UNION ACCEPTANCE CORPORATION


                            1999 INCENTIVE STOCK PLAN

         1. Purpose. The purpose of the Union Acceptance  Corporation 1999 Stock
Option and Incentive Plan (the "Plan") is to provide to directors,  officers and
other key employees of Union  Acceptance  Corporation  (the  "Company")  and its
majority-owned  and wholly-owned  subsidiaries  (individually a "Subsidiary" and
collectively  the  "Subsidiaries"),   including,   but  not  limited  to,  Union
Acceptance  Funding  Corporation,  UAC Securitization  Corporation,  Performance
Funding  Corporation,   Performance  Securitization  Corporation,   UAC  Finance
Corporation,  UAC Boat  Funding  Corp.  and  Circle  City Car  Company,  who are
materially  responsible  for the  management or operation of the business of the
Company or a Subsidiary and have provided  valuable  service to the Company or a
Subsidiary, a favorable opportunity to acquire Class A Common Stock, without par
value (the "Common  Stock"),  of the  Company,  thereby  providing  them with an
increased  incentive to work for the success of the Company and its Subsidiaries
and better  enabling  each such entity to attract and retain  capable  executive
personnel.

         2.   Administration of the Plan.

                  (a) The Committee.  The Plan shall be administered,  construed
         and  interpreted  by a committee  consisting of at least two members of
         the Board of Directors of the Company,  each of whom is a disinterested
         person within the meaning of the  definition of that term  contained in
         Reg. ss. 16b-3 promulgated  under the Securities  Exchange Act of 1934,
         as  amended  (the " 1934 Act") and an outside  director  under  Section
         162(m) of the Internal  Revenue Code of 1986,  as amended (the "Code").
         The members of the Committee  shall be designated  from time to time by
         the Board of  Directors  of the  Company.  ("Committee"  as used herein
         refers to the committee so  designated,  and, as the context  requires,
         may also refer to the full Board of  Directors  or the  Special  Option
         Committee   acting  under  Section   2(c).)  In  the  absence  of  such
         designation,  the Committee shall be the Compensation  Committee of the
         Corporation  as  long  as  such  committee   shall  consist  solely  of
         non-employee  directors.  The  decision of a majority of the members of
         the Committee shall  constitute the decision of the Committee,  and the
         Committee  may act  either  at a  meeting  at which a  majority  of the
         members of the Committee is present or by a written  consent  signed by
         all members of the Committee.

                  (b) Authority of the Committee.  The Committee  shall have the
         sole, final and conclusive authority to determine,  consistent with and
         subject to the provisions of the Plan:

                           (i) the individuals ("Optionees or Awardees") to whom
                  options  or   successive   options,   cash  awards  or  shares
                  (collectively, "Awards") shall be granted under the Plan;

                           (ii) the time when Awards shall be granted hereunder;

                           (iii) the  number  of  shares  of Common  Stock to be
                  covered under each option and the amount of any cash awards;

                           (iv) the  number of shares to be subject to awards of
                  restricted shares;

                           (v) the option  price to be paid upon the exercise of
                  each option;

                           (vi) the period  within which each such option may be
                  exercised and the period of restriction  for restricted  share
                  grants;

                           (vii) the  extent to which an option is an  incentive
                  stock option or a non-qualified stock option;

                           (viii) the terms and conditions  upon which awards of
                  restricted shares may be granted; and

                           (ix)  the  terms  and  conditions  of the  respective
                  agreements by which Awards shall be evidenced.

The Committee shall also have authority to prescribe,  amend, waive, and rescind
rules and  regulations  relating to the Plan, to  accelerate  the vesting of any
stock options or cash awards made hereunder,  to amend the restrictions  imposed
on  Awards  of  restricted  shares  made  hereunder,   and  to  make  all  other
determinations necessary or advisable in the administration of the Plan.

                  (c) Special  Authority.  Notwithstanding  the above  paragraph
         2(b),

                           (i) The  full  Board  of  Directors  shall  have  the
                  special  authority  from time to time to grant  awards  and to
                  make the determinations  described in paragraph 2(b)(i)-(viii)
                  with respect to such grants.

                           (ii) A special  option  committee  of the Board  (the
                  "Special Option  Committee")  shall have the special authority
                  from  time  to  time  to  grant   options   and  to  make  the
                  determinations  described  in  paragraph  2(b)(i)-(viii)  with
                  respect to such  options  where the number of shares of Common
                  Stock to be covered under the option is less than one thousand
                  (1000) and the  Optionee is a person not subject to Section 16
                  of the 1934 Act.  Such special  committee  shall consist of at
                  least  two  (2)  members  of the  Board  of  Directors  of the
                  Company.  The  member(s)  of  the  special  committee  may  be
                  designated  from time to time by the Board of Directors of the
                  Company  and may  include  the  President  or Chief  Executive
                  Officer of the Company.

         3. Eligibility.  The Committee may, consistent with the purposes of the
Plan, grant Awards to directors, officers and other key employees of the Company
or of a  Subsidiary  who in the opinion of the  Committee  are from time to time
materially  responsible  for the  management or operation of the business of the
Company or of a Subsidiary and have provided valuable services to the Company or
a  Subsidiary;  provided,  however,  that in no event may any  employee who owns
(after  application of the ownership  rules in ss. 425(d) of the Code) shares of
stock  possessing more than 10 percent of the total combined voting power of all
classes  of  stock of the  Company  or any of its  Subsidiaries  be  granted  an
incentive stock option  hereunder  unless at the time such option is granted the
option price is at least 110% of the fair market  value of the stock  subject to
the option and such option by its terms is not exercisable  after the expiration
of five (5) years from the date such option is granted. Subject to the foregoing
and the  provisions  of  Section  8  hereof,  an  Optionee,  if he is  otherwise
eligible, may be granted additional Awards if the Committee shall so determine.

         4. Stock Subject to the Plan. A total of 300,000 shares of Common Stock
of the Company shall be reserved for issuance  pursuant to Awards  granted under
the Plan. Such reserved shares may be authorized but unissued shares or treasury
shares of the Company. Subject to Section 8 hereof, the shares for which options
may be granted under the Plan shall not exceed that number.  If any option shall
expire or  terminate  or be  surrendered  for any  reason  without  having  been
exercised in full, or if an award of restricted  shares shall be forfeited,  the
unpurchased shares subject thereto shall (unless the Plan shall have terminated)
become available for other options under the Plan. Notwithstanding the forgoing,
no Awardee  shall be granted more than 200,000  shares of Common Stock under the
Plan.

         5.  Terms of  Options.  Each  option  granted  under the Plan  shall be
subject  to the  following  terms and  conditions  and to such  other  terms and
conditions not  inconsistent  therewith as the Committee may deem appropriate in
each case:

                  (a)  Option  Price.  The price to be paid for  shares of stock
         upon the exercise of each option shall be  determined  by the Committee
         at the time such  option is  granted,  but such price in the case of an
         incentive stock option shall not be less than the fair market value, as
         determined by the Committee  consistent with Treas.  Reg. ss. 20.2031-2
         and any requirements of ss. 422A of the Code, of such stock on the date
         on which  such  option is  granted;  and  provided,  further,  that the
         Committee may in no event award  non-qualified stock options at a price
         less than 85% of the fair market  value of the Common Stock on the date
         of grant, as determined by the Committee  consistent  with Treas.  Reg.
         ss. 20.2031-2.

                  (b) Period for  Exercise  of  Option.  An option  shall not be
         exercisable  after the  expiration  of such period as shall be fixed by
         the Committee at the time of the grant  thereof,  but such period in no
         event  shall  exceed  ten (10) years and one day from the date on which
         such option is granted;  provided, that incentive stock options granted
         hereunder  shall  have terms not in excess of ten (10)  years.  Options
         shall be subject to earlier termination as hereinafter provided.

                  (c)  Exercise  of Options.  The option  price of each share of
         stock purchased upon exercise of an option shall be paid in full at the
         time of such exercise. Payment may be made:

                           (i)      in cash;

                           (ii) if the  Optionee  may do so in  conformity  with
                  Regulation T (12 C.F.R. ss. 220.3(e)(4)) without violating ss.
                  16(b) or ss.  16(c) of the 1934 Act,  pursuant  to a  broker's
                  cashless exercise procedure, by delivering a properly executed
                  exercise  notice together with  irrevocable  instructions to a
                  broker to promptly  deliver to the  Company  the total  option
                  price in cash and, if  desired,  the amount of any taxes to be
                  withheld from the Optionee's  compensation  as a result of any
                  withholding  tax  obligation  of  the  Company  or  any of its
                  Subsidiaries, as specified in such notice; or

                           (iii)  with  the  approval  of  the   Committee,   by
                  tendering whole shares of the Company's  Common Stock owned by
                  the  Optionee and cash having a fair market value equal to the
                  cash  exercise  price of the shares with  respect to which the
                  option is being  exercised.  For this  purpose,  any shares so
                  tendered by an Optionee  shall be deemed to have a fair market
                  value equal to the mean between the highest and lowest  quoted
                  selling  prices for the shares on the date of  exercise of the
                  option  (or if there  were no sales on such date the  weighted
                  average of the means  between the  highest  and lowest  quoted
                  selling prices on the nearest date before and the nearest date
                  after the date of  exercise  of the  option as  prescribed  by
                  Treas.  Reg. ss.  20.2031-2),  provided if there were no sales
                  during a reasonable period before and after the exercise date,
                  the fair market value shall be  determined  by taking the mean
                  between the bid and asked prices on the exercise  date (or, if
                  none,  the weighted  average of the means  between the bid and
                  asked  prices  on the  nearest  trading  date  before  and the
                  nearest  trading date after the exercise date on which bid and
                  asked quotations exist) as reported in The Wall Street Journal
                  or a similar publication selected by the Committee.

The Committee  shall have the authority to grant options  exercisable in full at
any time during their term, or  exercisable in such  installments  at such times
during their term as the Committee may determine.  Installments not purchased in
earlier  periods  shall be  cumulated  and be  available  for  purchase in later
periods.  The  Committee  shall  have  the  authority,  in  its  discretion,  to
accelerate  the time at which any or all of an option shall become  exercisable,
whenever it may determine  that such action is  appropriate by reason of changes
in  applicable  tax or other laws or other  changes in  circumstances  occurring
after the grant of an option.  Subject to the other  provisions of this Plan, an
option may be  exercised at any time or from time to time during the term of the
option as to any or all whole  shares  which have  become  subject  to  purchase
pursuant to the terms of the option or the Plan, but not at any time as to fewer
than one hundred  (100)  shares  unless the  remaining  shares which have become
subject to purchase are fewer than one hundred  (100)  shares.  An option may be
exercised only by written notice to the Company,  mailed to the attention of its
Secretary,  signed by the  Optionee  (or such  other  person or persons as shall
demonstrate  to  the  Company  his or  their  right  to  exercise  the  option),
specifying the number of shares in respect of which it is being  exercised,  and
accompanied  by payment in full in either  cash or by check in the amount of the
aggregate  purchase  price  therefor,  by  delivery  of the  irrevocable  broker
instructions referred to above, or, if the Committee has approved the use of the
stock swap feature  provided for above,  followed as soon as  practicable by the
delivery of the option price for such shares.

                  (d)  Certificates.  The  certificate or  certificates  for the
         shares  issuable  upon an  exercise  of an  option  shall be  issued as
         promptly as practicable after such exercise. An Optionee shall not have
         any rights of a  shareholder  in respect to the shares of stock subject
         to an option until the date of issuance of a stock  certificate  to him
         for such  shares.  In no case may a fraction of a share be purchased or
         issued  under the Plan,  but if,  upon the  exercise  of an  option,  a
         fractional  share would  otherwise be issuable,  the Company  shall pay
         cash in lieu thereof.

                  (e)      Termination of Option.

                           (i) In the case of an  Optionee  who is an  Employee,
                  unless an earlier or later date of termination is specified by
                  the Committee,  any option granted to an Optionee shall expire
                  and   terminate  on  the  date  thirty  (30)  days   following
                  Optionee's termination of employment for any reason other than
                  retirement,  disability  or death.  In the event of Optionee's
                  termination  of employment  due to  retirement,  disability or
                  death,  any  outstanding  options  shall  become  exercisable,
                  whether  or not the option was  otherwise  exercisable  at the
                  date  of  the  Optionee's  termination  but  shall  expire  as
                  indicated in the following table.


--------------------------------------  ----------------------------------------
             Circumstance of                         Expiration Date
               Termination
--------------------------------------  ----------------------------------------
                Retirement              3 months after termination of employment
--------------------------------------  ----------------------------------------
           Disability or death           1 year after termination of employment
              while employed
--------------------------------------  ----------------------------------------
       Death within 3 months after             1 year after date of death
   retirement OR within one year after
      termination due to disability
--------------------------------------  ----------------------------------------


                           (ii)     For purposes of this Plan,

                                    (x)  "Disability"  means permanent and total
                           disability as defined in ss. 22(e)(3) of the Code.

                                    (y)  "Retirement"  means such termination of
                           employment as shall entitle such  individual to early
                           or normal retirement benefits under any then existing
                           pension plan of the Company or a Subsidiary.

                                    (z)  Leave  of  absence   approved   by  the
                           Committee   shall   not   constitute   cessation   of
                           employment.

                           (iii)   In  the  case  of  an   Optionee   who  is  a
                  Non-employee  Director,  unless an  earlier  or later  date of
                  termination is specified by the Committee,  any option granted
                  to such an Optionee shall expire and terminate on the date one
                  year following the Optionee's  resignation or removal or other
                  discontinuance   of   service   as   a   director   (including
                  discontinuance by reason of death); provided that in the event
                  of the  death of such  Optionee  during  the one  year  period
                  following such date, the Option shall be further  extended and
                  shall  expire and  terminate on the first  anniversary  of the
                  Optionee's date of death.

                           (iv) If the Optionee  dies prior to expiration of the
                  Option in accordance with the foregoing provisions, the option
                  may be  exercised  by the  executor  or  administrator  of his
                  estate or by the person or persons  entitled  to the option by
                  will  or by  applicable  laws  of  descent  and  distribution,
                  whether  or not the option was  otherwise  exercisable  at the
                  date of his death.

                           (v)  In  no   circumstances,   shall  the  Option  be
                  exercisable  later  than the date on which it would  otherwise
                  expire.

                  (f) Nontransferability of Option. No option may be transferred
         by the  Optionee  otherwise  than by will or the  laws of  descent  and
         distribution  or pursuant to a qualified  domestic  relations  order as
         defined  by the  Code or  Title  I of the  Employee  Retirement  Income
         Security  Act of  1974,  as  amended,  or  the  rules  and  regulations
         thereunder,  and during the lifetime of the Optionee  options  shall be
         exercisable   only  by  the   Optionee   or  his   guardian   or  legal
         representative; provided, however, that non-qualified stock options may
         be transferred to members of the Optionee's immediate family, to trusts
         for the benefit of such immediate family members, and to trusts for the
         benefit of the  Optionee,  to the extent  permitted by the stock option
         agreement between the Optionee and the Company.

                  (g) No Right to Continued Service.  Nothing in this Plan or in
         any agreement  entered into pursuant  hereto shall confer on any person
         any right to  continue  in the employ or service of the  Company or its
         Subsidiaries or affect any rights of the Company, a Subsidiary,  or the
         shareholders  of the Company may have to  terminate  his service at any
         time.

                  (h) Maximum Incentive Stock Options. The aggregate fair market
         value of stock with respect to which  incentive  stock options  (within
         the meaning of ss. 422A of the Code) are exercisable for the first time
         by an  Optionee  during any  calendar  year under the Plan or any other
         plan of the Company or its Subsidiaries shall not exceed $100,000.  For
         this purpose,  the fair market value of such shares shall be determined
         as of the date the  option is  granted  and shall be  computed  in such
         manner as shall be determined  by the  Committee,  consistent  with the
         requirements of ss. 422A of the Code.

                  (i) Agreement.  Each option shall be evidenced by an agreement
         between the Optionee and the Company which shall  provide,  among other
         things,  that,  with respect to incentive  stock options,  the Optionee
         will  advise the Company  immediately  upon any sale or transfer of the
         shares of Common  Stock  received  upon  exercise  of the option to the
         extent such sale or transfer  takes place prior to the later of (a) two
         (2)  years  from the date of grant or (b) one (1) year from the date of
         exercise.

                  (j) Investment  Representations.  Unless the shares subject to
         an option are registered under applicable  federal and state securities
         laws, each Optionee by accepting an option shall be deemed to agree for
         himself and his legal  representatives  that any option  granted to him
         and any and all shares of Common Stock  purchased  upon the exercise of
         the option shall be acquired for  investment and not with a view to, or
         for the sale in connection  with, any  distribution  thereof,  and each
         notice of the exercise of any portion of an option shall be accompanied
         by a  representation  in writing,  signed by the  Optionee or his legal
         representatives,  as the case may be,  that the shares of Common  Stock
         are being acquired in good faith for investment and not with a view to,
         or for sale in connection  with, any  distribution  thereof  (except in
         case of the Optionee's legal representatives for distribution,  but not
         for  sale,  to  his  legal  heirs,   legatees  and  other  testamentary
         beneficiaries).  Any shares issued pursuant to an exercise of an option
         may bear a legend evidencing such representations and restrictions.

         6. Incentive  Stock Options and  Non-Qualified  Stock Options.  Options
granted under the Plan may be incentive stock options under ss. 422A of the Code
or non-qualified  stock options.  All options granted  hereunder will be clearly
identified as either incentive stock options or non-qualified  stock options. In
no event will the  exercise of an  incentive  stock  option  affect the right to
exercise  any  non-qualified  stock  option,  nor  shall  the  exercise  of  any
non-qualified  stock  option  affect the right to exercise any  incentive  stock
option.  Nothing  in this  Plan  shall be  construed  to  prohibit  the grant of
incentive  stock  options and  non-qualified  stock  options to the same person,
provided,  further, that incentive stock options and non-qualified stock options
shall not be granted in a manner whereby the exercise of one non-qualified stock
option or incentive stock option affects the exercisability of the other.

         7. Share Awards. The Committee shall have full and complete  authority,
subject  to the  limitations  of the Plan,  to grant  awards of shares  and,  in
addition to the terms and conditions contained in subsections (a) through (f) of
this  Section  7, to  provide  such  terms  and  conditions  (which  need not be
identical among  Awardees) in respect of such Awards of shares,  and the vesting
thereof,  as the Committee shall determine and provide in the agreement referred
to in subsection (d) of this Section 7.

                  (a) At the time of an  award  of  shares,  the  Committee  may
         establish for each Awardee a period during which,  or at the expiration
         of which, as the Committee shall determine and provide in the agreement
         referred to in  subsection  (d) of this  Section 7,  shares  awarded as
         restricted shares shall vest (the "Restricted Period"),  and subject to
         any such other terms and  conditions  as the Committee  shall  provide,
         restricted shares may not be sold,  assigned,  transferred,  pledged or
         otherwise  encumbered by the Awardee,  except as hereinafter  provided,
         during the Restricted Period. Except for such restrictions, and subject
         to subsections (c), (d) and (e) of this Section 7 and Section 8 hereof,
         the Awardee,  as owner of such  shares,  shall have all the rights of a
         shareholder,  including  but not  limited to the right to  receive  all
         dividends  paid on such shares and the right to vote such  shares.  The
         Committee shall have the authority,  in its  discretion,  to accelerate
         the time at  which  any or all of the  restrictions  shall  lapse  with
         respect  to  any  restricted  shares  prior  to the  expiration  of the
         Restricted Period with respect thereto, or to remove any or all of such
         restrictions, whenever it may determine that such action is appropriate
         by reason of changes in  applicable  tax or other laws or other changes
         in  circumstances  occurring after the  commencement of such Restricted
         Period.

                  (b) If an Awardee  ceases to be an employee of the Company and
         the  Subsidiaries  or ceases to be a director who is not an employee of
         the Company or any of the Subsidiaries (a "Non-employee  Director") for
         any reason other than permanent or total disability (within the meaning
         of ss.  22(e)(3) of the Code),  or death,  unless the  Committee  shall
         otherwise  determine  and  provide  in  the  agreement  referred  to in
         subsection (d) of this Section 7, all restricted shares awarded to such
         Awardee  and  which  at the time of such  cessation  of  employment  or
         service are subject to the  restrictions  imposed by subsection  (a) of
         this Section 7 shall upon such  cessation of  employment  or service be
         forfeited and returned to the Company;  provided,  however,  that if an
         Awardee  ceases to be an  employee  of the  Company  or a  Non-employee
         Director by reason of retirement pursuant to Company plans or policies,
         the Committee, in its sole discretion, may lift all or a portion of the
         restrictions of the restricted shares.  Unless the Committee shall have
         provided in the agreement referred to in subsection (d) of this Section
         7 for a  ratable  lapse of  restrictions  with  respect  to an Award of
         restricted shares during the Restricted Period, if an Awardee ceases to
         be an employee of the Company and the  Subsidiaries  or a  Non-employee
         Director by reason of permanent or total disability (within the meaning
         of ss. 22(e)(3) of the Code), or death, such portion of such restricted
         shares  awarded to the Awardee,  which at the time of such cessation of
         employment  or  service  are  subject  to the  restrictions  imposed by
         subsection  (a) of this  Section 7 as shall be equal to the  portion of
         the  Restricted  Period with  respect to such  shares  which shall have
         elapsed at the time of such  cessation of employment or service,  shall
         be free of restrictions and shall not be forfeited.

                  (c) Each  certificate in respect of restricted  shares awarded
         under the Plan  subject  to  restriction  under  Section  7(a) shall be
         registered  in the name of the Awardee and  deposited  by the  Awardee,
         together  with a stock power  endorsed  in blank,  with the Company and
         shall bear the following (or a similar legend:

                           "The  transferability  of  this  certificate  and the
                  shares of stock  represented  hereby are  subject to the terms
                  and conditions  (including  forfeiture) contained in the Union
                  Acceptance  Corporation Incentive Stock Plan, and an Agreement
                  entered into between the registered owner and Union Acceptance
                  Corporation.  Copies of such Plan and Agreement are on file in
                  the offices of the Secretary of Union Acceptance  Corporation,
                  45 North Pennsylvania Street, Indianapolis, Indiana 46204."

                  (d) At the time of an award of shares  subject to  restriction
         under Section 7(a),  the Awardee shall enter into an Agreement with the
         Company in a form specified by the Committee, agreeing to the terms and
         conditions of the award of restricted  shares and such other matters as
         the Committee shall in its sole discretion determine.

                  (e)  At  the  time  of an  award  of  restricted  shares,  the
         Committee  may, in its  discretion,  determine  that the payment to the
         Awardee of dividends  declared or paid on such  shares,  or a specified
         portion thereof,  by the Company shall be deferred until the earlier to
         occur of (i) the lapsing of the  restrictions  imposed under subsection
         (a) of this  Section  7 or (ii) the  forfeiture  of such  shares  under
         subsection  (b) of this Section 7, and shall be held by the Company for
         the  account  of the  Awardee  until  such  time.  In the event of such
         deferral,  there  shall be credited at the end of each year (or portion
         thereof)  interest on the amount of the account at the beginning of the
         year at a rate  per  annum as the  Committee,  in its  discretion,  may
         determine.  Payment  of  deferred  dividends,  together  with  interest
         accrued  thereon as aforesaid,  shall be made upon the earlier to occur
         of the events  specified in (i) and (ii) of the  immediately  preceding
         sentence.

                  (f)  At  the  expiration  of  any   restrictions   imposed  by
         subsection  (a) of this Section 7, the Company  shall  redeliver to the
         Awardee (or where the  relevant  provision  of  subsection  (b) of this
         Section 7 applies in the case of a deceased  Participant,  to his legal
         representative, beneficiary or heir) the certificate(s) and stock power
         deposited  with it pursuant to subsection (c) of this Section 7 and the
         restricted shares  represented by such certificate (s) shall be free of
         the restrictions referred to in subsection (a) of this Section 7.

                  (g) Each  Non-employee  Director who is elected as such at any
         annual  shareholder  meeting of the  Company  subsequent  to the Public
         Offering or who continues to serve as a Non-employee Director following
         any such annual  meeting shall receive on the date of such  shareholder
         meeting  an Award of  shares  equal to the  number  of shares of Common
         Stock  determined  by dividing  $15,000 by the fair market value of one
         such share on the date of such  annual  meeting  or the next  preceding
         trading date if such date was not a trading date  (rounded  down to the
         nearest whole  number);  provided that each Award  provided for by this
         sentence  shall be  reduced  by the  number of shares  awarded  to such
         Non-employee  Director on such date under Section 7(g) of the Company's
         1994 Incentive  Stock Plan. If on any date in any given year the number
         of  shares of  Common  Stock  available  for  Awards  under the Plan is
         insufficient to grant such Nonemployee  Director  entitled thereto such
         an Award of  restricted  shares,  the shares  available for such Awards
         shall be awarded  ratably  (to the  nearest  whole  share) to each such
         Non-employee Director on such date.

         8. Adjustment of Shares. In the event of any change after the effective
date of the  Plan in the  outstanding  stock of the  Company  by  reason  of any
reorganization,  recapitalization,  stock split, stock dividend,  combination of
shares, exchange of shares, merger or consolidation,  liquidation,  or any other
change after the effective date of the Plan in the nature of the shares of stock
of the  Company,  the  Committee  shall  determine  what  changes,  if any,  are
appropriate  in the number and kind of shares  reserved  under the Plan, and the
Committee  shall  determine what changes,  if any, are appropriate in the option
price and restricted share price under and the number and kind of shares covered
by outstanding Awards granted under the Plan. Any determination of the Committee
hereunder shall be conclusive.

         9. Cash Awards.  The Committee may, at any time and in its  discretion,
grant to any Optionee who is granted a  non-qualified  stock option the right to
receive, at such times and in such amounts as determined by the Committee in its
discretion,  a cash amount  (cash  award)  which is intended  to  reimburse  the
Optionee  for all or a portion  of the  federal,  state and local  income  taxes
imposed upon such Optionee as a consequence  of the exercise of a  non-qualified
stock option and the receipt of a cash award.

         10.  Replacement and Extension of the Terms of Options and Cash Awards.
The  Committee  from time to time may permit an  Optionee  under the Plan or any
other stock option plan  heretofore  or hereafter  adopted by the Company or any
Subsidiary to surrender  for  cancellation  any  unexercised  outstanding  stock
option and receive from his employing corporation in exchange therefor an option
for such number of shares of Common Stock as may be designated by the Committee.
Such Optionees also may be granted  related cash awards as provided in Section 9
hereof.

         11. Tax  Withholding.  Whenever the Company  proposes or is required to
issue or transfer  shares of Common Stock under the Plan, the Company shall have
the right to require the Optionee or Awardee or his or her legal  representative
to remit to the  Company an amount  sufficient  to satisfy  any  federal,  state
and/or  local  withholding  tax  requirements  prior  to  the  delivery  of  any
certificate  or  certificates  for such  shares,  and  whenever  under  the Plan
payments  are to be  made in  cash,  such  payments  shall  be net of an  amount
sufficient  to  satisfy  any  federal,   state  and/or  local   withholding  tax
requirements.   If  permitted  by  the  Committee  and  pursuant  to  procedures
established by the Committee, an Optionee or Awardee may make a written election
to have  shares of Common  Stock  having an  aggregate  fair  market  value,  as
determined by the Committee, consistent with the requirements of Treas. Reg. ss.
20.2031-2 sufficient to satisfy the applicable  withholding taxes, withheld from
the shares otherwise to be received upon the exercise of a non-qualified  option
or vesting of a restricted share Award.

         12. Amendment. The Board of Directors of the Company may amend the Plan
from time to time and,  with the consent of the  Optionee or Awardee,  the terms
and  provisions  of his or her Award,  except that  without the  approval of the
holders of at least a majority of the shares of the Company  voting in person or
by proxy at a duly constituted meeting or adjournment thereof:

                  (a) the number of shares of stock  which may be  reserved  for
         issuance  under the Plan may not be  increased  except as  provided  in
         Section 8 hereof; and

                  (b) the classes of persons to whom Awards may be granted under
         the Plan shall not be expanded materially.

         No  amendment  of the Plan,  however,  may,  without the consent of the
Optionees or Awardees,  make any changes in any  outstanding  Award  theretofore
granted under the Plan which would adversely affect the rights of such persons.

         13.  Termination.  The Board of Directors of the Company may  terminate
the Plan at any time and no Award shall be granted thereafter. Such termination,
however,  shall not affect the validity of any Award  theretofore  granted under
the Plan. In any event,  no incentive stock option may be granted under the Plan
after the date which is ten (10) years from the  effective  date of the Plan or,
if earlier, the date the Plan is approved by the Company's shareholders.

         14.  Successors.  This Plan shall be binding  upon the  successors  and
assigns of the Company.

         15.  Governing Law. The terms of any Awards  granted  hereunder and the
rights and obligations  hereunder of the Company, the Optionees and Awardees and
their  successors in interest  shall,  except to the extent  governed by federal
law, be governed by Indiana law.

         16. Government and Other Regulations. The obligations of the Company to
issue or transfer and deliver shares under Awards granted under the Plan or make
cash  awards  shall  be  subject  to  compliance   with  all  applicable   laws,
governmental rules and regulations, and administrative action.

         17.  Effective  Date.  The Plan shall be  effective as of July 1, 1999;
provided,  however,  that any  grant of  Awards  pursuant  to the Plan  shall be
subject to the approval of the Plan by the holders of at least a majority of the
voting  power of the shares of the Company  entitled to vote  thereon  voting in
person or by proxy at a duly constituted meeting or adjournment thereof, and any
options  granted  pursuant to the Plan may not be  exercised  until the Board of
Directors of the Company has been advised by counsel that such approval has been
obtained and all other applicable legal requirements have been met.