death or disability of a Participant, and may also include
provisions concerning the treatment of Grants in the event of a change of
control of Corporation.

5.       GRANTS
         ------

                  From time to time, the Committee will determine the forms and
amounts of Grants for Participants. Such Grants may take the following forms in
the Committee's sole discretion:

                  (a) INCENTIVE STOCK OPTIONS - These are stock options within
         the meaning of Section 422 of the Internal Revenue Code of 1986, as
         amended ("CODE"), to purchase Common Stock. In addition to other
         restrictions contained in the Plan, an option granted under this
         Paragraph 5(a), (i) may not be exercised more than 10 years after the
         date it is granted, (ii) may not have an option price less than the
         Fair Market Value of Common Stock on the date the option is granted,
         (iii) must otherwise comply with Code Section 422, and (iv)

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<PAGE>   12



         must be designated as an "Incentive Stock Option" by the Committee. The
         maximum aggregate Fair Market Value of Common Stock (determined at the
         time of each Grant) with respect to which any Participant may first
         exercise Incentive Stock Options under this Plan and any Incentive
         Stock Options granted to the Participant for such year under any plans
         of the Corporation or any Subsidiary in any calendar year is $100,000.
         Payment of the option price shall be made in cash or in shares of
         Common Stock, or a combination thereof, in accordance with the terms of
         the Plan, the Grant Agreement, and of any applicable guidelines of the
         Committee in effect at the time.

                  (b) OTHER STOCK OPTIONS - These are options to purchase Common
         Stock which are not designated by the Committee as "Incentive Stock
         Options". At the time of the Grant the Committee shall determine, and
         shall have contained in the Grant Agreement or other Plan rules, the
         option exercise period, the option price, and such other conditions or
         restrictions on the grant or exercise of the option as the Committee
         deems appropriate, which may include the requirement that the grant of
         options is predicated on the acquisition of Purchase Shares under
         Paragraph 5(e) by the Optionee. In addition to other restrictions
         contained in the Plan, an option granted under this Paragraph 5(b), (i)
         may not be exercised more than 10 years after the date it is granted
         and (ii) may not have an option exercise price less than 50% of the
         Fair Market Value of Common Stock on the date the option is granted.
         Payment of the option price shall be made in cash or in shares of
         Common Stock, or a combination thereof, in accordance with the terms of
         the Plan and of any applicable guidelines of the Committee in effect at
         the time.

                  (c) STOCK APPRECIATION RIGHTS - These are rights that on
         exercise entitle the holder to receive the excess of (i) the Fair
         Market Value of a share of Common Stock on the date of exercise over
         (ii) the Fair Market Value on the date of Grant (the "BASE VALUE")
         multiplied by (iii) the number of rights exercised as determined by the
         Committee. Stock Appreciation Rights granted under the Plan may, but
         need not be, granted in conjunction with an Option under Paragraph 5(a)
         or 5(b). The Committee, in the Grant Agreement or by other Plan rules,
         may impose such conditions or restrictions on the exercise of Stock
         Appreciation Rights as it deems appropriate, and may terminate, amend,
         or suspend such Stock Appreciation Rights at any time. No Stock
         Appreciation Right granted under this Plan may be exercised less than 6
         months or more than 10 years after the date it is granted except in the
         event of death or disability of a Participant. To the extent that any
         Stock Appreciation Right that shall have become exercisable, but shall
         not have been exercised or cancelled or, by reason of any termination
         of employment, shall have become non-exercisable, it shall be deemed to

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<PAGE>   13



         have been exercised automatically, without any notice of exercise, on
         the last day of which it is exercisable, provided that any conditions
         or limitations on its exercise are satisfied (other than (i) notice of
         exercise and (ii) exercise or election to exercise during the period
         prescribed) and the Stock Appreciation Right shall then have value.
         Such exercise shall be deemed to specify that the holder elects to
         receive cash and that such exercise of a Stock Appreciation Right shall
         be effective as of the time of automatic exercise.

                  (d) RESTRICTED STOCK - Restricted Stock is Common Stock
         delivered to a Participant with or without payment of consideration
         with restrictions or conditions on the Participant's right to transfer
         or sell such stock; PROVIDED that the price of any Restricted Stock
         delivered for consideration and not as bonus stock may not be less than
         50% of the Fair Market Value of Common Stock on the date such
         Restricted Stock is granted or the price of such Restricted Stock may
         be the par value. If a Participant irrevocably elects in writing in the
         calendar year preceding a Grant of Restricted Stock, dividends paid on
         the Restricted Stock granted may be paid in shares of Restricted Stock
         equal to the cash dividend paid on Common Stock. The number of shares
         of Restricted Stock and the restrictions or conditions on such shares
         shall be as the Committee determines, in the Grant Agreement or by
         other Plan rules, and the certificate for the Restricted Stock shall
         bear evidence of the restrictions or conditions. No Restricted Stock
         may have a restriction period of less than 6 months, other than in the
         case of death or disability.

                  (e) PURCHASE STOCK - Purchase Stock are shares of Common Stock
         offered to a Participant at such price as determined by the Committee,
         the acquisition of which will make him eligible to receive under the
         Plan, including, but not limited to, Other Stock Options; PROVIDED,
         HOWEVER, that the price of such Purchase Shares may not be less than
         50% of the Fair Market Value of the Common Stock on the date such
         shares of Purchase Stock are offered.

                  (f) DIVIDEND EQUIVALENT RIGHTS - These are rights to receive
         cash payments from the Corporation at the same time and in the same
         amount as any cash dividends paid on an equal number of shares of
         Common Stock to shareholders of record during the period such rights
         are effective. The Committee, in the Grant Agreement or by other Plan
         rules, may impose such restrictions and conditions on the Dividend
         Equivalent Rights, including the date such rights will terminate, as it
         deems appropriate, and may terminate, amend, or suspend such Dividend
         Equivalent Rights at any time.

                                       -5-



<PAGE>   14



                  (g) PERFORMANCE UNITS - These are rights to receive at a
         specified future date, payment in cash of an amount equal to all or a
         portion of the value of a unit granted by the Committee. At the time of
         the Grant, in the Grant Agreement or by other Plan rules, the Committee
         must determine the base value of the unit, the performance factors
         applicable to the determination of the ultimate payment value of the
         unit and the period over which Corporation performance will be
         measured. These factors must include a minimum performance standard for
         the Corporation below which no payment will be made and a maximum
         performance level above which no increased payment will be made. The
         term over which Corporation performance will be measured shall be not
         less than six months.

                  (h) PERFORMANCE SHARES - These are rights to receive at a
         specified future date, payment in cash or Common Stock, as determined
         by the Committee, of an amount equal to all or a portion of the Fair
         Market Value for all days that the Common Stock is traded during the
         last forty-five (45) days of the specified period of performance of a
         specified number of shares of Common Stock at the end of a specified
         period based on Corporation performance during the period. At the time
         of the Grant, the Committee, in the Grant Agreement or by Plan rules,
         will determine the factors which will govern the portion of the rights
         so payable and the period over which Corporation performance will be
         measured. The factors will be based on Corporation performance and must
         include a minimum performance standard for the Corporation below which
         no payment will be made and a maximum performance level above which no
         increased payment will be made. The term over which Corporation
         performance will be measured shall be not less than six months.
         Performance Shares will be granted for no consideration.

                  (i) OTHER STOCK-BASED GRANTS - The Committee may make other
         Grants under the Plan pursuant to which shares of Common Stock (which
         may, but need not, be shares of Restricted Stock pursuant to Paragraph
         5(d)), are or may in the future be acquired, or Grants denominated in
         stock units, including ones valued using measures other than market
         value. Other Stock-Based Grants may be granted with or without
         consideration; PROVIDED, HOWEVER, that the price of any such Grant made
         for consideration that provides for the acquisition of shares of Common
         Stock or other equity securities of the Corporation may not be less
         than 50% of the Fair Market Value of the Common Stock or such other
         equity securities on the date of grant of such Grant. Such Other
         Stock-Based Grants may be made alone, in addition to or in tandem with
         any Grant of any type made under the Plan and must be consistent with
         the purposes of the Plan.

                                       -6-



<PAGE>   15



6.       LIMITATIONS AND CONDITIONS
         --------------------------

                  (a) The number of Shares available for Grants under this Plan
shall be _________ shares of the authorized Common Stock as of the effective
date of the Plan. The number of Shares subject to Grants under this Plan to any
one Participant shall not be more than ________ shares. Unless restricted by
applicable law, Shares related to Grants that are forfeited, terminated,
cancelled or expire unexercised, shall immediately become available for Grants.

                  (b) No Grants shall be made under the Plan beyond ten years
after the effective date of the Plan, but the terms of Grants made on or before
the expiration thereof may extend beyond such expiration. At the time a Grant is
made or amended or the terms or conditions of a Grant are changed, the Committee
may provide for limitations or conditions on such Grant.

                  (c) Nothing contained herein shall affect the right of the
Corporation to terminate any Participant's employment at any time or for any
reason.

                  (d) Deferrals of Grant payouts may be provided for, at the
sole discretion of the Committee, in the Grant Agreements.

                  (e) Except as otherwise prescribed by the Committee, the
amounts of the Grants for any employee of a Subsidiary, along with interest,
dividend, and other expenses accrued on deferred Grants shall be charged to the
Participant's employer during the period for which the Grant is made. If the
Participant is employed by more than one Subsidiary or by both the Corporation
and a Subsidiary during the period for which the Grant is made, the
Participant's Grant and related expenses will be allocated between the companies
employing the Participant in a manner prescribed by the Committee.

                  (f) Other than as specifically provided with regard to the
death of a Participant, no benefit under the Plan shall be subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, and any attempt to do so shall be void. No such benefit shall, prior to
receipt thereof by the Participant, be in any manner liable for or subject to
the debts, contracts, liabilities, engagements, or torts of the Participant.

                  (g) Participants shall not be, and shall not have any of the
rights or privileges of, stockholders of the Corporation in respect of any
Shares purchasable in connection with any Grant unless and until certificates
representing any such Shares have been issued by the Corporation to such
Participants.

                  (h) No election as to benefits or exercise of Stock Options,
Stock Appreciation Rights, or other rights may be made during a Participant's
lifetime by anyone other than the

                                       -7-



<PAGE>   16



Participant except by a legal representative appointed for or by the
Participant.

                  (i) Absent express provisions to the contrary, any grant under
this Plan shall not be deemed compensation for purposes of computing benefits or
contributions under any retirement plan of the Corporation or its Subsidiaries
and shall not affect any benefits under any other benefit plan of any kind or
subsequently in effect under which the availability or amount of benefits is
related to level of compensation. This Plan is not a "Retirement Plan" or
"Welfare Plan" under the Employee Retirement Income Security Act of 1974, as
amended.

                  (j) Unless the Committee determines otherwise, no benefit or
promise under the Plan shall be secured by any specific assets of the
Corporation or any of its Subsidiaries, nor shall any assets of the Corporation
or any of its Subsidiaries be designated as attributable or allocated to the
satisfaction of the Corporation's obligations under the Plan.

7.       TRANSFERS AND LEAVES OF ABSENCE
         -------------------------------

                  For purposes of the Plan, unless the Committee determines
otherwise: (a) a transfer of a Participant's employment without an intervening
period of separation among the Corporation and any Subsidiary shall not be
deemed a termination of employment, and (b) a Participant who is granted in
writing a leave of absence shall be deemed to have remained in the employ of the
Corporation during such leave of absence.

8.       ADJUSTMENTS
         -----------

                  In the event of any change in the outstanding Common Stock by
reason of a stock split, spin-off, stock dividend, stock combination or
reclassification, recapitalization or merger, change of control, or similar
event, the Committee may adjust appropriately the number of Shares subject to
the Plan and available for or covered by Grants and Share prices related to
outstanding Grants and make such other revisions to outstanding Grants as it
deems are equitably required.

9.       MERGER, CONSOLIDATION, EXCHANGE,
         ACQUISITION, LIQUIDATION OR DISSOLUTION
         ---------------------------------------

                  In its absolute discretion, and on such terms and conditions
as it deems appropriate, coincident with or after the grant of any Stock Option
or any Stock-Based Grant, the Committee may provide that such Stock Option or
Stock-Based Grant cannot be exercised after the merger or consolidation of the
Corporation into another corporation, the exchange of all or substantially all
of the assets of the Corporation for the securities of another corporation, the
acquisition by another corporation of 80% or more of the Corporation's then
outstanding shares of voting stock or the recapitalization, reclassification,

                                       -8-



<PAGE>   17



liquidation or dissolution of the Corporation, and if the Committee so provides,
it shall, on such terms and conditions as it deems appropriate in its absolute
discretion, also provide, either by the terms of such Stock Option or
Stock-Based Grant or by a resolution adopted prior to the occurrence of such
merger, consolidation, exchange, acquisition, recapitalization,
reclassification, liquidation or dissolution, that, for some period of time
prior to such event, such Stock Option or Stock-Based Grant shall be exercisable
as to all shares subject thereto, notwithstanding anything to the contrary
herein (but subject to the provisions of Paragraph 6(b)) and that, upon the
occurrence of such event, such Stock Option or Stock-Based Grant shall terminate
and be of no further force or effect; PROVIDED, HOWEVER, that the Committee may
also provide, in its absolute discretion, that even if the Stock Option or
Stock-Based Grant shall remain exercisable after any such event, from and after
such event, any such Stock Option or Stock-Based Grant shall be exercisable only
for the kind and amount of securities and/or other property, or the cash
equivalent thereof, receivable as a result of such event by the holder of a
number of shares of stock for which such Stock Option or Stock-Based Grant could
have been exercised immediately prior to such event.

10.      AMENDMENT AND TERMINATION
         -------------------------

                  The Committee shall have the authority to make such amendments
to any terms and conditions applicable to outstanding Grants as are consistent
with this Plan provided that, except for adjustments under Paragraph 8 or 9
hereof, no such action shall modify such Grant in a manner adverse to the
Participant without the Participant's consent except as such modification is
provided for or contemplated in the terms of the Grant.

                  The Board of Directors may amend, suspend or terminate the
Plan except that no such action, other than an action under Paragraph 8 or 9
hereof, may be taken which would, without shareholder approval, increase the
aggregate number of Shares available for Grants under the Plan, decrease the
price of outstanding Options or Stock Appreciation Rights, change the
requirements relating to the Committee or extend the term of the Plan.

11.      FOREIGN OPTIONS AND RIGHTS
         --------------------------

                  The Committee may make Grants to Employees who are subject to
the laws of nations other than the United States, which Grants may have terms
and conditions that differ from the terms thereof as provided elsewhere in the
Plan for the purpose of complying with foreign laws.

                                       -9-



<PAGE>   18


12.      WITHHOLDING TAXES
         -----------------

                  The Corporation shall have the right to deduct from any cash
payment made under the Plan any federal, state or local income or other taxes
required by law to be withheld with respect to such payment. It shall be a
condition to the obligation of the Corporation to deliver shares upon the
exercise of an Option or Stock Appreciation Right, upon payment of Performance
units or shares, upon delivery of Restricted Stock or upon exercise, settlement
or payment of any Other Stock-Based Grant that the Participant pay to the
Corporation such amount as may be requested by the Corporation for the purpose
of satisfying any liability for such withholding taxes. Any Grant Agreement may
provide that the Participant may elect, in accordance with any conditions set
forth in such Grant Agreement, to pay a portion or all of such withholding taxes
in shares of Common Stock.

13.      EFFECTIVE DATE AND TERMINATION DATES
         ------------------------------------

                  The Plan shall be effective on and as of the date of its
approval by the stockholders of the Corporation and shall terminate ten years
later, subject to earlier termination by the Board of Directors pursuant to
Paragraph 10.

                                      -10-



<PAGE>   19
                                                                 Exhibit 10(vii)

                                    FORM OF
                            1996 UNIT INCENTIVE PLAN
                              FOR KEY EMPLOYEES OF
                 BORDEN FOODS CORPORATION AND ASSOCIATED PERSONS

1.       PURPOSE OF PLAN
         ---------------

                  The 1996 Unit Incentive Plan for Key Employees of Borden Foods
Corporation and Associated Persons (the "PLAN") is designed:

                  (a) to promote the long term financial interests and growth of
         Borden Foods Corporation (the "CORPORATION") and its Subsidiaries by
         attracting and retaining management personnel with the training,
         experience and ability to enable them to make a substantial
         contribution to the success of the Corporation's business;

                  (b)  to motivate management personnel by means of
         growth-related incentives to achieve long range goals; and

                  (c) to further the identity of interests of Participants with
         those of the direct and indirect equityholders of the Corporation
         through opportunities to participate in increased value of the
         Corporation and its Associated Persons.

2.       DEFINITIONS
         -----------

                  As used in the Plan, the following words shall have the
following meanings:

                  (a) "ASSOCIATED PERSON" shall mean any Subsidiary of BFH LLC,
including, without limitation, Borden Foods Holdings Corporation and the
Corporation, or any other entity designated by the Board of Directors in which
BFH LLC or an Associated Person has an interest, which may include, without
limitation, a successor to BFH LLC.

                  (b) "BFH LLC" shall mean Borden Foods Holdings, LLC, a
Delaware limited liability company.

                  (c) "BFH LLC UNIT" shall mean a Class A Unit or a Class B Unit
(each as defined in the Limited Liability Company Agreement of BFH LLC), as the
context may require.

                  (d)  "BOARD OF DIRECTORS" means the Board of Directors
of the Corporation.

                  (e)  "COMMITTEE" means the Compensation Committee of
the Board of Directors.



<PAGE>   20




                  (f) "EMPLOYEE" means a person, including an officer, in the
regular full-time employment of the Corporation or one of its Subsidiaries who,
in the opinion of the Committee, is, or is expected, to be primarily responsible
for the management, growth or protection of some part or all of the business of
the Corporation.

                  (g) "EQUIVALENT COMPANY" shall mean any Associated Person
that, at the relevant time, owns or operates, directly or indirectly,
substantially all of the business and assets of BFH LLC and its Subsidiaries.

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

                  (i) "FAIR VALUE" means such value of a BFH LLC Unit or similar
ownership interest in an Equivalent Company as determined in accordance with any
applicable resolutions or regulations of the Committee in effect at the relevant
time and in accordance with the provisions of a Grant Agreement.

                  (j) "GRANT" means an award made to a Participant pursuant to
the Plan and described in Paragraph 5, including, without limitation, an award
of a BFH LLC Unit Option, Unit Appreciation Right, Purchase BFH LLC Unit or
Other Unit-Based Grant, or any combination of the foregoing.

                  (k) "GRANT AGREEMENT" means an agreement between the
Corporation and a Participant that sets forth the terms, conditions and
limitations applicable to a Grant.

                  (l) "PARTICIPANT" means an Employee selected to participate in
the Plan by the Committee in its sole discretion and to whom one or more Grants
have been made and such Grants have not all been forfeited or terminated under
the Plan; PROVIDED, HOWEVER, a non-employee director of the Corporation or one
of its Subsidiaries may not be a Participant.

                  (m) "SUBSIDIARY" means any corporation, partnership or other
entity in an unbroken chain of corporations, partnerships or other entities
beginning with BFH LLC if each of the corporations, partnerships or other
entities, or group of commonly controlled corporations, partnerships or other
entities other than the last corporation, partnership or other entity in the
unbroken chain then owns 50% or more of the voting stock or other ownership
interests in one of the other corporations, partnerships or other entities in
such chain.

3.       ADMINISTRATION OF PLAN
         ----------------------

                  (a) The Plan shall be administered by the Committee. The
Committee may adopt its own rules of procedure, and the action of a majority of
the Committee, taken at a meeting or taken without a meeting by a writing signed
by such majority,

                                       -2-



<PAGE>   21



shall constitute action by the Committee. The Committee shall have the power and
authority to administer, construe and interpret the Plan, to make rules for
carrying it out and to make changes in such rules. Any such interpretations,
rules, and administration shall be consistent with the basic purposes of the
Plan.

                  (b) The Committee may delegate to the Chief Executive Officer
and to other senior officers of the Corporation its duties under the Plan
subject to such conditions and limitations as the Committee shall prescribe,
except that only the Committee may designate and make Grants to Participants who
are subject to Section 16 of the Exchange Act.

                  (c) The Committee may employ attorneys, consultants,
accountants, appraisers, brokers or other persons. The Committee, the
Corporation, and the officers and directors of the Corporation shall be entitled
to rely upon the advice, opinions or valuations of any such persons. All actions
taken and all interpretations and determinations made by the Committee in good
faith shall be final and binding upon all Participants, the Corporation and all
other interested persons. No member of the Committee or the Board of Directors,
or the Board of Directors of any Associated Person, and none of the Corporation,
BFH LLC or any Associated Person shall be liable (personally or otherwise) for
any action, determination or interpretation made in good faith with respect to
the Plan or the Grants, and all such persons shall be fully protected by the
Corporation with respect to any such action, determination or interpretation.

4.       ELIGIBILITY
         -----------

                  The Committee may from time to time make Grants under the Plan
to such Employees and in such form and having such terms, conditions and
limitations as the Committee may determine in its sole discretion. No Grants may
be made under this Plan to non-employee directors of Corporation or any of its
Subsidiaries. Grants may be granted singly, in combination or in tandem. The
terms, conditions and limitations of each Grant under the Plan shall be set
forth in a Grant Agreement, in a form approved by the Committee, consistent,
however, with the terms of the Plan; PROVIDED, HOWEVER, such Grant Agreement
shall contain provisions dealing with the treatment of Grants in the event of
the termination, death or disability of a Participant, and may also include
provisions concerning the treatment of Grants in the event of a change of
control of the Corporation.

5.       GRANTS
         ------

                  From time to time, the Committee will determine the forms and
amounts of Grants for Participants. Such Grants may take the following forms in
the Committee's sole discretion:

                                       -3-



<PAGE>   22



                  (a) BFH LLC UNIT OPTIONS - These are options to purchase BFH
         LLC Units. At the time of the Grant the Committee shall determine, and
         shall have contained in the Grant Agreement or other Plan rules, the
         option exercise period, the option exercise price, and such other
         conditions or restrictions on the grant or exercise of the option as
         the Committee deems appropriate, which may include the requirement that
         the grant of options is predicated on the acquisition of Purchase BFH
         LLC Units by the optionee.

                  (b) UNIT APPRECIATION RIGHTS - These are rights that on
         exercise entitle the holder to receive the excess of (i) the Fair Value
         on the date of exercise over (ii) the exercise price thereof multiplied
         by (iii) the number of rights exercised. The Committee, in the Grant
         Agreement or by other Plan rules, may impose such conditions or
         restrictions on the exercise of Unit Appreciation Rights and may
         provide for the conversion of the Unit Appreciation Rights into options
         to purchase ownership in BFH LLC or any Associated Person as it deems
         appropriate.

                  (c) PURCHASE BFH LLC UNIT - Purchase BFH LLC Units are BFH LLC
         Units offered to a Participant at such price as determined by the
         Committee, the acquisition of which will make him eligible to receive
         Grants under the Plan; PROVIDED, HOWEVER, that the price of such
         Purchase BFH LLC Units may not be less than 50% of the fair market
         value (as determined by the Committee) of the BFH LLC Units on the date
         such Purchase BFH LLC Units are offered.

                  (d) OTHER UNIT-BASED GRANTS - The Committee may make other
         Grants under the Plan pursuant to which BFH LLC Units (or similar
         ownership interests of an Equivalent Company) are or may in the future
         be acquired, or payments are or may in the future be made, in each
         case, based on the performance or value of the Corporation and its
         Associated Persons. The Committee, in the Grant Agreement or by other
         Plan rules, may impose such conditions or restrictions on any such
         Grant as it deems appropriate, consistent with the purposes of the
         Plan.

6.       LIMITATIONS AND CONDITIONS
         --------------------------

                  (a) The number of BFH LLC Units available for Grants under
this Plan initially shall be ___________, but may be increased or decreased (but
in no event decreased to a number lower than the number of Purchase BFH LLC
Units theretofore granted under the Plan), by the Committee in its sole
discretion. Unless restricted by applicable law, the number of BFH LLC Units
related to Grants that are forfeited, terminated, cancelled or expire shall
immediately become available for Grants.

                  (b)  No Grants shall be made under the Plan beyond ten
years after the effective date of the Plan, but the terms of

                                       -4-



<PAGE>   23



Grants made on or before the expiration thereof may extend beyond such
expiration. At the time a Grant is made or amended or the terms or conditions of
a Grant are changed, the Committee may provide for limitations or conditions on
such Grant.

                  (c) Nothing contained herein shall affect the right of the
Corporation to terminate any Participant's employment at any time or for any
reason.

                  (d) Deferrals of Grant payouts may be provided for, at the
sole discretion of the Committee, in the Grant Agreements.

                  (e) Except as otherwise prescribed by the Committee, the
amounts of the Grants for any employee of a Subsidiary, along with interest,
dividend and other expenses accrued on deferred Grants shall be charged to the
Participant's employer during the period for which the Grant is made. If the
Participant is employed by more than one Subsidiary or by both the Corporation
and a Subsidiary during the period for which the Grant is made, the
Participant's Grant and related expenses will be allocated between the companies
employing the Participant in a manner prescribed by the Committee.

                  (f) Other than as specifically provided with regard to the
death of a Participant, no Grant or right to payment in respect thereof under
the Plan shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, and any attempt to do so
shall be void. No Grant or right to payment in respect thereof shall, prior to
receipt thereof by the Participant, be in any manner liable for or subject to
the debts, contracts, liabilities, engagements or torts of the Participant.

                  (g) Participants shall not be, and shall not have any of the
rights or privileges of, members of BFH LLC or equity holders in any Associated
Person in respect of any BFH LLC Units or interests in an Associated Person
purchasable in connection with any Grant unless and until such Participant is
registered as the owner thereof and, if applicable, certificates representing
any such BFH LLC Units or such other interests have been issued by BFH LLC or
such Associated Person to such Participants.

                  (h) No election as to benefits or exercise of BFH LLC Unit
Options, Unit Appreciation Rights or other rights may be made during a
Participant's lifetime by anyone other than the Participant except by a legal
representative appointed for or by the Participant.

                  (i) Absent express provisions to the contrary, any grant under
this Plan shall not be deemed compensation for purposes of computing benefits or
contributions under any retirement plan of the Corporation or its Subsidiaries
and shall not affect any benefits under any other benefit plan of any kind or
subsequently in effect under which the availability or amount

                                       -5-



<PAGE>   24



of benefits is related to level of compensation. This Plan is not a "Retirement
Plan" or "Welfare Plan" under the Employee Retirement Income Security Act of
1974, as amended.

                  (j) Unless the Committee determines otherwise, no benefit or
promise under the Plan shall be secured by any specific assets of the
Corporation or any of its Subsidiaries, nor shall any assets of the Corporation
or any of its Subsidiaries be designated as attributable or allocated to the
satisfaction of the Corporation's obligations under the Plan.

7.       TRANSFERS AND LEAVES OF ABSENCE
         -------------------------------

                  For purposes of the Plan, unless the Committee determines
otherwise: (a) a transfer of a Participant's employment without an intervening
period of separation among the Corporation and any Associated Person shall not
be deemed a termination of employment, and (b) a Participant who is granted in
writing a leave of absence shall be deemed to have remained in the employ of the
Corporation during such leave of absence.

8.       ADJUSTMENTS
         -----------

                  In the event that the Corporation (or any Equivalent Company)
consummates a Public Offering, or any similar event occurs, or there is a change
in the powers, designations, preferences and relative participating, optional or
other rights, if any, or the qualifications, limitations or restrictions of the
outstanding BFH LLC Units or equity interests in an Equivalent Company or a
reclassification, recapitalization or merger, change of control, or similar
event affecting the Corporation, BFH LLC or an Equivalent Company, the Committee
may adjust appropriately the outstanding Grants as it deems to be equitably
required, including converting the Grants into grants of options or other rights
to purchase ownership interests of the Corporation or the Equivalent Company
that consummates a Public Offering on such terms as the Committee deems to be
appropriate in its sole discretion.

9.       MERGER, CONSOLIDATION, EXCHANGE,
         ACQUISITION, LIQUIDATION OR DISSOLUTION
         ---------------------------------------

                  In its absolute discretion, and on such terms and conditions
as it deems appropriate, coincident with or after the grant of any BFH LLC Unit
Option or any Unit-Based Grant, the Committee may provide that such BFH LLC Unit
Option or Unit-Based Grant cannot be exercised after the merger or consolidation
of BFH LLC or the Corporation into another corporation, the exchange of all or
substantially all of the assets of BFH LLC or the Corporation for the securities
of another corporation, the sale of all or substantially all the assets of BFH
LLC or the Corporation, the acquisition by another corporation of 80% or more of
BFH LLC's or the Corporation's then outstanding units or shares of voting stock
or the recapitalization, reclassification,

                                       -6-



<PAGE>   25



liquidation or dissolution of BFH LLC or the Corporation, and if the Committee
so provides, it shall, on such terms and conditions as it deems appropriate in
its absolute discretion, also provide, either by the terms of such BFH LLC Unit
Option or Unit-Based Grant or by a resolution adopted prior to the occurrence of
such merger, consolidation, exchange, acquisition, recapitalization,
reclassification, liquidation or dissolution, that, for some period of time
prior to such event, such BFH LLC Unit Option or Unit-Based Grant shall be
exercisable as to all units or shares subject thereto, notwithstanding anything
to the contrary herein (but subject to the provisions of Paragraph 6(b)) and
that, upon the occurrence of such event, such BFH LLC Unit Option or Unit-Based
Grant shall terminate and be of no further force or effect; PROVIDED, HOWEVER,
that the Committee may also provide, in its absolute discretion, that even if
the BFH LLC Unit Option or Unit-Based Grant shall remain exercisable after any
such event, from and after such event, any such BFH LLC Unit Option or
Unit-Based Grant shall be exercisable only for the kind and amount of
securities and/or other property, or the cash equivalent thereof, receivable as
a result of such event by the holder of a number of units or shares of stock
for which such BFH LLC Unit Option or Unit-Based Grant could have been
exercised immediately prior to such event.

10.      AMENDMENT AND TERMINATION
         -------------------------

                  The Committee shall have the authority to make such amendments
to any terms and conditions applicable to outstanding Grants as are consistent
with this Plan provided that, except for adjustments under Paragraph 8 or 9
hereof, no such action shall modify such Grant in a manner adverse to the
Participant without the Participant's consent except as such modification is
provided for or contemplated in the terms of the Grant.

                  The Board of Directors may amend, suspend or terminate the
Plan except that no such action, other than an action under Paragraph 8 or 9
hereof, may be taken which would decrease the exercise price of outstanding BFH
LLC Unit Options or Unit Appreciation Rights, change the requirements relating
to the Committee or extend the term of the Plan.

11.      FOREIGN OPTIONS AND RIGHTS
         --------------------------

                  The Committee may make Grants to Employees who are subject to
the laws of nations other than the United States, which Grants may have terms
and conditions that differ from the terms thereof as provided elsewhere in the
Plan for the purpose of complying with foreign laws.

12.      WITHHOLDING TAXES
         -----------------

                  The Corporation shall have the right to deduct from any cash
payment made under the Plan any federal, state or local income or other taxes
required by law to be withheld with respect

                                       -7-



<PAGE>   26


to such payment. It shall be a condition to the obligation of the Corporation to
deliver BFH LLC Units upon exercise of a BFH LLC Unit Option or to make payment
upon exercise or settlement of any Unit Appreciation Right or Other Unit-Based
Grant that the Participant pay to the Corporation such amount as may be
requested by the Corporation for the purpose of satisfying any liability for
such withholding taxes. Any Grant Agreement may provide that the Participant may
elect, in accordance with any conditions set forth in such Grant Agreement, to
pay a portion or all of such withholding taxes in BFH LLC Units.

13.      EFFECTIVE DATE AND TERMINATION DATES
         ------------------------------------

                  The Plan shall be effective on and as of the date of its
approval by the stockholders of the Corporation and shall terminate ten years
later, subject to earlier termination by the Board of Directors pursuant to
Paragraph 10.

                                       -8-