Document:

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                                  EXHIBIT 10.27

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                             OPTION PLAN TRUST (OPT)
                               ADOPTION AGREEMENT
                                   (EMPLOYEES)

THE COMPANY hereby completes and executes this ADOPTION AGREEMENT, as of the
____ day of ______________________, 2000, for the purpose of implementing the
Plan comprised of this ADOPTION AGREEMENT and the corresponding PLAN DOCUMENT,
which PLAN DOCUMENT is attached hereto as APPENDIX A and made a part hereof. Any
term used in this ADOPTION AGREEMENT that is defined in the PLAN DOCUMENT shall
have the meaning the PLAN DOCUMENT ascribes to such term.

SECTION 1. COMPANY INFORMATION

PART A     Name of Company: First Charter National Bank

PART B     Address: Post Office Box 228

PART C     City:  Concord   State:  NC  Zip:  28026-0225

PART D     Telephone: 800-442-4650

PART E     Federal Tax Identification Number:  56-1355866

PART F     Income Tax Year End:  12/31  (mm/dd)

PART G     Type of Business for Federal Tax Purposes (check only one)
OPTION A          [ ] Sole Proprietorship
OPTION B          [ ] Partnership
OPTION C          [X] C Corporation
OPTION D          [ ] S Corporation
OPTION E          [ ] Other (specify)

PART H     Type of Organization under State Law (check only one)
OPTION A          [ ] Sole Proprietorship
OPTION B          [ ] General Partnership
OPTION C          [ ] Limited Partnership
OPTION D          [ ] Limited Liability Company
OPTION E          [ ] Limited Liability Partnership
OPTION F          [X] Corporation
OPTION G          [ ] Professional Corporation or Professional Association
OPTION H          [ ] Trust
OPTION I          [ ] Other (specify)

PART I     Jurisdiction of Organization:  United States

PART J     Type of Business (describe):  Bank

PART K     State Law to Apply:  North Carolina

PART L     Plan Sequence No.:  104

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SECTION 2. PLAN NAME

         The name of this Plan is "First Charter Option Plan Trust (OPT)".

SECTION 3. EFFECTIVE DATES

         The Effective Date of this Plan is December 1, 2000.

SECTION 4. OPTION TYPES AND VESTING (CHECK EACH THAT APPLIES)

PART A     [ ]    PRIOR PLAN OPTIONS. The Plan permits each eligible Employee to
                  agree to cancel and forgo benefits under the (the "Prior
                  Plan"). The Participating Company shall grant each Participant
                  a Prior Plan Option as specified in the OPTion Agreement
                  between the Participating Company and the Participant.

                  The Vested Percentage of Prior Plan Options is as follows: (if
                  the Plan provides for Prior Plan Options, then check and
                  complete Option A or B)

OPTION A          [ ]      100% at all times

OPTION B          [ ]      100% upon Termination of Employment on account of
                           Retirement or Pre-Retirement Death, and the following
                           percentage upon Termination of Employment on account
                           of Severance:

                             Years of Service       Vested Percentage

PART B     [X]    REGULAR OPTIONS. Each year, the Participating Company will
                  enter into an OPTion Agreement with each Participant providing
                  for the granting of Regular Options.

                  The Vested Percentage of Regular Options is 100% at all times.

           [ ]    MATCHING OPTIONS. As of each    , the Company shall grant each
                  Participant a Matching Option with a Grant Date Spread equal
PART C            to    % of the cumulative Grant Date Spread of Regular Options
                  granted to the Participant during the preceding calendar year,
                  but not to exceed % of the sum of the Participant's salary for
                  the preceding calendar year plus the cumulative Grant Date
                  Spread of

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                  Regular Options granted to the Participant during the
                  preceding calendar year.

                  The Vested Percentage of Matching Options is as follows: (if
                  the Plan provides for Matching Options, then check and
                  complete Option A or B)

                  [ ]      100% at all times

                  [ ]      100% upon Termination of Employment on account of
                           Retirement or Pre-Retirement Death, and the following
                           percentage upon Termination of Employment on account
                           of Severance:

OPTION A

                       Years of Service          Vested Percentage

OPTION B

           [X]    BONUS OPTIONS. Each year, the Participating Company will enter
                  into an OPTion Agreement with each Participant providing for
                  the granting of one or more Bonus Options.

PART D            The Vested Percentage of Bonus Options is as follows: (if the
                  Plan provides for Bonus Options, then check and complete
                  Option A or B)

                  [X]      100% at all times

                  [ ]      100% upon Termination of Employment on account of
                           Retirement or Pre-Retirement Death, and the following
                           percentage upon Termination of Employment on account
                           of Severance:

OPTION A
                           Years of Service       Vested Percentage
OPTION B

           [X]    RESTORATION OPTIONS. Each year the Participating Company will
                  enter into an OPTion Agreement with each Participant providing
                  for the granting of Restoration Options. The Grant Date Spread
                  of each Restoration Option shall equal the "Lost Qualified
                  Plan Credits" for a specified calendar year. "Lost Qualified
                  Plan Credits" means the excess, if any, of the Aggregate
                  Qualified Plan Credits that would have been on the
                  Participant's behalf for the calendar year but for the effect
                  of certain conditions as specified in the OPTion Agreement,
PART E            over the Aggregate Qualified Plan Credits that were actually
                  made on the Participant's behalf for the calendar year.
                  "Aggregate Qualified Plan Credits" means the sum of
                  allocations for the period under the Participating Company's
                  individual account plans qualified under

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                  Code Section 401(a) or 403(b) ("Qualified Plans"). The OPTion
                  Agreement can specify any one or more of the following
                  conditions, as determined by the Administrative Committee in
                  the exercise of its discretion from Participant to Participant
                  and from year to year (check each that applies)

                  [X]      if the Grant Date Spread of Regular Options or Bonus
                           Options or both had been considered as compensation
                           under the Qualified Plans (before the application of
                           Code Section 401(a)(17))

                  [X]      if the Grant Date Spread of Regular Options or Bonus
                           Options or both had been considered as elective
                           deferrals under the Participating Company's 401(k)
                           plan, subject to the plan's limitations on elective
                           deferrals

OPTION A          [X]      if the Internal Revenue Code (the "Code") limitations
                           on Qualified Plan Credits, such as those found in
                           Code Sections 401(a)(17), 415, 401(k) and 403(b) had
                           not applied

OPTION B          [ ]      if salary reductions under the Participating
                           Company's Section 125 cafeteria plan had been
                           considered as compensation under the Qualified Plans
                           (before the application of Code Section 401(a)(17))

OPTION C          The Vested Percentage of Restoration Options is as follows:
                  (if the Plan provides for Restoration Options, then check and
                  complete Option D or E)

                  [ ]      100% at all times

OPTION D          [X]      100% upon Termination of Employment on account of
                           Retirement or Pre-Retirement Death, and the following
                           percentage upon Termination of Employment on account
                           of Severance:

OPTION D                       Years of Service      Vested Percentage
                               Less than 1                   0%
                               1, but less than 2           20%
OPTION E                       2, but less than 3           40%
                               3, but less than 4           60%
                               4, but less than 5           80%
                               5 or more                   100%

           [X]    CUSTOMIZED OPTIONS. The Participating Company may grant a
                  Participant a Customized Option from time to time. The Grant
                  Date Spread of a Customized Option cannot be less than $5,000.

PART F

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SECTION 5. OPTION EXPIRATION TIME

         The "Option Expiration Time" means, with respect to an Option, the time
         at which the Option expires and after which the Optionholder cannot
         exercise the Option. The Option Expiration Time for an Option other
         than a Customized Option shall be the close of business on the first to
         occur of the following: (complete each of the following)

         (A)      In the event of the Retirement of the Participant (the
                  Optionee of the Option): the last day of the 15 consecutive
                  year period following (check one)

                           [X] the Participant's Retirement

                           [ ] the Participant's Normal Retirement Age

         (B)      In the event of the Pre-Retirement Death of the Participant
                  (the Optionee of the Option): the last day of the 6
                  consecutive month period following the Participant's
                  Pre-Retirement Death

         (C)      In the event of the Severance of the Participant (the Optionee
                  of the Option): the last day of the 6 consecutive month period
                  following the Participant's Severance

         The Option Expiration Time of a Customized Option is that which is
         specified in the Option Confirmation.

SECTION 6. EARLIEST EXERCISE DATE

         The "Earliest Exercise Date" means, with respect to an Option, the
         first date on which the Optionholder can exercise the Option. The
         Earliest Exercise Date for an Option other than a Customized Option
         shall be the first Business Day following the 0-day period after the
         Grant Date. The Earliest Exercise Date of a Customized Option is that
         which is specified in the Option Confirmation.

SECTION 7. RETIREMENT

         Retirement consists of Normal Retirement, Deferred Retirement, Early
         Retirement or Disability Retirement.

         Normal Retirement means Termination of Employment, other than on
         account of Death or Total Disability, on the later of the Participant's
         birthday or the age

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         at which the Participant first qualifies for full Social Security
         benefits (Normal Retirement Age).

         Deferred Retirement means Termination of Employment, other than on
         account of death or Total Disability, after attaining Normal Retirement
         Age.

         Early Retirement means Termination of Employment after (check and
         complete only one)

OPTION A          [ ] attaining age

OPTION B          [X] attaining age 55 and completing 10 Years of Service

         A Participant who incurs a Termination of Employment on account of
         Total Disability shall be deemed to have taken Disability Retirement
         upon either (i) attaining the age requirement for Early Retirement, or
         (ii), if there is an Early Retirement Service requirement, the earlier
         of attaining Normal Retirement Age or attaining the age requirement and
         completing the Service requirement for Early Retirement.

SECTION 8. TOTAL DISABILITY

         Total Disability means a physical or mental condition (check only one)

OPTION A          [X]      under which the Participant qualifies for disability
                           benefits under the long-term disability plan of the
                           Participating Company; provided; however, if the
                           Participant is not covered by such plan or if there
                           is no such plan, the Participant would have qualified
                           for disability benefits were the Participant covered
                           by the plan or if there were such a plan.

                  [ ]      that totally and permanently prevents the Participant
OPTION B                   from performing each of the material duties of the
                           Participant's regular occupation.

                  [ ]      that totally and permanently prevents the Participant
OPTION C                   from performing any occupation for which the
                           Participant is qualified by education, training or
                           experience.

                  [ ]      that prevents the Participant during the first months
                           following the onset of the condition from performing
OPTION D                   each of the material duties of the Participant's
                           regular occupation, and thereafter from performing
                           any occupation for which the Participant is qualified
                           by education, training or experience.

SECTION 9. YEARS OF SERVICE

         "Years of Service" means, with respect to a Participant, the following:
         (check and complete one)

                  [ ]      The number of periods of 12 consecutive months of
                           Service (no month to be counted more than once).

OPTION A          [X]      "Years of Service" as that term is defined in the
                           Company's 401(k) plan.

OPTION B

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                  COMPANY SIGNATURE

SECTION 10.       Duly executed the day and year first above written on behalf
                  of the Company by the Company's duly authorized officers.

                  --------------------------------------------------------------
                  Signature

                  --------------------------------------------------------------
                  Printed Name / Title

                  Attest: ______________________________________________________
                          __________ Secretary

                  [SEAL]

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                                   APPENDIX A

                                  PLAN DOCUMENT
                       APPENDED TO AND MADE A PART OF THE
                       ADOPTION AGREEMENT FOR DEFERRAL OPT
                         (EMPLOYEES OF TAXABLE COMPANY)

                                TABLE OF CONTENTS

ARTICLE 1.  ESTABLISHMENT AND PURPOSE                                         1
         1.1  ESTABLISHMENT                                                   1
         1.2  PURPOSE                                                         1
ARTICLE 2.  REFERENCES, CONSTRUCTION AND DEFINITIONS                          1
         2.1  ACCOUNTS                                                        1
         2.2  ADJUSTMENT DATE                                                 1
         2.3  ADMINISTRATIVE COMMITTEE                                        1
         2.4  ADOPTION AGREEMENT                                              1
         2.5  AFFILIATE                                                       1
         2.6  AGGREGATE MARKET VALUE                                          2
         2.7  AUTHORIZED LEAVE OF ABSENCE                                     2
         2.8  BENEFICIARY                                                     2
         2.9  BENEFICIARY DESIGNATION                                         2
         2.10 BONUS OPTIONS                                                   2
         2.11 BUSINESS DAY                                                    2
         2.12 CANCELLATION                                                    2
         2.13 CODE                                                            2
         2.14 COMPANY                                                         2
         2.15 CUSTOMIZED OPTIONS                                              2
         2.16 DEFERRED RETIREMENT                                             2
         2.17 DISABILITY RETIREMENT                                           2
         2.18 EARLIEST EXERCISE DATE                                          2
         2.19 EARLY RETIREMENT                                                2
         2.20 EFFECTIVE DATE                                                  2
         2.21 EMPLOYEE                                                        2
         2.22 ERISA                                                           3
         2.23 EXERCISE DATE                                                   3
         2.25 EXERCISE PERIOD                                                 3
         2.26 EXPIRATION                                                      3
         2.27 FORFEITURES                                                     3
         2.28 FUND DISTRIBUTIONS                                              3
         2.29 FUNDS                                                           3
         2.30 GOVERNING BODY                                                  3
         2.31 INDEXED STRIKE PRICE                                            3
         2.32 MARKET VALUE                                                    3
         2.33 MATCHING OPTIONS                                                3
         2.34 MINIMUM STRIKE PRICE                                            3
         2.35 NORMAL RETIREMENT                                               3
         2.36 NORMAL RETIREMENT AGE                                           3
         2.37 OPTION                                                          4
         2.38 OPTION AGREEMENT                                                4

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         2.39 OPTION ALLOCATION ELECTION                                      4
         2.40 OPTION ASSIGNMENT                                               4
         2.41 OPTION EXERCISE ELECTION                                        4
         2.42 OPTION EXPIRATION TIME                                          4
         2.43 OPTION GRANT CONFIRMATION                                       4
         2.44 OPTION REALLOCATION ELECTION                                    4
         2.45 OPTIONEE                                                        4
         2.46 OPTIONHOLDER                                                    4
         2.47 OPTIONOR                                                        4
         2.48 PARTICIPANT                                                     4
         2.49 PARTICIPATING COMPANY                                           5
         2.50 PERSON                                                          5
         2.51 PLAN                                                            5
         2.52 PLAN ADMINISTRATOR                                              5
         2.53 PLAN YEAR                                                       5
         2.54 PRE-RETIREMENT DEATH                                            5
         2.55 PRIOR PLAN                                                      5
         2.56 PRIOR PLAN OPTIONS                                              5
         2.57 REGULAR OPTION                                                  5
         2.58 RESTORATION OPTIONS                                             5
         2.59 RETIREMENT                                                      5
         2.60 SERVICE                                                         5
         2.59 SEVERANCE                                                       5
         2.60 SPREAD                                                          5
         2.61 STRIKE PRICE                                                    5
         2.62 STRIKE PRICE ACCOUNTS                                           6
         2.63 SURVIVING SPOUSE                                                6
         2.64 TERMINATION OF EMPLOYMENT                                       6
         2.65 TOTAL DISABILITY                                                6
         2.66 UNDERLYING SHARES                                               6
         2.67 UNDERLYING SHARE ACCOUNT                                        6
         2.68 UNDERLYING SHARE ALLOCATION                                     6
         2.71 UNDERLYING SHARE RETURN                                         6
         2.72 VESTED                                                          6
         2.73 VESTED PERCENTAGE                                               6
         2.66 YEARS OF SERVICE                                                6
ARTICLE 3.  ELIGIBILITY AND PARTICIPATION                                     6
         3.1  ELIGIBILITY                                                     7
         3.2  GRANTS                                                          7
         3.3  REGULAR OPTION AGREEMENTS                                       7
         3.4  NONALIENATION                                                   7
         3.5  REEMPLOYMENT                                                    8
ARTICLE 4.  UNDERLYING SHARE CHANGES                                          8
ARTICLE 5.  EXERCISES                                                         8
         5.1  EXERCISABILITY                                                  8
         5.2  PROCEDURES                                                      8
         5.3  PAYMENTS TO BENEFICIARY                                         9
ARTICLE 6.  ACCOUNTS                                                          9
         6.1  UNDERLYING SHARE ACCOUNTS                                       9
         6.2  INDEXED STRIKE PRICE ACCOUNT (OTHER THAN CUSTOMIZED OPTIONS)   10
         6.3  INDEXED STRIKE PRICE ACCOUNT (CUSTOMIZED OPTIONS)              10
         6.4  MINIMUM STRIKE PRICE ACCOUNT                                   10

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ARTICLE 7.  ADMINISTRATION OF THE PLAN                                       11
         7.1  POWERS AND DUTIES OF THE ADMINISTRATIVE COMMITTEE              11
         7.2  AGENTS                                                         11
         7.3  REPORTS TO GOVERNING BOARD                                     11
         7.4  STRUCTURE OF ADMINISTRATIVE COMMITTEE                          11
         7.5  ADOPTION OF PROCEDURES OF ADMINISTRATIVE COMMITTEE             11
         7.6  INSTRUCTIONS FOR PAYMENTS                                      12
         7.7  CLAIMS FOR BENEFITS                                            12
         7.8  HOLD HARMLESS                                                  12
         7.9  SERVICE OF PROCESS                                             13
ARTICLE 8.  DESIGNATION OF BENEFICIARIES                                     13
         8.1  BENEFICIARY DESIGNATION                                        13
         8.2  FAILURE TO DESIGNATE BENEFICIARY                               13
ARTICLE 9.  WITHDRAWAL OF PARTICIPATING COMPANY                              13
         9.1  WITHDRAWAL OF PARTICIPATING COMPANY                            13
         9.2  EFFECT OF WITHDRAWAL                                           13
ARTICLE 10.  AMENDMENT OR TERMINATION OF THE PLAN                            14
         10.1 RIGHT TO AMEND OR TERMINATE PLAN                               14
         10.2 NOTICE                                                         14
ARTICLE 11.  GENERAL PROVISIONS AND LIMITATIONS                              14
         11.1 NO RIGHT TO CONTINUED EMPLOYMENT                               14
         11.2 PAYMENT ON BEHALF OF PAYEE                                     14
         11.3 NONALIENATION                                                  14
         11.4 MISSING PAYEE                                                  15
         11.5 REQUIRED INFORMATION                                           15
         11.6 NO TRUST OR FUNDING CREATED                                    15
         11.7 BINDING EFFECT                                                 16
         11.8 MERGER OR CONSOLIDATION                                        16
         11.9 OPTION CANCELLATION                                            16
         11.10 ENTIRE PLAN                                                   16
EXHIBIT A--OPTION CERTIFICATE                                                17
EXHIBIT B--SALARY REDUCTION AGREEMENT                                        18
EXHIBIT C--PRIOR PLAN AGREEMENT                                              20
EXHIBIT D--FUND ALLOCATION ELECTION                                          21
EXHIBIT E--BENEFICIARY DESIGNATION                                           22
EXHIBIT F--EXERCISE ELECTION                                                 24
EXHIBIT G--OPTION ASSIGNMENT                                                 25

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                      ARTICLE 1. ESTABLISHMENT AND PURPOSE

         1.1 ESTABLISHMENT. As of the Effective Date and subject to the
provisions of Article 9, the Company hereby establishes, for the benefit of
certain employees as described herein, a plan which shall be known by the name
specified in Section 1 of the Adoption Agreement (the "Plan"). The Plan is
intended to be an individual account plan which is not a money purchase plan and
is intended to be exempt from Parts 2 through 4 of Title I of ERISA as an
unfunded plan designed primarily to provide deferred compensation for a select
group of management or highly compensated employees. All provisions of the Plan
shall be construed accordingly.

         1.2 PURPOSE. The future success of the Company and its Affiliates
depends largely on their ability to attract and retain talented, motivated and
dedicated executives and other key employees. In turn, such ability depends on
the competitiveness of its long-term incentives -- especially, retirement,
survivor and severance benefits.

         To help the Company and its Affiliates attract, retain and inspire
executives and other key employees, the Company has established the Plan. Under
the Plan, the Participating Company awards Participants with Options. The Plan
is designed to facilitate Participants' acquisitions of retirement and survivor
benefits, and thereby to promote the Participating Company's interest in
ensuring the continuity of a high quality executive team and the long-term
employment of other individuals responsible for major contributions to the
success of the Participating Company.

               ARTICLE 2. REFERENCES, CONSTRUCTION AND DEFINITIONS

         Unless otherwise indicated, all references to articles, sections and
subsections shall be to this Plan Document. The Plan and all rights thereunder
shall be construed and enforced in accordance with ERISA and, to the extent that
state law is applicable, the laws of the State identified in Section 1 of the
Adoption Agreement. The titles and captions preceding articles, sections and
subsections of the Adoption Agreement and this Plan Document have been inserted
solely as a matter of convenience and in no way define or limit the scope or
intent of any provision. When the context so requires, the singular includes the
plural. Whenever used herein and capitalized, the following terms shall have the
respective meanings indicated unless the context plainly requires otherwise.

         2.1 ACCOUNTS means, with respect to a Participant, the Participant's
Underlying Share Accounts, Strike Price Accounts, and any subaccounts of such
accounts.

         2.2 ADJUSTMENT DATE means each Business Day.

         2.3 ADMINISTRATIVE COMMITTEE means the committee provided for in
Article 7 and responsible for administering the Plan.

         2.4 ADOPTION AGREEMENT means the document executed by the Company and
by which the Company adopts the Plan and agrees to be bound by its terms.

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         2.5 AFFILIATE means any Person affiliated with the Company under ERISA
Section 4001(a)(14) or otherwise and any other Person the Governing Body
designates an Affiliate for purposes of this Plan.

         2.6 AGGREGATE MARKET VALUE means the total market value of the
referenced Underlying Shares.

         2.7 AUTHORIZED LEAVE OF ABSENCE means either (a) a leave of absence
authorized (pursuant to applicable procedures) by the Participating Company that
employs the Employee under the Participating Company's personnel practices,
provided that all Persons under similar circumstances are treated alike in the
granting of such leaves of absence, and provided further that the Employee
returns within the period specified in the leave of absence, or (b) an absence
required to be considered an Authorized Leave of Absence by applicable law.

         2.8 BENEFICIARY means the Person designated by a Participant pursuant
to Article 8 to become the Optionholder of specified Options owned by the
Participant upon the death of such Participant. If, however, there has been no
such designation or an invalid designation, Beneficiary means the Person who
becomes the Optionholder.

         2.9 BENEFICIARY DESIGNATION means, with respect to an Optionholder, the
written designation filed by the Optionholder with the Administrative Committee
and which in substantially the form attached hereto as Exhibit E.

         2.10 BONUS OPTIONS is defined in Section 4 of the Adoption Agreement.

         2.11 BUSINESS DAY means any day on which the New York Stock Exchange is
open for business.

         2.12 CANCELLATION means, with respect to an Option, the cancellation of
the Option pursuant to a written agreement between the Optionholder and the
Participating Company.

         2.13 CODE means the Internal Revenue Code of 1986, as now in effect or
as hereafter amended. All citations to sections of the Code are to such sections
as they may from time to time be amended or renumbered.

         2.14 COMPANY means the Company identified in Section 1 of the Adoption
Agreement, and any successor thereto.

         2.15 CUSTOMIZED OPTIONS is defined in Section 4 of the Adoption
Agreement.

         2.16 DEFERRED RETIREMENT is defined in Section 7 of the Adoption
Agreement.

         2.17 DISABILITY RETIREMENT is defined in Section 7 of the Adoption
Agreement.

         2.18 EARLIEST EXERCISE DATE shall have the meaning Section 6 of the
Adoption Agreement ascribes to such term.

         2.19 EARLY RETIREMENT is defined in Section 7 of the Adoption
Agreement.

         2.20 EFFECTIVE DATE is defined in Section 3 of the Adoption Agreement.

         2.21 EMPLOYEE means an individual who is a common law employee of the
Participating Company or an Affiliate.

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         2.22 ERISA means the Employee Retirement Income Security Act of 1974,
as now in effect or as hereafter amended. All citations to sections of ERISA are
to such sections as they may from time to time be amended or renumbered.

         2.23 EXERCISE DATE means the date the Optionholder tenders a valid
Exercise Election.

         2.25 EXERCISE PERIOD means, with respect to an Option, the period, as
set forth in the Option Grant Confirmation, during which the Optionholder can
exercise the Option, to the extent Vested. An Option's Exercise Period begins on
the Earliest Exercise Date and ends at the Option Expiration Time.

         2.26 EXPIRATION means, with respect to an Option, the expiration of the
Option at the Option Expiration Time.

         2.27 FORFEITURE means, with respect to a Participant who incurs a
Severance, the amount of the Participant's Options that is not vested and as a
result forfeited by the Participant.

         2.28 FUND DISTRIBUTIONS means distributions the Fund makes to its
shareholders, including distributions of net investment income, capital gains
and return of capital.

         2.29 FUNDS means the mutual funds identified by the Administrative
Committee.

         2.30 GOVERNING BODY means the board of directors of the Company or
equivalent governing body, however denominated.

         2.31 INDEXED STRIKE PRICE means, with respect to an Option other than a
Customized Option, as of the Grant Date 90% of the Grant Date Aggregate Market
Value of the Underlying Shares. Each Business Day after the Grant Date, the
Indexed Strike Price is adjusted at the same rate as the Option's Underlying
Share Return.

         With respect to a Customized Option, the Indexed Strike Price shall be
as set forth in the Option Grant Confirmation.

         2.32 MARKET VALUE means, with respect to an Underlying Share as of any
date, the Underlying Share's closing price as of the Business Day next preceding
the date of reference.

         2.33 MATCHING OPTIONS is defined in Section 4 of the Adoption
Agreement.

         2.34 MINIMUM STRIKE PRICE means, with respect to an Option other than a
Customized Option, as of any date 50% of the Grant Date Aggregate Market Value
of the Underlying Shares.

         With respect to a Customized Option, the Minimum Strike Price shall be
as set forth in the Option Grant Confirmation.

         2.35 NORMAL RETIREMENT is defined in Section 7 of the Adoption
Agreement.

         2.36 NORMAL RETIREMENT AGE is defined in Section 7 of the Adoption
Agreement.

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         2.37 OPTION means the rights the Participating Company grants to a
Participant on the Option's Grant Date to purchase specified Underlying Shares
at a specified Strike Price before the expiration of the Exercise Period. Each
Option grant is to be confirmed by an Option Confirmation.

         2.38 OPTION AGREEMENT means the written agreement between a Participant
and the Participating Company in substantially the form attached hereto as
Exhibit B.

         2.39 OPTION ALLOCATION ELECTION means the Participant's written
election, made in accordance with Article 4 and substantially in the form
attached hereto as Exhibit D, regarding the Participant's Grant Date Underlying
Share Allocation of Options granted on or after the date such election takes
effect.

         2.40 OPTION ASSIGNMENT means the written assignment of an Option and
which is in substantially the form attached hereto as Exhibit G.

         2.41 OPTION EXERCISE ELECTION means the Optionholder's filing with the
Administrative Committee of a properly completed OPTion Exercise Election form,
in substantially the form attached hereto as Exhibit F.

         2.42 OPTION EXPIRATION TIME is defined in Section 5 of the Adoption
Agreement.

         2.43 OPTION GRANT CONFIRMATION means the confirmation issued by the
Participating Company to a Participant to confirm the grant of an Option and
which is in substantially the form attached hereto as Exhibit A.

         2.44 OPTION REALLOCATION ELECTION means the Participant's written
election, made in accordance with Article 4 and substantially in the form
attached hereto as Exhibit E, regarding the reallocation of the Underlying
Shares of all the Participant's Options.

         2.45 OPTIONEE means the recipient of an Option from the Optionor.

         2.46 OPTIONHOLDER means, with respect to an Option, the Person who is
the beneficial owner of the Option and has the right to exercise the Option.

         2.47 OPTIONOR means the grantor or issuer of an Option to an Optionee.

         2.48 PARTICIPANT means, as of any date, any Employee who has received
one or more Options from the Participating Company and any part of such Options
remains exercisable.

         2.49 PARTICIPATING COMPANY means the Company or an Affiliate which, by
action of its board of directors or equivalent governing body and with the
written consent of the Governing Body, has adopted the Plan; provided that the
Governing Body may, subject to the foregoing proviso, waive the requirement that
such board of directors or equivalent governing body effect such adoption. By
its adoption of or participation in the Plan, a Participating Company shall be
deemed to appoint the Company its exclusive agent to exercise on its behalf all
of the power and authority conferred by the Plan upon the Company and accept the
delegation to the Administrative Committee of all the power and authority
conferred upon it by the Plan. The authority of the Company to act as such agent
shall continue until the Plan is terminated as to the Participating Company. The
term "Participating Company" shall be construed as if the Plan were solely the
Plan of such Participating Company, unless the context plainly requires
otherwise.

<PAGE>   16

         2.50 PERSON means a natural person or any duly organized and validly
existing entity such as a corporation, partnership, limited liability company,
association or trust.

         2.51 PLAN means the nonqualified mutual fund option plan of the Company
as contained in the Adoption Agreement and the Plan Document and as it may be
amended from time to time hereafter.

         2.52 PLAN ADMINISTRATOR means the Administrative Committee.

         2.53 PLAN YEAR means the calendar year; provided, however, that the
first Plan Year shall be the period commencing on the Effective Date and ending
on December 31 of the year of the Effective Date.

         2.54 PRE-RETIREMENT DEATH means the death of a Participant either (a)
while an Employee of the Participating Company or an Affiliate, or (b) while
Totally Disabled but prior to Disability Retirement.

         2.55 PRIOR PLAN is defined in Part C of Section 4 of the Adoption
Agreement.

         2.56 PRIOR PLAN OPTIONS is defined in Section 4 of the Adoption
Agreement.

         2.57 REGULAR OPTIONS is defined in Section 4 of the Adoption Agreement.

         2.58 RESTORATION OPTIONS is defined in Section 4 of the Adoption
Agreement.

         2.59 RETIREMENT means a Participant's Normal Retirement, Early
Retirement, Deferred Retirement or Disability Retirement. The term "Retire"
means the act of taking Retirement.

         2.60 SERVICE means employment with the Participating Company or any
Affiliate; provided, however, that Service does not include periods of
employment with an Affiliate rendered prior to the date the Affiliate became an
Affiliate. Service includes periods of employment with a predecessor employer.
Service may also include any period of a Participant's prior employment by any
organization upon such terms and conditions as the board of directors or
equivalent governing body of the Participating Company may approve.
Notwithstanding any provision in the Plan to the contrary, periods of Total
Disability constitute Service.

         2.59 SEVERANCE means termination of Employment other than on account of
Retirement, death or Total Disability. With respect to a Participant whose
employment with the Participating Company or an Affiliate terminates on account
of Total Disability, Severance shall occur if and when the Total Disability
ceases prior to Disability Retirement and the Participant does not return to the
employment of the Participating Company or an Affiliate. A "Severed Participant"
is a Participant who has incurred a Severance and who has not again become an
Employee.

         2.60 SPREAD means, with respect to an Option as of any date, the
excess, if any, of the Aggregate Market Value of the Underlying Shares of the
Option over the Option's Strike Price.

         2.61 STRIKE PRICE means with respect to an Option as of any date the
greater of the Indexed Strike Price and the Minimum Strike Price.

<PAGE>   17

         2.62 STRIKE PRICE ACCOUNTS means the accounts maintained with respect
to each Option pursuant to Article VI to keep track of the Strike Price of the
Option.

         2.63 SURVIVING SPOUSE means the survivor of a deceased Participant to
whom such deceased Participant was legally married (as determined by the
Administrative Committee) immediately before the Participant's death.

         2.64 TERMINATION OF EMPLOYMENT means a termination of employment with
the Participating Company or an Affiliate as determined by the Administrative
Committee in accordance with reasonable standards and policies adopted by the
Administrative Committee; provided, however, that the transfer of an Employee
from employment by one Participating Company or an Affiliate to employment by
another Participating Company or Affiliate shall not constitute a Termination of
Employment; and provided further that a Termination of Employment shall occur on
the earlier of (a) or (b) where

         (a) is the date as of which an Employee quits, is discharged,
terminates employment in connection with incurring a Total Disability, Retires
or dies, and

         (b) is the first day of absence of an Employee who fails to return to
employment at the expiration of an Authorized Leave of Absence.

         2.65 TOTAL DISABILITY shall have the meaning Section 8 of the Adoption
Agreement ascribes to such term.

         2.66 UNDERLYING SHARES means, with respect to an Option, the shares of
the Funds that underlie the Option.

         2.67 UNDERLYING SHARE ACCOUNT means, with respect to each Option,the
account maintained pursuant to Section 6.1 to keep track of the Underlying
Shares of the Option.

         2.68 UNDERLYING SHARE ALLOCATION means, with respect to a Participant's
Options as of any date, the allocation of the Options' Underlying Shares among
the Funds.

         2.71 UNDERLYING SHARE RETURN means, with respect to an Option, the rate
of growth or decline of the Aggregate Market Value of the Option's Underlying
Shares.

         2.72 VESTED means, with respect to an Option or a portion thereof, that
the Participant has acquired a nonforfeitable right to exercise the Option or
the vested portion thereof.

         2.73 VESTED PERCENTAGE means, with respect to an Option, percentage of
the Option to which the Participant has a vested and nonforfeitable exercise
right. Section 4 of the Adoption Agreement specifies the Vested Percentage of
each type of Option.

         2.74 YEARS OF SERVICE shall have the meaning Section 9 of the Adoption
Agreement ascribes to such term.

             ARTICLE 3. ELIGIBILITY, PARTICIPATION AND OPTION GRANTS

<PAGE>   18

         3.1 ELIGIBILITY. An Employee whom the Administrative Committee
designates, shall be eligible to become a Participant in the Plan; provided,
however, unless the Company is exempt from ERISA, each such Employee shall be a
member of the Participating Company's "select group of management or highly
compensated employees", as defined in Sections 201(2), 301(a)(3) and 401(a) of
ERISA, as amended.

         3.2 GRANTS. The Participating Company shall make Option grants as set
forth in Section 4 of the Adoption Agreement.

         3.3 REGULAR OPTION AGREEMENTS.

         (a) PROCEDURE. To enter into an agreement for Regular Options for a
calendar year, the agreement must be made prior to the beginning of such
calendar year. Notwithstanding the foregoing, an agreement for Regular Options
may be made between an eligible Employee and the Participating Company within 30
days following the date the Employee first becomes eligible to participate in
this Plan for Regular Options to be granted during the portion of the calendar
year remaining after the Regular Option agreement.

         (b) MINIMUM. The minimum Grant Date Spread for any Regular Option shall
be $200.

         3.4 NONALIENATION.

          (a) Subject to subsection (b) of this Section 3.4, no Option,
interest, expectancy, benefit, payment, claim or right of any Participant or
Optionholder under the Plan shall be (a) subject in any manner to any claims of
any creditor of the Participant or Optionholder, (b) subject to the debts,
contracts, liabilities or torts of the Participant or Optionholder or (c)
subject to alienation by anticipation, sale, transfer, assignment, bankruptcy,
pledge, attachment, charge or encumbrance of any kind. If any Person shall
attempt to take any action contrary to this Section, such action shall be null
and void and of no effect, and the Administrative Committee and the
Participating Company shall disregard such action and shall not in any manner be
bound thereby and shall suffer no liability on account of its disregard thereof.
If the Participant or Optionholder, or any other beneficiary hereunder shall
become bankrupt or attempt to anticipate, alienate, sell, assign, pledge,
encumber, or charge any right hereunder, then such right or benefit shall, in
the discretion of the Administrative Committee, cease and terminate, and in such
event, the Administrative Committee may hold or apply the same or any part
thereof for the benefit of the Participant or Optionholder or the spouse,
children, or other dependents of the Participant or Optionholder, or any of
them, in such manner and in such amounts and proportions as the Administrative
Committee may deem proper.

         (b) Notwithstanding subsection (a) of this Section 3.4, a Participant
may at any time prior to death assign an Option to the Participant's spouse,
adult children or a trust for the benefit of the Participant, the Participant's
spouse or adult children. The Participant may also assign an Option to a
tax-exempt entity as defined in Code Section 501(c)(3). Notwithstanding the
foregoing, such an assignment shall be permitted only if (i) the Participant is
100% Vested in the Option, and (ii) the Participant receives no consideration
for the assignment. Any such assignment shall be evidenced by an appropriate
written document executed by the Participant and a copy delivered to the
Committee in advance of the effective date of the assignment. In the event of
such an assignment, the assignee shall become the Optionholder of the Option and
shall be entitled to all the rights of the Participant with respect to the
assigned Option, and such Option shall continue to be subject to all of the
terms, conditions and restrictions applicable to the Option, as set forth in the
Plan.

<PAGE>   19

         3.5 REEMPLOYMENT. If a Retired Participant again becomes an Employee,
such reemployment shall not change, suspend, delay or otherwise affect payment
of the Participant's benefits, and such Employee shall not again become eligible
to participate in the Plan unless the Administrative Committee, in the exercise
of its discretion, notifies the former Participant in writing that the former
Participant is again eligible to participate in the Plan.

                          ARTICLE 4. UNDERLYING SHARES

         At any time the Optionholder may file an OPTion Allocation Election or
an OPTion Reallocation Election with the Administrative Committee. All
allocations shall be in whole percentage increments. The Administrative
Committee shall determine the effective date of elections.

                              ARTICLE 5. EXERCISES

         5.1 EXERCISABILITY. On any Business Day, the Optionholder can exercise
an Option, but only to the extent the Option is Vested.

         5.2 PROCEDURES AND TIMING.

         (a) EXERCISE ELECTION. To exercise an Option in whole or in part, the
Optionholder must file with the Administrative Committee, an OPTion Exercise
Election, properly completed and duly executed by the Optionholder, specifying
the amount of Spread desired, together with payment of the Strike Price related
to the desired Spread. Notwithstanding the foregoing, the Administrative
Committee may, in the exercise of its discretion, waive the payment of the
Strike Price.

         (b) SETTLEMENT. Within seven (7) Business Days of receipt of valid
Exercise Election, the Participating Company shall discharge the Participating
Company's obligations with respect to the Option. Unless payment of the Strike
Price is waived, the Participating Company shall deliver to the Optionholder the
Underlying Shares that are subject to the exercise as of the Exercise Date, or
if the Administrative Committee so elects, cash equal to the Aggregate Market
Value of such Underlying Shares as of the Exercise Date. If payment of the
Strike Price is waived, the Participating Company shall deliver Underlying
Shares or cash equal to the Spread being exercised as of the Exercise Date. The
Optionholder is not entitled to interest for the time that elapses between the
Exercise Date and the settlement date.

         (c) LESS THAN ALL EXERCISES. The Optionholder may elect to exercise
less than all of the Optionholder's Options. If an exercise calls for the
exercise of less than all of the Optionholder's Options, the Options will be
exercised according to the following protocol:

                  (i) the "in-the-money" Option with the nearest Option
         Expiration Time is exercised first to the extent necessary to fulfill
         the Exercise Election (if there is more than one such Option, the
         Options are exercised pro rata), and if such Option(s) is insufficient,
         then the "in-the-money" Option(s) with the second nearest Option
         Expiration Time is exercised to the extent necessary to fulfill the
         Exercise Election, and if such Option(s) is insufficient the process
         continues with "in-the-money" Options as necessary to fulfill the
         Exercise Election;

<PAGE>   20

                  (ii) if the "in-the-money" Options are insufficient to fulfill
         the Exercise Election, the Administrative Committee shall notify the
         Optionholder of the shortfall.

         An Option is "in-the-money" if it has a positive Spread. A partial
exercise of an Option shall not affect the Optionholder's exercise rights with
respect to the remainder of the Option. If there occurs a partial exercise of an
Option that is less than 100% Vested, the Vested portion of the Option shall be
adjusted to reflect the exercise.

         (d) MINIMUM EXERCISE. In no event shall an exercise be permitted if the
Spread to be exercised is less than $2,000, unless all of the Optionholder's
Options are being exercised.

         (e) WITHHOLDING. Whenever payment is made pursuant to the exercise of
an Option, all tax withholding shall be made either by means of tax withholding
or payment by the Optionholder to the Participating Company of an amount equal
to the taxes due. The Participating Company may also withhold such reasonable
fees as the Administrative Committee may establish from time to time.

         5.3 PAYMENTS TO BENEFICIARY. If a Participant entitled to a benefit
under this Article 5 dies before payment of the benefit is made, then payment of
the benefit shall be made to such Participant's Beneficiary.

ARTICLE 6.  ACCOUNTS

         6.1 UNDERLYING SHARE ACCOUNTS. The Administrative Committee shall keep
or cause to be kept an Underlying Account with respect to each Option. As of
each Adjustment Date, each Underlying Share Account shall be adjusted in the
order set forth below:

                  (a) There shall be a reduction equal to the Underlying Shares
         transferred or deemed transferred pursuant to an exercise of the Option
         since the last preceding Adjustment Date;

                  (b) There shall be a reduction equal to the Underlying Shares
         corresponding to a Forfeiture, Cancellation or Expiration of the Option
         since the last preceding Adjustment Date;

                  (c) There shall be an increase equal to the Underlying Shares
         deemed to be purchased by the reinvestment of all Fund Distributions
         with respect to the Underlying Shares since the last preceding
         Adjustment Date;

                  (d) There shall be an increase equal to the Underlying Shares
         deemed to be received as a distribution of Fund shares since the last
         preceding Adjustment Date; and

                  (e) As a result of a recapitalization of the Fund, a split of
         Fund shares or a change in the Underlying Shares pursuant to Article 4
         since the last preceding Adjustment Date, there shall be a reduction
         equal to the Underlying Shares cancelled and an increase equal to the
         Underlying Shares received in exchange therefor.

<PAGE>   21

         6.2 INDEXED STRIKE PRICE ACCOUNT (OTHER THAN CUSTOMIZED OPTIONS). The
Administrative Committee shall keep or cause to be kept an Indexed Strike Price
Account with respect to each Option (other than a Customized Option). As of each
Adjustment Date, each such Indexed Strike Price Account shall be adjusted in the
order set forth below:

                  (a) There shall be a reduction equal to the Strike Price
         received or deemed to be received pursuant to an exercise of the Option
         since the last preceding Adjustment Date;

                  (b) There shall be a reduction in the same proportion that any
         Forfeiture, Cancellation or Expiration of the Option since the last
         preceding Adjustment Date bears to the total Option immediately
         preceding the Forfeiture, Cancellation or Expiration;

                  (c) There shall be an increase (decrease) equal to the
         Underlying Share Return of the Option since the last preceding
         Adjustment Date; and

                  (d) There shall be an increase, if applicable, pursuant to
         Section 6, Option B of the Adoption Agreement.

         6.3 INDEXED STRIKE PRICE ACCOUNT (CUSTOMIZED OPTIONS). The
Administrative Committee shall keep or cause to be kept an Indexed Strike Price
Account with respect to each Customized Option. As of each Adjustment Date, each
such Indexed Strike Price Account shall be adjusted in the order set forth
below:

                  (a) There shall be a reduction equal to the Strike Price
         received or deemed to be received pursuant to an exercise of the Option
         since the last preceding Adjustment Date;

                  (b) There shall be a reduction in the same proportion that any
         Forfeiture, Cancellation or Expiration of the Option since the last
         preceding Adjustment Date bears to the total Option immediately
         preceding the Forfeiture, Cancellation or Expiration;

                  (c) There shall be an increase (decrease) equal to the rate
         specified in the Option Confirmation for the Option since the last
         preceding Adjustment Date.

         6.4 MINIMUM STRIKE PRICE ACCOUNT. The Administrative Committee shall
keep or cause to be kept a Minimum Strike Price Account with respect to each
Option. As of each Adjustment Date, each such Minimum Strike Price Account shall
be adjusted in the order set forth below:

                  (a) There shall be a reduction in the same proportion that the
         Strike Price Strike Price received or deemed to be received pursuant to
         an exercise of the Option since the last preceding Adjustment Date
         bears to the total Strike Price immediately preceding such exercise;
         and

                  (b) There shall be a reduction in the same proportion that any
         Forfeiture, Cancellation or Expiration of the Option since the last
         preceding Adjustment Date bears to the total Option immediately
         preceding such Forfeiture, Cancellation or Expiration.

<PAGE>   22

                      ARTICLE 7. ADMINISTRATION OF THE PLAN

         7.1 POWERS AND DUTIES OF THE ADMINISTRATIVE COMMITTEE. The
Administrative Committee shall have general responsibility for the
administration of the Plan (including but not limited to complying with
reporting and disclosure requirements, and establishing and maintaining Plan
records). In the exercise of its sole and absolute discretion, the
Administrative Committee shall interpret the Plan's provisions and determine the
eligibility of individuals for benefits.

         7.2 AGENTS. The Administrative Committee may engage such legal counsel,
certified public accountants and other advisers and service providers, who may
be advisers or service providers for the Participating Company or an Affiliate,
and make use of such agents and clerical or other personnel, as it shall require
or may deem advisable for purposes of the Plan. The Administrative Committee may
rely upon the written opinion of any legal counsel or accountants engaged by the
Administrative Committee, and may delegate to any such agent or to any
subcommittee or member of the Administrative Committee its authority to perform
any act hereunder, including, without limitation, those matters involving the
exercise of discretion, provided that such delegation shall be subject to
revocation at any time at the discretion of the Administrative Committee.

         7.3 REPORTS TO GOVERNING BODY. The Administrative Committee shall
report to the Governing Body or to a committee of the Governing Body designated
for that purpose, as frequently as the Governing Body or such committee shall
specify, with regard to the matters for which the Administrative Committee is
responsible under the Plan.

         7.4 STRUCTURE OF ADMINISTRATIVE COMMITTEE. The Administrative Committee
shall consist of three or more members, each of whom shall be appointed by,
shall remain in office at the will of, and may be removed with or without cause
by, the Governing Body. Any member of the Administrative Committee may resign at
any time. No member of the Administrative Committee shall be entitled to act on
or decide any matter relating solely to such member or any of such member's
rights or benefits under the Plan. In the event the Administrative Committee is
unable to act in any matter by reason of the foregoing restriction, the
Governing Body shall act on such matter. The members of the Administrative
Committee shall not receive any special compensation for serving in the capacity
as members of the Administrative Committee but shall be reimbursed for any
reasonable expenses incurred in connection therewith. Except as otherwise
required by ERISA, no bond or other security shall be required of the
Administrative Committee or any member thereof in any jurisdiction. Any member
of the Administrative Committee, any subcommittee or agent to whom the
Administrative Committee delegates any authority, and any other person or group
of persons, may serve in more than one fiduciary capacity with respect to the
Plan.

         7.5 ADOPTION OF PROCEDURES OF ADMINISTRATIVE COMMITTEE. The
Administrative Committee shall establish its own procedures and the time and
place for its meetings, and provide for the keeping of minutes of all meetings.
A majority of the members of the Administrative Committee shall constitute a
quorum for the transaction of business at a meeting of the Administrative
Committee. Any action of the Administrative Committee may be taken upon the
affirmative vote of a majority of the members of the Administrative Committee at
a meeting. The Administrative Committee may also act without meeting by
unanimous written consent.

         7.6 INSTRUCTIONS FOR PAYMENTS. All requests of or directions to the
Participating Company for payment or disbursement shall be signed by a member of
the Administrative Committee or such other person or persons as the
Administrative Committee may from time to time designate in writing. This person
shall cause to be kept full and accurate accounts of payments and disbursements
under the Plan.

<PAGE>   23

         7.7 CLAIMS FOR BENEFITS. All claims for benefits under the Plan shall
be submitted in writing to the Administrative Committee. Within a reasonable
period of time the Administrative Committee shall decide the claim by majority
vote in the exercise of its sole and absolute discretion. Written notice of the
decision on each such claim shall be furnished within 90 days after receipt of
the claim; provided that, if special circumstances require an extension of time
for processing the claim, an additional 90 days from the end of the initial
period shall be allowed for processing the claim, in which event the claimant
shall be furnished with a written notice of the extension prior to the
termination of the initial 90-day period indicating the special circumstance
requiring an extension. If the claim is wholly or partially denied, such written
notice shall set forth an explanation of the specific findings and conclusions
on which such denial is based. A claimant may review all pertinent documents and
may request a review by the Administrative Committee of such a decision denying
the claim. Such a request shall be made in writing and filed with the
Administrative Committee within 60 days after delivery to said claimant of
written notice of said decision. Such written request for review shall contain
all additional information which the claimant wishes the Administrative
Committee to consider. The Administrative Committee may hold any hearing or
conduct any independent investigation which it deems necessary to render its
decision, and the decision on review shall be made as soon as possible after the
Administrative Committee's receipt of the request for review. Written notice of
the decision on review shall be furnished to the claimant within 60 days after
receipt by the Administrative Committee of a request for review, unless special
circumstances require an extension of time for processing, in which event an
additional 60 days shall be allowed for review and the claimant shall be so
notified in writing. Written notice of the decision on review shall include
specific reasons for such decision. For all purposes under the Plan, such
decisions on claims (where no review is requested) and decisions on review
(where review is requested) shall be final, binding and conclusive on all
parties.

         7.8 HOLD HARMLESS. To the maximum extent permitted by law, no member of
the Administrative Committee shall be personally liable by reason of any
contract or other instrument executed by such member or on such member's behalf
in such member's capacity as a member of the Administrative Committee nor for
any mistake of judgment made in good faith, and the Participating Company shall
indemnify and hold harmless, directly from its own assets (including the
proceeds of any insurance policy the premiums of which are paid from the
Company's own assets), each member of the Administrative Committee and each
other officer, employee, or director of the Participating Company or an
Affiliate to whom any duty or power relating to the administration or
interpretation of the Plan against any cost or expense (including counsel fees)
or liability (including any sum paid in settlement of a claim with the approval
of the Participating Company) arising out of any act or omission to act in
connection with the Plan unless arising out of such person's own fraud or bad
faith.

         7.9 SERVICE OF PROCESS. The Secretary of the Participating Company or
such other person designated by the Governing Body shall be the agent for
service of process under the Plan.

<PAGE>   24

                     ARTICLE 8. DESIGNATION OF BENEFICIARIES

         8.1 BENEFICIARY DESIGNATION. Every Optionholder shall file with the
Administrative Committee an OPTion Beneficiary Designation of one or more
Persons as the Beneficiary who shall be entitled to become the Optionholder of
Options held by the Optionholder upon the Participant's death. A Participant may
from time to time revoke or change such Beneficiary designation without the
consent of any prior Beneficiary by filing a new designation with the
Administrative Committee. The last such designation received by the
Administrative Committee shall be controlling; provided, however, that no
designation, or change or revocation thereof, shall be effective unless received
by the Administrative Committee prior to the Participant's death, and in no
event shall it be effective as of any date prior to such receipt. All decisions
of the Administrative Committee concerning the effectiveness of any Beneficiary
designation, and the identity of any Beneficiary, shall be final.

         8.2 FAILURE TO DESIGNATE BENEFICIARY. If no Beneficiary designation is
in effect at the time of an Optionholder's death, the Options, if any, held by
the Participant at the Participant's death shall be transferred to the
Optionholder's Surviving Spouse, if any, or if the Optionholder has no Surviving
Spouse, to the Participant's estate. If the Administrative Committee is in doubt
as to the right of any person to receive such Options, the Administrative
Committee may direct the Participating Company to withhold payment, without
liability for any interest thereon, until the rights thereto are determined, or
the Administrative Committee may direct the Participating Company to pay any
such amount into any court of appropriate jurisdiction and such payment shall be
a complete discharge of the liability of the Participating Company therefor.

                 ARTICLE 9. WITHDRAWAL OF PARTICIPATING COMPANY

         9.1 WITHDRAWAL OF PARTICIPATING COMPANY. The Participating Company
(other than the Company) may withdraw from participation in the Plan by giving
the Governing Body prior written notice approved by resolution by its board of
directors or equivalent governing body specifying a withdrawal date, which shall
be the last day of a month at least 30 days subsequent to the date which notice
is received by the Governing Body. The Participating Company shall withdraw from
participating in the Plan if and when it ceases to be either a division of the
Company or an Affiliate. The Governing Body may require the Participating
Company to withdraw from the Plan, as of any withdrawal date the Governing Body
specifies.

         9.2 EFFECT OF WITHDRAWAL. The Participating Company's withdrawal from
the Plan shall not in any way modify, reduce or otherwise affect the
Participating Company's obligations under the Plan, as such obligations are
defined under the provisions of the Plan existing immediately before this
withdrawal.

         Withdrawal from the Plan by any Participating Company shall not in any
way affect any other Participating Company's participation in the Plan.

<PAGE>   25

                ARTICLE 10. AMENDMENT OR TERMINATION OF THE PLAN

         10.1 RIGHT TO AMEND OR TERMINATE PLAN. The Governing Body reserves the
right at any time to amend or terminate the Plan, in whole or in part, and for
any reason and without the consent of any Participating Company, Participant or
Beneficiary. Each Participating Company by its participation in the Plan shall
be deemed to have delegated this authority to the Governing Body.

         The Administrative Committee may adopt any ministerial and
nonsubstantive amendment which may be necessary or appropriate to facilitate the
administration, management and interpretation of the Plan, provided the
amendment does not materially affect the currently estimated cost to the
Participating Companies of maintaining the Plan. Each Participating Company by
its participation in the Plan shall be deemed to have delegated this authority
to the Administrative Committee.

         In no event shall an amendment or termination modify, reduce or
otherwise affect the Participating Company's obligations under the Plan, as such
obligations are defined under the provisions of the Plan existing immediately
before such amendment or termination.

         10.2 NOTICE. Notice of any amendment or termination of the Plan shall
be given by the Governing Body or the Administrative Committee, whichever adopts
the amendment, to the other and all Participating Companies.

                 ARTICLE 11. GENERAL PROVISIONS AND LIMITATIONS

         11.1 NO RIGHT TO CONTINUED EMPLOYMENT. Nothing contained in the Plan
shall give any Employee the right to be retained in the employment of the
Participating Company or Affiliate or affect the right of any such employer to
dismiss any Employee. The adoption and maintenance of the Plan shall not
constitute a contract between any Participating Company and Employee or
consideration for, or an inducement to or condition of, the employment of any
Employee.

         11.2 PAYMENT ON BEHALF OF PAYEE. If the Administrative Committee shall
find that any person to whom any amount is payable under the Plan is unable to
care for such person's affairs because of illness or accident, or is a minor, or
has died, then any payment due such person or such person's estate (unless a
prior claim therefor has been made by a duly appointed legal representative)
may, if the Administrative Committee so elects, be paid to such person's spouse,
a child, a relative, an institution maintaining or having custody of such
person, or any other person deemed by the Administrative Committee to be a
proper recipient on behalf of such person otherwise entitled to payment. Any
such payment shall be a complete discharge of the liability of the Plan and the
Participating Company therefor.

         11.3 NONALIENATION. No interest, expectancy, benefit, payment, claim or
right of any Participant or Beneficiary under the Plan shall be (a) subject in
any manner to any claims of any creditor of the Participant or Beneficiary, (b)
subject to the debts, contracts, liabilities or torts of the Participant or
Beneficiary or (c) subject to alienation by anticipation, sale, transfer,
assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind.
If any person shall attempt to take any action contrary to this Section, such
action shall be null and void and of no effect, and the Administrative Committee
and the Participating Company shall disregard such action and shall not in any
manner be bound thereby and shall suffer no liability on account of its
disregard thereof. If the Participant, Beneficiary, or any other beneficiary
hereunder shall become bankrupt or attempt to anticipate, alienate, sell,
assign, pledge, encumber, or charge any right hereunder, then such right or
benefit shall, in the discretion of the Administrative Committee, cease and
terminate, and in such event the Administrative Committee may hold or apply the
same or any part thereof for the benefit of the Participant or Beneficiary or
the spouse, children, or other dependents of the Participant or Beneficiary, or
any of them, in such manner and in such amounts and proportions as the
Administrative Committee may deem proper.

<PAGE>   26

         11.4 MISSING PAYEE. If the Administrative Committee cannot ascertain
the whereabouts of any person to whom a payment is due under the Plan, and if,
after five years from the date such payment is due, a notice of such payment due
is mailed to the last known address of such person, as shown on the records of
the Administrative Committee or the Company, and within three months after such
mailing such person has not made written claim therefor, the Administrative
Committee, if it so elects, after receiving advice from counsel to the Plan, may
direct that such payment and all remaining payments otherwise due to such person
be cancelled on the records of the Plan and the amount thereof forfeited, and
upon such cancellation, the Participating Company shall have no further
liability therefor, except that, in the event such person later notifies the
Administrative Committee of such person's whereabouts and requests the payment
or payments due to such person under the Plan, the amounts otherwise due but
unpaid shall be paid to such person without interest for late payment.

         11.5 REQUIRED INFORMATION. Each Participant shall file with the
Administrative Committee such pertinent information concerning himself or
herself, such Participant's Beneficiary, or such other person as the
Administrative Committee may specify, and no Participant, Beneficiary, or other
person shall have any rights or be entitled to any benefits under the Plan
unless such information is filed by or with respect to the Participant.

         11.6 NO TRUST OR FUNDING CREATED. The obligations of the Participating
Company to make payments hereunder shall constitute a liability of the
Participating Company to a Participant or Beneficiary, as the case may be. Such
payments shall be made from the general funds of the Participating Company, and
the Participating Company shall not be required to establish or maintain any
special or separate fund, or purchase or acquire life insurance on a
Participant's life, or otherwise to segregate assets to assure that such payment
shall be made, and neither a Participant nor a Beneficiary shall have any
interest in any particular asset of the Participating Company by reason of its
obligations hereunder. Nothing contained in the Plan shall create or be
construed as creating a trust of any kind or any other fiduciary relationship
between the Participating Company and a Participant or any other person. The
rights and claims of a Participant or a Beneficiary to a benefit provided
hereunder shall have no greater or higher status than the rights and claims of
any other general, unsecured creditor of the Participating Company.

         11.7 BINDING EFFECT. Obligations incurred by the Participating Company
pursuant to this Plan shall be binding upon and inure to the benefit of the
Participating Company, its successors and assigns, and the Participant and the
Participant's Beneficiary.

         11.8 MERGER OR CONSOLIDATION. In the event of a merger or a
consolidation by the Participating Company with another corporation, or the
acquisition of substantially all of the assets or outstanding stock of the
Participating Company by another corporation, then and in such event the
obligations and responsibilities of the Participating Company under this Plan
shall be assumed by any such successor or acquiring corporation, and all of the
rights, privileges and benefits of the Participants and Beneficiaries hereunder
shall continue.

<PAGE>   27

         11.9 OPTION CANCELLATION. Each Optionholder has the right, without
consent of the Participating Company, to surrender any Option for cancellation.
Upon such a surrender, the Optionholder shall receive no value in exchange, and
releases and discharges the Participating Company from any and all obligations
under the Option surrendered.

         11.10 ENTIRE PLAN. The Adoption Agreement and the Plan Document, and
any written amendments thereto, contain all the terms and provisions of the Plan
and shall constitute the entire Plan, any other alleged terms or provisions
being of no effect.

<PAGE>   28

                                    EXHIBIT A
                            OPTION GRANT CONFIRMATION
                                      DATE

TO:               PARTICIPANT:      Name:
                                    Address:
                                    Social Security No.:

FROM:             PARTICIPATING COMPANY:    Name:
                                            Address:

PLAN NAME:        FIRST CHARTER OPT (REFERRED TO HEREIN AS THE "PLAN")

PLAN NUMBER:

--------------------------------------------------------------------------------

THE PARTICIPATING COMPANY HAS GRANTED THE PARTICIPANT THE FOLLOWING OPTION:

OPTION NO.:

TYPE OF OPTION:
                [ ] Regular Option
                [ ] Bonus Option
                [ ] Prior Plan Option
                [ ] Matching Option
                [ ] Customized Option
                [ ] Restoration Option

GRANT DATE:

GRANT DATE AGGREGATE MARKET VALUE OF THE UNDERLYING SHARES:   $
GRANT DATE STRIKE PRICE:                                      $
GRANT DATE SPREAD:                                            $

Capitalized terms shall have the meanings the Plan ascribes to them.

The Strike Price at Exercise Date, the Exercise Period and the Vesting of the
Option are as set forth in the Plan. [For a Customized Option, the Strike Price
at Exercise Date, the Exercise Period and the Vesting of the Option must be set
forth in this Option Confirmation.]

The Underlying Share Allocation at Grant Date of the Option is as set forth in
your Underlying Share Allocation Election in effect at the Grant Date, namely:

                FUND                                   PERCENTAGE
                ----                                   ----------

If you have questions, contact OPTLink at 1-866-OPT-Link (678-5465), fax
1-877-997-OPTs (6787) or e-mail myOPT@OPTLink.com.

<PAGE>   29

                                    EXHIBIT B
                                OPTION AGREEMENT

         THIS OPTION AGREEMENT made this    day of    , 200      by and between
____________________ (the "Participating Company") and (the "Participant") (the
"Agreement").

         1.  THE PLAN.  This Agreement is made under the following Plan:

         PLAN NAME:        First Charter OPT (referred to herein as the "Plan")
         PLAN NUMBER:

The Plan is incorporated herein by reference and shall govern the rights and
obligations hereunder. Capitalized terms shall have the meanings the Plan
ascribes to such terms.

         [PARAGRAPHS 2 THROUGH 7 ARE TO BE INCLUDED AS APPLICABLE]

         2. PRIOR PLAN OPTIONS. Pursuant to the terms of the Plan, the
Participant agrees elect to terminate participation in the Prior Plan, to cancel
the Participant's benefits under the Prior Plan, and the Participating Company
agrees to grant the Participant a Prior Plan Option on with a Grant Date Spread
of _________.

         3. REGULAR OPTIONS FOR THE REMAINDER OF THE CURRENT CALENDAR YEAR. The
Participant became eligible to participate in the Plan within the past 30 days.
Pursuant to the terms of the Plan, the Participating Company agrees to grant the
Participant Regular Options at the following times during the remainder of this
current calendar year: (check one only)

         [ ]  bi-weekly
         [ ]  semi-monthly
         [ ]  monthly
         [ ]  quarterly

         Each Regular Option under this paragraph shall have an equal Grant Date
Spread, the aggregate Grant Date Spread of all Regular Options under this
paragraph shall be $___________________, and the salary the Participant would
have otherwise received during the remainder of this current calendar year shall
be reduced by a like amount.

         Notwithstanding any provision in this Agreement to the contrary, the
Participating Company shall have no obligation to grant Regular Options after
the Participant's Termination of Employment.

         4. REGULAR OPTIONS FOR THE NEXT CALENDAR YEAR. Pursuant to the terms of
the Plan, the Participating Company agrees to grant the Participant Regular
Options at the following times during the next calendar: (check one only)

         [ ]  bi-weekly
         [ ]  semi-monthly
         [ ]  monthly
         [ ]  quarterly

         Each Regular Option under this paragraph shall have an equal Grant Date
Spread, the aggregate Grant Date Spread of all Regular Options under this
paragraph shall be $___________________, and the salary the Participant would
have otherwise received during the next calendar year shall be reduced by a like
amount.

         Notwithstanding any provision in this Agreement to the contrary, the
Participating Company shall have no obligation to grant Regular Options after
the Participant's Termination of Employment.

         5. MATCHING OPTIONS. Pursuant to the terms of Plan, the Participating
Company will grant the Participant Matching Options.

<PAGE>   30

         6. BONUS OPTIONS. Pursuant to the terms of the Plan, the Participating
Company agrees to grant the Participant a Bonus Option with a Grant Date Spread
of ___________% of the cash bonus the Participant would have received but for
the granting of the Bonus Option under this paragraph, and the cash bonus the
Participant would have otherwise received shall be reduced by an amount equal to
the Grant Date Spread of the Bonus Option. The Grant Date of the Bonus Option
shall be the date the Participating Company would have otherwise paid the cash
bonus.

         7. RESTORATION OPTIONS. Pursuant to the terms of Plan, the
Participating Company will grant the Participant Restoration Options for the
calendar year(s) ________. The Grant Date Spread of each Restoration Option will
equal the Lost Qualified Plan Credits for the calendar year. "Lost Qualified
Plan Credits" means the excess, if any, of the Aggregate Qualified Plan Credits
that would have been on the Participant's behalf for the calendar year (include
only the applicable provisions)

[if the Grant Date Spread of Regular Options and Bonus Options had been
considered as compensation under the Qualified Plans (before the application of
Code Section 401(a)(17))]

[if the Internal Revenue Code (the "Code") limitations on Qualified Plan
Credits, such as those found in Code Sections 401(a)(17), 415, 401(k) and 403(b)
had not applied]

[if salary reductions under the Participating Company's Section 125 cafeteria
plan had been considered as compensation under the Qualified Plans (before the
application of Code Section 401(a)(17))]

over the Aggregate Qualified Plan Credits that were actually made on the
Participant's behalf for the calendar year. "Aggregate Qualified Plan Credits"
means the sum of allocations for the period under the Participating Company's
individual account plans qualified under Code Section 401(a) or 403(b)
("Qualified Plans").

         8. CUSTOMIZED OPTION[S]. Pursuant to the terms of Plan, the
Participating Company will grant the Participant the following Customized
Option[s]: (specify Grant Date(s), Grant Date Spread, Indexed Strike Price,
Minimum Strike Price, Earliest Exercise Date, Option Expiration Time, and
Vesting]

         9. RELIANCE ON OWN ADVISORS. The Participant affirms that in making
this Agreement the Participant has relied on the Participant's own tax and
financial advisors and not on the Participating Company, any of its employees,
agents or representatives.

         10. NO EMPLOYMENT AGREEMENT. Nothing contained in the this Agreement
shall give the Participant the right to be retained in the employment of the
Participating Company or Affiliate or affect the right of any such employer to
dismiss any Employee. This Agreement shall not constitute a contract between any
Participating Company and the Participant or consideration for, or an inducement
to or condition of, the employment of the Participant.

         Duly executed by the parties the day and year first above written.

         ---------------------------------------
         Participant Signature

         Participating Company
         By:____________________________________
         Printed Name:___________________________  Title:_______________________

<PAGE>   31

                                    EXHIBIT C
                           OPTION ALLOCATION ELECTION

TO:      OPTLINK

FROM:    NAME:
         ADDRESS
         SOCIAL SECURITY NO.

PLAN NAME:        FIRST CHARTER OPT (REFERRED TO HEREIN AS THE "PLAN")

PLAN NUMBER:

         I, a Participant in the Plan, hereby request that each Option granted
to me after this election takes effect have the following Underlying Share
Allocation (allocations must be in whole percentages):

                                FUND                            PERCENTAGE
                                ----                            ----------

        [Name of Fund A]
        [Name of Fund B]
        [Name of Fund C]
        [Name of Fund D]
        [Name of Fund E]

         This election revokes all prior Underlying Share Allocation Elections.

         I understand that this election is subject to the terms of the Plan,
and that the Plan's provisions are incorporated herein by reference.

         __________________________________________________________Date
         Participant Signature

<PAGE>   32

                                    EXHIBIT D
                          OPTION REALLOCATION ELECTION

TO:      OPTLINK

FROM:    NAME:
         ADDRESS
         SOCIAL SECURITY NO.

PLAN NAME:        FIRST CHARTER OPT (REFERRED TO HEREIN AS THE "PLAN")

PLAN NUMBER:

         I, a Participant in the Plan, hereby request that as of the date this
election takes effect the Underlying Shares of all my Options have the following
Underlying Share Allocation (allocations must be in whole percentages):

                                FUND                            PERCENTAGE
                                ----                            ----------

        [Name of Fund A]
        [Name of Fund B]
        [Name of Fund C]
        [Name of Fund D]
        [Name of Fund E]

         I understand that this election is subject to the terms of the Plan,
and that the Plan's provisions are incorporated herein by reference.

         __________________________________________________________Date
         Participant Signature

<PAGE>   33

                                    EXHIBIT E
                         OPTION BENEFICIARY DESIGNATION

TO:      OPTLINK

FROM:    NAME:
         ADDRESS:
         SOCIAL SECURITY NO.:

PLAN:    FIRST CHARTER OPT (REFERRED TO HEREIN AS THE "PLAN")

PLAN NUMBER:

         I, a Participant in the Plan, hereby name the following person or
persons, entity or entities (herein called "Designated Beneficiary(ies)") to
receive ownership of Options issued under the Plan and that I own upon my death
(herein called "Survivor Options").

--------------------------------------------------------------------------------
  No       Name and Relationship           Address           Social Security No
--------------------------------------------------------------------------------

 1
--------------------------------------------------------------------------------

 2
--------------------------------------------------------------------------------

 3
--------------------------------------------------------------------------------

 4
--------------------------------------------------------------------------------

 5
--------------------------------------------------------------------------------

 6
--------------------------------------------------------------------------------

 7
--------------------------------------------------------------------------------

 8
--------------------------------------------------------------------------------

 9
--------------------------------------------------------------------------------

 10
--------------------------------------------------------------------------------

         If my Survivor Options, if any, are to be paid to more than one
Designated Beneficiary, I understand that such Survivor Options shall be divided
equally between or among such Designated Beneficiaries.

<PAGE>   34

         If any Designated Beneficiary(ies) named above is (are) not in
existence at my death, then I name the following Contingent Designated
Beneficiary(ies) to receive the Survivor Options that such Designated
Beneficiary(ies) would have received.

--------------------------------------------------------------------------------
    Name and Relationship             Address              Social Security No
--------------------------------------------------------------------------------
Contingent Beneficiary to Designated Beneficiary No.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
    Name and Relationship             Address              Social Security No
--------------------------------------------------------------------------------
Contingent Beneficiary to Designated Beneficiary No.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
    Name and Relationship             Address              Social Security No
--------------------------------------------------------------------------------
Contingent Beneficiary to Designated Beneficiary No.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
    Name and Relationship             Address              Social Security No
--------------------------------------------------------------------------------
Contingent Beneficiary to Designated Beneficiary No.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

         I understand that if a Designated Beneficiary dies before I do and
there is no Contingent Designated Beneficiary named to take such Designated
Beneficiary's share, then the Survivor Option will be paid to my Surviving
Spouse, if any, and if not to my estate.

         I understand that this Beneficiary Designation Form shall remain in
effect until revoked by me in writing or until superseded by my execution and
delivery of a substitute Beneficiary Designation Form. I understand that no such
revocation or substitute Beneficiary Designation Form will be effective until it
is actually received by the Administrative Committee.

         I understand that Survivor Options have federal and state tax
consequences and that such consequences may depend on the identity of the
beneficiary of such payments (for example, whether the beneficiary is my
spouse); and I acknowledge that I have been advised to consult an independent,
professional tax advisor before completing this Beneficiary Designation Form.

         __________________________________________________________Date
         Participant Signature

<PAGE>   35

                                    EXHIBIT F
                            OPTION EXERCISE ELECTION

TO:      OPTLINK

FROM:    NAME:
         ADDRESS:
         SOCIAL SECURITY NO.:

PLAN:    FIRST CHARTER OPT (REFERRED TO HEREIN AS THE "PLAN")

PLAN NUMBER:

         I, an Optionholder under the Plan, hereby elect to exercise my Options
as follows: (check and complete one)

         [ ] all of my Options

         [ ] such Options as are required under the Plan's protocol for me to
         realize a Spread of $.

         I understand that this Exercise Election is subject to the Plan
provisions, and is subject to tax withholding.

         __________________________________________________________Date
         Participant Signature

<PAGE>   36

                                    EXHIBIT G
                                OPTION ASSIGNMENT

TO:      NAME OF ASSIGNEE:
         ADDRESS:
         E-MAIL ADDRESS:
         DAYTIME PHONE NO.:

COPY:    OPTLINK

FROM:    NAME:
         SOCIAL SECURITY NO.:
         E-MAIL ADDRESS:
         DAYTIME PHONE NO.:

PLAN:    FIRST CHARTER OPT (REFERRED TO HEREIN AS THE "PLAN")

PLAN NUMBER:

         I, an Optionholder under the Plan, hereby assign the following Options
to the Assignee identified above.

              -----------------------------------------------------

                                   OPTION NO.
              -----------------------------------------------------

              -----------------------------------------------------

              -----------------------------------------------------

              -----------------------------------------------------

              -----------------------------------------------------

              -----------------------------------------------------

              -----------------------------------------------------

              -----------------------------------------------------

              -----------------------------------------------------

              -----------------------------------------------------

              -----------------------------------------------------

              -----------------------------------------------------

<PAGE>   37

         I understand that this assignment shall be valid only if approved by
the Administrative Committee, and that the Administrative Committee will
disapprove the assignment if it is not authorized under the Plan. I certify as
follows:

         1.  The Assignee is the following:  (check one)

                     [ ] person
                     [ ] trust
                     [ ] tax-exempt entity (501(c) organization)

         2. If the Assignee is a person, the Assignee's relationship to me, and
the Assignee's Social Security Number, are as follows:

                  Relationship:     SSN:

         3. If the Assignee is a trust, the trust's federal employer
identification number, and the trust's beneficiaries and their relationship to
me, are as follows:

                  Trust EIN:

                  --------------------------------------------------------------
                        Name of Beneficiary            Relationship
                  --------------------------------------------------------------

                  --------------------------------------------------------------

                  --------------------------------------------------------------

                  --------------------------------------------------------------

                  --------------------------------------------------------------

                  --------------------------------------------------------------

         4. If the Assignee is a tax-exempt entity, the entity's federal
employer identification number is as follows:

         I understand that this Assignment is subject to the Plan provisions. I
further authorize the Administrative Committee to act pursuant to my
instructions as indicated above. I agree that the Participating Company, the
Administrative Committee and its designee(s) may rely on this document as
genuine and that they shall not be liable for any loss, expense or cost arising
from such reliance on such instructions, even if such instructions are
fraudulent or unauthorized.

         _________________________________________________________Date:
         Participant's Signature<PAGE>   1

                                  EXHIBIT 10.28

<PAGE>   2

                                 AMENDMENT NO. 1
                                     TO THE
             CAROLINA FIRST BANCSHARES, INC. 1990 STOCK OPTION PLAN

         This Amendment No. 1 ("Amendment") to the Carolina First BancShares,
Inc. 1990 Stock Option Plan is made and executed this 20th day of May, 1999, to
be effective as of May 1, 1999.

         WHEREAS, the Board of Directors of Carolina First BancShares, Inc. (the
"Corporation"), deems it to be in the best interests of the Corporation and its
shareholders to effect certain amendments to the Carolina First BancShares, Inc.
1990 Stock Option Plan (the "Plan") pursuant to Section 5.3 of the Plan, which
amendments do not require approval of the stockholders of the Corporation;

         NOW, THEREFORE, in accordance with Section 5.3 of the Plan, the Plan is
hereby amended as follows:

         1. Definition of Acceleration Event. Section 1.2 of the Plan is hereby
amended by removing subsection (a) thereto and renumbering subsections (b) and
(c) accordingly.

         2. Definition of Change in Control. Section 1.2 of the Plan is hereby
amended by adding the following definition as new subsection (c):

         (c) "Change in Control" means and includes each of the following:

                  (1) The acquisition by any individual, entity or group (within
         the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act) (a
         "Person") of beneficial ownership (within the meaning of Rule 13d-3
         promulgated under the Securities Exchange Act of 1934, as amended) of
         25% or more of the combined voting power of the then outstanding voting
         securities of the Company entitled to vote generally in the election of
         directors (the "Outstanding Company Voting Securities"); provided,
         however, that for purposes of this subsection (1), the following
         acquisitions shall not constitute a Change of Control: (i) any
         acquisition by a Person who is on May 1, 1999 (the "Amendment Date")
         the beneficial owner of 25% or more of the Outstanding Company Voting
         Securities, (ii) any acquisition directly from the Company, (iii) any
         acquisition by the Company, (iv) any acquisition by any employee
         benefit plan (or related trust) sponsored or maintained by the Company
         or any corporation controlled by the Company, or (v) any acquisition by
         any corporation pursuant to a transaction which complies with clauses
         (i), (ii) and (iii) of subsection (3) of this definition; or

                  (2) Individuals who, as of the Amendment Date, constitute the
         Board (the "Incumbent Board") cease for any reason to constitute at
         least a majority of the Board; provided, however, that any individual
         becoming a director subsequent to the Amendment Date whose election, or
         nomination for election by the Company's shareholders, was approved by
         a vote of at least a majority of the directors then comprising the
         Incumbent Board shall be considered as though such individual were a
         member of the Incumbent Board, but excluding, for this purpose, any
         such individual whose initial assumption of office occurs as a result
         of an actual or threatened election contest with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Board; or

                  (3) Consummation of a reorganization, merger or consolidation
         or sale or other disposition of all or substantially all of the assets
         of the Company (a "Business Combination"), in each case, unless,
         following such Business Combination, (i) all or substantially all of
         the individuals and entities who were the beneficial owners of the
         Outstanding Company Voting Securities immediately prior to such
         Business Combination beneficially own, directly or indirectly, more
         than 50% of the combined voting power of the then outstanding voting
         securities entitled to vote generally in the election of directors of
         the corporation resulting from such Business Combination (including,
         without limitation, a corporation which as a result of such transaction

<PAGE>   3

         owns the Company or all or substantially all of the Company's assets
         either directly or through one or more subsidiaries) in substantially
         the same proportions as their ownership, immediately prior to such
         Business Combination of the Outstanding Company Voting Securities, and
         (ii) no Person (excluding any corporation resulting from such Business
         Combination or any employee benefit plan (or related trust) of the
         Company or such corporation resulting from such Business Combination)
         beneficially owns, directly or indirectly, 25% or more of the combined
         voting power of the then outstanding voting securities of such
         corporation except to the extent that such ownership existed prior to
         the Business Combination, and (iii) at least a majority of the members
         of the board of directors of the corporation resulting from such
         Business Combination were members of the Incumbent Board at the time of
         the execution of the initial agreement, or of the action of the Board,
         providing for such Business Combination; or

                  (4) Approval by the shareholders of the Company of a complete
         liquidation or dissolution of the Company.

         3. Committee Requirements. The first two sentences of Section 1.3 shall
be deleted in their entirety, and the following sentences are substituted in
lieu thereof:

         The Plan shall be administered by the Compensation and Benefits
         Committee of the Board (the "Committee") or, at the discretion of the
         Board from time to time, by the Board. The Committee shall consist of
         two or more members of the Board. It is intended that the directors
         appointed to serve on the Committee shall be "non-employee directors"
         (within the meaning of Rule 16b-3 promulgated under the 1934 Act) and
         "outside directors" (within the meaning of Code Section 162(m) and the
         regulations thereunder) to the extent that Rule 16b-3 and, if necessary
         for relief from the limitation under Code Section 162(m) and such
         relief is sought by the Company, Code Section 162(m), respectively, are
         applicable. However, the mere fact that a Committee member shall fail
         to qualify under either of the foregoing requirements shall not
         invalidate any Award made by the Committee which Award is otherwise
         validly made under the Plan. The members of the Committee shall be
         appointed by, and may be changed at any time and from time to time in
         the discretion of, the Board. During any time that the Board is acting
         as administrator of the Plan, it shall have all the powers of the
         Committee hereunder, and any reference herein to the Committee (other
         than in this Section 1.3) shall include the Board.

         4. Payment with Common Stock. Section 1.5(e) of the Plan is hereby
amended by adding the following clause to the end of the first sentence:

         ; provided that if shares of Stock surrendered in payment of the
         exercise price were themselves acquired otherwise than on the open
         market, such shares shall have been held by the Optionee for at least
         six months.

         5. Acceleration Upon a Change in Control. Section 1.6 of the Plan is
hereby deleted in its entirety and the following is substituted in lieu thereof:

         1.6      Acceleration Upon a Change in Control.

                  Except as otherwise provided in the Option Agreement, upon the
                  occurrence of a Change in Control, all outstanding Options,
                  SARs, and STARs shall become fully exercisable and all
                  restrictions on outstanding Options, SARs, and STARs shall
                  lapse; provided, however that such acceleration will not occur
                  if, in the opinion of the Company's accountants, such
                  acceleration would preclude the use of "pooling of interest"
                  accounting treatment for a Change in Control transaction that
                  (a) would otherwise qualify for such accounting treatment, and
                  (b) is contingent upon qualifying for such accounting
                  treatment. To the extent that this provision causes Incentive
                  Stock Options to exceed the dollar limitation set forth in
                  Section 2.2, the excess Options shall be deemed to be
                  Nonqualified Stock Options.

<PAGE>   4

         6. Acceleration Upon Certain Events Not Constituting a Change in
Control. Section 1.7 of the Plan is hereby deleted in its entirety and the
following is substituted in lieu thereof:

         1.7      Acceleration Upon Certain Events Not Constituting a Change in
                  Control.

                  In the event of the occurrence of any circumstance,
                  transaction or event not constituting a Change in Control (as
                  defined in Section 1.2(c)) but which the Board of Directors
                  deems to be, or to be reasonably likely to lead to, an
                  effective change in control of the Company of a nature that
                  would be required to be reported in response to Item 6(e) of
                  Schedule 14A of the 1934 Act, the Committee may in its sole
                  discretion declare all outstanding Options, SARs, and STARs to
                  be fully exercisable, and/or all restrictions on all
                  outstanding Options, SARs, and STARs to have lapsed, in each
                  case, as of such date as the Committee may, in its sole
                  discretion, declare, which may be on or before the
                  consummation of such transaction or event. To the extent that
                  this provision causes Incentive Stock Options to exceed the
                  dollar limitation set forth in Section 2.2, the excess Options
                  shall be deemed to be Nonqualified Stock Options.

         7. Acceleration for Any Other Reason; Changes in Capital Structure. The
Plan is hereby amended by adding the following as Sections 1.8 and 1.9 of the
Plan and by renumbering the present Section 1.8 to Section 1.10:

         1.8      Acceleration for Any Other Reason.

                  Regardless of whether an event has occurred as described in
                  Section 1.6 or 1.7 above, the Committee may in its sole
                  discretion at any time determine that all or a portion of an
                  Optionee's Options, SARs, and STARs shall become fully or
                  partially exercisable, and/or that all or a part of the
                  restrictions on all or a portion of the outstanding Options,
                  SARs, and STARs shall lapse, in each case, as of such date as
                  the Committee may, in its sole discretion, declare. The
                  Committee may discriminate among Participants and among Awards
                  granted to a Participant in exercising its discretion pursuant
                  to this Section 1.8.

         1.9      Changes in Capital Structure.

                  In the event a stock dividend or stock split is declared, the
                  authorization limits under Section 5.1 and 5.4 shall be
                  changed proportionately, and the shares of Stock then subject
                  to each Award shall be increased or decreased proportionately
                  and appropriately without any change in the aggregate purchase
                  price therefor. In the event the Stock shall be changed into
                  or exchanged for a different number or class of shares of
                  stock or securities of the Company or of another corporation,
                  whether through reorganization, recapitalization,
                  reclassification, share exchange, stock split-up, combination
                  of shares, merger or consolidation, the authorization limits
                  under Section 5.1 and 5.4 shall be adjusted proportionately,
                  and there shall be substituted for each such share of Stock
                  then subject to each Award the number and class of shares into
                  which each outstanding share of Stock shall be so exchanged,
                  all without any change in the aggregate purchase price for the
                  shares then subject to each Award, or, subject to Section
                  11.2, there shall be made such other equitable adjustment as
                  the Committee shall approve.

         8. Continued Employment. Section 2.3 of the Plan is hereby amended by
adding the following clause to the end of the first sentence:

         ; provided that with respect to Incentive Stock Options, if a period of
         leave exceeds 90 days and the individual's right to reemployment is not
         guaranteed whether by statute or by contract, the employment
         relationship shall be deemed to have terminated on the 91st day of such
         leave.

<PAGE>   5

         9. Termination of Employment. Section 3.1(b) of the Plan is hereby
changing the term "Stock Option Committee" to "Committee" and by deleting the
words "an Incentive or" from the first sentence.

         10. Section 83(b) Election. Section 3.2 of the Plan shall be deleted in
its entirety.

         11. Certain Tax Code References. All references in the Plan to Section
422A of the Code shall be changed to refer to "Section 422 of the Code," except
the references to Section 422A(c)(7) contained in Sections 1.5(c) and 1.5(d) of
the Plan, which shall be changed to refer to "Section 22(e)(3) of the Code," and
all references in the Plan to Section 425 of the Code, or any subsection
thereof, shall be changed to refer to "Section 424 of the Code," or the
corresponding subsection thereof.

         12. Effect of Amendment. As modified hereby, the provisions of the Plan
shall remain in full force and effect.

         IN WITNESS WHEREOF, the Corporation has caused this Amendment to be
duly executed as of the date first above written.

                           Carolina First BancShares, Inc.

                                                  ----------------------------
                                                  By:
                                                  Title:

<PAGE>   6

                         CAROLINA FIRST BANCSHARES, INC.
              1990 STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN

ARTICLE I GENERAL

1.1 Purpose of the Plan.

The purpose of the Carolina First BancShares, Inc. 1990 Stock Option and Stock
Appreciation Rights Plan (the "Plan") is to assist Carolina First BancShares,
Inc. (the "Company") in securing and retaining key employees of outstanding
ability by making it possible to offer them an increased incentive to join or
continue in the service of the Company and to increase their efforts for its
welfare by participating in the ownership and growth of the Company.

1.2 Definitions .

         (a) "Acceleration Event" means any event which in the opinion of the
Board of Directors of the Company is likely to lead to changes in control of
share ownership of the Company, whether or not such change in control actually
occurs.

         (b) "Board of Directors" or "Board" means the Board of Directors of the
Company.

         (c) "Code" means the Internal Revenue Code of 1986, as amended.

         (d) "Committee" means the committee referred to in Section 1.3.

         (e) "Common Stock" means the common stock of the Company having a par
value of $2.50 per share.

         (f ) "Fair Market Value" means the closing "asked" price of the shares
in the over-the-counter market on the day on which such value is to be
determined or, if such "asked" price is not available, the last sales price on
such day or, if no shares were traded on such day, on the next preceding day on
which the shares were traded, as reported by the National Association of
Securities Dealers Automatic Quotation System (NASDAQ) or other national
quotation service. If the shares are listed on a National Securities Exchange,
"fair market value" means the closing price of the shares on such National
Securities Exchange on the day on which such value is to be determined or, if no
shares were traded on such day, on the next preceding day on which shares were
traded, as reported by National Quotation Bureau, Inc. or other national
quotation service. If at any time shares of Common Stock are not traded on an
exchange or in the over-the-counter market, Fair Market Value shall be the value
determined by the Board of Directors or Committee administering the Plan, taking
into consideration those factors affecting or reflecting value which they deem
appropriate.

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         (g) "Incentive Stock Option" means an option to purchase shares of
Common Stock which is intended to qualify as an incentive stock option as
defined in Section 422A of the Code.

         (h) "Key Employee" means any person, including officers and directors,
in the regular employment of the Company or its Subsidiaries who is designated a
Key Employee by the Committee and is, or is expected to be, primarily
responsible for the management, growth, or supervision of some part or all of
the business of the Company or its Subsidiaries. The power to determine who is
and who is not a Key Employee is reserved solely for the Committee.

         (i) "Nonqualified Stock Option" means an option to purchase shares of
Common Stock which is not intended to qualify as an Incentive Stock Option as
defined in Section 422A of the Code.

         (j) "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.

         (k) "Optionee" means a Key Employee to whom an Option is granted under
the Plan.

         (I) "Parent" means any corporation which qualifies as a parent of a
corporation under the definition of "parent corporation" contained in Section
425(e) of the Code.

         (m) "Stock Appreciation Right" shall have the meaning stated in Article
IV of the Plan.

         (n) "Subsidiary" means any corporation which qualifies as a subsidiary
of a corporation under the definition of "subsidiary corporation" contained in
Section 425(f) of the Code.

         (o) "Term" means the period during which a particular Option may be
exercised as determined by the Committee and as provided in the Option
agreement.

1.3 ADMINISTRATION OF THE PLAN.

The Plan shall be administered by the Stock Option Committee (the "Committee")
appointed by the Board of Directors and consisting of at least three members
from the Board of Directors. No person while a member of the Committee shall be
eligible to participate in the Plan. Subject to the control of the Board, and
without limiting the control over decisions described in Section 1.7, the
Committee shall have the power to interpret and apply the Plan and to make
regulations for carrying out its purpose. More particularly, the Committee shall
determine which Key Employees shall be granted Options under the Plan, the
number of shares subject to each Option, the price per share under each Option,
the Term of each Option,

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<PAGE>   8

and any restrictions on the exercise of each Option. When granting Options, the
Committee shall designate the Option as either an Incentive Stock Option or a
Nonqualified Stock Option. The Committee shall also designate whether the Option
is granted with Stock Appreciation Rights. Determinations by the Committee under
the Plan (including, without limitation, determinations of the person to receive
Options, the form, amount and timing of such Options, and the terms and
provisions of such Options and the agreements evidencing same) need not be
uniform and may be made by the Committee selectively among persons who receive,
or are eligible to receive, Options under the Plan whether or not such persons
are similarly situated.

1.4 Shares Subject to the Plan.

The total number of shares that may be purchased pursuant to Options or
transferred pursuant to the exercise of Stock Appreciation Rights under the Plan
shall not exceed 110,0 00 shares of Common Stock. Shares subject to the Options
which terminate or expire prior to exercise shall be available for future
Options. Shares represented by an unexercised Option surrendered upon an
exercise of Stock Appreciation Rights including, without duplication, any shares
issued in payment of any Stock Appreciation Rights, shall be deducted from the
aggregate and shall not be available for further Options hereunder. Shares
issued pursuant to the Plan may be either unissued shares of Common Stock or
reacquired shares of Common Stock held in treasury.

1.5 Terms and Conditions of Options.

All Options shall be evidenced by agreements in such form as the Committee shall
approve from time to time subject to the provisions of Article II or Article
Ill, as appropriate, and the following provisions:

         (a) Exercise Price. Except as provided in Section 3.1, the exercise
price of the Option shall not be less than the Fair Market Value (as determined
by the Committee) of the Common Stock at the time the Option is granted.

         (b) Exercise. The Committee shall determine whether the Option shall be
exercisable in full at any time during the Term or in cumulative or
noncumulative installments during the Term.

         (c) Termination of Employment. An Optionee's Option shall expire on the
earlier of the expiration of (i) the date specified in the Option which in no
event shall be later than three months after the termination of the Optionee's
employment for any reason other than death or disability (as defined in Section
422A(c)(7) of the Code), or (ii) the Term specified in Section 2.1 or 3.1(a) as
the case may be.In the event of exercise of the Option after termination of
employment, the Optionee may exercise the Option only with respect to the shares
which could have been purchased by

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<PAGE>   9

the Optionee at the date of termination of employment. However, the Committee
may, but is not required to, waive any requirements made pursuant to Section
1.5(b) so that some or all of the shares subject to the Option may be exercised
within the time limitation described in this subsection. An Optionee's
employment shall be deemed to terminate on the last date for which he receives a
regular wage or salary payment.

         (d) Death or Disability. Upon termination of an Optionee's employment
by reason of death or disability (as determined by the Committee consistent with
the definition of Section 422A(c)(7) of the Code), the Option shall expire on
the earlier of the expiration of (i) the date specified in the Option which in
no event shall be later than 12 months after the date of such termination, or
(ii) the Term specified in Section 2.1 or 3.1(a) as the case may be. The
Optionee or his successor in interest, as the case may be, may exercise the
Option only as to the shares which could have been purchased by the Optionee at
the date of his termination of employment. However, the Committee may, but is
not required to, waive any requirements made pursuant to Section 1.5(b) so that
some or all of the shares subject to the Option may be exercised within the time
limitation described in this subsection.

         (e) Payment. Payment for shares as to which an Option is exercised
shall be made in such manner and at such time or times as shall be provided in
the Option agreement, including cash, Common Stock which was previously acquired
by the Optionee, or any combination thereof. The Fair Market Value of the
surrendered Common Stock as of the date of exercise shall be determined in
valuing Common Stock used in payment for Options.

         (f) Nontransferability. No Option granted under the Plan shall be
transferable other than by will or by the laws of descent and distribution.
During the lifetime of the Optionee, an Option shall be exercisable only by the
Optionee.

         (g) Additional Provisions. Each option agreement may contain such other
terms and conditions not inconsistent with the provisions of the Plan as the
Committee may deem appropriate from time to time.

1.6 Stock Adjustments; Mergers.

Notwithstanding Section 1.4, in the event the outstanding shares are increased
or decreased or changed into or exchanged for a different number or kind of
shares or other securities of the Company or of any other corporation by reason
of any merger, sale of stock, consolidation, liquidation, recapitalization,
reclassification, stock split, combination of shares, or stock dividend, the
total number of shares set forth in Section 1.4 shall be proportionately and
appropriately adjusted by the Committee. If the Company continues in existence,
(i) the number and kind of shares that are subject to any Option and the option
price per

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<PAGE>   10

share shall be proportionately and appropriately adjusted without any change in
the aggregate price to be paid therefor upon exercise of the Option, and (ii)
the Committee may make such adjustments in the number and kind of Stock
Appreciation Rights as it shall deem appropriate in the circumstances. If the
Company will not remain in existence or substantially all of its voting Common
Stock and Common Stock will be purchased by a single purchaser or group of
purchasers acting together, then the Committee may (i) declare that all Options
and Stock Appreciation Rights shall terminate 30 days after the Committee gives
written notice to all Optionees of their immediate right to exercise all Options
and Stock Appreciation Rights then outstanding (without regard to limitations on
exercise otherwise contained in the Options), or (ii) notify all Optionees that
all options and Stock Appreciation Rights granted under the Plan shall apply
with appropriate adjustments as determined by the Committee to the securities pf
the successor corporation to which holders of the numbers of shares subject to
such Options and Stock Appreciation Rights would have been entitled, or (iii)
some combination of aspects of (i) and (ii). The determination by the Committee
as to the terms of any of the foregoing adjustments shall be conclusive and
binding. Any fractional shares resulting from any of the foregoing adjustments
under this section shall be disregarded and eliminated.

1.7 Acceleration Event.

If an Acceleration Event occurs in the opinion of the Board of Directors, based
on circumstances known to it, the Board of Directors may direct the Committee to
declare that all Options and Stock Appreciation Rights granted under the Plan
shall become exercisable immediately, notwithstanding the provisions of the
respective Option agreements regarding exercisability.

1.8 Notification of Exercise.

Options shall be exercised by written notice directed to the Secretary of the
Company at the principal executive offices of the Company. Such written notice
shall be accompanied by any payment required pursuant to Section 1.5(e).
Exercise by an Optionee's heir or the representative of his estate shall be
accompanied by evidence of his authority to so act in form reasonably
satisfactory to the Company.

                                   ARTICLE II
                             INCENTIVE STOCK OPTIONS

2.1 Terms of Incentive Stock Options.

Each Incentive Stock Option granted under the Plan shall be exercisable only
during a Term fixed by the Committee; provided, however, that the Term shall end
no later than 10 years after the date the Incentive Stock Option is granted.

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<PAGE>   11

2. 2 Limitation on Options.

The aggregate Fair Market Value of Common Stock (determined at the time the
Incentive Stock Option is granted), subject to Incentive Stock Options granted
to a Key Employee under all plans of the Key Employee's employer corporation and
its Parent or Subsidiary corporations and that become exercisable for the first
time by such Key Employee during any calendar year, may not exceed $100,000.

2.3 Continued Employment.

Whether military, government or other service or other leave of absence shall
constitute a termination of employment shall be determined in each case by the
Committee at its discretion, and any determination by the Committee shall be
final and conclusive. A termination of employment shall not occur where the
Optionee transfers from the Company to one of its Subsidiaries or transfers from
a Subsidiary to the Company.

2.4 Special Rule for Ten Percent Shareholder.

If at the time an Incentive Stock Option is granted, an employee owns stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of his employer corporation or of its Parent or any of its
Subsidiaries, as determined using the attribution rules of Section 425(d) of the
Code, then the terms of the Incentive Stock Option shall specify that the option
price shall be at least 110% of the Fair Market Value of the stock subject to
the Incentive Stock Option and such Incentive Stock Option shall not be
exercisable after the expiration of five years from the date such Incentive
Stock Option is granted.

2.5 Interpretation.

In interpreting this Article II of the Plan and the provisions of individual
option agreements, the Committee and the Board shall be governed by the
principles and requirements of Sections 421, 422A and 425 of the Code, and
applicable Treasury Regulations.

                                   ARTICLE III
                           NONQUALIFIED STOCK OPTIONS

3.1 Terms and Conditions of Options.

In addition to the requirements of Section 1.5, Nonqualified Stock Options shall
be subject to the following provisions:

         (a) Term. Each Nonqualified Stock Option granted under the Plan shall
be exercisable only during a Term fixed by the Committee.

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<PAGE>   12

         (b) Termination of Employment. Notwithstanding the provisions of
Sections 1.5(c) and 1.5(d), the Stock Option Committee in its discretion may
provide, either upon the original grant of an Option or in an amendment to an
Incentive or Nonqualified Stock Option, that an Option may be exercisable during
a Term that does not expire upon the expiration of three months following an
Optionee's termination of employment (one year in the case of termination as a
result of death or disability), but in no event later than the Term specified in
Section 3.l(a) above.

         (c) Exercise Price. The Company may elect to grant Nonqualified Stock
Options at a price less than the Fair Market Value of the Common Stock at the
time the Option is granted, but in no event may the price for such Options be
less than the par value of such Shares.

         (d) Additional Terms. Pursuant to Section 1.5(g), the Committee may add
additional terms and conditions to a Nonqualified Stock Option, including, but
not limited to, a cash award for any federal tax liability suffered by the
Optionee upon the grant and/or exercise of a Nonqualified Stock Option.

3.2 Section 83(b) Election.

The Company recognizes that certain persons who receive Nonqualified Stock
Options may be subject to restrictions regarding their right to trade Common
Stock under applicable securities laws. Such may cause Optionees exercising such
Options not to be taxable under the provisions of Section 83(c) of the Code.
Accordingly, Optionees exercising such Nonqualified Stock Options may consider
making an election to be taxed upon exercise of the Option under Section 83(b)
of the Code and to effect such election will file such election with the
Internal Revenue Service within thirty (30) days of exercise of the Option and
otherwise in accordance with applicable Treasury Regulations.

                                   ARTICLE IV
                            STOCK APPRECIATION RIGHTS

4.1 Terms and Conditions of Stock Appreciation Rights.

Stock Appreciation Rights ("SAR") shall be granted by the Committee in
connection with the grant of an Option. All SARs shall be in such form as the
Committee may from time to time determine and shall be subject to the following
terms and conditions:

(a) Term and Exercise. An SAR shall be exercisable only (i) with the approval of
the Committee, (ii) during the Term of the Option to which it relates, (iii) at
such times as the Option to which it relates is exercisable, and (iv) if the
Fair Market Value of the Common Stock subject to the Option surrendered (on the
date surrendered) minus the aggregate option price of the Common Stock subject
to the Option surrendered is a positive amount.

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<PAGE>   13

(b)  Payment. In the event the Committee agrees to permit exercise of the SAR,
     the Optionee shall surrender to the Company the right to exercise the
     Option with respect to a specified number of shares as to which the Option
     is then exercisable. In return, the Optionee shall receive from the Company
     no more than an amount payable in cash and/or shares (as determined by the
     Committee after considering the request of the Optionee) equal to the
     difference between the Fair Market Value of Common Stock as to which the
     Optionee has surrendered the Option and the exercise price with respect
     thereto. In the event the committee determines to tender shares in full or
     partial payment of the SAR, the number of shares to be issued to the
     Optionee shall be based on the Fair market Value of the shares as of the
     date of exercise of the SAR. No fractional shares shall be issued to
     Optionees upon exercise of an SAR. Instead, the Company shall pay the
     Optionee the value of such fractional share based upon the Fair Market
     Value of a share on the date the SAR is exercised.

(c)  Nontransferability. An SAR granted under the Plan shall be transferable
     only when the Option to which it relates is transferable.

4.2 OTHER TERMS AND CONDITIONS.

Option agreements reflecting Stock Appreciation Rights which are granted under
the Plan may contain such other conditions not inconsistent with the provisions
of the Plan as the Committee may deem appropriate from time to time.

4.3 NOTIFICATION OF REQUEST TO EXERCISE.

The Optionee shall request the Committee's approval to exercise a Stock
Appreciation Right by written notice to the Secretary of the Company at the
principal executive offices of the Company. Such written notice shall state the
number of shares subject to the Option for which approval of the exercise of the
SAR is requested and the Optioniee's preferred form of payment of the SAR, as
hereinafter provided. The Optionee may indicate his or her preference to receive
payment of the SAR in cash or in Common Stock or in a combination thereof.
Notwithstanding anything to the contrary contained herein, the Committee shall
have absolute discretion in determining whether the request for the approval of
the exercise of the SAR shall be approved and, if such approval is given,
whether payment shall be made in cash or Common Stock or in a combination
thereof.

With 30 days after the delivery to the Secretary of the Optionee's request to
exercise the SAR as provided above, the Committee shall inform the Optionee in
writing of its determination, by personal delivery of such determination to the
Optionee by certified or registered mail, return receipt requested. The Optionee
must act on any approved exercise of an SAR within 30 days after the date of
such determination by the Committee

<PAGE>   14

(or such longer period as may be permitted by the Committee) and in accordance
with the terms approved by the Committee. Exercise shall be by written notice
actually delivered, or mailed by certified or registered mail, return receipt
requested, to the Secretary of the Company at the principal executive offices of
the Company.

4.4 Effect of Exercise.

Upon exercise of a Stock Appreciation Right, the Option to which it relates
shall lapse with respect to the shares as to which the SAR is exercised and such
shares shall not be available for further grant of Options.

                                    ARTICLE V
                              ADDITIONAL PROVISIONS

5.1 Stockholder Approval.

The Plan shall be submitted for the approval of the shareholders of the Company
at the first annual meeting of shareholders held subsequent to the adoption of
the Plan and in all events within one year of its approval by the Board of
Directors. If at said meeting the stockholders of the Company do not approve the
Plan, the Plan shall terminate.

5.2 Compliance with Other Laws and Regulations.

The Plan, the grant and exercise of Options hereunder, and the obligation of the
Company to sell and deliver shares under such Options, shall be subject to all
applicable Federal and state laws, rules, and regulations and to such approvals
by any government or regulatory agency as may be required. The Company shall not
be required to issue or deliver any certificates for shares of Common Stock
prior to (a) the listing of such shares on any stock exchange on which the
Common Stock may then be listed and (b) the completion of any registration or
qualification of such shares under any Federal or state law, or any ruling or
regulation of any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable.

5.3 Amendments.

The Board of Directors may discontinue the Plan at any time, and may amend it
from time to time, but no amendment, without approval by stockholders, may (a)
increase the total number of shares which may be issued under the Plan or to any
individual under the Plan, (b) reduce the Option price for shares which may be
purchased pursuant to Options under Articles II and III of the Plan, (c) extend
the period during which Options may be granted, or (d) change the class of
employees to whom Options may be granted, except as provided in Section 1.6.
Other than as expressly

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<PAGE>   15

permitted under the Plan, no outstanding Option may be revoked or altered in a
manner unfavorable to the Optionee without the consent of the Optionee.

5.4 No Rights As Shareholder.

No Optionee shall have any rights as a shareholder with respect to any share
subject to his or her Option prior to the date of issuance to him or her of a
certificate or certificates for such shares.

5.5 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 to remit to the Company an amount sufficient to satisfy any Federal,
state or local withholding tax liability prior to the delivery of any
certificate or certificates for such shares. Whenever under the Plan payments
are to be made in cash, such payments shall be made net of an amount sufficient
to satisfy any Federal, state, or local withholding tax liability.

5.6 Continued Employment Not Presumed.
This Plan, and any document describing this Plan and the grant of any stock
Option or Stock Appreciation Right hereunder, shall not give any Optionee or
other employee aright to continued employment by the Company or its Subsidiaries
or affect the right of the Company or its Subsidiaries to terminate the
employment of any such person with or without cause.

5.7 Effective Date: Duration.

The Plan shall become effective as of September 6, 1990 subject to shareholder
approval pursuant to Section 5.1 and shall expire on the same date in the year
2000. No Options may be granted 'under the Plan after such expiration date, but
Options granted on or before that date may be exercised according to the terms
of the Option agreements and shall continue to be governed by and interpreted
consistent with the terms hereof.

                                   ARTICLE VI
                       DETACHED STOCK APPRECIATION RIGHTS

6.1 Purpose.

The purpose of this Article VI is to provide a means whereby the Committee may
grant Key Employees Stock Appreciation Rights without granting Options in
connection with such Stock Appreciation Rights ("STAR").

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<PAGE>   16

6.2 Administration.

The Committee shall determine which Key Employees shall be granted STARs and the
number of STARs granted to such employees in accordance with Section 1.3 of the
Plan. Each grant of a STAR shall be communicated to the Key Employee within
thirty (30) days after the date such STAR is granted.

6.3 Terms and Conditions of STAR.

Each STAR shall be evidenced by agreements in such form as the Committee shall
approve from time to time. Each agreement shall provide the following terms and
conditions as determined by the Committee in its sole discretion:

(a) Vesting Schedule. The Committee shall determine whether STARs are fully
vested upon grant or whether the STARs shall vest or mature in whole or in part
over a specific time period.

(b) Exercise. The Comm1ttee shall determine whether the STARs are exerciseable
immediately, exerciseable in installments, or exerciseable after a specified
waiting period. The Committee shall also determine if the STARs expire if not
exercised within a specified period.

(c) Forfeiture. The Committee shall determine those events which will result in
the forfeiture of nonvested STARs and what events, if any, would result in the
forfeiture of vested STARs. Forfeiture events could include (but are not limited
to) voluntary or involuntary termination of employment, death or disability.

(d) Form of Payment. The Committee, in its sole discretion, shall determine
whether payment of an exercised STAR will be made in cash, shares of Common
Stock, or any combination thereof.

(e) Nontransferability. STARs granted under this Plan, and any rights and
privileges pertaining thereto, may not be transferred, assigned, pledged or
hypothecated in any manner, by operation of law or otherwise, other than by will
or by the laws of descent or distribution, and shall not be subject to
execution, attachment or similar process. In the event of the Key Employee's
death, payment of any amount due under the agreement shall be made to the Key
Employee's estate.

(f) Additional Provisions. Each award agreement may contain such other terms and
conditions not inconsistent with the provisions of this Article VI as the
Committee deems appropriate.

6.4 Exercise.

STARs may be exercised, to the extent exerciseable by the terms of the related
award agreement, by written notice directed to the Secretary of

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<PAGE>   17

the Company at the Company's principal executive offices. Such written notice
shall indicate the number of shares subject to the STAR that the Key Employee is
exercising. The written notice shall be by hand delivery or mailed by registered
or certified mail, return receipt requested.

6.5 Payment.

Upon exercise of a STAR, the Key Employee shall be entitled to receive the
economic value of such STAR. The economic value of each individual STAR shall
equal the Fair Market Value of one share of Common Stock on the date such STAR
is exercised, reduced by the Fair Market Value of one share of Common Stock on
the date such STAR is granted to the Key Employee. The economic value of all
STARs exercised by the Key Employee shall be the economic value of each STAR as
determined in the preceding sentence multiplied by the number of STARs
exercised.

6.6 Nature of STAR.

STARs shall be used solely as a device for the measurement and determination of
the amount to be paid to Key Employees upon exercise of the STAR. STARs shall
not constitute or be treated as property or a trust fund of any kind and nothing
in this Article VI shall require the Company to fund or to segregate any of its
assets to pay its obligations hereunder. Key Employees shall have only the right
of a general unsecured creditor of the Company with respect to any STARs granted
under this Plan.

6.7 Limits on Awards.

The total number of shares represented by STARs may not exceed the number of
shares of Common Stock described in Section 1.4, reduced by the number of shares
of Common Stock previously granted to Optionees under this Plan in the form of
Options, and further reduced or adjusted as described in . Section 1.4. Shares
represented by a STAR shall be deducted from the total number of shares subject
to the Plan in the manner described in Section 1.4.

6.8 Coordination with the Plan.

Except as modified in this Article VI, the provisions of Article I (General)
(other than Section 1.5) and Article V (Additional Provisions) shall also apply
to STARs and the use of the word "Option" or "SAR," where applicable, in such
provisions shall also refer to STARs. Articles II, III, IV and Section 1.5 of
Article I shall not be applied to this Article VI.

6.9 Effective Date.

This Article VI shall be effective as of January 24, 1991 ("Effective Date") and
STARs may be granted immediately thereafter. However, if the Plan is not
approved by the Company's shareholders as required by Section

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<PAGE>   18

5.7 of the Plan, all STARs granted shall be null and void as of the Effective
Date described in this Section 6.9 and no compensation shall be paid as a result
of such action. No STARs may be granted after the Plan's expiration date
described in Section 5.7 but STARs granted on or before that date may be
exercised according to the terms of the respective award agreements and shall
continue to be governed by and interpreted consistent with the terms of the
Plan.

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