EXHIBIT 10.13
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                BUFFETS HOLDINGS, INC. EQUITY PARTICIPATION PLAN

                                    ARTICLE 1
                                     GENERAL
1.1      Purpose; Overview.

         (a)      PURPOSE. The purpose of the Buffets Holdings, Inc. Equity
Participation Plan (the "Plan") is to give selected full time senior general
managers, above-store field managers, and director level and equivalent
corporate personnel (the latter personnel generally falling within job
classification 58 or higher consistent with the classification system in place
at the time of this Plan's inception, or similarly situated personnel under any
future system of classification)[the latter personnel referred to herein as
"Corporate Directors"], and founder advisors and members of the Board of
Directors, of Buffets Holdings, Inc. or its Affiliates (collectively, the
"Company," and the selected personnel above-referenced collectively, "Key
Personnel"), an equity-based incentive to maintain and enhance the performance
and profitability of the Company.

         (b)      OVERVIEW. The following overview shall be subject to the more
specific Plan provisions describing the grant, exercise and settlement of
Awards:

                  (i)      Awards under the Plan shall be made with respect to a
specified number of shares of the Company's Common Stock.

                  (ii)     The Award will entitle the grantee to receive either
cash or stock based upon the growth in the value of shares of the Company's
Common Stock from the value when the Award was granted to the value at the time
of exercise.

1.2      Administration.

         (a)      The Plan shall be administered by the compensation committee
(the "Committee") appointed by the Board of Directors of the Company (the
"Board"), which Committee shall consist of two or more directors. The members of
the Committee shall be appointed by the Board, and may be changed at any time
and from time to time in the discretion of the Board. Effective on and after a
Public Offering, each member of the Committee shall be a person who is (i) a
"non-employee director" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, or a person meeting any similar requirement under any
successor rule or regulation and (ii) an "outside director" within the meaning
of Section 162(m) of the Internal Revenue Code of 1986 (the "Code") and the
Treasury Regulations promulgated thereunder.

         (b)      Each grant of an Award under the Plan must be pre-approved by
the Committee. No grantee may participate in the consideration of any Award in
which they benefit.

         (c)      The Committee shall have the authority (i) to exercise all of
the powers granted to it under the Plan, (ii) to construe, interpret and
implement the Plan and any Award Agreements executed pursuant to the Plan, (iii)
to prescribe, amend and rescind rules relating to the Plan, (iv) to make any
determination necessary or advisable in administering the Plan and (v) to
correct any defect, supply any omission and reconcile any inconsistency in the
Plan and/or any Award Agreement.

         (d)      The determination of the Committee on all matters relating to
the Plan or any Award Agreement shall be conclusive.

         (e)      No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Award
hereunder.

         (f)      Notwithstanding anything to the contrary contained hereunder:
(i) until the Board shall appoint the members of the Committee, the Plan shall
be administered by the Board and (ii) the Board may, in its sole discretion, at
any time and from time to time, resolve to administer the



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Plan. In either of the foregoing events, the term "Committee" as used herein
shall be deemed to refer to the Board.

         (g)      The Chief Executive Officer, the Chief Financial Officer, and
the Secretary of the Company shall have the authority to execute instructions of
the Board or the Committee with respect to grants of awards, as well as
preparation and collection of option Award Agreements, and similar
administrative functions.

1.3      Persons Eligible for Awards.

Awards under the Plan may be made to such Key Personnel as the Committee shall
from time to time in its sole discretion select. Such key personnel shall be
eligible for Awards under the Plan as of the first day of their employment or
promotion into an eligible position, as applicable. If a previously eligible
employee undergoes a change in position with the Company such that he is no
longer in an eligible group, or if an otherwise-eligible individual begins
serving on the Board or acquires equity in the Company pursuant to incentive
shares, "additional shares" or subsequently acquired shares, such individual
shall not, at the Committee's election, be eligible for any new Awards under the
Plan while such status applies, but any previously issued Awards will remain in
effect.

1.4      Types of Awards Under Plan.

         (a)      Awards under the Plan ("Awards") shall be made in the form of
options ("options") to purchase shares of the Company's Common Stock.

         (b)      The options covered by Awards shall be "non-qualified" stock
options subject to the provisions of Code Section 83.

1.5      Shares Available for Awards.

         (a)      Subject to Section 3.5 (relating to adjustments upon changes
in capitalization), the total number of shares of Common Stock with respect to
which Awards may be granted hereunder shall equal 113,750 shares of Common
Stock. In accordance with (and without limitation upon) the preceding sentence,
Awards may be made in respect of shares covered by previously-granted Awards, to
the extent that such previously-granted Awards have expired, terminated or been
canceled for any reason whatsoever (other than by reason of exercise of such
previously-granted Awards).

         (b)      Shares of Common Stock that shall be subject to issuance
pursuant to the Plan shall be authorized and unissued or treasury shares of
Common Stock.

         (c)      Without limiting the generality of the foregoing, the
Committee may, with the grantee's consent, cancel any Award under the Plan and
issue a new Award in substitution therefor upon such terms as the Committee may
in its sole discretion determine; provided that the substituted Award shall
satisfy all applicable Plan requirements as of the date such new Award is
granted.

1.6      Definition of Certain Terms.

         (a)      The term "Affiliate" as used herein means 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.

         (b)      The term "Common Stock" as used herein means the shares of
common stock of the Company as constituted on the effective date of the Plan,
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.

         (c)      References herein to "employment" and "termination of
employment" shall refer only to the performance of services for, and cessation
of the performance of services for, the Company or an Affiliate in the capacity
of a common law employee. An individual shall not be deemed to


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have terminated employment until he no longer is a common law employee of the
Company or any of its Affiliates. In the case of an Award made to a Key Person
who is not, at the time of the Award, a common law employee, references herein
to employment, to termination of employment or the like shall be understood to
refer to the period of services during which the Key Person provides services as
a Director (or, if relevant, in some other independent contractor relationship).

         (d)      References to the time of a "Public Offering" shall mean the
earliest date on which shares of the Company's Common Stock are listed for
trading on the New York Stock Exchange, the American Stock Exchange or
authorized for quotation on the Nasdaq National Market.

         (e)      References to an "Extraordinary Transaction" shall mean (i)
the sale in one transaction or a series of transactions of all or substantially
all of the assets of the Company, or (ii) the acquisition by any person or group
(as the terms "person" and "group" are used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated under Section 13(d) of the Exchange Act), of
beneficial ownership (as such term is used in Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder) of Common Stock or other
voting securities of the Company possessing in excess of 50% of the voting power
of the outstanding voting securities of the Company.

1.7      Agreements Evidencing Awards.

         (a)      Awards made under the Plan shall be evidenced by written
agreements that 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 "Award Agreements."

         (b)      Each Award Agreement shall set forth the number of shares of
Common Stock subject thereto.

         (c)      Each Award Agreement shall set forth the amount (the "option
exercise price") payable by the grantee to the Company in connection with the
exercise of the option evidenced thereby, which, for purposes of options granted
in January, 2001, shall equal $10 per share of Common Stock. For Awards made
after January, 2001, the option exercise price for each option granted in a
particular fiscal quarter shall be set based on the four full fiscal quarters
immediately preceding the date of award, using the following calculation:

The quotient obtained by dividing (x) the amount by which (i) the sum of (A) the
product of 4.5 times EBITDA of the Company during the Measurement Period plus
(B) the proceeds payable to the Company upon the exercise of options or warrants
to acquire Common Stock that are included in determining the number of shares of
Fully Diluted Common Stock (ii) exceeds the Consolidated Indebtedness of the
Company as of the date of grant of an Award by (y) the number of shares of Fully
Diluted Common Stock on the date of grant of said Award.

All determinations of option exercise prices under this Section 1.7(c) shall be
made by the Committee based on the principle that any such determination shall
be made in good faith; provided, however, that the Committee's determinations of
option exercise prices shall be final, binding and conclusive.

For purposes of this Section, the following definitions shall apply:

"Consolidated Indebtedness" shall mean, without duplication, any indebtedness of
the Company and its subsidiaries, whether or not contingent, in respect of (A)
borrowed money or evidenced by bonds, notes, debentures or similar instruments,
(B) obligations under letters of credit (other than Risk Management LCs or
reimbursement agreements in respect thereof), banker's


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acceptances or similar arrangements, (C) capital lease obligations, (D) the
balance deferred and unpaid of the purchase price of any property, (E)
indebtedness of others secured by a lien on any asset of the Company or its
subsidiaries (whether or not such indebtedness is assumed by the Company), (F)
all obligations respecting the purchase, redemption, retirement or liquidation
value of preferred stock, including the Liquidation Value of and the Maximum
Dividend (each, as defined in the Company's Certificate of Incorporation)
payable with respect to the Preferred Stock; and (G) to the extent not otherwise
included, the guarantee by such Person of any indebtedness of any other Person.
The amount of any Consolidated Indebtedness outstanding as of any date shall be
(x) the accreted value thereof, in the case of any indebtedness issued with
original issue discount, and (y) the principal amount thereof, together with any
interest thereon that is more than 30 days past due, in the case of any other
Indebtedness. Indebtedness between the Company and its subsidiaries or between
subsidiaries of the Company shall not be included in Consolidated Indebtedness.
For purposes of avoidance of doubt, neither the lease of the Company's
headquarters entered into as part of the sale/leaseback transaction entered into
on September 29, 2000 nor Risk Management LCs shall constitute Consolidated
Indebtedness. In determining the amount of Consolidated Indebtedness, any
contingent items, guarantees or other amounts that are not recorded on the
Company's consolidated balance sheet shall be included at the fair probable
value thereof (meaning an estimate of the likely deduction an appraiser would
make from enterprise value to arrive at equity value when valuing the common
stock of the Company).

"Contingent Right" shall mean any option, warrant,
conversion right or other right to subscribe for, purchase or acquire Common
Stock, Preferred Stock or any other shares of capital stock of the Company.

"EBITDA" shall mean, for a specified fiscal period, consolidated net income
(loss) of the Company, (x) plus, to the extent deducted in computing such
consolidated net income (loss), (1) an amount equal to any extraordinary loss
and/or any net capital loss realized (2) provision for taxes based on income or
profits, (3) consolidated interest expense whether paid or accrued and whether
or not capitalized (including amortization or write-off of debt discount and
debt issuance costs and commissions, discounts and other fees and charges
associated with indebtedness (including costs associated with letters of credit
included in "Consolidated Indebtedness", as such term is defined in the
Stockholders' Agreement)), (4) depreciation and amortization (including
amortization of goodwill, organization costs and capitalized management fees,
overhead allocations, or transaction fees paid to the Sponsor (as defined in the
Stockholders' Agreement) or Affiliates or paid to Sentinel Capital Partners or
its Affiliates (but excluding payments of expense reimbursement or
indemnification payments to Sponsor), (6) dividends paid or accrued on preferred
stock, and (b) any management fees, overhead allocations and transaction fees
paid to the Sponsor or its Affiliates or paid to Sentinel Capital Partners or
its Affiliates (but excluding payments of expense reimbursement or
indemnification payments to Sponsor), and (y) minus any tax benefit recorded and
any extraordinary gain and/or any net capital gain realized, in each case, on a
consolidated basis and determined in accordance with GAAP.

"Fully Diluted Common Stock" shall mean at any time, all shares of Common Stock
then issued and outstanding and all shares of Common Stock issuable upon the
exercise of any then outstanding Contingent Right, whether or not such
Contingent Right is at the time exercisable.

"Measurement Period" shall mean the four full fiscal quarters immediately
preceding the date of grant of an Award of a grantee's options.


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"Preferred Stock" shall mean shares of Senior Preferred Stock, par value $.01
per share, of the Company, as adjusted to reflect any merger, consolidation,
recapitalization, reclassification, split up, stock dividend, rights offering,
reverse stock split or other similar action made, declared or effected with
respect to the Preferred Stock.

"Risk Management LCs" shall mean letters of credit issued in connection with the
Company's or any subsidiary's risk management program, including letters of
credit issued in connection with worker's compensation programs."

                                    ARTICLE 2
                                AWARDS OF OPTIONS

2.1      Grant of Stock Options.

Each Award shall provide the grantee an option to purchase shares of Common
Stock in such amounts and subject to such terms and conditions as the Committee
shall in its sole discretion specify in the applicable Award Agreement, subject
to the terms of the Plan.

2.2      Exercisability of Options.

Subject to the other provisions of the Plan:

         (a)      Exercise Event. Each award of an option shall only become
exercisable upon the occurrence of an event qualifying for "Tag-Along" treatment
under Section 4.5 of the Stockholders' Agreement and only to the extent
necessary to participate in the "Tag-Along" sale, or in the event that
Caxton-Iseman Investments, L.P. invokes its "Drag-Along" rights pursuant to
Section 4.7 of the Stockholders' Agreement (any such event to be described
herein as an "Exercise Event").

                  (i)      CASH TRANSACTION. Upon the closure and funding of an
Exercise Event that is a cash transaction associated with a "Tag-Along" (but
only to the extent necessary to participate in the "Tag-Along" sale) or a
"Drag-Along" event, the options shall unilaterally be sold, on the optionees'
behalf, pursuant to a same-day sale treated as a book entry by the Company and
the Company shall then distribute the proceeds net of the option exercise price,
withholdings and other deductions, to the optionees.

                  (ii)     EQUITY EXCHANGE. If, instead of a cash transaction,
the Exercise Event is an equity exchange for Company shares associated with a
"Tag-Along" or a "Drag-along" event, the Board may elect at such time whether to
(x) cash out the options as set forth in (i) above, based on an equivalent
value, or (y) unilaterally exercise the options and provide the optionee with
exchange shares in-kind, net of the option price. The Board has full discretion
to exercise its cash out right established herein, whether or not it determines
that such cash out is necessary in order to satisfy regulatory requirements
under securities laws or other laws.

         (b)      LIQUIDATION PRICE. Upon the exercise of an option pursuant to
an Exercise Event, each optionee shall receive, in the case of a cash
transaction or a Board election to cash out optionees pursuant to an equity
transaction, the actual net cash (net of taxes and other withholdings) payable
per share of Common Stock pursuant to such transaction. In the case of an equity
transaction, each optionee shall receive the net shares exchanged per share of
Common Stock (net of taxes and other withholdings). In all cases, payment will
be net of the option exercise price, withholdings and other deductions, as
described in (a) above.

2.3      Limitation on Exercise.  Notwithstanding any other provision of the
Plan:

         (a)      The options awarded under the Plan shall be exercisable for
fifteen years after the date of grant (unless terminated earlier in accordance
with Section 2.5 of the Plan).

         (b)      Except as otherwise provided in the Plan, an option Award
shall not be exercisable prior to the occurrence of a transaction described in
Section 2.2(a), above.


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         (c)      Subject to the provisions of Section 1.2 hereof, if the Board
shall propose or cause the Company to enter into an Extraordinary Transaction,
then the Board may direct that all outstanding options shall be cancelled;
PROVIDED; HOWEVER, that if such Extraordinary Transaction is only a partial sale
of the Company, then, outstanding options shall be cancelled as directed by the
Committee in its discretion. Any cancellation shall be effected either by
permitting outstanding options to be exercised as if an Exercise Event set forth
in Section 2.2(a) had occurred, so as to allow the affected grantees to
participate in the Extraordinary Transaction, or by directing that the Company
buy from each grantee and each grantee shall be obliged to sell to the Company
for cash the unexercised portion of his option at a price equivalent to what the
grantee would have received had he exercised his option and sold the underlying
Common Stock in connection with the Extraordinary Transaction.

2.4      Dividends.

To the extent that dividends are declared and paid to holders of Common Stock,
each grantee shall receive a dividend equivalent payment with respect to twenty
percent (20%) of his option on or after the first anniversary of the date of
grant, and with respect to an additional 20% on each of the next four
anniversaries of such date of grant.

2.5      Default Rules Concerning Termination of Employment.

Subject to the other provisions of the Plan and unless the applicable Award
Agreement otherwise provides:

         (a)      GENERAL RULE. All options granted to a grantee shall terminate
upon his termination of employment for any reason (including death) except to
the extent post-employment exercise of an option is permitted in accordance with
this Section 2.5.

         (b)      IMPROPER ACTIVITY; QUIT. All options granted to a grantee
shall terminate and expire on the day the grantee's employment is terminated for
cause or he quits whether or not he is a party to a written employment contract.
For purposes of this Section 2.5, "cause" shall mean (i) the conviction or
pleading of nolo contendere with respect to a felony, or a misdemeanor involving
moral turpitude or dishonesty in the conduct of the affairs of the Company or
its subsidiaries, (ii) gross negligence or willful misconduct or malfeasance by
a grantee in the performance of his or her duties as an officer or employee of
the Company or any of its subsidiaries, (iii) failure by any grantee to obey the
lawful directions of the Board of Directors or any executive officer of the
Company or any of its subsidiaries to whom such grantee reports which directions
are not materially inconsistent with such grantee's past or present duties and
responsibilities, or (iv) breach of any noncompetition, nonsolicitation or
confidentiality requirements set forth herein whether or not such agreement or
requirement is enforceable under applicable law. Notwithstanding the foregoing,
no grantee shall be deemed to have been terminated for cause pursuant to clauses
(ii) or (iii) until ten (10) days after there shall have been delivered to such
grantee a written notice from the Company or such grantee's employer setting
forth in reasonable detail the particulars forming the basis for such
termination. The grantee shall be given the opportunity to be heard during such
ten (10) day period before the Board of Directors respecting the matters set
forth in such notice.

         (c)      REGULAR TERMINATION; LEAVES OF ABSENCE. If the grantee's
employment terminates for reasons other than as provided in subsection (b) or
(d) of this Section 2.5, the options granted to such grantee prior to such
termination of employment may be exercised, if an Exercise Event as set forth in
Section 2.2(a) occurs during such post-termination period, until the earlier of
(a) sixty (60) days after grantee's termination of employment or (b) the date on
which such options terminate or expire in accordance with the provisions of the
Plan (other than this Section 2.5) and the Award Agreement; provided, that the
Committee may in its sole discretion determine such


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other period for exercise in the case of an individual whose employment
terminates solely because his employer ceases to be an Affiliate or he transfers
his employment with the Company's consent to a purchaser of a business disposed
of by the Company. The Committee may in its discretion determine (i) 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 (ii)
the impact, if any, of any such leave on outstanding Awards under the Plan.

         (d)      DEATH. If a grantee's employment terminates by reason of
death, or if a grantee's employment terminates in the manner described in
Section 2.5(c) and he dies within the period for exercise provided for therein,
any option held by him immediately prior to his death shall be exercisable by
the person to whom such option passes under the grantee's will (or, if
applicable, pursuant to the laws of descent and distribution), if an Exercise
Event as set forth in Section 2.2(a) occurs during such post-termination period,
until the earlier of (a) sixty (60) days after the grantee's death or
termination, whichever was earlier, or (b) the date on which such options
terminate or expire in accordance with the provisions of the Plan (other than
this Section 2.5) and the Award Agreement.

2.6      NONCOMPETITION.

The grantees each individually covenant, by accepting an Award under the Plan,
for the benefit of the Company and its Affiliates:

         (a)      ACCESS. Each grantee acknowledges that he or she has had and
will continue to have access to significant confidential and valuable
information which can be used unfairly and to the harm of the Company by present
or potential competitors in the buffet segment of the restaurant industry. The
covenants set forth in this Section 2.6 are for the benefit of the Company and
its Affiliates and may only be enforced by the Company or its Affiliates.

         (b)      DURING EMPLOYMENT. Each grantee agrees that, during the period
of his or her continued employment or consultancy by the Company or its
Affiliates, he or she will not render services to or give advice to, Affiliate
with (as employer, partner, consultant or otherwise), or invest or acquire any
interest in, in whole or in significant part, any other person or organization,
which is engaged in or about to become engaged in franchising, developing,
owning or operating a restaurant or other food service establishment that
utilizes, in whole or in significant part, a buffet (other than where incidental
to primary tableside service), smorgasbord or cafeteria service format (a
"Conflicting Organization"). Each grantee shall not, however, be prohibited from
investing in securities of any company that is listed on a national securities
exchange or traded on NASDAQ, provided that he or she does not hereafter own, or
have the right to acquire, more than 3% of the outstanding voting securities of
such a Conflicting Organization.

         (c)      POST EMPLOYMENT. Each grantee further agrees that, until the
expiration of a period of two (2) years after the cessation or termination of
his or her employment or consultancy with the Company or any controlled
Affiliate of the Company, whether voluntary or involuntary, with or without
cause, he or she (i) will not render services or give advice to, or affiliate
with (as employee, partner, consultant or otherwise) or invest or acquire any
interest in, any Conflicting Organization operating within one-hundred miles of
any location where a Company buffet restaurant is then currently operating, or
where the Company, an Affiliate or a present or prospective franchise operator
has leased or purchased, or is then negotiating to lease a purchase, a site on
which it plans to operate a Company buffet restaurant and (ii) shall not,
directly or indirectly, hire or solicit any person who has been employed by the
Company or any Affiliate within one year prior to the date of such hiring or
solicitation or encourage any such person to leave such employment. This Section
shall not prevent a grantee from hiring or soliciting any


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employee or former employee (who is or was not a management or store management
employee) of the Company or any Affiliate who responds to an add placed in a
newspaper, magazine, periodical or Internet web site that is a public
solicitation of prospective employees. Each grantee shall not, however, be
prohibited from investing in securities of any company that is listed on a
national securities exchange or traded on NASDAQ, provided that he or she does
not hereafter own, or have the right to acquire, more than 3% of the outstanding
voting securities of such Conflicting Organization. Notwithstanding the
foregoing, if the business of the Conflicting Organization has separate and
distinct divisions, a grantee may, following termination of such employment,
render services to or give advice to, or affiliate with, a division that would
not itself constitute a Conflicting Organization if, prior thereto, the Company
received written assurances satisfactory to the Company from the Conflicting
Organization and the grantee that grantee will not directly or indirectly render
services or give advice or information to any division of such Conflicting
Organization which would itself constitute a Conflicting Organization. This
Section 2.6 supersedes all noncompetition agreements in effect on the date of
the initial Award to the grantee, between the grantee and Buffets, Inc. or any
of its Affiliates.

         (d)      BLUE PENCIL. If any court determines that any of the covenants
set forth in Section 2.6, or any part thereof, is unenforceable because of the
duration or geographic scope of such provision, such court shall have the power
to reduce the duration or scope of such provision, as the case may be, and, in
its reduced form, such provision shall then be enforceable.

         (e)      CONFIDENTIALITY. During and following the employment or
consultancy of any grantee, the grantee will keep secret and retain in strictest
confidence, and will not use for the benefit of himself or others except in
connection with the business and affairs of the Company and its Affiliates, all
confidential matters relating to the Company or its Affiliates including
"know-how," financial information, trade secrets, recipes and formulas, lease or
construction terms, consultant contracts, pricing policies, operational methods,
marketing or franchising plans or strategies, product development techniques or
plans, business acquisition plans, new personnel acquisition plans, training
materials, designs and design projects and other business affairs relating to
the Company or its Affiliates and will not disclose them to anyone outside of
the Company and its Affiliates, whether during or after employment by or
consultancy with the Company or its Affiliates, except (i) as required in the
course of performing his or her duties for the Company or its Affiliates, (ii)
with the Company's express written consent or (iii) to the extent any such
confidential matter (A) is in the public domain or is generally known in the
industry through no unlawful or wrongful act of the grantee or (B) must be
disclosed by the grantee pursuant to law and the grantee's disclosure is limited
to that reasonably required by law. All memoranda, notes, lists, records and
other documents or papers (and all copies thereof), including such items stored
in computer memories, on microfiche or by any other means, made or compiled by
or on behalf of the grantee, or made available to the grantee concerning the
business of the Company or its Affiliates, are and will be the Company's
property and will be delivered to the Company promptly upon the termination of
the grantee's employment with the Company or its Affiliates or at any other time
on written request.

                                    ARTICLE 3
                                  MISCELLANEOUS

3.1      Amendment of the Plan; Modification of Awards.

         (a)      PLAN AGENTS. The Board may amend, alter, suspend, discontinue
or terminate the Plan or any portion thereof at any time; provided that no such
amendment, alteration, suspension, discontinuation or termination shall be made
without shareholder approval if such approval is


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necessary to comply with any tax or regulatory requirement; provided further
that no such amendment, alteration, suspension, discontinuation or termination
which impairs the rights of any grantee with respect to any Award theretofore
granted to such grantee shall to that extent be effective without the consent of
such grantee.

         (b)      AMENDMENTS TO AWARDS. The Committee may waive any conditions
or rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, any Award theretofore granted, prospectively or retroactively,
including, without limitation, any amendment which would (i) accelerate the time
or times at which an Award may become exercisable and/or (ii) extend the
scheduled termination or expiration date of an Award; provided that any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would impair the rights of any grantee with respect to any
Award theretofore granted shall not to that extent be effective without the
consent of the affected grantee.

3.2      Restrictions.

         (a)      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 Award under the Plan,
the acquisition, issuance or purchase of shares hereunder or the taking of any
other action hereunder (each such action being hereinafter referred to as 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. Without limiting the generality of the foregoing,
the Committee shall be entitled to determine not to make any payment whatsoever
until Consent has been given if (i) the Committee may make any payment under the
Plan in cash, stock or both, and (ii) the Committee determines that Consent is
necessary or desirable as a condition of, or in connection with, payment in any
one or more of such forms.

         (b)      CONSENT DEFINED. The term "Consent" as used herein with
respect to any Plan Action means (i) any and all listings, registrations or
qualifications in respect thereof upon any securities exchange or other
self-regulatory organization or under any federal, state, local or foreign law,
rule or regulation, (ii) 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
self-regulatory organization, (iii) 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 (iv) any and all consents,
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 Affiliate. The Company has amounts
borrowed under various loan agreements, and such loan agreements limit the
amount the Company can pay under this Plan and similar plans. If such payments
are not allowed under a loan agreement, they will be deferred unless and until
such time as they become allowable.

3.3      Nontransferability.

No Award 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 Award shall be exercisable only by him.

3.4      Withholding Taxes.


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<PAGE>

A grantee may be required to pay to the Company and the Company shall have the
right to withhold from any payment of cash or stock due under the Plan or from
any compensation or other amount payable to a grantee the amount (in cash or
shares of stock) of any applicable withholding taxes in respect of an Award, its
exercise, or any payment or transfer under an Award or under the Plan and to
take all such other action as may be necessary in the opinion of the Company to
satisfy all obligations for the payment of such taxes.

3.5      Adjustments Upon Changes in Capitalization.

If and to the extent specified by the Committee, the number of shares of Common
Stock which may be made subject to Awards under the Plan, the number of shares
of Common Stock subject to Award and the exercise price of options theretofore
granted under the Plan, (including without limitation the determination of
EBITDA) shall be appropriately adjusted (as the Committee may determine in its
sole discretion) for any change in the number of issued shares of Common Stock
resulting from the subdivision or combination of shares of Common Stock, capital
infusions or other capital adjustments (including without limitation the
incurrence of debt other than in the ordinary course of business) whether to
make an acquisition or for any other purpose, or the payment of a stock dividend
after the effective date of the Plan or other change in such shares of Common
Stock effected without receipt of consideration by the Company. Adjustments
under this Section 3.5 shall be made by the Committee based on the principle
that any such adjustment shall be designed in good faith in a manner reasonably
believed to reflect the economic impact of any of such events; provided,
however, that the Committee's determination as to what adjustments shall be
made, if any, and the extent thereof, shall be final, binding and conclusive.

3.6      Right of Discharge Reserved.

Nothing in the Plan or in any Award Agreement shall confer upon any person the
right to continue in the employment of the Company or an Affiliate or affect any
right which the Company or an Affiliate may have to terminate the employment of
such person.

3.7      No Rights as a Stockholder.

No grantee or other person shall have any of the rights of a stockholder of the
Company with respect to shares subject to an option until the issuance of a
stock certificate to him for such shares. Except as otherwise provided in
Section 3.5, 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.

3.8      Nature of Payments.

         (a)      Any and all Awards and payments hereunder shall be granted or
paid, as the case may be, in consideration of services performed for the Company
or for its Affiliates by the grantee.

         (b)      All such Awards and payments shall be considered special
incentive payments to the grantee and shall not, 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 (i) any pension,
retirement, life insurance or other benefit plan of the Company or any Affiliate
or (ii) any agreement between the Company or any Affiliate and the grantee.

         (c)      By accepting an Award under the Plan, the grantee shall
thereby waive any claim to continued exercise or vesting of an Award or to
damages or severance entitlement related to non-continuation of the Award beyond
the period provided herein or in the applicable Award Agreement, notwithstanding
any contrary provision in any written employment contract with the grantee,
whether any such contract is executed before or after the grant date of the
Award.

3.9      Non-Uniform Determinations.

         (a)      Award Agreements may vary the provisions of Section 1.7(c),
2.2(a), 2.2(b), 2.2(c), 2.4(a), 2.4(b) and 2.6 provided that the particular
Award


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<PAGE>

Agreements specifically reference this Section 3.9(a) establishing the intent to
effect the variances.

         (b)      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, Awards 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 Award
Agreement, 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 2.5(c).

3.10     Other Payments or Awards.

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 Award or payment to
any person under any other plan, arrangement or understanding, whether now
existing or hereafter in effect.

3.11     Section Headings.

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

3.12     Effective Date and Term of Plan.

         (a)      The Plan shall be deemed adopted and become effective upon the
approval thereof by the Board or such other date as the Board shall determine;
provided that, notwithstanding any other provision of the Plan, no Award made
under the Plan shall be exercisable unless the Plan is approved, directly or
indirectly, by (i) the express consent of stockholders holding at least a
majority of the Company's voting stock voting in person or by proxy at a duly
held stockholders' meeting, or (ii) the unanimous written consent of the
stockholders of the Company, within 12 months before or after the date the Plan
is adopted.

         (b)      The Plan shall terminate ten years after the earlier of the
date on which it becomes effective or is approved by shareholders, and no Awards
shall thereafter be made under the Plan. Notwithstanding the foregoing, all
Awards made under the Plan prior to such termination date shall remain in effect
until such Awards have been satisfied or terminated in accordance with the terms
and provisions of the Plan and the applicable Award Agreement.

3.13     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.


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