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                                                                  Final/Executed


                                                                    Exhibit 10.5



                               AMN HOLDINGS, INC.
                       1999 PERFORMANCE STOCK OPTION PLAN
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                                TABLE OF CONTENTS

<TABLE>
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                                                                           Page
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SECTION 1.  Purpose ...................................................      1

SECTION 2.  Administration ............................................      1

SECTION 3.  Eligibility ...............................................      2

SECTION 4.  Shares of Stock Subject to the Plan .......................      2
     4.1    Reserved Shares............................................      2
     4.2    Type of Shares.............................................      2

SECTION 5.  Stock Options .............................................      2
     5.1    Grant and Type of Stock Options............................      2
     5.2    Agreements Evidencing Options..............................      3
     5.3    Exercisability of Options..................................      3
     5.4    Payment of Option Price....................................      4
     5.5    Termination of Employment..................................      5
     5.6    Special ISO Requirements...................................      5

SECTION 6.  Certain Definitions .......................................      6

SECTION 7.  Amendment of the Plan; Modification of Options ............      7
     7.1    Plan Amendments............................................      7
     7.2    Option Modifications.......................................      7

SECTION 8.  Restrictions ..............................................      7
     8.1    Consent Requirements.......................................      7
     8.2    Consent Defined............................................      8

SECTION 9.  Nontransferability ........................................      8

SECTION 10. Withholding Taxes .........................................      8
     10.1   General....................................................      8
     10.2   Use of Shares..............................................      8

SECTION 11. Adjustments ...............................................      9
     11.1   Upon Changes in Capitalization.............................      9
     11.2   Other......................................................      9

SECTION 12. Right of Discharge Reserved ...............................      9

SECTION 13. No Rights as a Shareholder ................................      9

SECTION 14. Nature of Payments ........................................     10
</TABLE>


                                       i
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<TABLE>
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                                                                           Page
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     14.1   Consideration..............................................     10
     14.2   Other Plans................................................     10
     14.3   Entire Agreement...........................................     10

SECTION 15. Non-Uniform Determinations ................................     10

SECTION 16. Other Payments or Options .................................     10

SECTION 17. Change of Control .........................................     10

SECTION 18. Governing Law .............................................     11

SECTION 19. Headings ..................................................     11

SECTION 20. Effective Date ............................................     11
     20.1   Effective Date.............................................     11
     20.2   Term.......................................................     11
</TABLE>


                                       ii
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                               AMN HOLDINGS, INC.
                       1999 PERFORMANCE STOCK OPTION PLAN


SECTION 1.  Purpose.

         The purpose of this Plan is to promote the interests of AMN Holdings,
Inc. (the "Company") and its Affiliates, by (a) attracting, motivating and
retaining executive personnel of outstanding ability; (b) focusing the attention
of executive management on achievement of sustained long term results; (c)
fostering management's attention on overall corporate performance and thereby
promoting cooperation and teamwork among management of the operating units; and
(d) providing executives with a direct economic interest in the attainment of
demanding long term business objectives.

SECTION 2.  Administration.

         2.1 The Plan shall be administered by a committee (the "Committee")
appointed by the Board of Directors of the Company (the "Board"), which
Committee shall consist of two or more directors. The directors appointed to
serve on the Committee shall be "non-employee directors" (within the meaning of
Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (the "Act") and
"outside directors" (within the meaning of section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code")) to the extent Rule 16b-3 and Code
section 162(m), respectively, are applicable; however, the mere fact that a
Committee member shall fail to qualify under either of the foregoing
requirements shall not invalidate any award made by the Committee which award is
otherwise validly made under the Plan. The members of the Committee shall be
appointed by, and may be changed at any time and from time to time in the
discretion of, the Board.

         2.2 The Committee shall have the authority (a) to exercise all of the
powers granted to it under the Plan, (b) to construe, interpret and implement
the Plan and any Stock Option Agreements executed pursuant to the Plan, (c) to
prescribe, amend and rescind rules relating to the Plan, (d) to make any
determination necessary or advisable in administering the Plan, (e) to correct
any defect, supply any omission and reconcile any inconsistency in the Plan, (f)
to determine performance targets and make adjustments thereto as it deems
appropriate in order to reflect acquisitions, divestitures and other corporate
transactions occurring during a Fiscal Year (after consultation with the
Company's Chief Executive Officer), (g) to determine and adjust allocations of
future option grants as it deems appropriate in general (after consultation with
the Company's Chief Executive Officer), (h) to determine the terms and
conditions of any options and (i) generally, to make any and all adjustments it
deems appropriate to reflect the intent and purposes of the Plan.


         2.3 The determination of the Committee on all matters relating to the
Plan or any Stock Option Agreement shall be conclusive.
<PAGE>   5
                                                                               2


         2.4 No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
hereunder.

         2.5 Notwithstanding anything to the contrary contained herein: (a)
until the Board shall appoint the members of the Committee, the Plan shall be
administered by the Board, and (b) the Board may, in its sole discretion, at any
time and from time to time, resolve to administer the Plan. In either of the
foregoing events, the term Committee as used herein shall mean the Board.


         2.6 Notwithstanding the foregoing or any other provision of this Plan,
(i) the Board may at any time or from time to time resolve to administer the
Plan and, in such case, references herein to the Committee shall mean the Board
when so acting as the Committee, and (ii) when the Committee is acting and not
the Board, all of the Committee's decisions under this Plan will be subject to
approval by the Board.


SECTION 3.  Eligibility.

         Options under the Plan may be granted to such members of senior
management (including employees, officers and directors) of the Company and its
Affiliates ("Eligible Employees") as the Committee shall from time to time in
its sole discretion select. The Committee may, but shall not be required to,
consult with such executives of the Company and its Affiliates as it deems
appropriate prior to making such grants, provided, that the Committee shall
consult with the Company's Chief Executive Officer prior to making any such
grants.

SECTION 4.  Shares of Stock Subject to the Plan.


         4.1 Reserved Shares. Subject to Section 11 (relating to adjustments
upon changes in capitalization), the aggregate number of shares of Stock (as
defined in Section 6) that may be acquired under the Plan by all Eligible
Employees pursuant to options granted hereunder shall not exceed 85,565.9 shares
of Stock. Shares of Stock covered by options granted under the Plan, which
options expire, terminate or are canceled for any reason (other than an option,
or part thereof, that is canceled by the Committee and for which cash is paid in
respect thereof or an option which has expired because performance goals were
not met) shall again become available for award under the Plan.


         4.2 Type of Shares. Shares of Stock that shall be subject to issuance
pursuant to the Plan shall be authorized and unissued shares or treasury shares.

         4.3 Initial Grants. Of the total number of shares of Stock reserved for
issuance under this Plan, 50% of the initial grants shall be granted to the
Chief Executive Officer, and 40% shall be granted to other existing senior
managers. The remaining 10% of the shares of Stock shall be held in reserve for
additional incentives for other existing senior managers and new hires, to be
granted over a two-to-three year period, in the discretion of the Board, after
prior consultation with the Chief Executive Officer.
<PAGE>   6
                                                                               3


SECTION 5.  Stock Options.

         5.1 Grant and Type of Stock Options.

                  (a) General. Subject to the terms of the Plan, the Committee
may grant options to purchase shares of Stock in such amounts and subject to
such terms and conditions as the Committee shall from time to time in its sole
discretion determine, provided, that the Committee shall consult with the
Company's Chief Executive Officer prior to making any such grants.

                  (b) Types of Options Under Plan.

                        (i) Options granted under the Plan may be either (A)
      "nonqualified" stock options, or (B) options intended to qualify for
      incentive stock option treatment described in section 422 of the Code;
      provided, however, that incentive stock options may only be granted to
      employees of the Company or its "Parent Corporation" or "Subsidiary
      Corporation" in accordance with Code section 424.

                        (ii) All options when granted are intended to be
      nonqualified stock options, unless the applicable Stock Option Agreement
      explicitly states that the option is intended to be an incentive stock
      option. If an option is intended to be an incentive stock option, and if
      for any reason such option (or any portion thereof) shall not qualify as
      an incentive stock option, then, to the extent of such nonqualification,
      such option (or portion) shall be regarded as a nonqualified stock option
      appropriately granted under the Plan, provided that such option (or
      portion) otherwise meets the Plan's requirements relating to nonqualified
      stock options.

         5.2 Agreements Evidencing Options.

                  (a) General. Options granted under the Plan shall be evidenced
by written agreements, which shall (i) contain such provisions not inconsistent
with the terms of the Plan as the Committee may in its sole discretion deem
necessary or desirable and (ii) be referred to herein as "Stock Option
Agreements." If the grantee is party to an employment or consulting agreement
the terms of which relate to stock options and which are inconsistent with the
terms of any such Stock Option Agreement, the terms of such Stock Option
Agreement shall govern.

                  (b) Certain Terms. Each Stock Option Agreement shall set forth
the number of shares of Stock subject to the option granted thereby and the
amount (the "option exercise price") payable by the grantee to the Company in
connection with the exercise of the option evidenced thereby. Subject to Section
5.6 hereof, the exercise price per share shall be the Initial Founders' Price,
in the case of options granted at or within 120 days following the closing of
the transaction described in the Acquisition Agreement, dated October 1, 1999,
by and among the
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                                                                               4


Company, AMN Healthcare, Inc. ("AMN"), AMN Acquisition Corp., ("Acquisition")
and certain other Sellers (the "Acquisition Agreement"), or not less than the
Fair Market Value of a share of Stock on the date the option is granted in the
case of any subsequent grants made hereunder. Each Stock Option Agreement shall
set forth conditions subject to which the option evidenced thereby shall become
exercisable.

         5.3 Exercisability of Options.

                  (a) Exercise Provisions. Each option granted hereunder shall
become exercisable in accordance with the terms and conditions set forth in the
applicable Stock Option Agreement.

                  (b) Notice of Exercise; Exercise Date.

                        (i) An option shall be exercisable by the filing of a
      written notice of exercise with the Company, on such form and in such
      manner as the Committee shall in its sole discretion prescribe, and by
      payment in accordance with Section 5.4.

                        (ii) For purposes of the Plan, the "option exercise
      date" shall be deemed to be the first business day immediately following
      the date written notice of exercise is received by the Company.

         5.4 Payment of Option Price.

                  (a) Tender Due Upon Notice of Exercise. Unless the applicable
Stock Option Agreement otherwise provides or the Committee in its sole
discretion otherwise determines, (i) any written notice of exercise of an option
shall be accompanied by payment of the full purchase price for the shares being
purchased and (ii) the grantee shall have no right to receive shares of Stock
with respect to an option exercise prior to the option exercise date.

                  (b) Manner of Payment. Payment of the option exercise price
shall be made in any combination of the following:

                        (i) by certified or official bank check payable to the
      Company (or the equivalent thereof acceptable to the Committee);

                        (ii) with the consent of the Committee in its sole
      discretion, by personal check (subject to collection); and

                        (iii) if and to the extent provided in the applicable
      Stock Option Agreement or otherwise permitted by the Committee, by
      delivery of previously acquired shares of Stock owned by the grantee for
      at least six months having a Fair Market Value (determined as of the
      option exercise date) equal to the portion of the option exercise price
      being paid thereby, provided
<PAGE>   8
                                                                               5


      that the Committee may require the grantee to furnish an opinion of
      counsel acceptable to the Committee to the effect that such delivery would
      not result in the grantee incurring any liability under Section 16(b) of
      the Act and does not require any Consent (as defined in Section 8.2).

                  (c) Issuance of Shares. As soon as practicable (but in no
event more than five business days) after receipt of full payment, the Company
shall, subject to the provisions of Section 8, deliver to the grantee one or
more certificates for the shares of Stock so purchased, which certificates may
bear such legends as the Company may deem appropriate concerning restrictions on
the disposition of the shares in accordance with applicable securities laws,
rules and regulations or otherwise.

         5.5 Termination of Employment.

                  (a) General Rule. Unless otherwise provided in the applicable
Stock Option Agreement, all options granted to a grantee shall terminate and no
longer be exercisable upon such grantee's termination of employment for any
reason, except to the extent post-employment exercise of the exercisable portion
of an option is permitted in accordance with this Section 5.5.

                  (b) Death and Disability. Unless otherwise provided in the
applicable Stock Option Agreement, if a grantee's employment with the Company
and its subsidiaries terminates by reason of death or Disability (as defined in
a grantee's employment agreement, if applicable, or if not applicable, as
defined in section 22(e)(3) of the Code), the portion, if any, of options
granted to such grantee which were exercisable immediately prior to such
termination of employment may be exercised by such grantee or, as the case may
be, by such grantee's court-appointed legal representative or, in the case of
the grantee's death, by the person or persons to whom such options pass under
the grantee's will (or, if applicable, pursuant to the laws of descent and
distribution) until the earlier of (i) one year after the grantee's termination
by reason of death or Disability, and (ii) the date on which such options
terminate or expire in accordance with the other provisions of the Plan and the
Stock Option Agreement.

                  (c) Regular Termination; Leaves of Absence. Unless otherwise
provided in the applicable Stock Option Agreement, if the grantee's employment
terminates for reasons other than as provided in Section 5.5(b), the portion, if
any, of options granted to such grantee which were exercisable immediately prior
to such termination of employment may be exercised by such grantee until the
earlier of (i) 90 days after the grantee's date of termination, and (ii) the
date on which such options terminate or expire in accordance with the other
provisions of the Plan and the Stock Option Agreement. The Committee may in its
discretion determine (x) whether any leave of absence (including short-term or
long-term disability or medical leave) shall constitute a termination of
employment for purposes of the Plan and (y) the impact, if any, of any such
leave on outstanding options under the Plan.
<PAGE>   9
                                                                               6


         5.6 Special ISO Requirements.

                  (a) Term. No incentive stock option may have a term in excess
of ten years.

                  (b) 10% Owner. If an option granted under the Plan is intended
to be an incentive stock option and if the grantee, at the time of grant, owns
stock possessing 10% or more of the total combined voting power of all classes
of stock of the grantee's employer corporation or of its parent or subsidiary
corporation, then (a) the option exercise price per share shall in no event be
less than 110% of the Fair Market Value of the Stock on the date of such grant
and (b) such option shall not be exercisable after the expiration of five years
after the date such option is granted.

SECTION 6. Certain Definitions.

         6.1 "Affiliate" shall mean, any person or entity which, at the time of
reference, directly, or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, the Company.

         6.2 "Change of Control" shall mean the occurrence of any of the
following events: (a) any "person," (other than HWH Capital Partners, L.P. or
any of its Affiliates) as "person" is currently used in Section 13(d) of the
Securities Exchange Act of 1934 (the "1934 Act"), becomes a "beneficial owner,"
as such term is currently used in Rule 13d-3 promulgated under the 1934 Act, of
more than 50% of the voting securities of the Company; (b) a majority of the
Board consists of individuals other than the Incumbent Directors, which term
means the members of the Board on the Closing Date; provided that any individual
becoming a director subsequent to such date whose election or nomination for
election was supported by (i) two-thirds of the directors who then comprised the
Incumbent Directors or (ii) HWH Capital Partners, L.P. or any of its Affiliates,
shall be considered to be an Incumbent Director; (c) all or substantially all of
the assets or business of the Company is disposed of pursuant to a merger,
consolidation or other transaction or series of transactions (unless the
shareholders of the Company immediately prior to such merger, consolidation or
other transaction or series of transactions beneficially own, directly or
indirectly, in substantially the same proportion as they owned the Voting Stock
of the Company, more than 50% of the voting securities or other ownership
interests of the entity or entities, if any, that succeed to the business of the
Company); or (d) the Company combines with another company and is the surviving
corporation but, immediately after the combination, the shareholders of the
Company immediately prior to the combination hold, directly or indirectly, less
than 50% of the voting securities of the combined company.

         6.3 "EBITDA" shall mean the Company's operating income before income
taxes, interest expense and amortization and depreciation expense, all
determined in accordance with generally accepted accounting principles, adjusted
to exclude the impact of all items of gain, loss or expense determined to be
extraordinary or unusual in nature or infrequent in occurrence or related to the
<PAGE>   10
                                                                               7


disposal of a segment of a business or related to a change in accounting
principles, all as determined in accordance with standards established by
Opinion No. 30 of the Accounting Principles Board but shall not include any
transaction fees or annual monitoring fees paid to Haas Wheat & Partners, L.P.
or any Affiliates thereof.

         6.4 "Effective Date" shall mean that date as determined in Section
20.1.

         6.5 "Fair Market Value" shall mean as of any date in respect of any
share of Stock traded on a national securities exchange, the closing price of a
share of Stock as reported on the exchange on which such shares primarily trade
on such date. If Stock is not traded on a national exchange on such date, Fair
Market Value shall be determined by the Committee in its sole discretion.

         6.6 "Fiscal Year" shall mean the one-year period ending on each
December 31st.

         6.7 "Initial Founders' Price" shall mean $163.9743 per share of Stock,
which the Committee has determined represents the Fair Market Value of the Stock
on the Effective Date.

         6.8 "Plan" shall mean the AMN Holdings, Inc. 1999 Performance Stock
Option Plan.

         6.9 "Stock" shall mean common stock, par value $.01 per share, of the
Company as constituted on the Effective Date and any other shares into which
such common stock shall thereafter be changed by reason of a recapitalization,
merger, consolidation, split-up, combination, exchange of shares or the like.

         6.10 "Stock Option Agreement" shall mean any stock option agreement
executed in connection with any options awarded under the terms of this Plan.

SECTION 7.  Amendment of the Plan; Modification of Options.

         7.1 Plan Amendments. The Board may at any time and from time to time
suspend, discontinue or amend the Plan in any respect whatsoever, except that
(i) no such amendment or action shall adversely impair any rights under any
option theretofore granted under the Plan without obtaining the consent of the
grantee of such option and (ii) no such amendment for which shareholder approval
would be required under any law (including Code section 162(m) and Rule 16b-3,
to the extent applicable) or the rules of any securities exchange or other
regulatory organization shall be effective without such shareholder approval.

         7.2 Option Modifications. With the consent of the grantee and subject
to the terms and conditions of the Plan (including Section 7.1), the Committee
may amend outstanding Stock Option Agreements with such grantee, including,
<PAGE>   11
                                                                               8


without limitation, any amendment that would (i) accelerate the time or times at
which an option may become exercisable and/or (ii) extend the scheduled
termination or expiration date of the option.

SECTION 8.  Restrictions.

         8.1 Consent Requirements. If the Committee shall at any time determine
that any Consent (as hereinafter defined) is necessary or desirable as a
condition of, or in connection with, the granting of any option under the Plan,
the acquisition, issuance or purchase of shares or other rights hereunder or the
taking of any other action hereunder (each such action, a "Plan Action"), then
such Plan Action shall not be taken, in whole or in part, unless and until such
Consent shall have been effected or obtained to the full satisfaction of the
Committee.

         8.2 Consent Defined. The term "Consent" as used herein with respect to
any Plan Action means (a) any and all listings, registrations or qualifications
in respect thereof upon any securities exchange or other regulatory organization
or under any federal, state or local law, rule or regulation, (b) the
expiration, elimination or satisfaction of any prohibitions, restrictions or
limitations under any federal, state or local law, rule or regulation or the
rules of any securities exchange or other regulatory organization, (c) any and
all written agreements and representations by the grantee with respect to the
disposition of shares, or with respect to any other matter which the Committee
shall deem necessary or desirable to comply with the terms of any such listing,
registration or qualification or to obtain an exemption from the requirement
that any such listing, qualification or registration be made, and (d) any and
all consents, waivers, clearances and approvals in respect of a Plan Action by
any governmental or other regulatory bodies or any parties to any loan
agreements or other contractual obligations of the Company or any of its
subsidiaries.

SECTION 9.  Nontransferability.

         No option granted to any grantee shall be assignable or transferable by
the grantee other than by will or by the laws of descent and distribution.
During the lifetime of the grantee, all rights with respect to any option
granted to the grantee shall be exercisable only by the grantee or the grantee's
court-appointed legal representative. Notwithstanding the foregoing, the
Committee may provide in an applicable Stock Option Agreement that an option may
be transferred for estate planning purposes, to a family trust or family
partnership for the benefit of immediate members of the optionee's family.

SECTION 10.  Withholding Taxes.

         10.1 General. Whenever under the Plan shares of Stock are to be
delivered pursuant to an option, the Committee may require as a condition of
delivery that the grantee remit an amount sufficient to satisfy all federal,
state and other governmental withholding tax requirements related thereto.
<PAGE>   12
                                                                               9


         10.2 Use of Shares. Subject to the Committee's consent, a grantee may
elect to satisfy all or part of the foregoing withholding requirements by
delivery of unrestricted shares of Stock owned by the grantee for at least six
months (or such other period as the Committee may determine) having a Fair
Market Value (determined as of the date of such delivery by the grantee) equal
to all or part of the amount to be so withheld, provided that the Committee may
require, as a condition of accepting any such delivery, the grantee to furnish
an opinion of counsel acceptable to the Committee to the effect that such
delivery would not result in the grantee incurring any liability under Section
16(b) of the Act or any other federal or state securities laws, rules or
regulations.

SECTION 11.  Adjustments.

         11.1 Upon Changes in Capitalization. To the extent specified by the
Committee, the number of shares of Stock that may be issued pursuant to options
under the Plan, the number of shares of Stock subject to options, and the
exercise price of options theretofore granted under the Plan shall be
appropriately adjusted (as the Committee may determine) for any change in the
number of issued shares of Stock resulting from the subdivision or combination
of shares of Stock or other capital adjustments, or the payment of a stock
dividend after the effective date of the Plan, or other change in such shares of
Stock effected without receipt of consideration by the Company. Adjustments
under this Section 11 shall be made by the Committee, whose determination as to
what adjustments shall be made, and the extent thereof, shall be final, binding
and conclusive.

         11.2 Other. In the event of any acquisition, divestiture or any other
corporate transaction of any kind involving the Company or its subsidiaries
which the Committee, in its discretion, determines to be of such a kind or
nature as to make appropriate an amendment or adjustment to the Plan in order to
effectuate the intent and purposes of the Plan, the Committee, in its
discretion, may make such amendment or adjustment. Without limiting the
generality of the foregoing, the Committee, in its discretion (after
consultation with the Company's Chief Executive Officer) may, in connection with
any such corporate transaction, adjust the number and kind of shares of Stock
subject to outstanding options and the exercise price thereof, the number and
kind of shares of Stock available for issuance under the Plan, and any of the
performance targets previously established under the Plan or in any Stock Option
Agreement, as it deems appropriate to effectuate the intent and purposes of the
Plan and any individual Stock Option Agreements.

SECTION 12.  Right of Discharge Reserved.

         Nothing in the Plan or in any Stock Option Agreement shall confer upon
any person the right to continue in the service of the Company or any Affiliate
or affect or restrict any right which the Company or any Affiliate may have to
terminate the service of such person.
<PAGE>   13
                                                                              10


SECTION 13.  No Rights as a Shareholder.

         No grantee or other person shall have any of the rights of a
shareholder of the Company with respect to shares of Stock subject to an option
until the issuance of a stock certificate to such grantee for such shares of
Stock. Except as otherwise provided in Section 11, no adjustment shall be made
for dividends, distributions or other rights (whether ordinary or extraordinary,
and whether in cash, securities or other property) for which the record date is
prior to the date such stock certificate is issued.

SECTION 14.  Nature of Payments.

         14.1 Consideration. All options, shares or payments hereunder shall be
granted, issued, delivered or paid, as the case may be, in consideration of
services performed for the Company or for its subsidiaries by the grantee.

         14.2 Other Plans. No options, shares or payments hereunder shall,
unless otherwise determined by the Committee, be taken into account in computing
the grantee's salary or compensation for the purposes of determining any
benefits under (a) any pension, retirement, life insurance or other benefit plan
of the Company or any subsidiary or (b) any agreement between the Company or any
subsidiary and the grantee.

         14.3 Entire Agreement. Except as expressly set forth in an individual
Stock Option Agreement, the Plan contains the entire agreement of the Company
and each grantee with respect to options granted hereunder, the terms and
conditions of which shall not be modified or altered except as permitted by this
Plan or by a written instrument properly executed by both the Company and the
grantee.

SECTION 15. Non-Uniform Determinations.

         The Committee's determinations under the Plan need not be uniform and
may be made by it selectively among persons who receive, or are eligible to
receive, options under the Plan (whether or not such persons are similarly
situated). Without limiting the generality of the foregoing, the Committee shall
be entitled, among other things, to make non-uniform and selective
determinations, and to enter into non-uniform and selective Stock Option
Agreements, as to (a) the persons to receive options under the Plan, (b) the
terms and provisions of options under the Plan and (c) the treatment of leaves
of absence pursuant to Section 5.5(c).

SECTION 16.  Other Payments or Options.

         Nothing contained in the Plan shall be deemed in any way to limit or
restrict the Company, any Affiliate or the Committee from making any option,
award or payment to any person under any other plan, arrangement or
understanding, whether now existing or hereafter in effect; provided, however,
that the Stock Option Agreement may contain (but shall not be required to
contain) such provisions as the
<PAGE>   14
                                                                              11


Committee deems appropriate to insure that the penalty provisions of Code
section 4999 will not apply with respect to any option granted under the Plan.

SECTION 17.  Change of Control.

         In the event of a Change of Control of the Company after the date of
the adoption of this Plan or in the event that the Board shall propose that the
Company enter into a transaction which would result in a Change of Control, then
the Committee may in its discretion, by written notice to a grantee, provide
that such grantee's options will be terminated unless exercised within 30 days
(or such longer period as the Committee shall determine in its sole discretion)
after the date of such notice. The Committee also may in its discretion by
written notice to a grantee provide that the grantee's options shall be fully
exercisable as to all or some of the shares of Stock covered thereby or that all
or some of the restrictions on any of his options may lapse in the event of a
Change of Control upon such terms and conditions as the Committee may determine.
Whenever deemed appropriate by the Committee, the actions referred to in this
Section 17 may be varied from grantee to grantee or in any particular Stock
Option Agreement and may be made conditional upon the consummation of the
applicable Change of Control.

SECTION 18.  Governing Law.

         The Plan shall be governed by the laws of the State of Delaware
applicable to agreements made and to be performed entirely within such State.

SECTION 19.  Headings.

         The Section headings contained herein are for convenience only and are
not intended to define or limit the contents of said Sections.

SECTION 20.  Effective Date; Term.

         20.1 Effective Date. The Plan shall be deemed adopted and become
effective upon the approval thereof by the Board or on such other date as the
Board shall determine; provided that, notwithstanding any other provision of the
Plan, no options shall be granted under the Plan prior to the approval by the
express consent of shareholders holding at least a majority of the Company's
voting stock voting in person or by proxy at a duly held shareholders' meeting
(or by written consent in lieu of meeting), which shall have been received as of
the Effective Date.

         20.2 Term. The Plan shall terminate ten years after the earlier of the
date on which it becomes effective or is approved by shareholders, and no
options shall thereafter be granted under the Plan. Notwithstanding the
foregoing, all options granted under the Plan prior to such termination date
shall remain in effect until such options have been exercised or terminated in
accordance with the terms and provisions of the Plan and the applicable Stock
Option Agreement.