APPLEBEE'S INTERNATIONAL, INC.
                          1999 EMPLOYEE INCENTIVE PLAN


                                    SECTION 1

                              PURPOSE AND DURATION

         1.1 Effective Date.  This Plan shall become  effective on May 13, 1999.

         1.2 Purpose of this Plan.  This Plan permits the grant of  Nonqualified
Stock Options, SARs, Restricted Stock, Performance Units and Performance Shares.
This Plan is intended to attract,  motivate, and retain employees of the Company
and its  Affiliates.  This Plan also is  designed  to  further  the  growth  and
financial success of the Company and its Affiliates by aligning the interests of
the Participants,  through the ownership of Shares and through other incentives,
with the interests of the Company's stockholders.

                                    SECTION 2

                                   DEFINITIONS

         The  following  words and  phrases  shall have the  following  meanings
unless a different meaning is plainly required by the context:

         "1934 Act"  means the  Securities  Exchange  Act of 1934,  as  amended.
Reference to a specific  section of the 1934 Act or regulation  thereunder shall
include such section or regulation,  any valid regulation promulgated under such
section,  and any comparable  provision of any future  legislation or regulation
amending, supplementing or superseding such section or regulation.

         "Affiliate" means any corporation or any other entity  (including,  but
not limited to, partnerships and joint ventures)  controlling,  controlled by or
under common control with the Company.

         "Affiliated  SAR"  means an SAR that is granted  in  connection  with a
related  Option,  and that  automatically  will be deemed to be exercised at the
same time that the related Option is exercised.

         "Award" means, individually or collectively, a grant under this Plan of
Nonqualified  Stock  Options,  SARs,  Restricted  Stock,  Performance  Units  or
Performance Shares.

         "Award  Agreement" means the written  agreement setting forth the terms
and provisions applicable to each Award granted under this Plan.

         "Board" or "Board of  Directors"  means the Board of  Directors  of the
Company.

         "Change in  Control"  shall have the  meaning  assigned to such term in
Section 12.2.

         "Code" means the Internal  Revenue Code of 1986, as amended.  Reference
to a specific  section of the Code or regulation  thereunder  shall include such
section or regulation,  any valid regulation promulgated under such section, and
any  comparable  provision of any future  legislation  or  regulation  amending,
supplementing or superseding such section or regulation.



                                       1
<PAGE>


         "Committee"  means the  committee  appointed by the Board  (pursuant to
Section 3.1) to administer this Plan.

         "Company" means Applebee's International, Inc., a Delaware corporation,
and any successor thereto.

         "Director"  means  any  individual  who is a  member  of the  Board  of
Directors of the Company.

         "Disability" means a permanent and total disability,  provided that the
Committee in its sole  discretion  may  determine  whether a permanent and total
disability  exists in accordance with uniform and  non-discriminatory  standards
adopted by the Committee from time to time.

         "Employee"  means  any  employee  of the  Company  or of an  Affiliate,
whether such employee is so employed at the time this Plan is adopted or becomes
so employed subsequent to the adoption of this Plan, provided,  however, that no
employee of the Company or of an Affiliate with the title of  Vice-President  or
higher shall be considered an employee for purposes of this Plan.

         "Exercise Price" means the price at which a Share may be purchased by a
Participant pursuant to the exercise of an Option.

         "Fair Market  Value" means the last quoted per share  selling  price at
which  Shares are traded on any given  date,  or if no Shares are traded on such
date, the most recent prior date on which Shares were traded, as reported in The
Wall Street Journal. Notwithstanding the preceding, for federal, state and local
income tax  reporting  purposes,  fair market value shall be  determined  by the
Committee  (or its delegate) in  accordance  with uniform and  nondiscriminatory
standards adopted by it from time to time.

         "Fiscal Year" means the fiscal year of the Company.

         "Freestanding  SAR"  means a SAR that is granted  independently  of any
Option.

         "Grant Date" means,  with respect to an Award,  the date that the Award
was granted.

         "Nonqualified Stock Option" means an Option to purchase Shares which is
not an incentive stock option under Section 422 of the Code.

         "Option" means a Nonqualified Stock Option.

         "Participant" means an Employee who has an outstanding Award.

         "Performance  Period"  shall have the meaning  assigned to such term in
Section 8.3.

         "Performance Share" means an Award granted to a Participant pursuant to
Section 8.


                                       2

<PAGE>

         "Performance Unit" means an Award granted to a Participant  pursuant to
Section 8.

         "Period of  Restriction"  means the period during which the transfer of
Shares of  Restricted  Stock are subject to  restrictions  and,  therefore,  the
Shares are subject to a substantial  risk of forfeiture.  As provided in Section
7, such  restrictions  may be based on the passage of time,  the  achievement of
target levels of  performance or the occurrence of other events as determined by
the Committee in its sole discretion.

         "Plan" means the Applebee's International, Inc. 1999 Employee Incentive
Plan,  as set forth in this  instrument  and as  hereafter  amended from time to
time.

         "Restricted Stock" means an Award granted to a Participant  pursuant to
Section 7.

         "Retirement" means a Termination of Service by reason of the Employee's
retirement  if (a) the Employee has been a full time  Employee of the Company or
of any Affiliate for at least five (5) consecutive  years  immediately  prior to
the date of such retirement, and (b) the age of the Employee on the date of such
retirement  when added to the total number of years for which the Employee was a
full time  Employee  of the  Company  or of any  Affiliate  equals 60. For these
purposes,  employment  by a company or  business  acquired  by the Company or an
Affiliate prior to such acquisition  shall be counted as full time employment by
the Company or an Affiliate.

         "Shares" means the shares of common stock of the Company.

         "Stock Appreciation Right" or "SAR" means an Award, granted alone or in
connection  with a related  Option,  that is  designated  as a SAR  pursuant  to
Section 6.

         "Tandem SAR" means an SAR that is granted in connection  with a related
Option,  the exercise of which shall require forfeiture of the right to purchase
an equal  number  of  Shares  under  the  related  Option  (and  when a Share is
purchased under the Option, the SAR shall be canceled to the same extent).

         "Termination  of Service"  means a cessation  of the  employee-employer
relationship between an employee and the Company or an Affiliate for any reason,
including,  but not limited to, a cessation by  resignation,  discharge,  death,
Disability,  Retirement or the disaffiliation of an Affiliate, but excluding any
such cessation  where there is a simultaneous  reemployment by the Company or an
Affiliate.

                                    SECTION 3

                                 ADMINISTRATION

         3.1 The  Committee.  This Plan shall be  administered  by the Committee
that administers the Applebee's International, Inc., 1995 Equity Incentive Plan.

         3.2 Authority of the  Committee.  It shall be the duty of the Committee
to administer this Plan in accordance  with its provisions.  The Committee shall
have all powers and discretion  necessary or appropriate to administer this Plan
and to control its  operation,  including,  but not limited to, the power to (a)
determine which  Employees shall be granted Awards,  (b) prescribe the terms and
conditions  of the Awards,  (c)  interpret  this Plan and the Awards,  (d) adopt
rules for the administration, interpretation and application of this Plan as are
consistent therewith, and (e) interpret, amend or revoke any such rules.


                                       3
<PAGE>

         3.3 Delegation by the Committee.  The Committee, in its sole discretion
and on such terms and conditions as it may provide, may delegate all or any part
of its authority and powers under this Plan to one or more directors or officers
of the Company.

         3.4 Decisions  Binding.  All  determinations  and decisions made by the
Committee,  the Board and any delegate of the Committee  pursuant to Section 3.3
shall be final,  conclusive,  and binding on all persons, and shall be given the
maximum deference permitted by law.

                                    SECTION 4

                           SHARES SUBJECT TO THIS PLAN

         4.1 Number of Shares. Subject to adjustment as provided in Section 4.3,
the total number of Shares  available for grant under this Plan shall not exceed
333,000.  Shares  granted under this Plan may be either  authorized but unissued
Shares or treasury Shares, or any combination thereof.

         4.2 Lapsed  Awards.  If an Award is settled  in cash,  or is  canceled,
terminates,  expires  or  lapses  for any  reason  (with  the  exception  of the
termination  of a  Tandem  SAR  upon  exercise  of the  related  Option,  or the
termination of a related Option upon exercise of the corresponding  Tandem SAR),
any Shares subject to such Award thereafter shall be available to be the subject
of an Award.

         4.3  Adjustments in Awards and Authorized  Shares.  In the event of any
merger,    reorganization,    consolidation,    recapitalization,    separation,
liquidation,  stock dividend, stock split, Share combination, or other change in
the corporate structure of the Company affecting the Shares, the Committee shall
adjust the number and class of Shares  which may be  delivered  under this Plan,
the number,  class and price of Shares  subject to outstanding  Awards,  and the
numerical  limits of Sections  4.1, 5.1, 6.1, 7.1 and 8.1, in such manner as the
Committee  (in  its  sole  discretion)   shall  determine  to  be  advisable  or
appropriate to prevent the dilution or diminution of such Awards.

         4.4 Adjustments  upon Merger or Asset Sale. In the event of a merger of
the Company with or into another  corporation,  or the sale of substantially all
of the assets of the Company,  the Board of Directors,  in its  discretion,  may
require the successor corporation to either (i) assume each outstanding Award or
(ii) substitute an equivalent award by the successor  corporation or a Parent or
Subsidiary  of  the  successor  corporation.  If an  Award  is  not  assumed  or
substituted  in the event of a merger or sale of assets,  the Award shall become
immediately  exercisable and the Committee shall notify the Participant that the
Award shall be fully exercisable for a period of fifteen (15) days from the date
of such notice, and the Award shall terminate upon the expiration of such period
unless  exercised.  For the  purposes  of this  paragraph,  the  Award  shall be
considered assumed if, following the merger or sale of assets, the Award confers
the  right  to  purchase  or  receive,  for  each  Share  subject  to the  Award
immediately prior to the merger or sale of assets, equal consideration  (whether
stock,  cash, or other securities or property) as received in the merger or sale
of assets by holders of each Share of common stock held on the effective date of
the   transaction   (and  if  holders  of  Shares  were   offered  a  choice  of
consideration,  the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided,  however, that if such consideration received
in the  merger or sale of assets was not solely  common  stock of the  successor
corporation or its Parent,  the Committee may, with the consent of the successor
corporation,  provide for the  consideration to be received upon the exercise of
the Award, for each Share subject to the award, to be solely common stock of the
successor  corporation or its Parent equal in fair market value to the per share
consideration  received  by  holders  of common  stock in the  merger or sale of
assets.


                                       4
<PAGE>

                                    SECTION 5

                                  STOCK OPTIONS

         5.1 Grant of Options. Subject to the terms and provisions of this Plan,
Options  may be  granted  to  Employees  at any time  and  from  time to time as
determined by the Committee in its sole discretion.  The Committee,  in its sole
discretion,  shall  determine  the  number of  Shares  subject  to each  Option;
provided,  however, that during any Fiscal Year, no Participant shall be granted
Options covering more than 50,000 Shares.

         5.2  Award  Agreement.  Each  Option  shall  be  evidenced  by an Award
Agreement  that shall specify the Exercise  Price,  the  expiration  date of the
Option,  the number of Shares to which the Option  pertains,  any  conditions to
exercise of the Option and such other terms and conditions as the Committee,  in
its sole discretion, shall determine.

         5.3 Exercise Price.  Subject to the provisions of this Section 5.3, the
Exercise  Price for each Option shall be determined by the Committee in its sole
discretion.

                  5.3.1 Nonqualified Stock Options.  The Exercise Price shall be
         not less than one hundred  percent (100%) of the Fair Market Value of a
         Share on the Grant Date.


                  5.3.2 Substitute  Options.  Notwithstanding  the provisions of
         Sections  5.3.1,  in  the  event  that  the  Company  or  an  Affiliate
         consummates  a  transaction  in which  persons may become  Employees on
         account of such  transaction,  such  persons may be granted  Options in
         substitution  for options  granted by such former employer or recipient
         of services. If such substitute Options are granted, the Committee,  in
         its sole discretion,  may determine that such substitute  Options shall
         have an exercise  price less than one hundred (100%) of the Fair Market
         Value of the Shares on the Grant Date.

         5.4 Expiration of Options.

                  5.4.1 Expiration  Dates.  Each Option shall terminate upon the
         earlier of the first to occur of the following events: (a) The date for
         termination of the Option set forth in the Award Agreement; or

                           (b)      The  expiration  of ten (10)  years from the
                                    Grant Date; or

                                       5
<PAGE>


                           (c)      The expiration of one (1) year from the date
                                    of the Optionee's Termination of Service for
                                    a reason  other than the  Optionee's  death,
                                    Disability or Retirement; or

                           (d)      The  expiration  of three (3) years from the
                                    date  of  the   Optionee's   Termination  of
                                    Service by reason of Disability or death; or

                           (e)      The  expiration  of three (3) years from the
                                    date of the Optionee's Retirement.

                  5.4.2 Committee  Discretion.  Subject to the limits of Section
         5.4.1, the Committee, in its sole discretion, (a) shall provide in each
         Award Agreement when each Option expires and becomes unexercisable, and
         (b) may,  after an Option is granted,  extend the  maximum  term of the
         Option.

         5.5 Exercisability of Options. Options granted under this Plan shall be
exercisable at such times and be subject to such  restrictions and conditions as
the  Committee  shall  determine  in its sole  discretion.  After an  Option  is
granted,   the   Committee,   in  its  sole   discretion,   may  accelerate  the
exercisability of the Option.

         5.6 Payment.  Options shall be exercised by the Participant's  delivery
of a  written  notice  of  exercise  to the  Secretary  of the  Company  (or its
designee),  setting  forth the number of Shares with respect to which the Option
is to be exercised, accompanied by full payment for the Shares.

         Upon the exercise of any Option, the Exercise Price shall be payable to
the  Company  in full in cash or its  equivalent.  The  Committee,  in its  sole
discretion, also may permit exercise (a) by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of exercise equal to the total
Exercise  Price,  or (b) by any other  means  which the  Committee,  in its sole
discretion,  determines (i) to provide legal  consideration for the Shares,  and
(ii) to be consistent with the purposes of this Plan.

         As soon as  practicable  after  receipt  of a written  notification  of
exercise and full payment for the Shares purchased, the Company shall deliver to
the Participant (or the Participant's  designated  broker),  Share  certificates
(which may be in book entry form) representing such Shares.

           5.7 Restrictions on Share  Transferability.  The Committee may impose
such  restrictions on any Shares acquired  pursuant to the exercise of an Option
as it may deem advisable or appropriate in its sole discretion,  including,  but
not limited to, restrictions  related to applicable Federal securities laws, the
requirements of any national securities exchange or system upon which Shares are
then listed or traded, and any blue sky or state securities laws.


                                       6

<PAGE>

                                    SECTION 6

                            STOCK APPRECIATION RIGHTS

         6.1 Grant of SARs. Subject to the terms and conditions of this Plan, an
SAR may be  granted to  Employees  at any time and from time to time as shall be
determined by the  Committee,  in its sole  discretion.  The Committee may grant
Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination thereof.

                  6.1.1  Number of Shares.  The  Committee  shall have  complete
         discretion to determine the number of SARs granted to any  Participant,
         provided that during any Fiscal Year, no  Participant  shall be granted
         SARs covering more than 50,000 Shares.

                  6.1.2 Exercise Price and Other Terms.  The Committee,  subject
         to the  provisions  of this Plan,  shall have  complete  discretion  to
         determine  the terms and  conditions  of SARs granted  under this Plan;
         provided,  however, that the exercise price of a Freestanding SAR shall
         be not less than one hundred percent (100%) of the Fair Market Value of
         a Share on the Grant Date.  The exercise  price of Tandem or Affiliated
         SARs shall equal the Exercise Price of the related Option.

         6.2  Exercise of Tandem SARs.  Tandem SARs may be exercised  for all or
part of the Shares subject to the related Option upon the surrender of the right
to exercise the equivalent  portion of the related  Option.  A Tandem SAR may be
exercised  only with respect to the Shares for which its related  Option is then
exercisable.

         6.3 Exercise of Affiliated  SARs. An Affiliated  SAR shall be deemed to
be exercised upon the exercise of the related Option.  The deemed exercise of an
Affiliated SAR shall not necessitate a reduction in the number of Shares subject
to the related Option.

         6.4  Exercise  of  Freestanding   SARs.   Freestanding  SARs  shall  be
exercisable  on  such  terms  and  conditions  as the  Committee,  in  its  sole
discretion, shall determine.

         6.5 SAR  Agreement.  Each  SAR  grant  shall be  evidenced  by an Award
Agreement  that shall  specify  the  exercise  price,  the term of the SAR,  the
conditions of exercise, and such other terms and conditions as the Committee, in
its sole discretion, shall determine.

         6.6  Expiration  of SARs.  An SAR granted  under this Plan shall expire
upon the date determined by the Committee, in its sole discretion,  as set forth
in the Award Agreement.  Notwithstanding the foregoing, the terms and provisions
of Section 5.4 also shall apply to SARs.

         6.7 Payment of SAR Amount. Upon exercise of an SAR, a Participant shall
be  entitled to receive  payment  from the  Company in an amount  determined  by
multiplying:

                  (a) The positive difference between the Fair Market Value of a
         Share on the date of exercise over the exercise price; by

                  (b) The  number of  Shares  with  respect  to which the SAR is
         exercised.

                                       7

<PAGE>


At the sole discretion of the Committee, the payment upon an SAR exercise may be
in cash, in Shares of equivalent value, or in any combination thereof.

                                    SECTION 7

                                RESTRICTED STOCK

         7.1 Grant of Restricted  Stock.  Subject to the terms and provisions of
this Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted  Stock to  Employees in such  amounts as the  Committee,  in its sole
discretion,  shall  determine.  The  Committee,  in its sole  discretion,  shall
determine  the  number of Shares to be granted  to each  Participant;  provided,
however,  that during any Fiscal Year,  no  Participant  shall receive more than
50,000 Shares of Restricted Stock.

         7.2 Restricted Stock Agreement. Each Award of Restricted Stock shall be
evidenced by an Award  Agreement  that shall specify the Period of  Restriction,
the  number of Shares  granted,  and such  other  terms  and  conditions  as the
Committee, in its sole discretion, shall determine. Unless the Committee, in its
sole discretion,  determines otherwise, Shares of Restricted Stock shall be held
by the  Company  as  escrow  agent  until  the end of the  applicable  Period of
Restriction.

         7.3  Transferability.  Except as provided in this  Section 7, Shares of
Restricted  Stock may not be sold,  transferred,  gifted,  bequeathed,  pledged,
assigned, or otherwise alienated or hypothecated,  voluntarily or involuntarily,
until the end of the applicable Period of Restriction.

         7.4 Other  Restrictions.  The Committee,  in its sole  discretion,  may
impose  such other  restrictions  on Shares of  Restricted  Stock as it may deem
advisable or appropriate in accordance with this Section 7.4.

                  7.4.1 General Restrictions. The Committee may set restrictions
         based  upon (a) the  achievement  of  specific  performance  objectives
         (Company-wide,  divisional or  individual),  (b) applicable  Federal or
         state  securities  laws,  or (c)  any  other  basis  determined  by the
         Committee in its sole discretion.

                  7.4.2  Legend  on  Certificates.  The  Committee,  in its sole
         discretion,  may legend the certificates  representing Restricted Stock
         to give  appropriate  notice of such  restrictions.  For  example,  the
         Committee  may  determine  that some or all  certificates  representing
         Shares of Restricted Stock shall bear the following legend:

                  "THE SALE OR OTHER TRANSFER OF THE SHARES OF STOCK REPRESENTED
                  BY THIS CERTIFICATE,  WHETHER  VOLUNTARY,  INVOLUNTARY,  OR BY
                  OPERATION  OF LAW,  IS  SUBJECT  TO  CERTAIN  RESTRICTIONS  ON
                  TRANSFER AS SET FORTH IN THE  APPLEBEE'S  INTERNATIONAL,  INC.
                  1999  EMPLOYEE  INCENTIVE  PLAN,  AND  IN A  RESTRICTED  STOCK
                  AGREEMENT.  A COPY OF THIS  PLAN  AND  SUCH  RESTRICTED  STOCK
                  AGREEMENT  MAY BE OBTAINED  FROM THE  SECRETARY OF  APPLEBEE'S
                  INTERNATIONAL, INC."


                                       8
<PAGE>


         7.5  Removal of  Restrictions.  Except as  otherwise  provided  in this
Section 7, Shares of  Restricted  Stock covered by each  Restricted  Stock grant
made under this Plan shall be released from escrow as soon as practicable  after
the end of the applicable  Period of  Restriction.  The  Committee,  in its sole
discretion,  may accelerate the time at which any  restrictions  shall lapse and
remove any restrictions.  After the end of the applicable Period of Restriction,
the  Participant  shall be entitled to have any legend or legends  under Section
7.4.2 removed from his or her Share certificate,  and the Shares shall be freely
transferable by the Participant.

         7.6  Voting  Rights.  During the  Period of  Restriction,  Participants
holding  Shares of Restricted  Stock granted  hereunder may exercise full voting
rights with  respect to those  Shares,  unless the  applicable  Award  Agreement
provides otherwise.

         7.7   Dividends   and  Other   Distributions.   During  the  Period  of
Restriction,  Participants  holding Shares of Restricted Stock shall be entitled
to receive  all  dividends  and other  distributions  paid with  respect to such
Shares unless otherwise provided in the applicable Award Agreement.  If any such
dividends or  distributions  are paid in Shares,  the Shares shall be subject to
the same  restrictions on  transferability  and  forfeitability as the Shares of
Restricted Stock with respect to which they were paid.

         7.8 Return of Restricted Stock to Company. On the date set forth in the
applicable Award Agreement, the Restricted Stock for which restrictions have not
lapsed shall revert to the Company and  thereafter  shall be available for grant
under this Plan.

                                    SECTION 8

                    PERFORMANCE UNITS AND PERFORMANCE SHARES

         8.1  Grant  of   Performance   Units/Shares.   Performance   Units  and
Performance  Shares  may be granted  to  Employees  at any time and from time to
time, as shall be  determined  by the  Committee,  in its sole  discretion.  The
Committee   shall  have  complete   discretion  in  determining  the  number  of
Performance Units and Performance Shares granted to each Participant;  provided,
however,  that  during  any  Fiscal  Year,  (a)  no  Participant  shall  receive
Performance  Units having an initial  value  greater than  $250,000,  and (b) no
Participant shall receive more than 50,000 Performance Shares.

         8.2 Value of Performance Units/Shares. Each Performance Unit shall have
an initial  value that is  established  by the  Committee on or before the Grant
Date.  Each  Performance  Share  shall have an initial  value  equal to the Fair
Market Value of a Share on the Grant Date.

         8.3  Performance  Objectives and Other Terms.  The Committee  shall set
performance  objectives in its sole discretion which, depending on the extent to
which they are met, will determine the number or value of  Performance  Units or
Performance Shares, or both, that will be paid out to the Participants. The time
period during which the  performance  objectives must be met shall be called the
"Performance  Period." Each Award of  Performance  Units or  Performance  Shares
shall be  evidenced by an Award  Agreement  that shall  specify the  Performance
Period,  and such  other  terms and  conditions  as the  Committee,  in its sole
discretion,  shall determine. The Committee may set performance objectives based
upon (a) the achievement of  Company-wide,  divisional or individual  goals, (b)
applicable  Federal or state  securities laws, or (c) any other basis determined
by the Committee in its discretion.


                                       9
<PAGE>


         8.4  Earning  of   Performance   Units/Shares.   After  the  applicable
Performance  Period has ended,  the holder of  Performance  Units or Performance
Shares shall be entitled to receive a payout of the number of Performance  Units
or Performance  Shares,  as the case may be, earned by the Participant  over the
Performance  Period,  to be  determined as a function of the extent to which the
corresponding  performance  objectives have been achieved.  After the grant of a
Performance Unit or Performance  Share,  the Committee,  in its sole discretion,
may reduce or waive any  performance  objectives  for such  Performance  Unit or
Performance Share.

         8.5 Form and Timing of Payment of Performance Units/Shares.  Payment of
earned  Performance  Units  or  Performance  Shares  shall  be  made  as soon as
practicable after the end of the applicable  Performance  Period. The Committee,
in its sole discretion,  may pay earned  Performance Units or Performance Shares
in the form of cash, in Shares (which have an aggregate  Fair Market Value equal
to the value of the earned Performance Units or Performance  Shares, as the case
may be, at the end of the applicable  Performance Period), or in any combination
thereof.

         8.6  Cancellation of Performance  Units/Shares.  On the earlier of date
set forth in the Award  Agreement or the  Participant's  Termination  of Service
(other  than by death,  Disability  or  Retirement),  all  unearned  or unvested
Performance Units or Performance  Shares shall be forfeited to the Company,  and
thereafter  shall be  available  for grant  under this  Plan.  In the event of a
Participant's death, Disability or Retirement, prior to the end of a Performance
Period,  the Committee shall reduce his or her Performance  Units or Performance
Shares proportionately based on the date of such Termination of Service.

                                    SECTION 9

                                  MISCELLANEOUS

         9.1 Deferrals.  The  Committee,  in its sole  discretion,  may permit a
Participant  to defer  receipt of the payment of cash or the  delivery of Shares
that  would  otherwise  be due to such  Participant  under  an  Award.  Any such
deferral  election  shall be subject to such  rules and  procedures  as shall be
determined by the Committee in its sole discretion.

         9.2 No Effect on  Employment  or  Service.  Nothing  in this Plan shall
interfere  with or limit in any way the right of the  Company to  terminate  any
Participant's  employment  or service at any time,  with or without  cause.  For
purposes  of this Plan,  transfer of  employment  of a  Participant  between the
Company and any of its Affiliates (or between  Affiliates) shall not be deemed a
Termination of Service.  Employment with the Company and its Affiliates is on an
at-will  basis  only,  unless  otherwise  provided by an  applicable  employment
agreement between the Participant and the Company or its Affiliate,  as the case
may be.


                                       10
<PAGE>

         9.3  Participation.  No Employee shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.

         9.4 Indemnification.  Each person who is or shall have been a member of
the Committee,  or of the Board,  shall be indemnified  and held harmless by the
Company  against and from (a) any loss,  cost,  liability or expense  (including
attorneys'  fees) that may be imposed upon or reasonably  incurred by him or her
in connection  with or resulting from any claim,  action,  suit or proceeding to
which he or she may be a party or in which he or she may be  involved  by reason
of any action  taken or  failure to act under this Plan or any Award  Agreement,
and (b) from any and all amounts paid by him or her in settlement thereof,  with
the Company's prior written  approval,  or paid by him or her in satisfaction of
any judgment in any such claim,  action,  suit or proceeding against him or her;
provided,  however, that he or she shall give the Company an opportunity, at its
own expense, to handle and defend the same before he or she undertakes to handle
and defend it on his or her own behalf.  The foregoing right of  indemnification
shall not be  exclusive  of any other  rights of  indemnification  to which such
persons may be entitled  under the Company's  Certificate  of  Incorporation  or
Bylaws,  by contract,  as a matter of law or otherwise,  or under any power that
the Company may have to indemnify them or hold them harmless.

         9.5  Successors.  All  obligations of the Company under this Plan, with
respect to Awards  granted  hereunder,  shall be binding on any successor to the
Company,  whether the  existence of such  successor is the result of a direct or
indirect purchase,  merger,  consolidation or otherwise, of all or substantially
all of the business or assets of the Company.

         9.6  Beneficiary  Designations.   If  permitted  by  the  Committee,  a
Participant  under this Plan may name a beneficiary or beneficiaries to whom any
vested but unpaid Award shall be paid in the event of the  Participant's  death.
Each such designation shall revoke all prior designations by the Participant and
shall  be  effective  only if  given  in a form  and  manner  acceptable  to the
Committee. In the absence of any such designation, any vested benefits remaining
unpaid at the Participant's death shall be paid to the Participant's estate and,
subject to the terms of this Plan and of the  applicable  Award  Agreement,  any
unexercised  vested Award may be exercised by the  administrator  or executor of
the Participant's estate.

         9.7  Nontransferability of Awards. No Award granted under this Plan may
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will, by the laws of descent and  distribution,  or to the limited
extent provided in Section 9.6. All rights with respect to an Award granted to a
Participant  shall  be  available  during  his  or  her  lifetime  only  to  the
Participant.

         9.8 No Rights as Stockholder.  Except to the limited extent provided in
Sections 7.6 and 7.7, no Participant  (nor any  beneficiary  thereof) shall have
any of the rights or privileges of a stockholder  of the Company with respect to
any Shares issuable pursuant to an Award (or the exercise  thereof),  unless and
until certificates  representing such Shares shall have been issued, recorded on
the records of the Company or its transfer  agents or registrars,  and delivered
to the Participant (or his or her beneficiary).

                                       11
<PAGE>


                                   SECTION 10

                      AMENDMENT, TERMINATION, AND DURATION

         10.1  Amendment,  Suspension,  or  Termination.  The Board, in its sole
discretion,  may amend or terminate this Plan, or any part thereof,  at any time
and for any reason. The amendment,  suspension or termination of this Plan shall
not,  without  the  consent  of the  Participant,  alter or impair any rights or
obligations  under any Award theretofore  granted to such Participant.  No Award
may be granted  during any period of  suspension  or after  termination  of this
Plan.

         10.2  Duration of this Plan.  This Plan shall  become  effective on the
date specified  herein and, subject to Section 10.1 (regarding the Board's right
to amend or terminate this Plan), shall remain in effect thereafter.


                                   SECTION 11

                                 TAX WITHHOLDING

         11.1 Withholding  Requirements.  Prior to the delivery of any Shares or
cash pursuant to an Award (or the exercise thereof),  the Company shall have the
power and the right to deduct or withhold,  or require a Participant to remit to
the Company,  an amount  sufficient  to satisfy  Federal,  state and local taxes
(including  the  Participant's  FICA  obligation)  required to be withheld  with
respect to such Award (or the exercise thereof).

         11.2 Withholding  Arrangements.  The Committee,  in its sole discretion
and pursuant to such  procedures as it may specify from time to time, may permit
a Participant to satisfy such tax withholding  obligation,  in whole or in part,
by (a) electing to have the Company withhold  otherwise  deliverable  Shares, or
(b) delivering to the Company Shares then owned by the Participant having a Fair
Market  Value  equal to the amount  required to be  withheld.  The amount of the
withholding requirement shall be deemed to include any amount that the Committee
agrees may be withheld at the time any such election is made,  not to exceed the
amount  determined by using the maximum federal,  state or local marginal income
tax rates  applicable to the  Participant  with respect to the Award on the date
that the amount of tax to be withheld is to be determined. The Fair Market Value
of the Shares to be withheld or  delivered  shall be  determined  as of the date
that the taxes are required to be withheld.

                                   SECTION 12

                                CHANGE IN CONTROL

         12.1  Change in  Control.  In the event of a Change in  Control  of the
Company,  all Awards granted under this Plan that then are  outstanding  and not
then  exercisable  or are  subject  to  restrictions,  shall,  unless  otherwise
provided  for  in  the  Agreements   applicable   thereto,   become  immediately
exercisable,  and all restrictions  shall be removed,  as of the first date that
the Change in Control has been deemed to have occurred, and shall remain as such
for the remaining life of the Award as provided herein and within the provisions
of the related Agreements.


                                       12
<PAGE>

         12.2  Definition.  For  purposes  of Section  12.1  above,  a Change in
Control of the Company  shall be deemed to have occurred if the  conditions  set
forth in any one or more of the following shall have been satisfied, unless such
condition  shall  have  received  prior  approval  of a  majority  vote  of  the
Continuing Directors,  as defined below,  indicating that Section 12.1 shall not
apply thereto:

                  12.2.1 any  "person",  as such term is used in Sections  13(d)
         and 14(d) of the Exchange  Act (other than the Company,  any trustee or
         other fiduciary  holding  securities  under an employee benefit plan of
         the Company or any corporation  owned,  directly or indirectly,  by the
         stockholders of the Company in  substantially  the same  proportions as
         their ownership of stock of the Company), is or becomes the "beneficial
         owner" (as defined in Rule 13d-3 under the Exchange  Act),  directly or
         indirectly,  of securities of the Company  representing  thirty percent
         (30%)  or more of the  combined  voting  power  of the  Company's  then
         outstanding securities;

                  12.2.2  during  any  period  of  two  consecutive  years  (not
         including  any  period  prior  to the  Effective  Date of  this  Plan),
         individuals  ("Existing Directors") who at the beginning of such period
         constitute  the Board of Directors,  and any new director (an "Approved
         Director")  (other  than a  director  designated  by a  person  who has
         entered  into an  agreement  with the  Company to effect a  transaction
         described in Section  12.2.1,  12.2.2 or 12.2.3) whose  election by the
         Board  of  Directors  or  nomination  for  election  by  the  Company's
         shareholders  was approved by a vote of a least two-thirds (2/3) of the
         directors  then  still in  office  who  either  were  directors  at the
         beginning of the period or whose  election or  nomination  for election
         previously was so approved  (Existing  Directors together with Approved
         Directors constituting "Continuing Directors"), cease for any reason to
         constitute at least a majority of the Board of Directors; or

                  12.2.3 the  stockholders  of the  Company  approve a merger or
         consolidation  of the Company with any other  person,  other than (i) a
         merger or consolidation  which would result in the voting securities of
         the  Company  outstanding   immediately  prior  thereto  continuing  to
         represent  (either by remaining  outstanding or by being converted into
         voting  securities  for the  surviving  entity) more than fifty percent
         (50%) of the  combined  voting  power of the voting  securities  of the
         Company or such surviving  entity  outstanding  immediately  after such
         merger  or  consolidation,  or (ii) a merger in which no  "person"  (as
         defined in Section  12.2.1)  acquires more than thirty percent (30%) of
         the combined voting power of the Company's then outstanding securities;
         or

         (d)  the  stockholders  of  the  Company  approve  a plan  of  complete
         liquidation  of the Company or an agreement for the sale or disposition
         by the Company of all or substantially  all of the Company's assets (or
         any transaction having a similar effect).


                                       13
<PAGE>

                                   SECTION 13

                               LEGAL CONSTRUCTION

         13.1  Gender  and  Number.  Except  where  otherwise  indicated  by the
context,  any masculine  term used herein also shall  include the feminine,  the
plural shall include the singular, and the singular shall include the plural.

         13.2  Severability.  In the event any  provision  of this Plan shall be
held illegal or invalid for any reason,  the illegality or invalidity  shall not
affect the  remaining  parts of this Plan,  and this Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.

         13.3  Requirements  of Law.  The grant of Awards  and the  issuance  of
Shares  under  this Plan  shall be subject  to all  applicable  laws,  rules and
regulations,  and to such  approvals  by any  governmental  agencies or national
securities exchanges as may be required from time to time.

         13.4  Governing  Law.  This  Plan  and all  Award  Agreements  shall be
construed  in  accordance  with and  governed by the laws of the State of Kansas
(excluding its conflict of laws provisions).

         13.5  Captions.   Captions  are  provided  herein  for  convenience  of
reference  only,  and  shall  not  serve  as  a  basis  for   interpretation  or
construction of this Plan.



                                       14