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                                                                As amended as of
                                                                  August 5, 1998

                             TIME WARNER TELECOM LLC
                                1998 OPTION PLAN

                                    ARTICLE I
                               Purpose of the Plan

               The purpose of the Time Warner Telecom LLC (the "Company") 1998
Option Plan (hereinafter the "Plan") is to provide for the granting of options
to representatives and employees of the Company and its Subsidiaries in
recognition of the valuable services provided, and contemplated to be provided,
by such representatives and employees. The general purpose of the Plan is to
promote the interests of the Company and its members and to reward dedicated
representatives and employees of the Company and its Subsidiaries by providing
them additional incentives to continue and increase their efforts with respect
to, and to remain in the employ of, the Company or its Subsidiaries.

                                   ARTICLE II

                               Certain Definitions

               The following terms (whether used in the singular or plural) have
the meanings indicated when used in the Plan:

               (a) "Agreement" means the option agreement specified in Article
          XI.

               (b) "Approved Transaction" means any transaction in which the
Board (or, if approval of the Board is not required as a matter of law, the
members of the Company) shall approve (i) any consolidation or merger of the
Company in which the Company is not the continuing or surviving company or
pursuant to which Interests would be converted into cash, securities or other
property, other than a merger of the Company in which the equityholders of the
Company immediately prior to the merger have the same proportionate ownership of
the equity value of the surviving company immediately after the merger or (ii)
any sale, lease, exchange, or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, of the assets of the
Company, or (iii) the adoption of any plan or proposal for the liquidation or
dissolution of the Company; provided that the reconstitution of the Company as a




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corporation or other entity or a public offering of the equity of the Company
(or its successor) shall not constitute an Approved Transaction.

               (c) "Award" means grants of Options under this Plan.

               (d) "Board" means the Management Committee of the Company.

               (e) "Board Change" means such time as the Initial Members and
their respective affiliates as a group cease to have the ability to elect a
majority of the members of the Board (other than the chief executive officer of
the Company and independent representatives; provided that independent
representatives shall be included in calculating whether the foregoing majority
requirement is satisfied if the representatives nominated by the Initial Members
and their respective affiliates do not constitute a majority of the committee
that selects the Board's nominees for independent representatives) and a
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act) (other than the Initial Members and their respective affiliates)
has become the ultimate "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of more than 35% of the total voting power of the voting interests
of the Company on a fully diluted basis and such ownership represents a greater
percentage of the total voting power of the voting interests of the Company, on
a fully diluted basis, than is held by the Initial Members and their respective
affiliates as a group on such date.

               (f) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor statute or statutes thereto. Reference to
any specific Code section shall include any successor section.

               (g) "Committee" means the Committee comprised of members of the
Board appointed pursuant to Article IV.

               (h) "Company" means Time Warner Telecom LLC, a limited liability
company, and any successor thereto.

               (i) "Effective Date" means the date the Plan becomes effective
pursuant to Article XV.

               (j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor statute or statutes thereto.
Reference to any specific Exchange Act section shall include any successor
section.

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               (k) "Fair Market Value" of Units shall mean the fair market value
of such Units as determined in good faith by the Board after consultation with
an independent appraiser or other third party deemed appropriate by the Board.
In the event of an Approved Transaction involving the sale of Interests of the
Company, the Fair Market Value of a Unit shall be based upon the price per Unit
paid by the acquiror in connection with such Approved Transaction, subject to
appropriate adjustment to reflect relative differences among the Units as
determined in good faith by the Board.

               (l) "Holder" means a representative or an employee of the Company
or any of its Subsidiaries who has received an Award under this Plan. An
individual shall continue to be considered a Holder for purposes of this Plan
during the period such individual holds Units acquired pursuant to an exercise
of an Option.

               (m) "Initial Members" means Time Warner Inc., MediaOne Group,
Inc., Advance/Newhouse Partnership and the affiliates of each of the foregoing.

               (n) "Interest" shall mean a Class A Interest in the Company as
defined in the Operating Agreement.

               (o) "Operating Agreement" shall mean the Amended and Restated
Limited Liability Company Agreement of Time Warner Telecom LLC dated July 14,
1998, as in effect from time to time.

               (p) "Option" means any option granted pursuant to this Plan.

               (q) "Plan" has the meaning ascribed thereto in Article I.

               (r) "Subsidiary" of a person means any present or future
subsidiary of such person as such term is defined in section 425 of the Code and
any present or future trade or business, whether or not incorporated, controlled
by or under common control with such person. An entity shall be deemed a
Subsidiary of a person only for such periods as the requisite ownership or
control relationship is maintained.

               (s) "Total Disability" means a permanent and total disability as
defined in section 22(e)(3) of the Code.

               (t) "Unit" shall mean an Interest in the Company expressed as a
unit. As of the date of the initial grant of Options under the Plan, the Board
shall determine the notional amount of Units considered to be outstanding and
the

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percentage interest of the equity value of the Company represented by each Unit,
which amounts shall be subject to adjustment as provided in Section 3.02 and
Section 6.06. Any references herein to Units include any securities exchanged in
the conversion of Units.

                                   ARTICLE III
                            Units Subject to the Plan

               SECTION 3.01. Number of Units. Subject to the provisions of
Section 3.02 and Section 6.06, the maximum number of Units in respect of which
Awards may be granted under the Plan shall be determined by the Board as of the
date of the initial grant of Awards under the Plan, but shall in no event
represent more than 10% of the equity value of the Company as of that date. The
maximum number of Units in respect of which Awards may be granted during any
calendar year to any one individual under the Plan shall not exceed one-half the
number of Units that may be subject to Awards granted under the Plan under the
preceding sentence. If and to the extent that an Option shall expire, terminate
or be canceled for any reason without having been exercised, the Units subject
to such expired, terminated or canceled portion of the Option shall again become
available for purposes of the Plan.

               SECTION 3.02. Adjustments. In addition to the adjustment in the
Interests as described in Section 6.06, in the event that the Board determines
that any dividend or other distribution (whether in the form of cash, Interests,
securities or other property), recapitalization, reorganization, merger,
consolidation, issuance or exchange of Interests, other ownership interests or
other securities of the Company, issuance of warrants or other rights to
purchase Interests, other ownership interests or other securities of the Company
or other similar corporate transaction or event affects the Interests such that
an adjustment is determined by the Board in its discretion to be appropriate in
order to prevent inappropriate dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the Board
may, in such manner as it may deem equitable, adjust any or all of (a) the
number of Units, other ownership interests or other securities of the Company
(or number and kind of other securities or property) with respect to which
Awards may be granted, (b) the number of Units, other ownership interests or
other securities of the Company (or number and kind of other securities or
property) subject to outstanding Awards or the percentage of Interests, other
ownership interests or

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other securities of the Company subject to Units and (c) the exercise price with
respect to any Option or, if deemed appropriate, make provision for a cash
payment to the Holder of an outstanding Option in consideration for the
cancelation of such Option. No adjustment shall be made on account of the
issuance of Interests with respect to Options.


                                   ARTICLE IV
                                 Administration

               SECTION 4.01. Powers. The Plan shall be administered by the
Board. Subject to the express provisions of the Plan, the Board shall have
plenary authority, in its discretion, to grant Awards under the Plan and to
determine the terms and conditions (which need not be identical) of all Awards
so granted, including without limitation, (a) the individuals to whom, and the
time or times at which, Awards shall be granted or awarded, (b) the number of
Units to be subject to each Award, (c) when an Option can be exercised and
whether in whole or in installments, and (d) the form, terms and provisions of
any Agreement (which terms may be amended, subject to Article XIV).

               SECTION 4.02. Factors to Consider. In making determinations
hereunder, the Board may take into account the nature of the services rendered
by the respective representatives and employees, their dedication and past
contributions to the Company and its Subsidiaries, their present and potential
contributions to the success of the Company and its Subsidiaries and such other
factors as the Board in its discretion shall deem relevant.

               SECTION 4.03. Interpretation. Subject to the express provisions
of the Plan, the Board shall have plenary authority to interpret the Plan, to
prescribe, amend and rescind the rules and regulations relating to it and to
make all other determinations deemed necessary or advisable for the
administration of the Plan. The determinations of the Board on the matters
referred to in this Article IV shall be conclusive.

               SECTION 4.04. Delegation to Committee. Notwithstanding anything
to the contrary contained herein, the Board may at any time, or from time to
time, appoint a Committee and delegate to such Committee the authority of the
Board to administer the Plan, including to the extent provided by the Board, the
power to further delegate such authority. Upon such appointment and delegation,
any such Committee shall have all the powers, privileges and duties of

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the Board in the administration of the Plan to the extent provided in such
delegation, except for the power to appoint members of the Committee and to
terminate, modify or amend the Plan. The Board may from time to time appoint
members of any such Committee in substitution for or in addition to members
previously appointed, may fill vacancies in such Committee and may discharge
such Committee.

               Any such Committee shall hold its meetings at such times and
places as it shall deem advisable. A majority of members shall constitute a
quorum and all determinations shall be made by a majority of such quorum. Any
determination reduced to writing and signed by all of the members shall be fully
as effective as if it had been made by a majority vote at a meeting duly called
and held.

                                    ARTICLE V
                                   Eligibility

               Awards may be made only to (a) representatives, employees,
including officers and representatives who are also employees, of, and
consultants to, the Company or any of its Subsidiaries, (b) prospective
employees of the Company or any of its Subsidiaries and (c) any other
individuals providing services to the Company or any of its Subsidiaries. The
exercise of Options granted to a prospective employee shall be conditioned upon
such person becoming an employee of the Company or any of its Subsidiaries. For
purposes of the Plan, the term "prospective employee" shall mean any person who
holds an outstanding offer of employment on specific terms from the Company or
any of its Subsidiaries. Awards may be made to employees who hold or have held
Awards under this Plan or any similar or other awards under any other plan of
the Company or its Subsidiaries.

                                   ARTICLE VI

                                     Options

               SECTION 6.01. Option Price. The purchase price of the Units under
each Option shall be determined by the Board and set forth in the applicable
Agreement, but shall not be less than 100% of the Fair Market Value of the Unit
on the date of grant.

               SECTION 6.02. Term of Options. The term of each Option shall be
for such period as the Board shall determine, as set forth in the applicable
Agreement, but not more than

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10 years from the date of grant (except as provided in Section 6.08(b)).

               SECTION 6.03. Exercise of Options. An Option granted under the
Plan shall become (and remain) exercisable during the term of the Option to the
extent provided in the applicable Agreement and this Plan and, unless the
Agreement otherwise provides, may be exercised to the extent exercisable, in
whole or in part, at any time and from time to time during such term; provided,
however, that subsequent to the grant of an Option, the Board, at any time
before complete termination of such Option, may accelerate the time or times at
which such Option may be exercised in whole or in part (without reducing the
term of such Option). The Agreement may contain conditions precedent to the
exercisability of Options, including without limitation, the achievement of
minimum performance criteria.

               SECTION 6.04. Manner of Exercise. Payment of the Option purchase
price shall be made in cash or in whole Units already owned by the person
exercising an Option or, partly in cash and partly in such Units; provided,
however, that such payment may be made in whole or in part in Units held for six
months and only if and to the extent permitted by the applicable Agreement. In
addition, before the occurrence of an IPO (as defined below), the Company may,
in its sole discretion, lend, on a full recourse basis, funds sufficient to pay
any applicable exercise price; provided that any such loan shall (i) be made
only in the event of the Holder's death or the Holder's termination of
employment by the Company without cause (as determined by the Board), (ii) be
made at commercial rates and (iii) be payable in full by the borrower on the
earliest to occur of (a) the six month anniversary of the date of exercise, (b)
30 days after an IPO or (c) the sale of the Unit(s) acquired upon exercise of
the Option. Such an Option shall be exercised by written notice to the Company
upon such terms and conditions as provided in the Agreement. The Company shall
effect the transfer of the Units purchased under the Option as soon as
practicable. No Holder or other person exercising an Option shall have any of
the rights of a Unitholder of the Company with respect to Units subject to an
Option granted under the Plan until due exercise and full payment has been made.

               SECTION 6.05. Limited Transferability of Options. Except as set
forth in this Section 6.05 and Article XXI, Options shall not be transferable
other than by will or the laws of descent and distribution, and Options may be
exercised during the lifetime of the Holder thereof only by such Holder (or his
or her court appointed legal

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representative). The Agreement may provide that Options are transferable by gift
to such persons or entities and upon such terms and conditions specified in the
Agreement.

               SECTION 6.06. Adjustment of Percentage of Interests Subject to
Units. Upon the issuance or redemption of Interests in the Company, the number
of Units available under the Plan and the number of Units subject to outstanding
Options shall be equitably adjusted as determined by the Board in its sole
discretion to prevent inappropriate dilution or enlargement of the economic
interest represented by such Units.

               SECTION 6.07. Restrictions. As a condition to the exercise of an
Option, the Holder will be required to become a party to the Operating Agreement
and the Stockholders Agreement (as defined in the Operating Agreement) and the
Interests acquired upon exercise of the Option will be held subject in all
respects to the terms and conditions of the Operating Agreement and Stockholders
Agreement. In addition, certificates representing Interests issued upon exercise
of Options shall bear a restrictive legend to the effect that transferability of
such Interests is subject to the restrictions contained in the Plan and the
applicable Agreement.

               SECTION 6.08. Special Exercise Delay/Extension of Options. The
provisions of this Section 6.08 shall apply to an Option unless the applicable
Option Agreement otherwise provides.

               (a) An otherwise vested Option shall not be exercisable until the
        "Liquidity Date" which shall be the earlier of (i) an initial public
        offering of equity securities (an "IPO") of the Company or a successor
        thereto and (ii) the first anniversary of the initial grant of Options
        under the Plan; provided that the Liquidity Date may be postponed at the
        discretion of the Board, to comply with applicable securities laws or,
        prior to an IPO, to avoid the need for the Company to register the
        Interests under the securities laws.

               (b) If the vested portion of an Option would expire when the
        Liquidity Date has not yet occurred, the expiration date of such vested
        portion shall be extended until the later of (i) 30 days after the
        Liquidity Date or (ii) the regularly scheduled expiration date.

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               (c) Prior to an IPO, vested Options may be exercised only during
        the 30-day period starting on each Communication Date.

               SECTION 6.09. Section 83(b) election. Unless the Board determines
otherwise, an individual exercising an Option will be required to make a timely,
valid election under section 83(b) of the Code.

               SECTION 6.10. Tax Treatment of Exercise. Solely for purposes of
determining the appropriate tax treatment of the Members and the Holder, upon
exercise of an Option, a Holder will be treated as if the Company paid him or
her an amount equal to the aggregate difference between the exercise price and
the Fair Market Value of the Units subject to the Option and the Holder then
purchased from the Company for cash the applicable number of Units at the
then-current Fair Market Value of such Units.

               SECTION 6.11 Value Determinations. The Company shall determine
the Fair Market Value of the Units as of December 31 and June 30 of each year
(each, a "Valuation Date"). Such Fair Market Value shall be communicated to
Holders as soon as practicable following each Valuation Date (each such date, a
"Communication Date").

                                   ARTICLE VII
                             Acceleration of Options

               Notwithstanding any contrary waiting period or installment period
in any Agreement or in the Plan, or unless the applicable Agreement provides
otherwise, if a Holder's employment shall terminate by reason of death or Total
Disability, or in the event of any Approved Transaction or Board Change each
outstanding Option granted under the Plan shall immediately become exercisable
in full in respect of the aggregate number of Units covered thereby.

                                  ARTICLE VIII
                            Termination of Employment

               SECTION 8.01. General. If a Holder's employment shall terminate
prior to the complete exercise of an Option, then such Option shall thereafter
be exercisable in accordance with the provisions of the applicable Agreement
(including the provisions of any other agreement referred to in the Agreement);
provided, however, that (a) no Option may be exercised after the scheduled
expiration date of such Option; (b) if the Holder's employment terminates by
reason

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of death or Total Disability, Options shall remain exercisable for a period of
at least one year following such termination (but not later than the scheduled
expiration of such Option); and (c) any termination by the employing company for
cause will be treated in accordance with the provisions of Section 8.02.

               SECTION 8.02. Termination for Cause. If a Holder's employment
with the Company or any of its Subsidiaries shall be terminated for cause, by
the Company or such Subsidiary prior to the exercise of any Option, then all
Options held by such Holder and any permitted transferee pursuant to Section
6.05 shall immediately terminate. For the purposes of this Section 8.02, cause
shall have the meaning ascribed thereto in any employment agreement to which
such Holder is a party. In the absence of an employment agreement, cause shall
include but not be limited to, insubordination, dishonesty, incompetence, moral
turpitude, other misconduct of any kind and the refusal to perform his duties
and responsibilities for any reason other than illness or incapacity; provided,
however, that if such termination occurs within 12 months after an Approved
Transaction or Board Change, termination for cause in the absence of an
employment agreement shall mean only a felony conviction for fraud,
misappropriation or embezzlement.

               SECTION 8.03. Miscellaneous. The Board may determine whether any
given leave of absence constitutes a termination of employment. Awards made
under the Plan shall not be affected by any change of employment so long as the
Holder continues to be an employee of the Company or one of its Subsidiaries.

                                   ARTICLE IX
                    Right of Company to Terminate Employment

               Nothing contained in the Plan or in any Award shall confer on any
Holder any right to continue in the employ of the Company or any of its
Subsidiaries or interfere in any way with the right of the Company or a
Subsidiary to terminate the employment of the Holder at any time, with or
without cause; subject, however, to the provisions of any employment agreement
between the Holder and the Company or any of its Subsidiaries.

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                                    ARTICLE X
                            Nonalienation of Benefits

               Except as specifically provided in Section 6.05 and Article XXI,
no right or benefit under the Plan shall be subject to anticipation, alienation,
sale, assignment, hypothecation, pledge, exchange, transfer, encumbrance or
charge, and any attempt to anticipate, alienate, sell, assign, hypothecate,
pledge, exchange, transfer, encumber or charge the same shall be void. No right
or benefit hereunder shall in any manner be liable for or subject to the debts,
contracts, liabilities or torts of the person entitled to such benefits.

                                   ARTICLE XI
                                Written Agreement

               Each grant of an Option shall be evidenced by an Option Agreement
in such form and containing such terms and provisions not inconsistent with the
provisions of the Plan as the Board from time to time shall approve; provided,
however, that such Awards shall be evidenced by a single agreement. The
effective date of the granting of an Award shall be the date on which the Board
approves such grant. Each grantee of an Option shall be notified promptly of
such grant and a written Agreement shall be promptly executed and delivered by
the Company and the grantee; provided that such grant of Options shall terminate
if such written Agreement is not signed by such grantee (or his attorney) and
delivered to the Company within 90 days after the date the Agreement is sent to
such grantee for signature. Any such written Agreement may contain (but shall
not be required to contain) such provisions as the Board deems appropriate to
ensure that the penalty provisions of section 4999 of the Code will not apply to
any stock or cash received from the Company or any of its Subsidiaries by the
Holder or a transferee of such Holder if the Award, or any part thereof, has
been transferred pursuant to Section 6.05 or Article XXI.

                                   ARTICLE XII
                             Right of First Refusal

               The Agreement may contain such provisions as the Board shall
determine to the effect that if a Holder, or such other person exercising an
Option, elects to sell all or any Units that such Holder or other person
acquired upon the exercise of an Option awarded under the Plan, then such Holder
or other person shall not sell such Units unless such

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Holder or other person shall have first offered in writing to sell such Units to
the Company at Fair Market Value on a date specified in such offer (which date
shall be at least three business days and not more than 10 business days
following the date of such offer). If the Company does not accept such offer
within 10 days, the Units may be sold on terms no more favorable than those
offered to the Company. If the Units (i) are not sold within 10 days of the date
the Company declined to purchase the Units or (ii) would be sold on terms more
favorable than those offered to the Company, the holder of the Units must again
offer the Units for sale to the Company in accordance with this Article XII
before any subsequent sale of such Units. Any transfer of Units that occurs
after any violation of this Article XII shall be null and void.

                                  ARTICLE XIII
                           Put Rights and Call Rights

               SECTION 13.01. Recurring Put Rights. (a) Prior to any IPO, if a
Holder has exercised an Option and held the Units acquired upon exercise for a
period of more than six months, such Holder shall have the right to sell to the
Company all or any portion of such Units.

               (b) The put right may be exercised only during the 30-day period
starting on each Communication Date, at fair market value determined as of the
preceding Valuation Date; provided that, unless otherwise determined by the
Board, with respect to any calendar year the Company shall not be required to
purchase Units issued pursuant to the Plan with an aggregate value in excess of
$20,000,000 (the "Put Limit"). To the extent Units with a value in excess of the
Put Limit have been put to the Company, the Company shall purchase a pro rata
share of the Units put to the Company by each individual.

               (c) The put right will not be available to any Holder who is
terminated for cause.

               (d) Prompt payment in respect of the put right will be due,
without interest.

               (e) The determination of fair market value shall be made by the
Board in good faith. Such determination shall be made on a going concern basis
and a minority interest discount shall not be applied in assigning a value to
the Units that are being put back to the Company.

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               (f) Notwithstanding the foregoing, the Company shall not be
obligated to take any action or make any payment in satisfaction of a Holder's
exercise of a put right (the Company being hereinafter referred to as the "Put
Obligor") (i) if an event of default should then exist and be continuing under
the terms of any agreement for indebtedness for borrowed money to which the Put
Obligor or any of its subsidiaries is a party at such time or (ii) if such
action or payment would constitute a default or an event of default or result in
a mandatory prepayment requirement under the terms of any agreement for
indebtedness for borrowed money to which the Put Obligor or any of its
subsidiaries is a party at such time (each a "Financing Limitation")

               (g) If the Put Obligor is unable to make payments in respect of
the exercise of a put right due to a Financing Limitation, the Put Obligor will
make payment of the Put Date Value at the earliest practicable date following
the date when such payment would no longer contravene a Financing Limitation,
together with interest at the prime rate from the Scheduled Payment Date to the
date of payment by the Put Obligor.

               SECTION 13.02.  Recurring Call Rights.

               (a) Prior to an IPO, if a Holder whose employment has terminated
for any reason holds Units of the Company acquired upon the exercise of an
Option, the Company may, in its discretion, purchase all or any number of such
Units that have been held by the Holder for a period of more than six months.

               (b) The call right may be exercised only during the 30-day period
starting on each Communication Date.

               (c) The purchase price for called Units shall be the fair market
value as determined by the Board as of the preceding Valuation Date, as
applicable, and shall be determined under the principles governing the
determination of fair market value for purposes of the put right in Section
13.01 of this Plan.

                                   ARTICLE XIV
                            Termination And Amendment

               SECTION 14.01. General. Unless the Plan shall theretofore have
been terminated as hereinafter provided, no Awards may be made under the Plan on
or after the tenth anniversary of the Effective Date. The Board may at any time

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prior to the tenth anniversary of the Effective Date terminate the Plan, and the
Board may at any time modify or amend the Plan in such respects as it shall deem
advisable.

               SECTION 14.02. Modification. No termination, modification or
amendment of the Plan may, without the consent of the person to whom any Award
shall theretofore have been granted (or a transferee of such person if the
Award, or any part thereof, has been transferred pursuant to Section 6.05 or
Article XXI), adversely affect the rights of such person with respect to such
Award. No modification, extension, renewal or other change in any Award granted
under the Plan shall be made after the grant of such Award, unless the same is
consistent with the provisions of the Plan. With the consent of the Holder (or a
transferee of such Holder if the Award, or any part thereof, has been
transferred pursuant to Section 6.05 or Article XXI) and subject to the terms
and conditions of the Plan (including Section 14.01), the Board may amend
outstanding Agreements with any Holder (or any such transferee), including,
without limitation, any amendment which would (a) accelerate the time or times
at which the Award may be exercised and/or (b) extend the scheduled expiration
date of the Award. Without limiting the generality of the foregoing, the Board
may but solely with the Holder's consent, agree to cancel any Award under the
Plan held by such Holder and issue a new Award in substitution therefor;
provided that the Award so substituted shall satisfy all of the requirements of
the Plan as of the date such new Award is made.

               SECTION 14.03. Initial Public Offering. (a) Upon the occurrence
of an Initial Public Offering ("IPO") of stock by the Company or a successor,
the public corporation shall assume this Plan and any outstanding Options in
such manner as the Board shall determine to be equitable and consistent with the
purposes of the Plan. The Board shall, in its discretion, determine the period
during which the fair market value of the equity interests subject to the
Options are determined for purposes of this Section 14.03.

               (b) The Board shall have the right to require all Holders to
participate in a sale or merger transaction and to sell their Units to a third
party purchaser in connection with such sale or merger. Such right shall be
exercisable by written notice (the "Buyout Notice") given to each Holder which
shall state (i) that there has been a proposal to effect the sale of the
Interests of every Member of the Company to such third party purchaser, (ii) the
proposed purchase price per Unit to be paid by the third party purchaser for the
Interests of all of the Members, and 

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(iii) the name of the third party purchaser, and to which shall be attached a
copy of all writings between such selling Member and the other parties to such
transaction necessary to establish the terms of such transaction. Each such
Holder agrees that, upon receipt of a Buyout Notice, each such Holder shall be
obligated to sell his Option Interests upon the terms and conditions of such
transaction (and otherwise take all reasonably necessary action to cause
consummation of the proposed transaction, including voting any such Option
Interest in favor of such transaction). The third party purchaser shall furnish
evidence reasonably satisfactory to the Board to the effect that it has the
financial ability to consummate the proposed purchase of the Interests of all of
the Members. For purposes of this paragraph, "Holder" means a person who holds
an unexercised Option or who holds an Interest acquired upon exercise of an
Option. The term "Option Interest" means either an Option or an Interest
acquired pursuant to exercise of an Option.

               SECTION 14.04. Corporate Reconstitution. If the Company's
business is reconstituted in corporate form, outstanding Options shall be
assumed by the successor corporation in accordance with the principles set forth
in Section 14.03.

                                   ARTICLE XV
                            Effectiveness of the Plan

               The Plan shall become effective upon approval by the affirmative
vote of a majority of the Members of the Company entitled to vote thereon.

                                   ARTICLE XVI
                        Government and Other Regulations

               The obligation of the Company with respect to Awards shall be
subject to all applicable laws, rules and regulations and such approvals by any
governmental agencies as may be required, including, without limitation, the
effectiveness of any registration statement required under the Securities Act of
1933, and the rules and regulations of any applicable securities exchange.

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                                  ARTICLE XVII
                                   Withholding

               The Company's obligation to deliver Units in respect of any Award
under the Plan shall be subject to applicable federal, state and local tax
withholding requirements. Federal, state and local withholding taxes paid upon
the exercise of any Option may be paid in Units upon such terms and conditions
as the Board shall determine; provided, however, that the Board in its sole
discretion may disapprove such payment and require that such taxes be paid in
cash.

                                  ARTICLE XVIII
                                  Separability

               If any of the terms or provisions of this Plan conflict with the
requirements of applicable law or applicable rules and regulations thereunder,
including the applicable requirements, if any, of section 162(m) of the Code or
Rule 16b-3 under the Exchange Act, then such terms or provisions shall be deemed
inoperative to the extent necessary to avoid the conflict with applicable law,
or applicable rules and regulations, without invalidating the remaining
provisions hereof.

                                   ARTICLE XIX
                           Non-Exclusivity of the Plan

               Neither the adoption of the Plan by the Board nor the submission
of the Plan to the Members of the Company for approval shall be construed as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and the awarding of stock and cash otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.

                                   ARTICLE XX
             Exclusion from Pension and Profit-Sharing Computation.

               By acceptance of an Award, each Holder shall be deemed to have
agreed that such Award is special incentive compensation that will not be taken
into account, in any manner, as salary, compensation or bonus in determining the
amount of any payment under any pension, retirement or other

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employee benefit plan of the Company or any of its Subsidiaries. In addition,
each beneficiary of a deceased Holder shall be deemed to have agreed that such
Award will not affect the amount of any life insurance coverage, if any,
provided by the Company or any of its Subsidiaries on the life of the Holder
which is payable to such beneficiary under any life insurance plan covering
employees of the Company or any of its Subsidiaries.

                                   ARTICLE XXI
                                  Beneficiaries

               Each Holder may designate any person(s) or legal entity(ies),
including his or her estate, as his or her beneficiary under the Plan. Such
designation shall be made in writing on a form filed with the Secretary of the
Company or his or her designee and may be revoked or changed by such Holder at
any time by filing written notice of such revocation or change with the
Secretary of the Company or his or her designee. If no person shall be
designated by a Holder as his or her beneficiary or if no person designated as a
beneficiary survives such Holder, the Holder's beneficiary shall be his or her
estate.

                                  ARTICLE XXII
                                  Governing Law

               The Plan shall be governed by, and construed in accordance with,
the laws of the State of New York.


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