Document:

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                           FLEETWOOD ENTERPRISES, INC.
                              AMENDED AND RESTATED
                  1992 STOCK-BASED INCENTIVE COMPENSATION PLAN
          (INCLUDING ALL AMENDMENTS ADOPTED THROUGH DECEMBER 14, 1999)

I. GENERAL PROVISIONS

         1.1 PURPOSES OF THE PLAN

         Fleetwood Enterprises, Inc. ("Fleetwood") has adopted this 1992
Stock-Based Incentive Compensation Plan (the "Plan") to advance the interests of
Fleetwood and its stockholders by affording to key management and other
Employees of Fleetwood and its subsidiaries an opportunity to acquire or
increase a proprietary interest in Fleetwood or to otherwise benefit from the
success of the Company through the grant to such Employees of Incentive Awards
under the terms and conditions set forth herein. By thus encouraging such
Employees to become owners of Fleetwood's shares and by granting such Employees
other incentive compensation that is measured by the increased market value of
Fleetwood's shares or another appropriate measure of the success and
profitability of the Company, the Company seeks to attract, retain and motivate
those highly competent individuals upon whose judgment, initiative, leadership
and continued efforts the success of the Company in large measure depends.

         1.2 DEFINITIONS.

         As used herein the following terms shall have the meanings set forth
below:

         (a) "Board" means the Board of Directors of Fleetwood.

         (b) "Cause" means, with respect to the discharge by the Company of any
Participant, any conduct on the part of the Participant that constitutes (i) the
willful and continued failure to substantially perform Participant's employment
duties (other than due to physical or mental illness), (ii) the willful engaging
by Participant in misconduct which is or reasonably could be expected to become
materially injurious to the Company, monetarily or otherwise, (iii) an act or
acts of dishonesty on the part of the Participant constituting a felony under
applicable law, or (iv) a willful and material breach of any employment
agreement, if any, between Participant and the Company.

         (c) "Change in Control" means the following and shall be deemed to
occur if any of the following events occur:

                  (i) Any "person," as such term is used in Sections 13(d) and
         14(d) of the Exchange Act, is or becomes the "beneficial owner" (as
         defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
         of securities of Fleetwood representing 25% or more of the combined
         voting power of Fleetwood's then outstanding voting securities;

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                  (ii) Individuals who, as of the date hereof, constitute the
         Board (the "Incumbent Board"), cease for any reason to constitute at
         least a majority of the Board, provided that any person becoming a
         director subsequent to the date hereof whose election, or nomination
         for election by Fleetwood's stockholders, is approved by a vote of at
         least a majority of the directors then comprising the Incumbent Board
         (other than an election or nomination of an individual whose initial
         assumption of office is in connection with an actual or threatened
         election contest relating to the election of the directors of
         Fleetwood, as such terms are used in Rule 14a-11 of Regulation 14A
         promulgated under the Exchange Act) shall, for the purposes of this
         Plan, be considered as though such person were a member of the
         Incumbent Board;

                  (iii) The stockholders of Fleetwood approve a merger or
         consolidated with any other corporation, other than

                           (A) a merger or consolidation which would result in
                  the voting securities of Fleetwood outstanding immediately
                  prior thereto continuing to represent (either by remaining
                  outstanding or by being converted into voting securities of
                  another entity) more than 50% of the combined voting power of
                  the voting securities of Fleetwood or such other entity
                  outstanding immediately after such merger or consolidation,
                  and

                           (B) a merger or consolidation effected to implement a
                  recapitalization of the Company (or similar transaction) in
                  which no person acquires 50% or more of the combined voting
                  power of Fleetwood's then outstanding voting securities; or

                  (iv) The stockholders of Fleetwood approve a plan of complete
         liquidation of the Company or an agreement for the sale or other
         disposition by the Company of all or substantially all of the Company's
         assets.

Notwithstanding the preceding provisions of this Section 1.2(d), a Change in
Control shall not be deemed to have occurred (1) if the "person" described in
the preceding provisions of this Paragraph is an underwriter or underwriting
syndicate that has acquired the ownership of 50% or more of the combined voting
power of Fleetwood's then outstanding voting securities solely in connection
with a public offering of Fleetwood's securities; (2) if the "person" described
in the preceding provisions of this Paragraph is an employee stock ownership
plan or other employee benefit plan maintained by the Company that is qualified
under the provisions of the Employee Retirement Income Security Act of 1974, as
amended; or (3) if the person described in clause (i) of the preceding
provisions of this Paragraph would not otherwise be a beneficial owner of 25% or
more of the combined voting power of Fleetwood's then outstanding voting
securities but for a reduction in the number of outstanding voting securities
resulting from a stock repurchase program or other similar plan of the Company
or from a self tender offer of the Company, which plan or tender offer commenced
on or after the date hereof, provided, however, that the term "person" shall
include such person from and after the

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first date upon which (A) such person, since the date of the commencement of
such plan or tender offer, shall have acquired beneficial ownership of, in the
aggregate, a number of voting securities of the Company equal to 1% or more of
the voting securities of the Company then outstanding and (B) such person,
together with all affiliates and associates of such person, shall beneficially
own 25% or more the voting securities of the Company then outstanding.

         (d) "Code" means the Internal Revenue Code of 1986, as amended. Where
the context so requires, a reference to a particular Code section shall also
refer to any successor provision of the Code to such section.

         (e) "Committee" means the committee appointed by the Board to
administer the Plan.

         (f) "Common Stock" means the common stock of Fleetwood, par value $1.00
per share.

         (g) "Company" means Fleetwood and any present or future parent or
subsidiary corporations (as defined in Section 424 of the Code of 1986, as
amended) with respect to Fleetwood, any other entity designated by the Board, or
any successors to such corporations or entities.

         (h) "Employee" means any regular employee of the Company.

         (i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended. Where the context so requires, a reference to a particular section of
the Exchange Act shall also refer to any successor provision to such section.

         (j) "Fair Market Value" means the fair market value of a share of
Common Stock as determined by the Committee on the basis of such factors as it
may deem appropriate.

         (k) "Fleetwood" means Fleetwood Enterprises, Inc., a Delaware
corporation, or any successor thereto.

         (l) "Incentive Award" means any Stock Option, Stock Appreciation Right,
Stock Payment, Performance Award or other award granted or sold under the Plan.

         (m) "Incentive Stock Option" means an incentive stock option, as
defined under Section 422 of the Code and the regulations thereunder.

         (n) "Nonqualified Stock Option" means a stock option other than an
Incentive Stock Option. An Option that otherwise meets the requirements under
Code Section 422 for qualification as an incentive stock option shall
nevertheless be treated as a Nonqualified Stock Option if the Committee so
specifies in the Incentive Award pursuant to which such Option is granted.

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         (o) "Option or "Stock Option" means a right to purchase Common Stock
and refers to both Incentive Stock Options and Nonqualified Stock Options,
subject to an Incentive Award under this Plan and the provisions of Article III
hereof.

         (p) "Participant" means any Employee selected by the Committee to
receive an Incentive Award pursuant to this Plan.

         (q) "Payment Event" means the event or events giving rise to the right
to payment of a Performance Award.

         (r) "Performance Award" means an award, payable in cash, Common Stock
or a combination thereof, which is the subject of an Incentive Award under this
Plan and the provisions of Article IV hereof.

         (s) "Performance-Based Compensation" means performance-based
compensation as described in Section 162(m) of the Code and the regulations
thereunder. If the amount of compensation an Employee will receive under any
Incentive Award is not based solely on an increase in the value of Common Stock
after the date of grant or award, the Committee, in order to qualify an
Incentive Award as performance-based compensation under Section 162(m) of the
Code and the regulations thereunder, can condition the grant, award, vesting, or
exercisability of such an award on the attainment of a preestablished, objective
performance goal. For this purpose, a preestablished, objective performance goal
may include one or more of the following performance criteria: (i) cash flow,
(ii) earnings per share (including earnings before interest, taxes, and
amortization), (iii) return on equity, (iv) total stockholder return, (v) return
on capital, (vi) return on assets or net assets, (vii) income or net income,
(viii) operating margin, (ix) return on operating revenue, and (x) any other
similar performance criteria contemplated by the regulations under Section
162(m).

         (t) "Plan" means the Fleetwood Enterprises, Inc. 1992 Stock-Based
Incentive Compensation Plan as set forth herein, as amended from time to time.

         (u) "Purchase Price" means the purchase price (if any) to be paid by a
Participant for Restricted Stock as determined by the Committee.

         (v) "Restricted Stock" means Common Stock which is the subject of an
Incentive Award under this Plan and the provisions of Article V hereof.

         (w) "Securities Act" means the Securities Act of 1933, as amended.

         (x) "Stock Appreciation Right" or "Right" means a right granted
pursuant to Article V of the Plan to receive a number of shares of Common Stock
or, in the discretion of the Committee, an amount of cash or a combination of
shares and cash, based on the increase in the Fair Market Value of the shares
subject to the right during such period as is specified by the Committee.

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         (y) "Stock Payment" means a payment in shares of the Company's Common
Stock to replace all or any portion of the compensation (other than base salary)
that would otherwise become payable to any Employee of the Company, as provided
in Article VI.

         1.3 SHARES OF COMMON STOCK SUBJECT TO THE PLAN

         (a) Subject to the provisions of Section 1.3(c) and Section 8.1 of the
Plan, the aggregate number of shares of Common Stock that may be issued (or
allocated in the case of Stock Appreciation Rights which have been exercised)
pursuant to Incentive Awards under this Plan shall not exceed 6,900,000 shares,
which amount gives effect to a two-for-one split of the Common Stock effected in
the fourth quarter of the Company's fiscal 1993 the addition of 2,000,000
post-split Shares effective April 17, 1996 and the addition of 2,000,000
post-split Shares effective June 8, 1999.

         (b) The Common Stock to be issued under this Plan will be made
available, at the discretion of the Board or the Committee, either from
authorized but unissued shares of Common Stock or from previously issued shares
of Common Stock reacquired by the Company, including shares purchased on the
open market.

         (c) Shares of Common Stock subject to unexercised portions of any
Option or Right granted under this Plan that expires, terminates or is canceled
(other than an Option or Right which expires because it was in tandem with an
Option or Right which was exercised), will again become available for the grant
of further Incentive Awards under this Plan.

         (d) Notwithstanding any other provision of this Plan, no Employee shall
be granted Incentive Awards with respect to more than 100,000 shares of Common
Stock in any one calendar year; provided, however, that this limitation shall
not apply if it is not required in order for the compensation attributable to
Incentive Awards hereunder to qualify as Performance-Based Compensation. The
limitation set forth in this Section 1.3(d) shall be subject to adjustment as
provided in Section 7.1, but only to the extent such adjustment would not affect
the status of compensation attributable to Incentive Awards hereunder as
Performance-Based Compensation.

         1.4 ADMINISTRATION OF THE PLAN

         (a) The Plan will be administered by the Committee, which will consist
of two or more members of the Board appointed by the Board who, during the
one-year period prior to service on the Committee and while serving on the
Committee, are not granted or awarded equity securities of Fleetwood pursuant to
the Plan or any other plan of the Company or any of its affiliates, except as
permitted by Rule 16b-3(c)(2) promulgated under the Exchange Act (or any other
comparable provisions at the time or times in question). In addition, if
Incentive Awards are to be made to persons subject to Section 162(m) of the Code
and such awards are intended to constitute Performance-Based Compensation, then
each of the Committee's members shall also be an "outside director," as such
term is defined in the regulations under Section 162(m) of the Code.

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Notwithstanding anything contained herein, no person shall be disqualified from
being a member of the Committee merely because such person is entitled to
receive grants or awards pursuant to the Fleetwood Enterprises, Inc. 1992
Nonemployee Director Stock Plan.

         (b) The Committee has and may exercise such powers and authority of the
Board as may be necessary or appropriate for the Committee to carry out its
functions as described in the Plan. The Committee has authority in its
discretion to select the eligible Employees to whom, and the time or times at
which, Incentive Awards shall be granted or sold, the nature of each Incentive
Award, the number of shares of Common Stock or the number of rights that make up
each Incentive Award, the period for the exercise of each Incentive Award, the
performance criteria (which need not be identical) utilized to measure the value
of Performance Awards and such other terms and conditions applicable to each
individual Incentive Award as the Committee shall determine. The Committee may
grant at any time new Incentive Awards to a Participant who has previously
received Incentive Awards or other grants (including other stock options)
whether such prior Incentive Awards or such other grants are still outstanding,
have previously been exercised in whole or in part, or are canceled in
connection with the issuance of new Incentive Awards; provided, however, that
the Committee shall not have the authority to amend outstanding Incentive Awards
or to cancel outstanding Incentive Awards and grant new Incentive Awards in
substitution thereof if the purpose of such action is to reprice outstanding
Incentive Awards. The Committee may grant Incentive Awards singly or in
combination or in tandem with other Incentive Awards as it determines in its
discretion. The purchase price or initial value and any and all other terms and
conditions of the Incentive Awards may be established by the Committee without
regard to existing Incentive Awards or other grants. Further, the Committee may,
with the consent of a Participant, amend in a manner consistent with the Plan
the terms of any existing Incentive Award previously granted to such Participant
or acquire from a Participant for a payment of cash, Common Stock or other
consideration any existing Incentive Award.

         (c) Subject to the express provisions of the Plan, the Committee has
the authority to interpret the Plan, to determine the terms and conditions of
Incentive Awards and to make all other determinations necessary or advisable for
the administration of the Plan. The Committee has authority to prescribe, amend
and rescind rules and regulations relating to the Plan. All interpretations,
determinations and actions by the Committee shall be final, conclusive and
binding upon all parties. Any action of the Committee with respect to the
administration of the Plan shall be taken pursuant to a majority vote or by the
unanimous written consent of its members.

         (d) No member of the Board or the Committee will be liable for any
action or determination made in good faith by the Board or the Committee with
respect to the Plan or any transaction arising under the Plan.

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         1.5 PARTICIPATION

         (a) All Employees, as determined by the Committee, are eligible to
receive Incentive Awards under the Plan. In no event may any member of the Board
who is not an Employee be granted an Incentive Award under the Plan.

         (b) At the time of the grant of each Incentive Award pursuant to this
Plan, the Committee shall deliver, or cause to be delivered, to the Participant
to whom the Incentive Award is granted a written statement evidencing the
Incentive Award and setting forth such terms and conditions applicable to the
Incentive Award as the Committee may in its discretion determine consistent with
the Plan.

II. DIVIDEND EQUIVALENTS

         (a) In the Committee's discretion, a Participant may, as set forth in
subparagraph (b) below, be entitled to receive, at no additional cost, an amount
for each share of Common Stock upon which an Incentive Award is based, a
"Dividend Equivalent" equal to the cash or other consideration paid as a
dividend or distribution (other than a dividend or distribution payable in
Common Stock) by the Company with respect to its outstanding shares of Common
Stock, provided that with respect to Options and Rights granted in tandem, the
Dividend Equivalent will be payable with respect to either the Right or the
Option, but not both. If awarded by the Committee, Dividend Equivalents shall be
paid, with respect to record dates during the period on or after the date an
Incentive Award is granted to and including the date such Incentive Award is
exercised or terminated, or such other period as is determined by the Committee
and specified in the instrument that evidences the grant of the Incentive Award.
Such Dividend Equivalents shall be converted to additional shares of Common
Stock or cash by such formula as may be determined by the Committee.

         (b) The Committee, in its discretion, shall determine from time to time
whether any Participant shall be entitled to Dividend Equivalents with respect
to any other Incentive Award. The Committee shall not be obligated to award
Dividend Equivalents, and may elect to grant Dividend Equivalents to some
Participants and not to other Participants.

         (c) Dividend Equivalents shall be computed as of each record date for
Common Stock dividends or distributions in such manner as may be determined by
the Committee and shall be payable to Participants who have been granted
Dividend Equivalents at such time or times as the Committee in its discretion
may determine. Dividend Equivalents payable to holders of Incentive Awards may
be deferred and paid at a later date as and to the extent provided in the
Fleetwood Enterprises, Inc. Deferred Compensation Plan, as amended or restated
from time to time.

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III. OPTIONS

         3.1 GRANT OF OPTIONS; OPTION PRICE

         (a) The Committee may grant Options under the Plan from time to time to
Employees.

         (b) The purchase price of Common Stock under each Option (the "Option
Exercise Price") will be determined by the Committee at the date such Option is
granted. The Option Exercise Price may be equal to, greater than or less than
Fair Market Value on the date of grant of the Common Stock subject to the
Option; provided, however, that (i) in no event shall the Option Exercise Price
be less than the Fair Market Value of the Company Stock subject to the Option on
the date of grant nor less than the par value of the shares of Common Stock
subject to the Option; and (ii) that in the case of an Incentive Stock Option
the Option Exercise Price shall be not less than the Fair Market Value on the
date of grant of the Common Stock subject to such Option or such other amount as
is necessary to enable such Option to be treated as an "incentive stock option"
within the meaning of Code Section 422.

         3.2 OPTION PERIOD

         Options may be exercised as determined by the Committee, but, in the
case of an Incentive Stock Option, in no event after ten years from the date of
grant of such Option or such other period as is necessary to enable such Option
to be treated as an "incentive stock option" within the meaning of Code Section
422. Options granted to persons who are subject to the provisions of Section 16
of the Exchange Act shall not be exercisable prior to the expiration of six (6)
months from the date of the grant of such Option.

         3.3 EXERCISE OF OPTIONS

         At the time of the exercise of an Option, the purchase price shall be
paid in full in cash or other equivalent consideration acceptable to the
Committee and consistent with the Plan's purpose and applicable law, including
without limitation, Common Stock or Restricted Stock or other contingent awards
denominated in either stock or cash. Any shares of Company Stock assigned and
delivered to the Company in payment or partial payment of the purchase price
will be valued at their Fair Market Value on the exercise date. No fractional
shares will be issued pursuant to the exercise of an Option nor will any cash
payment be made in lieu of fractional shares. In the case of an Incentive Stock
Option, only the Participant to whom such Option is granted may exercise such
Option during the lifetime of such Participant, provided, however, in the event,
that such Participant becomes incompetent to exercise such Option, then such
Participant's legal representative may exercise such Option on his behalf.

         3.4 LIMITATION ON EXERCISE OF INCENTIVE STOCK OPTIONS

         The aggregate Fair Market Value (determined at the time the Option is
granted) with respect to which Incentive Stock Options are exercisable for the
first time by any

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Employee during any calendar year (under all stock option plans of the Company)
shall not exceed $100,000 or such other limit as is prescribed by the Code. Any
Options granted as Incentive Stock Options pursuant to the Plan in excess of
such limitation shall be treated as Nonqualified Stock Options.

         3.5 TERMINATION OF EMPLOYMENT

         (a) Except as otherwise provided in a written agreement between the
Company and the Participant, in the event of the termination of a Participant's
employment with the Company for Cause, all of the Participant's unexercised
Options and/or Rights shall expire as of the date of such termination.

         (b) Except as otherwise provided in a written agreement between the
Company and the Participant, in the event of a Participant's termination of
employment for:

                  (i) Any reason other than for Cause, death, disability, or
         normal retirement (as defined in the Company's retirement plan which
         covers the Participant), the Participant's Options and/or Rights shall
         expire and become unexercisable as of the earlier of (A) the date such
         Options and/or Rights expire in accordance with their terms or (B)
         three calendar months after the date of termination.

                  (ii) Death or disability, subject to the provisions of Section
         3.5(c) below, the Participant (or such Participant's legal
         representative) shall have twelve (12) months after the date of
         termination within which to exercise Options and/or Rights that have
         become exercisable on or before such date and that have not expired on
         or before such date, regardless of the date upon which such Options or
         Rights would otherwise expire in accordance with their terms.

                  (iii) Normal retirement, subject to the provisions of Section
         3.5(c) below, the Participant's Options and/or Rights shall expire and
         become unexercisable as of the earlier of (A) the date such Options
         and/or Rights expire in accordance with their terms or (B) three (3)
         years after the date of termination.

         (c) Notwithstanding anything to the contrary in Sections 3.5(a) or
3.5(b), above, the Committee may in its discretion designate such shorter or
longer periods to exercise Options and/or Rights following a Participant's
termination of employment; provided, however, that any shorter periods
determined by the Committee shall be effective only if provided for in the
instrument that evidences the grant to the Participant of such Options and/or
Rights or if such shorter period is agreed to in writing by the Participant. In
the case of an Incentive Stock Option, notwithstanding anything to the contrary
herein, in no event shall such Option be exercisable after the expiration of ten
years from the date such Option is granted (or such other period as is provided
in Code Section 422), nor shall such Option be the subject of any term or
provision which would disqualify such Option from being an incentive stock
option under Code Section 422.

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Notwithstanding anything to the contrary herein, Options and/or Rights shall be
exercisable by a Participant (or his successor in interest) following such
Participant's termination of employment only to the extent that installments
thereof had become exercisable on or prior to the date of such termination;
provided, however, that the Committee, in its discretion, may elect to
accelerate the vesting of all or any portion of any Options and/or Rights that
had not become exercisable on or prior to the date of such termination.

IV. PERFORMANCE AWARDS

         4.1 GRANT OF PERFORMANCE AWARDS

         The Committee may authorize the payment of Performance Awards under the
Plan. The Committee shall determine the performance criteria (which need not be
identical) to be utilized to calculate the value of the Performance Awards, the
term and vesting (which shall not be less than one year) of such Performance
Awards, the Payment Event, and the form and time of payment of Performance
Awards. The specific terms and conditions of each Performance Award shall be set
forth in a written statement evidencing the grant of such Performance Award.

         4.2 PAYMENT OF AWARD; LIMITATION

         Upon the occurrence of a Payment Event, payment of a Performance Award
will be made to the Participant in cash or in shares of Common Stock valued at
Fair Market Value on the date of the Payment Event or a combination of Common
Stock and cash, as the Committee in its discretion may determine. The Committee
may impose a limitation on the amount payable upon the occurrence of a Payment
Event, which limitation shall be set forth in the written statement evidencing
the grant of the Performance Award. Notwithstanding any other provision of this
Plan, as to any Performance Awards not subject to the annual share limitation of
Section 1.3(d), no Employee shall be granted Performance Awards of more than
$500,000 in any one calendar year; provided, however, that this limitation shall
not apply if it is not required in order for the compensation attributable to
Performance Award hereunder to qualify as Performance-Based Compensation.

         4.3 EXPIRATION OF PERFORMANCE AWARD

         If any Participant's employment with the Company is terminated for any
reason, all of the Participant's rights under the Performance Award shall expire
and terminate unless otherwise determined by the Committee.

V.       STOCK APPRECIATION RIGHTS

         5.1 GRANTING OF STOCK APPRECIATION RIGHTS

         The Committee may grant to Employees Stock Appreciation Rights, related
or unrelated to Options, at any time.

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         (a) A Stock Appreciation Right granted in connection with an Option
granted under this Plan will entitle the holder of the related Option, upon
exercise of the Stock Appreciation Right, to surrender such Option, or any
portion thereof to the extent unexercised, with respect to the number of shares
as to which such Stock Appreciation Right is exercised, and to receive payment
of an amount computed pursuant to Section 5.1(c). Such Option will, to the
extent surrendered, then cease to be exercisable.

         (b) Subject to Section 5.1(g), a Stock Appreciation Right granted in
connection with an Option hereunder will be exercisable at such time or times,
and only to the extent that, the related Option is exercisable, and will not be
transferable except to the extent that such related Option may be transferable.
A Stock Appreciation Right shall be canceled to the extent a related Option is
exercised.

         (c) Upon the exercise of a Stock Appreciation Right related to an
Option, the Holder will be entitled to receive payment of an amount determined
by multiplying: (i) the difference obtained by subtracting the Option Exercise
Price of a share of Common Stock specified in the related Option from the Fair
Market Value of a share of Common Stock on the date of exercise of such Stock
Appreciation Right (or as of such other date or as of the occurrence of such
event as may have been specified in the instrument evidencing the grant of the
Stock Appreciation Right), by (ii) the number of shares as to which such Stock
Appreciation Right is exercised.

         (d) The Committee may grant Stock Appreciation Rights unrelated to
Options to Employees. Section 5.1(c) shall be used to determine the amount
payable at exercise under such Stock Appreciation Right, except that in lieu of
the Option Exercise Price specified in the related Option the initial base
amount specified in the Incentive Award shall be used.

         (e) Notwithstanding the foregoing, the Committee, in its discretion,
may place a dollar limitation on the maximum amount that will be payable upon
the exercise of a Stock Appreciation Right under the Plan.

         (f) Payment of the amount determined under the foregoing provisions of
this Section 5.1 may be made solely in whole shares of Common Stock valued at
their Fair Market Value on the date of exercise of the Stock Appreciation Right
or, alternatively, at the sole discretion of the Committee, in cash or in a
combination of cash and shares of Common Stock as the Committee deems advisable.
The Committee is hereby vested with full discretion to determine the form in
which payment of a Stock Appreciation Right will be made and to consent to or
disapprove the election of a Participant to receive cash in full or partial
settlement of a Stock Appreciation Right. If the Committee decides to make full
payment in shares of Common Stock, and the amount payable results in a
fractional share, payment for the fractional share will be made in cash.

         (g) The Committee may, at the time a Stock Appreciation Right is
granted, impose such conditions on the exercise of the Stock Appreciation Right
as may be

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required to satisfy the requirements of Rule 16b-3 under the Exchange Act (or
any other comparable provisions in effect at the time or times in question).

         (h) No Stock Appreciation Rights granted hereunder shall vest earlier
than one year from the date of grant.

         5.2 TERMINATION OF EMPLOYMENT

         Section 3.5 will govern the treatment of Stock Appreciation Rights upon
the termination of a Participant's employment with the Company.

VI. STOCK PAYMENTS

         The Committee may approve Stock Payments of the Company's Common Stock
to any Employee of the Company for all or any portion of the Employee's
compensation (other than base salary). For purposes of making Stock Payments,
the Common Stock shall be valued by the Committee.

VII. OTHER PROVISIONS

         7.1 ADJUSTMENT PROVISIONS

         (a) Subject to Section 7.1(b) below, (i) if the outstanding shares of
Common Stock of Fleetwood are increased, decreased or exchanged for a different
number or kind of shares or other securities of Fleetwood, or if additional
shares or new or different shares or other securities of Fleetwood are
distributed in respect of such shares of Common Stock (or any stock or
securities received with respect to such Common Stock), through reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, spin-off or other distribution with respect to such shares of Common
Stock (or any stock or securities received with respect to such Common Stock),
or (ii) if the value of the outstanding shares of Common Stock of Fleetwood is
reduced by reason of an extraordinary cash dividend, an appropriate and
proportionate adjustment may be made in (x) the maximum number and kind of
shares provided in Section 1.3, (y) the number and kind of shares or other
securities subject to then outstanding Incentive Awards, and (z) the price for
each share or other unit of any other securities subject to then outstanding
Incentive Awards.

         (b) In addition to the adjustments permitted by Section 7.1(a) above,
except as otherwise expressly provided in the statement evidencing the grant of
an Incentive Award, upon the occurrence of a Change in Control of Fleetwood any
outstanding Incentive Awards not theretofore exercisable, payable or free from
restrictions, as the case may be, shall immediately become exercisable, payable
or free from restrictions (other than restrictions required by applicable law or
any national securities exchange upon which any securities of Fleetwood are then
listed), as the case may be, in their entirety and any shares of Common Stock
acquired pursuant to an Incentive Award which are not fully vested shall
immediately become fully vested, notwithstanding any of the other provisions of
the Plan.

                                       12
<PAGE>

         (c) Upon the dissolution or liquidation of Fleetwood or upon a
reorganization, merger or consolidation of Fleetwood with one or more
corporations, as a result of which Fleetwood goes out of existence or becomes a
subsidiary of another corporation, or upon a sale of substantially all of the
property of Fleetwood to another corporation (in each of such cases a
"Termination Event"), this Plan shall terminate. Any Option theretofore granted
under the Plan and not exercised on or prior to the Termination Event shall
expire and terminate, unless provision be made in writing in connection with
such Termination Event for the assumption of the Option or the substitution for
such Option of a new option covering the stock of a successor employer
corporation, or a parent or subsidiary thereof or of the Company, with
appropriate adjustments as to number and kind of shares and prices, in which
event such Option shall continue in the manner and under the terms so provided.

         (d) Adjustments under this Section 7.1 will be made by the Committee,
whose determination as to what adjustments will be made and the extent thereof
will be final, binding and conclusive. No fractional interests will be issued
under the Plan resulting from any such adjustments.

         7.2 TRANSFERABILITY OF INCENTIVE AWARDS

         Incentive Awards, any interest therein, and the right to receive the
proceeds thereof shall not be transferable by a Participant, other than by will
or the laws of descent and distribution. The transfer by a Participant to a
trust created by the Participant for the benefit of the Participant or the
Participant's family which is revocable at any and all times during the
Participant's lifetime by the Participant and as to which the Participant is the
sole acting Trustee during his or her lifetime, will not be deemed to be a
transfer for purposes of the Plan. Under such rules and regulations as the
Committee may establish pursuant to the terms of the Plan, a beneficiary may be
designated with respect to an Incentive Award in the event of the death of a
Participant. If the estate of the Participant is the beneficiary with respect to
an Incentive Award, any rights with respect to such Incentive Award may be
transferred to the person or persons or entity (including a trust) entitled
thereto under the will of such Participant or pursuant to the laws of descent
and distribution. The Committee shall by such rules and regulations as are
established from time to time prescribe the manner in which and the terms and
conditions of the transfer of Incentive Awards pursuant to qualified domestic
relations orders.

         7.3 CONTINUATION OF EMPLOYMENT

         (a) Nothing in the Plan or in any statement evidencing the grant of an
Incentive Award pursuant to the Plan shall be construed to create or imply any
contract of employment between any Participant and the Company, to confer upon
any Participant any right to continue in the employ of the Company, or to confer
upon the Company any right to require any Participant's continued employment.
Except as expressly provided in the Plan or in any statement evidencing the
grant of an Incentive Award pursuant to the Plan, the Company shall have the
right to deal with each Participant in the same manner as if the Plan and any
such statement evidencing the grant of an Incentive Award pursuant

                                       13
<PAGE>

to the Plan did not exist, including, without limitation, with respect to all
matters related to the hiring, discharge, compensation and conditions of the
employment of the Participant. Unless otherwise expressly set forth in a
separate employment agreement between the Company and such Participant, the
Company or the Participant may terminate the employment of any Participant with
the Company at any time for any reason, with or without cause.

         (b) Any question(s) as to whether and when there has been a termination
of a Participant's employment, the reason (if any) for such termination, and/or
the consequences thereof under the terms of the Plan or any statement evidencing
the grant of an Incentive Award pursuant to the Plan shall be determined by the
Committee, and the Committee's determination thereof shall be final and binding.

         7.4 COMPLIANCE WITH GOVERNMENT REGULATIONS

         No shares of Common Stock will be issued pursuant to an Incentive Award
unless and until all applicable requirements imposed by federal and state
securities and other laws, rules and regulations and by any regulatory agencies
having jurisdiction and by any stock exchanges upon which the Common Stock may
be listed have been fully met. As a condition precedent to the issuance of
shares of Common Stock pursuant to an Incentive Award, the Company may require
the Participant to take any reasonable action to comply with such requirements.

         7.5 ADDITIONAL CONDITIONS

         The award of any benefit under this Plan also may be subject to such
other provisions (whether or not applicable to the benefit award to any other
Participant) as the Committee determines appropriate including, without
limitation, provisions to assist the Participant in financing the purchase of
Common Stock through the exercise of Stock Options, provisions for the
forfeiture of or restrictions on resale or other disposition of shares of Common
Stock acquired under any form of benefit, provisions giving the Company the
right to repurchase shares of Common Stock acquired under any form of benefit in
the event the Participant elects to dispose of such shares, and provisions to
comply with federal and state securities laws. The Company may make such
provisions as it deems appropriate for the withholding by the Company pursuant
to federal or state income tax laws of such amounts as the Company determines it
is required to withhold in connection with any Incentive Award. The Company may
require a Participant to satisfy any relevant tax requirements before
authorizing any issuance of Common Stock to such Participant or payment of any
other benefit hereunder to such Participant. Any such settlement shall be made
in the form of cash, a certified or bank cashier's check or such other form of
consideration as is satisfactory to the Board.

         7.6 PRIVILEGES OF STOCK OWNERSHIP

         No Participant and no beneficiary or other person claiming under or
through such Participant will have any right, title or interest in or to any
shares of Common Stock

                                       14
<PAGE>

allocated or reserved under the Plan or subject to any Incentive Award, except
as to such shares of Common Stock, if any, that have been issued to such
Participant in accordance with the terms and conditions of the applicable
Incentive Award.

         7.7 AMENDMENT AND TERMINATION OF PLAN: AMENDMENT OF INCENTIVE AWARDS

         (a) The Board may alter, amend, suspend or terminate the Plan at any
time. No such action of the Board, unless taken with the approval of the
stockholders of the Company, may increase the maximum number of shares that may
be sold or issued under the Plan, alter the class of Employees eligible to
participate in the Plan, or make other material amendments to the Plan.

         (b) The Committee may, with the consent of a Participant, make such
modifications in the terms and conditions of an Incentive Award as it deems
advisable. Without limiting the generality of the foregoing, the Committee may,
with the consent of the Participant, from time to time adjust or reduce the
purchase price of Options held by such Participant by cancellation of such
Options and granting of Options to purchase the same or a lesser number of
shares at lower purchase prices or by modification, extension or renewal of such
Options.

         (c) Except as otherwise provided in this Plan or in the statement
evidencing the grant of the Incentive Award, no amendment, suspension or
termination of the Plan will, without the consent of the Participant, alter,
terminate, impair or adversely affect any right or obligation under any
Incentive Award previously granted under the Plan.

         7.8 UNFUNDED STATUS OF PLAN

         The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of the
Company. In its sole discretion, the Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Common Stock or payments in lieu of or with respect to Incentive Awards
hereunder, provided, however, that unless the Committee otherwise determines
with the consent of the affected Participant, the existence of such trusts or
other arrangements is consistent with the "unfunded" status of the Plan.

         7.9 OTHER COMPENSATION PLANS

         The adoptive of the Plan shall not affect any other stock option,
incentive or other compensation plans in effect for the Company, nor shall the
Plan preclude the Company from establishing any other forms of incentive or
other compensation for Employees of the Company.

                                       15
<PAGE>

         7.10 PLAN BINDING ON SUCCESSORS

         The Plan and any agreement with respect to an Incentive Award shall be
binding upon the successors and assigns of the Company and upon each Participant
and such Participant's heirs, executors, administrators, personal
representatives, permitted assignees, and successors in interest.

         7.11 SINGULAR, PLURAL; GENDER

         Whenever used herein, nouns in the singular shall include the plural,
and the masculine pronoun shall include the feminine gender, as the context may
require.

         7.12 APPLICABLE LAW

         This Plan shall be governed by, interpreted under, and construed and
enforced in accordance with the internal laws of the State of California.

VIII.    EFFECTIVE DATE AND DURATION OF PLAN

         The Plan shall become effective on the later of (a) the date of its
adoption by the Board, (b) the date of its approval by the holders of a majority
of the outstanding shares of Common Stock. The Plan shall terminate at such time
as the Board, in its discretion, shall determine. No Incentive Award may be
granted under the Plan after the date of such termination, but such termination
shall not affect any Incentive Award theretofore granted.

                                       16<PAGE>

RESOLVED, THAT THE COMPANY'S AMENDED 1992 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
(THE "PLAN") BE AMENDED AS FOLLOWS:

1.   PARAGRAPHS 3.2 THROUGH 3.5 SHALL BE DELETED IN THEIR ENTIRETY AND THE
     FOLLOWING SHALL BE SUBSTITUTED IN PLACE THEREOF.

     III. STOCK OPTIONS

     3.2  STOCK OPTION TERM. UNLESS EARLIER EXERCISED OR TERMINATED PURSUANT TO
          THE PROVISIONS OF SECTION 3.4, EACH STOCK OPTION SHALL EXPIRE AND NO
          LONGER BE EXERCISABLE ON A DATE WHICH IS TEN YEARS AFTER THE DATE OF
          GRANT.

     3.3  EXERCISE OF STOCK OPTIONS. OPTIONS GRANTED SHALL BECOME EXERCISABLE
          IMMEDIATELY UPON ISSUANCE. OPTIONS SHALL REMAIN EXERCISABLE UNTIL THE
          STOCK OPTION IS EXERCISED OR EXPIRES AS PROVIDED IN THIS ARTICLE III.
          AT THE TIME OF THE EXERCISE OF A STOCK OPTION, THE PURCHASE PRICE
          SHALL BE PAID IN FULL IN CASH, OR IN SHARES OF COMMON STOCK VALUED AT
          THEIR FAIR MARKET VALUE ON THE EXERCISE DATE. NO FRACTIONAL SHARES
          WILL BE ISSUED PURSUANT TO THE EXERCISE OF A STOCK OPTION, NOR WILL
          ANY CASH PAYMENT BE MADE IN LIEU OF FRACTIONAL SHARES.

     3.4  TERMINATION OF DIRECTOR STATUS. IN THE EVENT THAT THE HOLDER OF STOCK
          OPTIONS CEASES TO BE A DIRECTOR OF THE COMPANY FOR ANY REASON
          ("TERMINATION"), ALL STOCK OPTIONS SHALL THEREAFTER BE EXERCISABLE
          UNTIL THE EARLIER TO OCCUR OF THREE YEARS FROM THE DATE OF TERMINATION
          OR TEN YEARS FROM THE DATE OF THE GRANT OF SUCH STOCK OPTION.

     3.5  DIVIDEND EQUIVALENTS. THE COMPANY SHALL PAY TO HOLDERS OF STOCK
          OPTIONS AN AMOUNT FOR EACH SHARE OF COMMON STOCK ISSUABLE UPON
          EXERCISE OF SUCH STOCK OPTIONS A "DIVIDEND EQUIVALENT" EQUAL TO THE
          CASH OR OTHER CONSIDERATION PAID AS A DIVIDEND OR DISTRIBUTION (OTHER
          THAN A DIVIDEND OR DISTRIBUTION PAYABLE IN COMMON STOCK) BY THE
          COMPANY WITH RESPECT TO ITS OUTSTANDING SHARES OF COMMON STOCK.
          DIVIDEND EQUIVALENTS SHALL BE PAID, WITH RESPECT TO ANY RECORD DATE
          FOR SUCH DIVIDEND OR DISTRIBUTION OCCURRING ON OR AFTER THE DATE OF
          GRANT OF ANY STOCK OPTION TO AND INCLUDING THE DATE OF EXERCISE OR
          TERMINATION OF SUCH STOCK OPTION, IN THE SAME MANNER AS PROVIDED FOR
          HOLDERS OF COMMON STOCK.

2.   PARAGRAPH 4.2 IS HEREBY DELETED IN ITS ENTIRETY. PARAGRAPHS 4.3 AND 4.4 ARE
     HEREBY RENUMBERED AS PARAGRAPHS 4.2 AND 4.3, RESPECTIVELY.

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