Document:

EXHIBIT 10.6

                              Amended and Restated

                              EMPLOYMENT AGREEMENT

                                     between

                            WKI HOLDING COMPANY, INC.

                                      and

                                  JOSEPH McGARR

<PAGE>

                              EMPLOYMENT AGREEMENT
                              --------------------

                                    Recitals
                                    --------

     WHEREAS, Joseph McGarr (the "Executive") entered into an Employment
Agreement (the "Employment Agreement") with WKI Holding Company, Inc. (the
"Company") which was effective as of November 25, 2002 and executed in January
of 2003; and

     WHEREAS, the Employment Agreement was amended by an amendment which was
effective as of May 31, 2003 and an amendment which was dated July 9, 2003 (the
amendments, collectively with the Employment Agreement being collectively
referred to herein as the "Prior Agreement"); and

     WHEREAS, the Company desires to continue to employ Executive to serve as
the Chief Financial Officer and Senior Vice President upon the terms and subject
to the conditions set forth in this Agreement (the "Agreement") which shall be
effective on July 31, 2003 (the "Agreement Date"); and

     WHEREAS, the Company and Executive further agree and acknowledge that the
terms of this Agreement supersede and completely replace the terms of the Prior
Agreement as of the Agreement Date and that the Prior Agreement is null and void
as of the Agreement Date.

     NOW, THEREFORE, in consideration of the premises (which are deemed to be an
integral part of this Agreement) and the mutual covenants, representations,
warranties and agreements contained herein, the Company and Executive hereby
agree as follows:

                           Article I.     DEFINITIONS

     The terms set forth below have the following meanings (such meanings to be
applicable to both the singular and plural forms, except where otherwise
expressly indicated):

     1.1  "Accrued Annual Bonus" means the amount of any Annual Bonus earned but
           --------------------
     not yet paid with respect to the Fiscal Year ended prior to the Date of
     Termination.

     1.2  "Accrued Base Salary" means the amount of Executive's Base Salary
           -------------------
     which is earned but not yet paid as of the Date of Termination.

     1.3  "Accrued Retention Bonus" means the amount (if any) of any Retention
           -----------------------
     Bonus vested but not yet paid as of the Date of Termination.

     1.4  "Agreement" is defined in the Recitals to this Agreement.
           ---------

     1.5  "Agreement Date" is defined in the Recitals to this Agreement.
           --------------

     1.6  "Anniversary Date" means any annual anniversary of the Agreement Date.
           ----------------

                                        1
<PAGE>
     1.7  "Annual Bonus" is defined in Section 4.2(a).
           ------------

     1.8  "Base Salary" is defined in Section 4.1.
           -----------

     1.9  "Beneficiary" is defined in Section 8.9.
           -----------

     1.10 "Cause" means any of the following:
           -----

          (a)  Executive's commission of a misdemeanor involving fraud,
          dishonesty, or moral turpitude, or of a felony,

          (b)  Executive's willful or intentional material breach of his
          material obligations under this Agreement, provided that such
          misconduct is not cured to the best of Executive's ability within ten
          (10) business days after the delivery of notice to Executive of such
          misconduct

          (c)  willful or intentional material misconduct by Executive in the
          performance of his duties under this Agreement, or

          (d)  the willful or intentional failure by Executive to materially
          comply (to the best of his ability) with a specific, written direction
          of the Chief Executive Officer of the Company that is not inconsistent
          with this Agreement and Executive's responsibilities hereunder,
          provided that such refusal or failure (i) is not cured to the best of
          Executive's ability within ten (10) business days after the delivery
          of such direction to Executive and (ii) is not based on Executive's
          good faith belief, as expressed by written notice to the Chief
          Executive Officer of the Company, given within such ten (10) business
          day period, that the implementation of such direction of the Chief
          Executive Officer of the Company would be unlawful or unethical.

     1.11 "Change of Control" means any one or more of the following events:
           -----------------

          (a)  any person (as such term is used in Rule 13d-5 under the Exchange
          Act) or group (as such term is defined in Sections 3(a)(9) and
          13(d)(3) of the Exchange Act), other than any Subsidiary or any
          employee benefit plan (or any related trust) of the Company or any of
          its Subsidiaries, becomes the beneficial owner in the aggregate of
          more than thirty-five percent (35%) of the Voting Securities;

          (b)  individuals who constitute the initial board of directors of the
          Company as of January 31, 2003 (the "Reorganized Incumbent Board")
                                               ---------------------------
          cease for any reason to constitute more than sixty-six and two-thirds
          percent (66-2/3%) of the members of the board of directors of the
          Company; provided that any individual who becomes a director after
          January 31, 2003 whose election or nomination for election by the
          Company's shareholders, was approved by more than sixty-six and
          two-thirds percent (66-2/3%) of the members of the Reorganized
          Incumbent Board (other than an election or nomination of an individual
          whose initial assumption of office is in connection with an actual or
          threatened "election contest" relating to the election of the
          directors of the Company (as such terms are used in Rule 14a-11 under
          the Exchange Act), "tender offer" (as such term is used

                                        2
<PAGE>
          in Section 14(d) of the Exchange Act) or a proposed Merger (as defined
          below in clause (iii) of this Section 1.11(c))) shall be deemed to be
          members of the Reorganized Incumbent Board;

          (c)  consummation of a merger, reorganization, consolidation, or
          similar transaction (any of the foregoing, a "Merger") unless the
          Persons who were the beneficial owners of the Voting Securities
          immediately before such Merger, are the beneficial owners, immediately
          after such Merger, directly or indirectly, in the aggregate, of more
          than sixty percent (60%) of the common stock and any other voting
          securities of the entity resulting from such Merger in substantially
          the same relative proportions as they owned the Voting Securities
          immediately before the Merger;

          (d)  consummation of a transfer or sale of all or substantially all of
          the assets of the Company or World Kitchen, Inc. (a "Sale") unless the
                                                               ----
          Persons who were the beneficial owners of the Voting Securities
          immediately before such Sale, are the beneficial owners, immediately
          after such Sale, directly or indirectly, in the aggregate, of more
          than sixty percent (60%) of the common stock and any other voting
          securities of the entity or entities that own such assets immediately
          after the Sale; or

          (e)  The board of directors of the Company or the shareholders of the
          Company, as applicable, approve a plan of liquidation of the Company
          or World Kitchen, Inc.

     Notwithstanding the foregoing, there shall not be a Change of Control if,
     in advance of (or subsequent to) such event, Executive, in his sole
     discretion, agrees in writing that such event shall not constitute a Change
     of Control. For purposes of this definition of Change of Control, entry
     into and performance of the Stockholders' Agreement entered into by and
     among the Company and certain of its stockholders, dated as of January 31,
     2003 (as the same may be amended from time to time) shall not constitute
     any Person as a member of a group with any other Person.

     1.12 "Code" means the Internal Revenue Code of 1986, as amended from time
           ----
     to time.

     1.13 "Compensation Committee" means the compensation committee of the WKI
           ----------------------
     Board, composed exclusively of non-employee directors.

     1.14 "Date of Termination" means the effective date of a Termination of
           -------------------
     Employment for any reason, including death or Disability, whether by the
     Company or by Executive.

     1.15 "Disability" means a mental or physical condition which renders
           ----------
     Executive unable or incompetent to carry out the material job
     responsibilities which Executive held or the material duties to which
     Executive was assigned at the time the disability was incurred, which has
     existed for at least three (3) calendar months and which in the opinion of
     a physician mutually agreed upon by the Company and Executive (provided
     that the parties shall not unreasonably withhold such agreement) is
     expected to be permanent or to last for an indefinite duration or a
     duration in excess of six (6) calendar months.

                                        4
<PAGE>
     1.16 "Employment Period" is defined in Article III.
           -----------------

     1.17 "Equity Plan" means the WKI Holding Company, Inc. Stock Option Plan.
           -----------

     1.18 "Exchange Act" means the United States Securities Exchange Act of
           ------------
     1934, as amended, or any federal statute or statutes which shall be enacted
     to take its place, together with all rules and regulations promulgated
     thereunder.

     1.19 "Excise Tax" means the excise tax imposed by Section 4999 of the Code,
           ----------
     together with any interest or penalties imposed with respect to such excise
     tax.

     1.20 "Executive" is defined in the Recitals to this Agreement.
           ---------

     1.21 "Fiscal Year" means the calendar year period beginning each January 1
           -----------
     and ending each December 31.

     1.22 "Good Reason" means the occurrence of any one of the following events:
           -----------

          (a)  any material breach of the Agreement by the Company (or by World
          Kitchen, Inc. under Section 8.5 hereof) of any material obligations
          under this Agreement, including any of the following occurrences which
          shall be deemed to constitute a material breach of a material
          obligation:

               (i) failure to pay Base Salary as required by Section 4.1, Annual
          Bonus as required by Section 4.2, or Retention Bonus as required by
          Section 4.3;

               (ii) failure to pay or provide material benefits under Articles V
          and VI of this Agreement, including without limitation, the failure to
          comply with the provisions of the Long-Term Incentive Plan or any
          applicable Guidelines as are adopted by the Committee relating
          thereto; or

               (iii) any substantial adverse change in the position,
          responsibilities, and duties of Executive as compared to Executive's
          position, responsibilities and duties as set forth in Section 2.1,

               (iv) failure of Executive and the Company to agree on appropriate
          equity compensation arrangements in accordance with Article V hereof
          by the Agreement Date,

          (b)  the failure of the Company to assign this Agreement to a
          successor, as applicable, or the failure of such successor to
          explicitly assume and agree to be bound by this Agreement, or

          (c)  the Company's requiring Executive to be principally based at any
          office or location more than 25 miles away from Reston, Virginia.

     Notwithstanding the foregoing, none of the foregoing events shall
constitute a "Good Reason" event if, in advance of (or subsequent to) such
event, Executive, in his sole discretion, agrees in writing that such event
shall not constitute a "Good Reason" event within the meaning of this Agreement.

                                        4
<PAGE>
     1.23 "Gross-Up Payment" is defined in Section 6.4(a).
           ----------------

     1.24 "Guidelines" shall have the meaning set forth in the Long-Term
           ----------
     Incentive Plan.

     1.25 "including" means including without limitation.
           ---------

     1.26 "Interest Rate" means the prime commercial lending rate announced by
           -------------
     JPMorgan Chase Bank or its successor on the date an amount is to be
     determined hereunder or, if no such rate shall be announced on such date,
     the immediately prior date on which JPMorgan Chase Bank or its successor
     announced such a rate; provided, however, that if the interest rate
     determined in accordance with this Section 1.30 exceeds the highest legally
     permissible interest rate, then the Interest Rate shall be the highest
     legally-permissible interest rate.

     1.27 "Long-Term Incentive Plan" means the WKI Holding Company, Inc.
           ------------------------
     Long-Term Incentive Plan effective as of May 29, 2003, as in effect from
     time to time.

     1.28 "Maximum Annual Bonus" is defined in Section 4.2(b).
           --------------------

     1.29 "Maximum Annual Goals" is defined in Section 4.2(b).
           --------------------

     1.30 "Maximum Percentage" is defined in Section 4.2(b).
           ------------------

     1.31 "Parachute Value" of a Payment shall mean the present value as of the
           ---------------
     date of a change of control for purposes of Section 280G of the Code of the
     portion of such Payment that constitutes a "parachute payment" under
     Section 280G(b)(2), as determined by the Accounting Firm for purposes of
     determining whether and to what extent the Excise Tax will apply to such
     Payment.

     1.32 "Payment" shall mean any payment or distribution in the nature of
           -------
     compensation (within the meaning of Section 280G(b)(2) of the Code) to or
     for the benefit of Executive, whether paid or payable pursuant to this
     Agreement or otherwise.

     1.33 "Person" means any individual, sole proprietorship, partnership, joint
           ------
     venture, trust, unincorporated organization, association, corporation,
     institution, public benefit corporation, entity or government
     instrumentality, division, agency, body or department.

     1.34 "Prorata Annual Bonus" means (a) the product of the Target Annual
           --------------------
     Bonus for the Fiscal Year that includes the Date of Termination multiplied
     by (b) a fraction, the numerator of which is the number of days which have
     elapsed in the Fiscal Year through the Date of Termination and the
     denominator of which is 365.

     1.35 "Prorata Retention Bonus" is defined in Section 4.3(c).
           -----------------------

     1.36 "Retention Bonus" is defined in Section 4.3(a).
           ---------------

     1.37 "Safe Harbor Amount" means 2.99 times Executive's "base amount,"
           ------------------
     within the meaning of Section 280G(b)(3) of the Code.

     1.38 "Severance Period" means two (2) years from the Date of Termination.
           ----------------

                                        5
<PAGE>
     1.39 "Stock" means the shares of common stock, par value $0.01 per share,
           -----
     of the Company.

     1.40 "Subsidiary" means, with respect to any Person, (a) any corporation of
           ----------
     which more than fifty percent (50%) of the outstanding capital stock having
     ordinary voting power to elect a majority of the board of directors of such
     corporation (irrespective of whether, at the time, stock of any other class
     or classes of such corporation shall have or might have voting power by
     reason of the happening of any contingency) is at the time, directly or
     indirectly, owned by such Person, or (b) any partnership, limited liability
     company or other entity in which such Person has a direct or indirect
     interest (whether in the form of voting or participation in profits or
     capital contribution) of more than fifty percent (50%).

     1.41 "Target Annual Bonus" is defined in Section 4.2(b).
           -------------------

     1.42 "Target Annual Goals" is defined in Section 4.2(b).
           -------------------

     1.43 "Target Percentage" is defined in Section 4.2(b).
           -----------------

     1.44 "Taxes" means the incremental United States federal, state and local
           -----
     income, excise and other taxes payable by Executive with respect to any
     applicable item of income.

     1.45 "Tax Gross-Up Payment" means an amount payable to Executive such that
           --------------------
     after payment of Taxes on such amount there remains a balance sufficient to
     pay the Taxes being reimbursed.

     1.46 "Termination for Cause" means a termination of the employment of the
           ---------------------
     Executive by the Company for Cause during the Employment Period.

     1.47 "Termination for Good Reason" means a Termination of Employment by
           ---------------------------
     Executive for a Good Reason during the Employment Period.

     1.48 "Termination of Employment" means a termination by the Company or by
           -------------------------
     Executive of Executive's employment by the Company.

     1.49 "Termination Without Cause" means a termination of the employment of
           -------------------------
     Executive by the Company for any reason other than Cause or Executive's
     death or Disability during the Employment Period.

     1.50 "Value" of a Payment shall mean the economic present value of a
           -----
     Payment as of the date of a change of control for purposes of Section 280G
     of the Code, as determined by the Accounting Firm using the discount rate
     required by Section 280G(d)(4) of the Code.

     1.51 "Voting Securities" means any of the securities of the Company
           -----------------
     entitled to vote generally in the election of the directors of the Company.

     1.52 "WKI Board" means the board of directors of the Company.
           ---------

                                        6
<PAGE>
                  Article II.     POSITION AND RESPONSIBILITIES

     2.1  Duties. During the Employment Period, the Company shall employ the
          ------
     Executive as its Chief Financial Officer and as a Senior Vice President of
     the Company. During the Employment Period, World Kitchen, Inc. shall also
     appoint Executive as its' Chief Financial Officer and Senior Vice
     President. Executive shall be responsible for such functions and operations
     as assigned to him from time to time by the Chief Executive Officer of the
     Company. Executive shall report on all functions and operations within the
     scope of his responsibilities to the Chief Executive Officer of the
     Company. During the Employment Period, and excluding any periods of
     disability, vacation, or sick leave to which Executive is entitled,
     Executive agrees to devote his full attention and time to the business and
     affairs of the Company and the Subsidiaries.

     2.2  Other Activities. Executive may serve on corporate, civic or
          ----------------
     charitable boards or committees, deliver lectures, fulfill speaking
     engagements or teach at educational institutions, or manage personal
     investments, provided that such activities do not individually or in the
     aggregate materially interfere with the performance of Executive's duties
     under this Agreement.

                       Article III.     EMPLOYMENT PERIOD

     3.1  Employment Period.
          -----------------

          (a)  Subject to the termination provisions hereinafter provided, the
          initial term of Executive's employment under this Agreement (the
          "Employment Period") shall commence as of November 25, 2002 (the
           -----------------
          "Employment Date") and end on the Anniversary Date which is three (3)
           ---------------
          years after the Employment Date (the "Initial Term"); provided,
                                                ------------
          however, that as of the date that is six (6) months before the end of
          the Initial Term, the Employment Period will automatically be extended
          through the Anniversary Date that is five years after the Employment
          Date, unless one party has previously provided the other with a notice
          that such extension shall not take place (a "Notice of
          Non-Extension"). The period from the end of the Initial Term through
          such fifth Anniversary Date is referred to as the "Extension Period".
                                                             ----------------
          The Initial Term and the Extension Period shall collectively be
          referred to herein as the "Employment Period."
                                     -----------------

          (b)  Notwithstanding the foregoing, (i) if either party timely
          delivers a written Notice of Non-Extension to the other in accordance
          with the provisions of Subsection (a) hereof, this Agreement and the
          Employment Period shall automatically terminate at the end of the
          Initial Term and (ii) this Agreement and the Employment Period shall
          automatically terminate at the end of the Employment Period, subject
          to Executive's rights as set forth in Section 7.

                          Article IV.     COMPENSATION

     4.1  Salary. The Company shall pay to Executive in accordance with the
          ------
     normal payroll practices of the Company an annual salary at a rate of
     $430,000 per year ("Base Salary"). During the Employment Period, the Base
                         -----------
     Salary shall be reviewed at least annually and may be increased (but not
     decreased) from time to time as shall be determined by the WKI Board or the
     Compensation Committee. Any increase in Base Salary shall not limit or
     reduce any other obligation of the Company to Executive under this
     Agreement. Each such increase in the Base Salary shall be treated for all
     purposes of this Agreement as Executive's Base Salary. Base Salary shall
     not be decreased at any time without the express written consent of
     Executive.

     4.2  Annual Bonus.
          ------------

          (a)  Executive shall be eligible to earn an annual cash bonus ("Annual
                                                                          ------
          Bonus") in accordance with the terms hereof for each Fiscal Year which
          -----
          begins during the Employment Period.

          (b)  The WKI Board or the Compensation Committee, as applicable,
          (collectively, the "Board or Committee") shall establish written
                              ------------------
          performance goals, the achievement of which will determine the amount
          of the Executive's annual bonuses for the 2003 Fiscal Year and later
          Fiscal Years that end during the Employment Period. Performance goals
          for other Fiscal Years shall be established annually by the Board or
          Committee, after consultation wit the Executive, within ninety (90)
          calendar days after the first day of the applicable Fiscal Year. If
          Executive achieves the target level of such performance goals (the
          "Target Annual Goals"), as determined by the Board or Committee, his
           -------------------
          Annual Bonus for that Fiscal year shall be equal to seventy percent
          (70%) (the "Target Percentage") of Executive's Base Salary (the
                      -----------------
          "Target Annual Bonus"). If Executive achieves the maximum level of
           -------------------
          such performance goals ("Maximum Annual Goals") for any such Fiscal
                                   --------------------
          year, as determined by the Board or Committee, his Annual Bonus for
          that Fiscal Year shall be one hundred and forty percent (140%) (the
          "Maximum Percentage") of Executive's Base Salary (the "Maximum Annual
           ------------------                                    --------------
          Bonus"). The Annual Bonus for any Fiscal Year may exceed the Maximum
          -----
          Annual Bonus at the discretion of the Board or Committee. The Target
          Percentage and the Maximum Percentage may be increased by the Board or
          Committee, from time to time, but may not be decreased below the above
          specified percentages of Executive's Base Salary without the express
          written consent of Executive. If Executive achieves a level of
          performance which falls between the Target Annual Goals and the
          Maximum Annual Goals, linear interpolation shall be applied to
          determine Executive's Annual Bonus for such year.

          (c)  Except as described in the following sentence, the Company shall
          pay the entire Annual Bonus that is payable with respect to a Fiscal
          Year in a lump sum cash payment as soon as practicable after the Board
          or Committee determines whether and the degree to which Maximum Annual
          Goals or Target Annual Goals have been achieved following the close of
          such Fiscal Year. Any such Annual Bonus shall in any event be
          determined and paid within ninety (90) calendar days after the end of
          the Fiscal Year.

     4.3  Retention  Bonus.
          ----------------

                                        8
<PAGE>
          (a)  Executive  shall  be  eligible  for  a  cash retention bonus (the
          "Retention Bonus") equal to a total of one hundred percent (100%) of
           ---------------
          Base Salary in accordance with the following vesting schedule:

               (i) since Executive remained employed by the Company through
          December 31, 2002, a portion of the Retention Bonus equal to
          twenty-five percent (25%) of Base Salary was vested on that date;

               (ii) since Executive remained employed by the Company until
          January 31, 2003, a portion of the Retention Bonus equal to an
          additional twenty-five percent (25%) of Base Salary was vested on that
          date; and

               (iii) if Executive remains employed by the Company through
          December 31, 2003, a portion of the Retention Bonus equal to an
          additional fifty percent (50%) of Base Salary shall vest.

          (b)  Each portion of the Retention Bonus shall be paid in cash to
          Executive no later than thirty (30) calendar days after it vests in
          accordance with the provisions of Section 4.3(a) above.

          (c)  In the event of a Termination Without Cause or a Termination for
          Good Reason, or if Executive's Termination of Employment is due to his
          death or Disability, then he or his Beneficiaries, as the case may be,
          shall be vested in and paid (in addition to any portion of the
          Retention Bonus which previously vested but was unpaid), the portion
          of the unvested portion of the Retention Bonus on a time-prorated
          basis (the "Prorata Retention Bonus"), which shall consist of the
                      -----------------------
          following:

               (i) if the amount referred to in Section 4.3(a)(iii) is not
          vested on the Date of Termination, the product of fifty percent (50%)
          of Base Salary multiplied by a fraction (not in excess of 1.00), the
          numerator of which is the number of days which have elapsed from the
          Employment Date through the Date of Termination and the denominator of
          which is the number of days from the Employment Date through December
          31, 2003.

                   Article V.     PARTICIPATION IN EQUITY PLAN

     5.1  Executive  and the Company agree that Executive shall be a participant
     in the Equity Plan on terms and conditions mutually agreeable to the
     Executive and the Compensation Committee. Executive and the Company agree
     that the parties shall negotiate in good faith to establish appropriate
     terms for the reservation and authorization for the issuance of Stock under
     the Equity Plan with respect to Executive. If Executive and the Company do
     not execute a written agreement setting forth appropriate provisions
     pursuant to the immediately preceding sentence by the Agreement Date, then
     Executive shall have Good Reason to terminate his employment, without the
     requirement under this Agreement to comply with the provisions of Section
     7.3(c).

     5.2  In the event of a conflict between this Agreement and the Equity Plan,
     the provisions of the Equity Plan shall control, including without
     limitation, all provisions

                                        9
<PAGE>
     pertaining to Executive's rights under the Equity Plan in the event of a
     Change of Control or a Termination of Employment.

                    Article VI.     BENEFITS AND PERQUISITES

     6.1  Benefit  Plans,  Perquisites  and  Additional  Payments.
          -------------------------------------------------------

          (a)  During the Employment Period, Executive shall be entitled to
          participate in the welfare benefit plans and programs and perquisites
          of the Company on terms not less favorable than those in effect for
          other senior executives of the Company from time to time; provided,
          that Executive shall not be covered by any severance plan, program or
          policy during the Employment Period.

          (b)  During the Employment Period, Executive shall be entitled to
          participate in the retirement and savings benefit plans and programs
          of the Company on terms not less favorable than those in effect for
          other senior executives of the Company from time to time.

          (c)  Without limiting the generality of the foregoing, during the
          Employment Period, Executive shall continue to receive a cash benefits
          allowance of $35,000 per year, which amount shall be paid (in arrears)
          no later than January 31 of the following year.

          (d)  During the Employment Period, Executive shall also be entitled to
          participate in the Long-Term Incentive Plan or such other plan or
          program sponsored by the Company providing deferred compensation or
          retirement benefits, as in effect from time to time.

          (e)  Notwithstanding any provision of the Long-Term Incentive Plan or
          this Agreement to the contrary, in the event of a Change of Control
          during the Employment Period , in addition to any amounts payable to
          the Executive under this Agreement, the Equity Plan, the Long-Term
          Incentive Plan or otherwise, Executive shall also be entitled to
          receive no later than thirty (30) days after the Change of Control a
          lump sum cash payment in immediately available funds equal to (A)
          minus (B), where:

                         (A)  = the difference between (1) two million dollars
                              ($2,000,000) and (2) all amounts paid to the
                              Executive under the Long-Term Incentive Plan (or
                              which become payable as a result of the Change of
                              Control or his Termination of Employment, if
                              applicable); and

                         (B)  = the severance benefits which are payable under
                              Section 7.3(a)(ii) hereof (in the event that
                              Executive also incurs a Termination Without Cause
                              or a Termination for Good Reason as a result of
                              the Change of Control).

     6.2  Expenses. During the Employment Period, Executive shall be entitled to
          --------
     receive prompt reimbursement for all reasonable employment-related expenses
     incurred by

                                       10
<PAGE>
     Executive upon the receipt by the Company of an accounting for such
     expenses in accordance with the practices, policies and procedures
     applicable to other senior executives of the Company.

     6.3  Office; Support Staff. During the Employment Period, Executive shall
          ---------------------
     be entitled to an office, and to secretarial and other assistance,
     appropriate to his position and duties under this Agreement.

     6.4  Gross-Up Payment.
          ----------------

          (a)  Anything in this Agreement to the contrary notwithstanding and
          except as set forth below, in the event it shall be determined that
          any Payment would be subject to the Excise Tax, then Executive shall
          be entitled to receive an additional payment (the "Gross-Up Payment")
                                                             ----------------
          in an amount such that, after payment by Executive of all Taxes (and
          any interest or penalties imposed with respect to such Taxes),
          including any income taxes (and any interest and penalties imposed
          with respect thereto) and Excise Tax imposed upon the Gross-Up
          Payment, Executive retains an amount of the Gross-Up Payment equal to
          the Excise Tax imposed upon the Payments. Notwithstanding the
          foregoing provisions of this Section 6.4(a), if it shall be determined
          that Executive is entitled to the Gross-Up Payment, but that the
          Parachute Value of all Payments does not exceed one hundred and ten
          percent (110%) of the Safe Harbor Amount, then except as provided
          below, no Gross-Up Payment shall be made to Executive and the amounts
          payable under this Agreement, other than amounts or benefits provided
          under Article V of this Agreement or pursuant to any other option or
          equity grants to Executive (the "Subject Payments"), shall be reduced
                                           ----------------
          (but not below zero) so that the Parachute Value of all Payments, in
          the aggregate, equals the Safe Harbor Amount. The reduction of the
          amounts payable hereunder, if applicable, shall be made by first
          reducing the payments under Section 7.3(a)(ii), unless an alternative
          method of reduction is elected by Executive, and in any event shall be
          made in such a manner as to maximize the Value of all Payments
          actually made to Executive. For purposes of reducing the Payments to
          the Safe Harbor Amount, only the Subject Payments shall be reduced. If
          the reduction of the Subject Payments would not result in a reduction
          of the Parachute Value of all Payments to the Safe Harbor Amount, no
          amounts payable under the Agreement shall be reduced pursuant to this
          Section 6.4(a), and the Gross-Up Payment shall be made to Executive.
          The Company's obligation to make Gross-Up Payments under this Section
          6.4 shall not be conditioned upon Executive's Termination of
          Employment.

          (b)  Subject to the provisions of Section 6.4(c), all determinations
          required to be made under this Section 6.4, including whether and when
          a Gross-Up Payment is required, the amount of such Gross-Up Payment
          and the assumptions to be utilized in arriving at such determination,
          shall be made by Ernst & Young, LLP, or such other nationally
          recognized certified public accounting firm as may be designated by
          Executive (the "Accounting Firm"). The Accounting Firm shall provide
                          ---------------
          detailed supporting calculations both to the Company and Executive
          within fifteen (15) business days of the receipt of notice from
          Executive that there

                                       11
<PAGE>
          has been a Payment or such earlier time as is requested by the
          Company. In the event that the Accounting Firm is serving as
          accountant or auditor for the individual, entity or group effecting
          the Change of Control, Executive may appoint another nationally
          recognized accounting firm to make the determinations required
          hereunder (which accounting firm shall then be referred to as the
          Accounting Firm hereunder). All fees and expenses of the Accounting
          Firm shall be borne solely by the Company. Any Gross-Up Payment, as
          determined pursuant to this Section 6.4, shall be paid by the Company
          to Executive within five (5) business days of the receipt of the
          Accounting Firm's determination. Any determination by the Accounting
          Firm shall be binding upon the Company and Executive. As a result of
          the uncertainty in the application of Section 4999 of the Code at the
          time of the initial determination by the Accounting Firm hereunder, it
          is possible that Gross-Up Payments that will not have been made by the
          Company should have been made (the "Underpayment"), consistent with
                                              ------------
          the calculations required to be made hereunder. In the event the
          Company exhausts its remedies pursuant to Section 6.4(c) and Executive
          thereafter is required to make a payment of any Excise Tax, the
          Accounting Firm shall determine the amount of the Underpayment that
          has occurred and any such Underpayment shall be promptly paid by the
          Company to or for the benefit of Executive.

          (c)  The Executive shall notify the Company in writing of any claim by
          the Internal Revenue Service that, if successful, would require the
          payment by the Company of the Gross-Up Payment. Such notification
          shall be given as soon as practicable, but no later than ten (10)
          business days after Executive is informed in writing of such claim.
          The Executive shall apprise the Company of the nature of such claim
          and the date on which such claim is requested to be paid. The
          Executive shall not pay such claim prior to the expiration of the
          thirty (30) calendar day period following the date on which Executive
          gives such notice to the Company (or such shorter period ending on the
          date that any payment of Taxes with respect to such claim is due). If
          the Company notifies Executive in writing prior to the expiration of
          such period that the Company desires to contest such claim, Executive
          shall:

               (i) give the Company any information reasonably requested by the
          Company relating to such claim,

               (ii) take such action in connection with contesting such claim as
          the Company shall reasonably request in writing from time to time,
          including accepting legal representation with respect to such claim by
          an attorney reasonably selected by the Company,

               (iii) cooperate with the Company in good faith in order
          effectively to contest such claim, and

               (iv) permit the Company to participate in any proceedings
          relating to such claim;

          provided, however, that the Company shall bear and pay directly all
          costs and expenses (including additional interest and penalties)
          incurred in connection

                                       12
<PAGE>
          with such contest, and shall indemnify and hold Executive harmless, on
          an after-tax basis, for any Excise Tax or income tax (including
          interest and penalties) imposed as a result of such representation and
          payment of costs and expenses. Without limitation on the foregoing
          provisions of this Section 6.4(c), the Company shall control all
          proceedings taken in connection with such contest, and, at its or
          their sole discretion, may pursue or forgo any and all administrative
          appeals, proceedings, hearings and conferences with the applicable
          taxing authority in respect of such claim and may, at its or their
          sole discretion, either direct Executive to pay the tax claimed and
          sue for a refund or contest the claim in any permissible manner, and
          Executive agrees to prosecute such contest to a determination before
          any administrative tribunal, in a court of initial jurisdiction and in
          one or more appellate courts, as the Company shall determine;
          provided, however, that, if the Company direct or directs Executive to
          pay such claim and sue for a refund, the Company shall advance the
          amount of such payment to Executive, on an interest-free basis, and
          shall indemnify and hold Executive harmless, on an after-tax basis,
          from any Excise Tax or income tax (including interest or penalties)
          imposed with respect to such advance or with respect to any imputed
          income in connection with such advance; and provided, further, that
          any extension of the statute of limitations relating to payment of
          Taxes for the taxable year of Executive with respect to which such
          contested amount is claimed to be due is limited solely to such
          contested amount. Furthermore, the Company's control of the contest
          shall be limited to issues with respect to which the Gross-Up Payment
          would be payable hereunder, and Executive shall be entitled to settle
          or contest, as the case may be, any other issue raised by the Internal
          Revenue Service or any other taxing authority.

          (d)  If, after the receipt by Executive of a Gross-Up Payment or an
          amount advanced by the Company pursuant to Section 6.4(c), Executive
          becomes entitled to receive any refund with respect to the Excise Tax
          to which such Gross-Up Payment relates or with respect to such claim,
          Executive shall (subject to the Company's complying with the
          requirements of Section 6.4(c), if applicable) promptly pay to the
          Company the amount of such refund (together with any interest paid or
          credited thereon after Taxes applicable thereto). If, after the
          receipt by Executive of an amount advanced by the Company pursuant to
          Section 6.4(c), a determination is made that Executive shall not be
          entitled to any refund with respect to such claim and the Company do
          or does not notify Executive in writing of its or their intent to
          contest such denial of refund prior to the expiration of thirty (30)
          calendar days after such determination, then such advance shall be
          forgiven and shall not be required to be repaid and the amount of such
          advance shall be offset, to the extent thereof, against the amount of
          Gross-Up Payment required to be paid.

          (e)  Notwithstanding any other provision of this Section 6.4, the
          Company may, in its sole discretion, withhold and pay over to the
          Internal Revenue Service or any other applicable taxing authority, for
          the benefit of Executive, all or any portion of any Gross-Up Payment,
          and Executive hereby consents to such withholding.

                                       13
<PAGE>
                      Article VII.     TERMINATION BENEFITS

     7.1  Termination for Cause, Other Than for Good Reason, Death or
          -----------------------------------------------------------
     Disability, or At or After End of Employment Term. If (i) the Company
     -------------------------------------------------
     terminates Executive's employment for Cause, (ii) Executive terminates his
     employment other than for Good Reason, death or Disability, or (iii) the
     Executive's employment is terminated at or after the end of the Employment
     Period for any reason (whether by Executive or the Company), including,
     without limitation, by virtue of the Company providing a Notice of
     Non-Extension to the Executive, the Company shall pay to Executive as soon
     as reasonably possible but in no event later than thirty (30) calendar days
     after the Date of Termination an amount equal to the sum of Executive's
     Accrued Base Salary, Accrued Annual Bonus, and Accrued Retention Bonus. The
     respective provisions of the Equity Plan, the Long-Term Incentive Plan and
     any other benefit plans and perquisite programs in which Executive
     participates shall govern whether Executive shall be entitled to any
     benefits thereunder in the event his employment is terminated under any of
     the foregoing circumstances. Notwithstanding the foregoing, in the event
     that the Executive's employment is terminated after the end of the
     Employment Period under circumstances which would entitle him to receive
     severance benefits under a severance plan or policy of the Company in
     effect as such time, the amount of the Executive's severance pay shall in
     no event be less than one (1) year's Base Salary (as in effect at
     termination), payable in a lump sum, in cash, within thirty (30) days of
     the Date of Termination.

     7.2  Termination for Death or Disability. If, before the end of the
          -----------------------------------
     Employment Period, Executive's employment terminates due to his death or
     Disability, the Company shall pay to Executive or his Beneficiaries, as the
     case may be, as soon as reasonably possible but in no event later than
     thirty (30) calendar days after the Date of Termination, an amount which is
     equal to the sum of Executive's Accrued Base Salary, Accrued Annual Bonus,
     Accrued Retention Bonus, and Prorata Retention Bonus. Further, if the Date
     of Termination occurs during the period commencing from July 1 through
     December 31 of any Fiscal Year, Executive or his Beneficiaries, as the case
     may be, shall be paid a Prorata Annual Bonus as soon as reasonably possible
     but in no event later than thirty (30) calendar days after the Date of
     Termination. The respective provisions of the Equity Plan, Long-Term
     Incentive Plan and any other benefit plans or perquisite programs in which
     Executive participates shall govern whether Executive or his Beneficiaries,
     as applicable, shall be entitled to any benefits under such plans or
     programs in the event of a termination of Executive's employment for death
     or Disability.

     7.3  Termination Without Cause or for Good Reason.
          --------------------------------------------

          (a)  In the event of a Termination Without Cause or a Termination for
          Good Reason during the Employment Period, Executive shall receive the
          following:

               (i) as soon as reasonably possible but in no event later than
          thirty (30) calendar days after the Date of Termination, a lump sum
          amount in immediately available funds equal to the sum of Executive's
          Accrued Base Salary, Accrued Annual Bonus, Accrued Retention Bonus,
          and Prorata Retention Bonus;

                                       14
<PAGE>
               (ii) as soon as reasonably possible but in no event later than
          thirty (30) calendar days after the Date of Termination, a lump sum
          amount in immediately available funds equal to 135% of Executive's
          Base Salary;

               (iii) if the Date of Termination occurs during the period
          commencing from July 1 through December 31 of any Fiscal Year, as soon
          as reasonably possible but in no event later than thirty (30) calendar
          days after the Date of Termination, a lump sum amount in immediately
          available funds equal to the Prorata Annual Bonus;

               (iv) as soon as reasonably possible but in no event later than
          thirty (30) calendar days after the Date of Termination, a lump sum
          amount in immediately available funds equal to the total amount (if
          any) of Executive's unvested benefits under any plan or program
          sponsored by the Company, providing deferred compensation or
          retirement benefits, that are forfeited on account of the Termination
          of Employment, and that would have vested, had Executive's employment
          continued through the end of the Severance Period;

               (v) the provisions of the Equity Plan, the Long-Term Incentive
          Plan and any other benefit plans or perquisite programs in which
          Executive is a participant as of the Date of Termination shall govern
          whether Executive shall be entitled to any benefits under such plans
          or programs in the event of a Termination for Good Reason or a
          Termination Without Cause;

               (vi) the medical and dental benefits referred to in Section
          6.1(a) to which Executive is entitled as of the Date of Termination
          through the Severance Period; and

               (vii) as soon as reasonably possible but in no event later than
          thirty (30) calendar days after the Date of Termination, but without
          duplication of the foregoing, a lump sum cash payment equal to the
          present value (determined using the Interest Rate) of the amounts
          payable under Section 6.1(c) for the period from the Date of
          Termination through the Severance Period.

          (b)  In addition to the amounts payable under Subsection 7.3(a) above,
          in the event that Executive's employment is terminated on account of a
          Termination Without Cause or a Termination for Good Reason during the
          Employment Period (regardless of whether a Change of Control has
          occurred), Executive shall also be entitled to receive the amounts
          described in Section 6.1(e) hereof.

          (c)  Executive's Termination of Employment shall not be considered to
          be for Good Reason unless:

               (i) not more than ninety (90) calendar days after the occurrence
          (or if later, not more than ninety (90) calendar days after the
          Executive becomes aware) of the event or events alleged to constitute
          Good Reason, Executive provides the Company, as applicable, with
          written notice (the "Notice of Good Reason") of his intent to consider
                               ---------------------
          the Termination for Good Reason, including a detailed description of
          the specific reasons which form the basis for such consideration, and

                                       15
<PAGE>
          demanding that such event or events be cured not later than ten (10)
          business days after the Company receives the Notice of Good Reason
          (the "Cure Period");

               (ii) the Company shall have failed to cure such event or events
          during the Cure Period; and

               (iii) not more than ninety (90) calendar days following the
          expiration of the Cure Period, Executive shall have given the Company
          a second notice (a "Notice of Termination for Good Reason") stating
                              -------------------------------------
          that such cure has not occurred and that as a result, Executive is
          terminating his employment for Good Reason on the date (after the end
          of the Cure Period) specified in the Notice of Termination for Good
          Reason. A Notice of Termination for Good Reason shall not be based
          upon any reason or reasons other than one or more reasons set forth in
          the Notice of Good Reason.

                         Article VIII.     MISCELLANEOUS

     8.1  Public Announcement. Executive shall be given a reasonable opportunity
          -------------------
     to review and comment on any public announcement by the Company or any of
     its Subsidiaries relating to this Agreement or Executive's employment by
     the Company.

     8.2  Approvals. The Company represents and warrants to Executive that it
          ---------
     has taken all corporate action necessary to authorize and enter into this
     Agreement.

     8.3  No Offset. The obligations of the Company (and World Kitchen, Inc.
          ---------
     solely for purposes of Section 8.5) to make the payments provided for in
     this Agreement and otherwise to perform their obligations hereunder shall
     not be affected by any circumstances, including set-off, counterclaim,
     recoupment, defense or other claim, right or action which the Company or
     World Kitchen, Inc. may have against Executive or others. Any claim which
     the Company or World Kitchen, Inc. as applicable, may have against
     Executive, whether for a breach of this Agreement or otherwise, shall be
     brought in a separate action or proceeding and not as part of any action or
     proceeding brought by Executive to enforce any rights against the Company
     or World Kitchen, Inc. as applicable, under this Agreement.

     8.4  No Mitigation. In no event shall Executive be obligated to seek other
          -------------
     employment or to take any other action to mitigate the amounts payable to
     Executive under any of the provisions of this Agreement, nor shall the
     amount of any payment hereunder be reduced by any compensation earned as a
     result of Executive's employment by another employer, except that any
     continued welfare benefits provided for by Section 7.3(a)(vi) shall not
     duplicate any benefits that are provided to Executive and his family by
     such other employer and shall be secondary to any coverage provided by such
     other employer.

     8.5  Guarantee. World Kitchen, Inc. agrees to guarantee the payment of all
          ---------
     liabilities under this Agreement, except the payment of amounts which are
     due and owing under the Long-Term Incentive Plan or the Equity Plan, which
     payments shall remain the sole obligation of the Company. World Kitchen,
     Inc. represents and warrants to Executive

                                       16
<PAGE>
     that it has taken all corporate action necessary to authorize and make the
     foregoing guarantee of payment.

     8.6  Liability Insurance and Indemnification. The Company shall maintain
          ---------------------------------------
     directors' and officers' liability insurance for Executive while employed,
     and for a six (6) year period following Termination of Employment at a
     level equivalent to the most favorable and protective coverage for any
     active officer or director of the Company. The Company agrees to indemnify
     Executive for any job-related liability to the fullest extent permitted
     under all applicable laws, its by-laws, and all other applicable
     indemnification agreements of the Company and any of its Subsidiaries.

     8.7  Non-Solicitation. In consideration of the benefits provided under this
          ----------------
     Agreement, Executive hereby agrees to be bound by the provisions of this
     Section. During the Employment Period and for a period of one (1) year
     after termination of employment for any reason, Executive shall not in any
     manner, directly or indirectly, induce or attempt to induce any employee of
     the Companies or any Subsidiary or affiliate to quit or abandon his or her
     employment, or any customer, independent contractor, consultant, supplier
     or vendor of the Company Business to quit or abandon its relationship for
     any purpose whatsoever. For purposes of this Section, "Company Business"
     means the development, manufacture or purchase from third parties and
     marketing of consumer bakeware, dinnerware, kitchen and household tools,
     rangetop cookware and cutlery products.

     8.8  Enforcement.
          -----------

          (a)  If Executive incurs legal, accounting, expert witness or other
          fees and expenses in an effort to establish, in connection with any
          dispute with the Company, Executive's entitlement to compensation and
          benefits under this Agreement, the Company shall, to the extent
          Executive is successful in, or enters into a settlement with the
          Company in which the Company agrees to resolve, such dispute,
          reimburse Executive for such fees and expenses, to the extent the
          incurrence and amount thereof are reasonable, and shall pay Executive
          a Tax Gross-Up Payment in respect of the Taxes incurred by Executive
          with respect to such reimbursement of fees and expenses. The Company
          shall reimburse Executive for such fees and expenses on a monthly
          basis upon Executive's request for reimbursement accompanied by
          evidence that the fees and expenses were incurred.

          (b)  If the Company fails to pay any amount provided under this
          Agreement when due, the Company shall pay interest on such amount at a
          rate equal to the Interest Rate.

     8.9  Beneficiary. If Executive dies prior to receiving all of the amounts
          -----------
     payable to him in accordance with the terms and conditions of this
     Agreement, such amounts shall be paid to the beneficiary ("Beneficiary")
                                                                -----------
     designated by Executive in writing to the Company during his lifetime, or
     if no such Beneficiary is designated, to Executive's estate. Such payments
     shall be made in a lump sum to the extent so payable and, to the extent not
     payable in a lump sum, in accordance with the terms of this Agreement.
     Executive, without the consent of any prior Beneficiary, may change his
     designation of

                                       17
<PAGE>
     designation of Beneficiary or Beneficiaries at any time or from time to
     time by submitting to the Company a new designation in writing.

     8.10 Assignment; Successors. Neither the Company nor World Kitchen, Inc.
          ----------
     may assign its rights or obligations under this Agreement without the prior
     written consent of Executive except to any surviving entity following a
     Change of Control that has assumed in writing all of the obligations under
     this Agreement. This Agreement shall be binding upon and inure to the
     benefit of Executive, his estate and Beneficiaries, the Company and the
     successors and permitted assigns of the Company. Any assignment or
     attempted assignment in violation of this Section 8.10 shall constitute a
     Good Reason event of termination.

     8.11 Nonalienation. Except as otherwise expressly provided herein, benefits
          -------------
     payable under this Agreement shall not be subject in any manner to
     anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
     charge, garnishment, execution or levy of any kind, either voluntary or
     involuntary, prior to actually being received by Executive, and any such
     attempt to dispose of any right to benefits payable hereunder shall be
     void.

     8.12 Severability. If all or any part of this Agreement is declared by any
          ------------
     court or governmental authority to be unlawful or invalid, such
     unlawfulness or invalidity shall not serve to invalidate any portion of
     this Agreement not declared to be unlawful or invalid. Any provision so
     declared to be unlawful or invalid shall, if possible, be construed in a
     manner which will give effect to the terms of such provision to the fullest
     extent possible while remaining lawful and valid.

     8.13 Amendment; Waiver. This Agreement shall not be amended or modified
          -----------------
     except by written instrument executed by the Company, World Kitchen, Inc.
     and Executive. A waiver of any term, covenant or condition contained in
     this Agreement shall not be deemed a waiver of any other term, covenant or
     condition, and any waiver of any default in any such term, covenant or
     condition shall not be deemed a waiver of any later default thereof or of
     any other term, covenant or condition.

     8.14 Notices. All notices hereunder shall be in writing and delivered by
          -------
     hand, by nationally-recognized delivery service that guarantees overnight
     delivery, or by first-class, registered or certified mail, return receipt
     requested, postage prepaid, addressed as follows:

               If to the Company, to:

                    11911 Freedom Drive
                    One Fountain Square
                    Reston, Virginia  20190
                    Attention:  General Counsel

                                       18
<PAGE>

               If to Executive, to:

                    Joseph McGarr
                    7815 Crownhurst Ct.
                    McLean, VA  22102

               with a copy to:

                    Mr. Patrick N. Bouslog
                    The Ayco Company
                    150 Field Dr.
                    Suite 200
                    Lake Forest, IL  60045

     The parties may from time to time designate a new address by notice given
     in accordance with this Section 8.14. Notice shall be considered to have
     been given when actually received by the addressee.

     8.15 Counterparts. This Agreement may be executed in several counterparts,
          ------------
     each of which shall be deemed to be an original but all of which together
     shall constitute one and the same instrument.

     8.16 Entire Agreement. This Agreement and each of the plans, benefit
          ----------------
     programs and policies in effect from time to time during the Employment
     Period forms the entire agreement between the parties hereto with respect
     to the subject matter contained in the Agreement and in the respective
     plans, benefit programs and policies and shall supersede all prior
     agreements, promises and representations regarding employment,
     compensation, severance or other payments or any other obligation of the
     Company or any of its Subsidiaries upon Termination of Employment, whether
     in writing or otherwise.

     8.17 Applicable Law. This Agreement shall be interpreted and construed in
          --------------
     accordance with the laws of the State of Delaware, without regard to its
     choice of law principles.

     8.18 Survival of Executive's Rights. Each of the provisions of this
          ------------------------------
     Agreement which by their terms are to be performed after, or which
     expressly survive, the termination of this Agreement or the Date of
     Termination shall survive the termination of Executive's employment, the
     termination of this Agreement, or both.

                                       19
<PAGE>
     IN  WITNESS  WHEREOF,  the  parties  have  executed  this  Agreement  to be
effective  as  of  the  Agreement  Date.

                                       WKI  HOLDING  COMPANY,  INC.

                                       By:      /s/  James  Sharman
                                          --------------------------------
                                       Its:
                                           -------------------------------
                                       Date:  July  31,  2003
                                            ------------------------------

                                       WORLD  KITCHEN,  INC.

                                       By:
                                          --------------------------------
                                       Its:
                                           -------------------------------
                                       Date:
                                            ------------------------------

                                       EXECUTIVE:

                                          /s/ Joseph McGarr
                                       -----------------------------------
                                       Joseph McGarr

                                           July 31, 2003
                                       -----------------------------------
                                       Date

                                       20
<PAGE><Page>

                                                                    EXHIBIT 10.1

                         GENERAL GROWTH PROPERTIES, INC.

                          2003 INCENTIVE STOCK PLAN(1)

----------
(1) Effective May 7, 2003

<Page>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                    PAGE
<S>                                                                                   <C>
SECTION 1.     PURPOSE; DEFINITIONS...................................................1
    (a)    "ADMINISTRATOR"............................................................1
    (b)    "AFFILIATE"................................................................1
    (c)    "APPLICABLE LAWS...........................................................1
    (d)    "AWARD"....................................................................1
    (e)    "AWARD AGREEMENT"..........................................................1
    (f)    "AWARDED STOCK"............................................................1
    (g)    "BOARD"....................................................................1
    (h)    "CAUSE"....................................................................1
    (i)    "CODE".....................................................................1
    (j)    "COMMITTEE"................................................................1
    (k)    "COMMON STOCK".............................................................2
    (l)    "COMPANY"..................................................................2
    (m)    "DIRECTOR".................................................................2
    (n)    "DISABILITY"...............................................................2
    (o)    "EMPLOYEE".................................................................2
    (p)    "EXCHANGE ACT".............................................................2
    (q)    "FAIR MARKET VALUE"........................................................2
    (r)    "INCENTIVE STOCK OPTION"...................................................2
    (t)    "NON-QUALIFIED STOCK OPTION"...............................................2
    (u)    "OFFICER,".................................................................3
    (v)    "PARTICIPANT"..............................................................3
    (w)    "PLAN".....................................................................3
    (x)    "RECIPIENT"................................................................3
    (y)    "RESTRICTED STOCK".........................................................3
    (z)    "RESTRICTED STOCK AGREEMENT"...............................................3
    (aa)   "RETIREMENT"...............................................................3
    (bb)   "SERVICE PROVIDER".........................................................3
    (cc)   "SHARE"....................................................................3
    (ee)   "SUBSIDIARY"...............................................................3
</Table>

                                       -i-
<Page>

                                TABLE OF CONTENTS
                                   (continued)

<Table>
<Caption>
                                                                                    PAGE
<S>                                                                                  <C>
SECTION 2.     STOCK SUBJECT TO THE PLAN..............................................3
SECTION 3.     ADMINISTRATION OF THE PLAN.............................................4
    (a)    ADMINISTRATION.............................................................4
    (b)    POWERS OF THE COMMITTEE....................................................4
SECTION 4.     ELIGIBILITY FOR AWARDS.................................................5
SECTION 5.     LIMITATIONS ON OPTIONS.................................................5
SECTION 6.     TERM OF OPTION.........................................................5
SECTION 7.     OPTION EXERCISE PRICE; VESTING AND CONSIDERATION.......................6
    (a)    EXERCISE PRICE.............................................................6
    (b)    WAITING PERIOD AND EXERCISE DATES..........................................6
    (c)    FORM OF CONSIDERATION......................................................6
SECTION 8.     EXERCISE OF OPTION.....................................................7
    (a)    PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER............................7
    (b)    TERMINATION OF RELATIONSHIP AS EMPLOYEE OR DIRECTOR........................7
    (c)    DISABILITY OF RECIPIENT....................................................8
    (d)    DEATH OF RECIPIENT.........................................................9
    (e)    RETIREMENT OF RECIPIENT....................................................9
    (f)    CASH OUT PROVISIONS.......................................................10
SECTION 9.     RESTRICTED STOCK......................................................10
    (a)    AWARDS OF RESTRICTED STOCK................................................10
    (b)    AWARDS AND CERTIFICATES...................................................10
    (c)    TERMS AND CONDITIONS......................................................11
    (d)    OTHER PROVISIONS..........................................................12
SECTION 10.    DIRECTOR STOCK OPTIONS................................................12
    (a)    AUTOMATIC AWARD...........................................................12
    (b)    ELIGIBILITY...............................................................12
    (c)    INSUFFICIENT SHARES.......................................................12
    (d)    AMENDMENT.................................................................12
SECTION 11.    NON-TRANSFERABILITY OF AWARDS.........................................12
SECTION 12.    EFFECT OF CHANGE IN CONTROL...........................................13
</Table>

                                      -ii-
<Page>

                                TABLE OF CONTENTS
                                   (continued)

<Table>
<Caption>
                                                                                    PAGE
<S>                                                                                  <C>
    (a)    EFFECT....................................................................13
    (b)    CHANGE IN CONTROL.........................................................13
SECTION 13.    ADJUSTMENTS UPON CHANGES IN CAPITALIZATION............................14
SECTION 14.    DATE OF GRANT.........................................................15
SECTION 15.    TERM; AMENDMENT AND TERMINATION OF THE PLAN...........................15
    (a)    AMENDMENT AND TERMINATION.................................................15
    (b)    STOCKHOLDER APPROVAL......................................................15
    (c)    EFFECT OF AMENDMENT OR TERMINATION........................................15
SECTION 16.    CONDITIONS UPON ISSUANCE OF SHARES....................................16
    (a)    LEGAL COMPLIANCE..........................................................16
    (b)    WITHHOLDING OBLIGATIONS...................................................16
    (c)    INABILITY TO OBTAIN AUTHORITY.............................................16
    (d)    GRANTS EXCEEDING ALLOTTED SHARES..........................................16
    (a)    TERM OF PLAN..............................................................16
    (b)    NO CONTRACT OF EMPLOYMENT.................................................17
    (c)    SEVERABILITY..............................................................17
    (d)    GOVERNING LAW.............................................................17
    (e)    DIVIDENDS.................................................................17
</Table>

                                      -iii-
<Page>

            GENERAL GROWTH PROPERTIES, INC. 2003 INCENTIVE STOCK PLAN

     SECTION 1. PURPOSE; DEFINITIONS.

          The purposes of this Plan are to promote the interests of the Company
(including its Subsidiaries and Affiliates) and its stockholders by using equity
interests in the Company to attract, retain and motivate its Officers, Employees
and Directors and to encourage and reward their contributions to the Company's
performance and profitability.

          The following capitalized terms shall have the following respective
meanings when used in this Plan:

     (a)  "ADMINISTRATOR" means the Board or any of its Committees as shall be
administering the Plan, in accordance with Section 3 of the Plan.

     (b)  "AFFILIATE" means General Growth Management, Inc. and any other
corporation or other entity controlled by the Company and designated by the
Committee as such.

     (c)  "APPLICABLE LAWS" means the legal requirements relating to the
administration of plans providing one or more of the types of Awards described
in this Plan and the issuance of Shares thereunder pursuant to U.S. state
corporate laws, U.S. federal and state securities laws, the Code and the
applicable laws of any foreign country or jurisdiction where Options, Stock
Purchase Rights or other Awards are, or will be, granted under the Plan.

     (d)  "AWARD" includes, without limitation, a Stock Option or Restricted
Stock as described in or granted under the Plan, on a stand alone, combination
or tandem basis, as described in or granted under the Plan.

     (e)  "AWARD AGREEMENT" means a written agreement between the Company and a
Participant evidencing the terms and conditions of an individual Award grant.
The Award Agreement is subject to the terms and conditions of the Plan.

     (f)  "AWARDED STOCK" means the Common Stock subject to an Award.

     (g)  "BOARD" means the Board of Directors of the Company.

     (h)  "CAUSE" shall mean, unless otherwise determined by the Committee, (i)
the conviction of the Recipient for committing a felony under federal law or the
law of the state in which such action occurred, (ii) dishonesty in the course of
fulfilling the Recipient's employment duties or (iii) willful and deliberate
failure on the part of the Recipient to perform his or her employment duties in
any material respect.

     (i)  "CODE" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.

     (j)  "COMMITTEE" means the Committee appointed by the Board in accordance
with Section 3 of the Plan.

<Page>

     (k)  "COMMON STOCK" means the common stock, par value $.10 per share, of
the Company.

     (l)  "COMPANY" means General Growth Properties, Inc., a Delaware
corporation.

     (m)  "DIRECTOR" means a member of the Board.

     (n)  "DISABILITY" means permanent and total disability as determined under
procedures established by the Committee for purposes of the Plan.

     (o)  "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Subsidiary or Affiliate of the Company. Neither
service as a Director nor payment of a director's fee by the Company, without
more, shall constitute "employment" by the Company. Except as expressly
authorized by Section 10 of the Plan, no grant shall be made to a Director who
is not an Officer or a salaried Employee.

     (p)  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.

     (q)  "FAIR MARKET VALUE" means, as of any date, the value of Common Stock
determined as follows:

          (A)  If the Common Stock is listed on the New York Stock Exchange
Composite Tape, its Fair Market Value shall be the mean of the highest and
lowest reported sale prices of the stock (or, if no sales were reported, the
average of the closing bid and asked price) on the New York Stock Exchange for
any given day or, if not listed on such exchange, on any other national
securities exchange on which the Common Stock is listed or on NASDAQ, as
reported in THE WALL STREET JOURNAL or such other source as the Committee deems
reliable;

          (B)  If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on any given day, as reported in THE WALL STREET
JOURNAL or such other source as the Committee deems reliable;

          (C)  In the absence of an established regular public market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Committee.

     (r)  "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

     (s)  "MATURE SHARES" means any shares held by the Recipient for a minimum
period of 6 months.

     (t)  "NON-QUALIFIED STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option.

                                      - 2 -
<Page>

     (u)  "OFFICER," unless otherwise noted herein, means a person who is an
officer of the Company or a Subsidiary or Affiliate within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.

     (v)  "PARTICIPANT" means an Employee, Director or Officer who holds an
outstanding Award.

     (w)  "PLAN" means the General Growth Properties, Inc. 2003 Incentive Stock
Plan.

     (x)  "RECIPIENT" means an Employee, Director or Officer who holds an
outstanding Award.

     (y)  "RESTRICTED STOCK" means shares of Common Stock acquired pursuant to
an Award under Section 9 below.

     (z)  "RESTRICTED STOCK AGREEMENT" means a written agreement between the
Company and the Recipient evidencing the terms and restrictions applying to
stock awarded pursuant to an Award of Restricted Stock. The Restricted Stock
Agreement is subject to the terms and conditions of the Plan.

     (aa) "RETIREMENT" means a Service Provider's retirement from active
employment as determined under a pension plan of the Company or any Subsidiary
or Affiliate, or under an employment contract with the Company or any Subsidiary
or Affiliate; or the Service Provider's termination of employment at or after
age 65 under circumstances that the Committee, in its sole discretion, deems
equivalent to retirement.

     (bb) "SERVICE PROVIDER" means an Employee, Director or Officer. A Service
Provider who is an Employee shall not cease to be a Service Provider (i) during
any leave of absence approved by the Company; provided that, for purposes of
Incentive Stock Options, no such leave may exceed ninety days, unless
reemployment upon expiration of such leave is guaranteed by statute or contract;
or (ii) as a result of transfers between locations of the Company or between the
Company and any Subsidiary or Affiliate. If reemployment upon expiration of a
leave of absence approved by the Company is not guaranteed by statute or
contract, then on the 181st day of such leave, any Incentive Stock Option held
by the Recipient shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Non-Qualified Stock Option.

     (cc) "SHARE" means a share of the Common Stock, as adjusted in accordance
with Section 13 of the Plan.

     (dd) "STOCK OPTION" or "OPTION" means a qualified or non-qualified option
to purchase Shares granted pursuant to the Plan.

     (ee) "SUBSIDIARY" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.

     SECTION 2. STOCK SUBJECT TO THE PLAN.

     Subject to the provisions of Section 13 of the Plan, the maximum aggregate
number of

                                      - 3 -
<Page>

Shares available for grants of Awards under the Plan is 3,000,000 Shares of
Common Stock. Shares subject to an Award under the Plan may be authorized but
unissued, or reacquired, Common Stock or treasury shares. No Recipient may be
granted Awards in any calendar year with respect to more than 300,000 Shares. In
determining the number of Shares with respect to which a Service Provider may be
granted an Award in any calendar year, any Award which is cancelled shall count
against the maximum number of Shares for which an Award may be granted to a
Service Provider.

     If an Award expires or becomes unexercisable without having been exercised
in full, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); PROVIDED, HOWEVER, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option, Restricted Stock Award or other
Award, shall not be returned to the Plan and shall not become available for
future distribution under the Plan.

     SECTION 3. ADMINISTRATION OF THE PLAN.

     (a)  ADMINISTRATION. The Plan shall be administered by an Administrator
that shall consist of the Compensation Committee of the Board or such other
Committee consisting of two or more directors as shall be designated from time
to time by the Board ("Committee"). Each member of the Committee shall qualify
as a "non-Employee Director" as determined under Rule 16b-3, or any successor or
replacement rule adopted by the Securities and Exchange Commission. Committee
members shall serve for such term as the Board may determine, subject to removal
by the Board at any time. Any such Committee shall act by a majority of its
members, or, if there are only two members of such Committee, by unanimous
consent of both members. If at any time no Committee shall be in office, the
functions of the Committee specified in the Plan shall be carried out by the
Board.

     (b)  POWERS OF THE COMMITTEE. Except for the terms and conditions
explicitly set forth in the Plan, the Committee shall have exclusive authority,
in its discretion, to determine the Fair Market Value of the Common Stock, in
accordance with Section 1(q) of the Plan. The Committee also shall have
exclusive authority to determine all matters relating to Awards under the Plan,
including the selection of individuals to be granted an Award, the type of
Award, the number of shares of Common Stock subject to an Award, all terms,
conditions, restrictions and limitations, if any, of an Award and the terms of
any instrument that evidences the Award, provided that Awards to non-Employee
Directors shall be made only in accordance with Section 10. The Committee shall
also have exclusive authority to construe and interpret the Plan and its rules
and regulations, to promulgate, amend and rescind rules relating to the
implementation of the Plan (subject to Section 15) and to make all other
determinations deemed necessary or advisable under or for administering the
Plan, including determining under what circumstances a Stock Option may be
settled in cash or Common Stock. Notwithstanding the foregoing, the Committee
may, by a majority of its members then in office, (i) delegate to an Officer of
the Company the authority to make decisions pursuant to Sections 8(a), (b), (c),
(d) and (e) (provided that the Committee may not delegate its authority with
regard to the selection for participation of or the granting of Awards to
persons subject to Section 16 of the Exchange Act); and (ii) authorize any one
or more of their members or any Officer of the Company to execute and deliver
documents on behalf of the Committee. All actions taken and determinations made
by

                                      - 4 -
<Page>

the Committee or its delegate pursuant to the Plan shall be conclusive and
binding on all parties involved or affected.

     SECTION 4. ELIGIBILITY FOR AWARDS.

     Non-Qualified Stock Options and other Awards may be granted to Employees,
Directors and Officers who are responsible for or contribute to the management,
growth and profitability of the business of the Company, its Subsidiaries or
Affiliates. Incentive Stock Options may be granted only to Employees of the
Company or any Subsidiary. In addition, an Award may also be granted to a person
who is offered employment by the Company, a Subsidiary or an Affiliate, provided
that such Award shall be immediately forfeited if such person does not accept
such offer of employment within such time period as the Company, Subsidiary or
Affiliate may establish. If otherwise eligible, an Employee, Director or Officer
who has been granted an Option or Restricted Stock Award may be granted
additional Options or additional Restricted Stock, to the extent permitted under
the Plan. Except as expressly authorized by Section 10 of the Plan, no Award
shall be made to a Director who is not an Officer or a salaried Employee.

     SECTION 5. LIMITATIONS ON OPTIONS.

     Each Option shall be designated in the written Award Agreement as either an
Incentive Stock Option or a Non-Qualified Stock Option. However, notwithstanding
such designation, to the extent that the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by the Recipient during any calendar year (under all plans of the
Company and any Subsidiary or Affiliate) exceeds $100,000, such Options shall be
treated as Non-Qualified Stock Options. For purposes of this Section 5,
Incentive Stock Options shall be taken into account in the order in which they
were granted. The Fair Market Value of the Shares shall be determined as of the
time the Option with respect to such Shares is granted. If an Option is granted
hereunder that is part Incentive Stock Option and part Non-Qualified Stock
Option due to becoming first exercisable in any calendar year in excess of
$100,000, the Incentive Stock Option portion of such Option shall become
exercisable first in such calendar year, and the Non-Qualified Stock Option
portion shall commence becoming exercisable once the $100,000 limit has been
reached.

     SECTION 6. TERM OF OPTION.

     The term of each Option shall be stated in the Award Agreement but shall be
no later than ten (10) years from the date of grant or such shorter term as may
be provided in the Award Agreement. Moreover, in the case of an Incentive Stock
Option granted to a Recipient who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or its Subsidiaries
(taking into account the attribution rules under Section 424(d) of the Code),
the term of the Incentive Stock Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Award Agreement, and the
exercise price shall be as set forth in Section 7(a)(A)(i) below.

                                      - 5 -
<Page>

     SECTION 7. OPTION EXERCISE PRICE; VESTING AND CONSIDERATION.

     (a)  EXERCISE PRICE. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

          (A)  In the case of an Incentive Stock Option

               (i)     granted to an Employee who, at the time the Incentive
                       Stock Option is granted, owns stock representing more
                       than ten percent (10%) of the total combined voting power
                       of all classes of stock of the Company or its
                       Subsidiaries (taking into account the attribution rules
                       under Section 424(d) of the Code), the per Share exercise
                       price shall be no less than 110% of the Fair Market Value
                       per Share on the date of grant.

               (ii)    granted to any Employee or Officer other than an Employee
                       described in paragraph (i) immediately above, the per
                       Share exercise price shall be no less than 100% of the
                       Fair Market Value per Share on the date of grant.

          (B)  In the case of a Non-Qualified Stock Option, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

     (b)  WAITING PERIOD AND EXERCISE DATES. The Committee shall have the
authority, subject to the terms of the Plan, to determine any vesting
restriction or limitation or waiting period with respect to any Option granted
to a Recipient or the Shares acquired pursuant to the exercise of such Option.

     (c)  FORM OF CONSIDERATION. The Committee shall determine the acceptable
form of consideration for exercising an Option, including the method of payment.
In the case of an Incentive Stock Option, the Committee shall determine the
acceptable form of consideration at the time of grant. Such consideration may
consist entirely of the following:

               (i)     cash (in the form of certified or bank check or such
                       other instrument as the Company may accept);

               (ii)    other Mature Shares already owned by the Recipient (and,
                       in the case of the exercise of a Non-Qualified Stock
                       Option, Restricted Stock subject to an Award hereunder)
                       based on the Fair Market Value of the Common Stock on the
                       date the Stock Option is exercised; provided, however,
                       that, in the case of an Incentive Stock Option, the right
                       to make a payment in the form of already owned Shares may
                       be authorized only at the time the Stock Option is
                       granted; and provided that if payment is made in the form
                       of Restricted Stock, the number of equivalent shares of
                       Common Stock to be received shall be subject to the same
                       forfeiture restrictions to which such Restricted Stock
                       was subject, unless otherwise determined by the
                       Committee;

                                      - 6 -
<Page>

               (iii)   by any combination of (i) and (ii) above;

               (iv)    subject to Section 17(g) in the case of a Director or
                       "Executive Officer" (as defined in Rule 3b-7 of the
                       Exchange Act) of the Company, at the discretion of the
                       Committee, by delivery of a properly executed exercise
                       notice together with such other documentation as the
                       Committee and a qualified broker, if applicable, shall
                       require to effect an exercise of the Option, and delivery
                       to the Company of the sale or loan proceeds required to
                       pay the exercise price; or

               (v)     such other consideration and method of payment for the
                       issuance of Shares as permitted by the Committee and
                       Applicable Laws.

     SECTION 8. EXERCISE OF OPTION.

     (a)  PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Committee and set forth in
the Award Agreement. If the Committee provides that any Stock Option is
exercisable only in installments, the Committee may at any time waive such
installment exercise provisions, in whole or in part, based on such factors as
the Committee may determine. The Committee may at any time, in whole or in part,
accelerate the exercisability of any Stock Option.

     An Option shall be deemed exercised when the Company receives: (i) written
notice of exercise (in accordance with the Award Agreement) from the person
entitled to exercise the Option, and (ii) full payment for the Shares with
respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Committee and permitted by
the Award Agreement and by the Plan as described under Section 7(c) above.
Shares issued upon exercise of an Option shall be issued in the name of the
Recipient. Until the stock certificate evidencing such Shares is issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a stockholder shall exist with respect to the optioned
Stock, notwithstanding the exercise of the Option. The Company shall issue (or
cause to be issued) such stock certificate promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the stock certificate is issued, except as
provided in Section 13 of the Plan.

     Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.

     (b)  TERMINATION OF RELATIONSHIP AS EMPLOYEE OR DIRECTOR. If a Recipient
ceases to be a Service Provider, other than for Cause or upon the Recipient's
Disability, death or Retirement, the Recipient, subject to the restrictions of
this Section 8(b), may exercise his or her Option within the time specified
herein to the extent that the Option is vested on the date of termination,
including any acceleration of vesting granted by the Committee, and has not yet

                                      - 7 -
<Page>

expired as set forth in the Award Agreement. Unless otherwise determined by the
Committee, such Option may be exercised as follows: (A) if the Option is a
Non-Qualified Stock Option, it shall remain exercisable for the lesser of the
remaining term of the Option or one year from the date of such termination of
the relationship as a Service Provider; or (B) if the Option is an Incentive
Stock Option, it shall remain exercisable for the lesser of the term of the
Option or three (3) months following the Recipient's termination of his
relationship as a Service Provider; provided, however, that if the Recipient
dies within such three-month period, any unexercised Stock Option held by such
Recipient shall notwithstanding the expiration of such three-month period
continue to be exercisable to the extent to which it was exercisable at the time
of death for a period of one year from the date of such death or the expiration
of the stated term of such Option, whichever period is shorter. If, on the date
of termination, the Recipient is not vested as to his or her entire Option and
the Committee has not granted any acceleration of vesting, the Shares covered by
the unvested portion of the Option shall revert to the Plan. If a Recipient
ceases to be a Service Provider for Cause, the Option shall immediately
terminate, and the Shares covered by such Option shall revert to the Plan. If,
after termination, the Recipient does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

     Notwithstanding the above, in the event of a Recipient's change in status
from the current status to an Employee, Director or Officer, the Recipient shall
not automatically be treated as if the Recipient terminated his relationship as
a Service Provider, nor shall the Recipient be treated as ceasing to provide
services to the Company solely as a result of such change in status. In the
event a Recipient's status changes from Employee to Director, an Incentive Stock
Option held by the Recipient shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Non-Qualified Stock Option
three months and one day following such change of status.

     (c)  DISABILITY OF RECIPIENT. If, as a result of the Recipient's
Disability, a Recipient ceases to be a Service Provider, the Recipient may
exercise his or her Option subject to the restrictions of this Section 8(c) and
within the period of time specified herein to the extent the Option is vested on
the date of termination, including any acceleration of vesting granted by the
Committee, and has not yet expired as set forth in the Award Agreement. Unless
otherwise determined by the Committee, such Option shall be exercisable for the
lesser of the remaining period of time specified in the Award Agreement or three
years from the date of such termination. Notwithstanding the foregoing, if the
Recipient dies within such three-year (or shorter) period, any unexercised Stock
Option held by such Recipient shall, notwithstanding the expiration of such
period, continue to be exercisable to the extent to which it was exercisable at
the time of death for a period of one year from the date of death or the
expiration of the stated term of such Stock Option, whichever period is the
shorter. If, on the date of termination, the Recipient is not vested as to his
or her entire Option and the Committee has not granted any acceleration of
vesting, the Shares covered by the unvested portion of the Option shall revert
to the Plan. If, after termination, the Recipient does not exercise his or her
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan. In the event of
termination of employment by reason of Disability, if an Incentive Stock Option
is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.

                                      - 8 -
<Page>

     (d)  DEATH OF RECIPIENT. If a Recipient dies while an Employee, Director or
Officer, the Option may be exercised subject to the restrictions of this Section
8(d) and within such period of time as is specified in the Award Agreement (but
in no event later than the earlier of one year or the expiration of the term of
such Option as set forth in the Award Agreement), by the Recipient's estate or
by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of
death, including any acceleration of vesting granted by the Committee, and has
not yet expired as set forth in the Award Agreement. Unless otherwise determined
by the Committee, the Option shall remain exercisable for the lesser of the
remaining period of time specified in the Award Agreement or twelve (12) months
following the Recipient's death. If, at the time of death, the Recipient is not
vested as to his or her entire Option and the Committee has not granted any
acceleration of vesting, the Shares covered by the unvested portion of the
Option shall immediately revert to the Plan. The Option may be exercised by the
executor or administrator of the Recipient's estate or, if none, by the
person(s) entitled to exercise the Option under the Recipient's will or the laws
of descent or distribution. If the Option is not so exercised within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan. In the event of termination of employment by
reason of death, if an Incentive Stock Option is exercised after the expiration
of the exercise periods that apply for purposes of Section 422 of the Code, such
Stock Option will thereafter be treated as a Non-Qualified Stock Option.

     (e)  RETIREMENT OF RECIPIENT. If, as a result of the Recipient's
Retirement, a Recipient ceases to be a Service Provider, the Recipient may,
subject to the restrictions of this Section 8(e), exercise his or her
Non-Qualified Stock Option within the time specified herein to the extent the
Option is vested on the date of termination, including any acceleration of
vesting granted by the Committee, and has not yet expired as set forth in the
Award Agreement. Unless otherwise determined by the Committee, such Option may
be exercised for the lesser of the remaining period of time specified in the
Award Agreement or three (3) years following the Recipient's Retirement.
Notwithstanding the foregoing, if the Recipient dies within such three-year (or
shorter) period, any unexercised Non-Qualified Stock Option held by such
Recipient shall, notwithstanding the expiration of such period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a
period of one year from the date of death or the expiration of the stated term
of such Stock Option, whichever period is shorter. If the Recipient holds an
Incentive Stock Option and ceases to be a Service Provider by reason of his or
her Retirement, such Incentive Stock Option may continue to be exercisable by
the Recipient to the extent to which it was exercisable at the time of
Retirement for a period of three months from the date of Retirement or the
expiration of the stated term of such Stock Option, whichever period is the
shorter. Notwithstanding the foregoing, if the Recipient dies within such
three-month period, any unexercised Incentive Stock Option held by such
Recipient shall, notwithstanding the expiration of such period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a
period of one year from the date of such death or the expiration of the stated
term of such Stock Option, whichever period is the shorter. If, on the date of
termination, the Recipient is not vested as to his or her entire Option and the
Committee has not granted any acceleration of vesting, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after termination,
the Option is not exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

                                      - 9 -
<Page>

     (f)  CASH OUT PROVISIONS. On receipt of written notice of exercise, the
Committee may elect to cash out all or any part of the shares of Common Stock
for which a Stock Option is being exercised by paying the optionee an amount, in
cash, equal to the excess of the Fair Market Value of the Common Stock over the
option price times the number of shares of Common Stock for which the Stock
Option is being exercised on the effective date of such cash out. Cash outs
pursuant to this Section 8(f) relating to Options held by Recipients who are
actually or potentially subject to Section 16(b) of the Exchange Act shall
comply with the provisions of Section 16 of the Exchange Act and the rules
promulgated thereunder, to the extent applicable.

     SECTION 9. RESTRICTED STOCK.

     (a)  AWARDS OF RESTRICTED STOCK. Shares of Restricted Stock may be issued
either alone, in addition to, or in tandem with other Awards granted under the
Plan and/or cash awards made outside of the Plan. The Committee shall determine
the Employees to whom it will award Restricted Stock under the Plan, and it
shall advise the Recipient in writing, by means of an Award Agreement, of the
terms, conditions and restrictions related to the offer, including the number of
Shares to be awarded to the Recipient, the time or times within which such
Awards may be subject to forfeiture and any other terms and conditions of the
Awards, in addition to those contained in this Section 9. The Committee may
condition the grant of Restricted Stock upon the attainment of specified
performance goals of the Recipient or of the Company, Subsidiary or Affiliate
for or within which the Recipient is primarily employed, or upon such other
factors as the Committee shall determine. The provisions of a Restricted Stock
Award need not be the same with respect to each Recipient. The terms of the
Award of Restricted Stock shall comply in all respects with Applicable Law and
the terms of the Plan.

     (b)  AWARDS AND CERTIFICATES. Each Award shall be confirmed by, and subject
to the terms of, a Restricted Stock Agreement. Shares of Restricted Stock shall
be evidenced in such manner as the Committee may deem appropriate, including
book-entry registration or issuance of one or more stock certificates. The
Committee may require that the certificates evidencing such Shares be held in
custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the Recipient shall have
delivered to the Company a stock power, endorsed in blank, relating to the
Common Stock covered by such Award. Any certificate issued with respect to
Shares of Restricted Stock shall be registered in the name of such Recipient and
shall bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such Award, substantially in the following form:

          "The transferability of this certificate and the shares of Stock
          represented hereby are subject to the terms and conditions (including
          forfeiture) of the General Growth Properties, Inc. 2003 Incentive
          Stock Plan and a Restricted Stock Agreement. Copies of such Plan and
          Stock Agreement are on file at the office of the Secretary of General
          Growth Properties, Inc."

If and when the Restriction Period (hereinafter defined) expires without a prior
forfeiture of the Restricted Stock subject to such Restriction Period,
unlegended certificates for such Shares shall be delivered to the Recipient.

                                     - 10 -
<Page>

     (c)  TERMS AND CONDITIONS. Shares of Restricted Stock shall be subject to
the following terms and conditions:

          (A)  RESTRICTION PERIOD. Subject to the provisions of the Plan and the
terms of the Restricted Stock Agreement, during a period set by the Committee,
commencing with the date of such Award (the "Restriction Period"), the Recipient
shall not be permitted to sell, assign, transfer, pledge or otherwise encumber
Shares of Restricted Stock (the "Restrictions"). The Committee may provide for
the lapse of such Restrictions in installments or otherwise and may accelerate
or waive such Restrictions, in whole or in part, in each case based on period of
service, performance of the Recipient or of the Company, Subsidiary or
Affiliate, division or department for which the Recipient is employed or such
other factors or criteria as the Committee may determine, subject to the rules
set forth below.

               (i)     With respect to Awards of Restricted Stock designated as
                       "performance-based," no Restrictions shall lapse or be
                       waived or accelerated before a period of least twelve
                       (12) months has elapsed following the date of grant;

               (ii)    If the Recipient of a Restricted Stock Award is subject
                       to the provisions of Section 16 of the Exchange Act,
                       shares of Common Stock subject to the grant may not,
                       without the written consent of the Committee, be sold or
                       otherwise disposed of within six (6) months following the
                       date of grant; and

               (iii)   With respect to Awards of Restricted Stock which are not
                       designated as "performance-based," the Restrictions shall
                       lapse in accordance with a schedule that does not provide
                       for a lapse of such Restrictions any sooner than:
                       immediately (on the date of grant) with respect to
                       one-third (1/3) of the Shares subject to the Award; on
                       the first anniversary of the date of grant with respect
                       to another one-third (1/3) of such Shares; and on the
                       second anniversary of the date of grant with respect to
                       the final one-third (1/3) of such Shares. Within any
                       twelve-month period, no Recipient shall receive an Award
                       of Restricted Stock in excess of one hundred thousand
                       (100,000) Shares, unless such Award is
                       "performance-based."

          (B)  RIGHTS. Except as provided in this Section 9(c)(B), Section
9(c)(A) above, the Restricted Stock Agreement and under Applicable Law, the
Recipient shall have, with respect to the Shares of Restricted Stock, all of the
rights of a stockholder of the Company holding the class or series of Common
Stock that is the subject of the Restricted Stock Agreement, including, if
applicable, the right to vote the Shares and the right to receive any cash
dividends. If so determined by the Committee in the applicable Restricted Stock
Agreement and subject to Section 17(e), for the Restriction Period, (A) cash
dividends on the Shares of Common Stock that are the subject of the Restricted
Stock Award shall be automatically deferred and reinvested in additional
Restricted Stock and (B) dividends payable in Common Stock shall be paid in the
form of Restricted Stock.

                                     - 11 -
<Page>

          (C)  TERMINATION OF SERVICE PROVIDER RELATIONSHIP. Except to the
extent otherwise provided in the applicable Restricted Stock Agreement, Sections
9(c)(A), this Section 9(c)(C) and Section 12(a)(B), if a Recipient ceases to be
a Service Provider for any reason during the Restriction Period, all Shares
still subject to restriction shall be forfeited by the Recipient.

     (d)  OTHER PROVISIONS. The Restricted Stock Agreement shall contain such
other terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Committee in its sole discretion. In addition, the terms of
Restricted Stock Agreements need not be the same with respect to each Recipient.

     SECTION 10. DIRECTOR STOCK OPTIONS.

     The granting of Awards to non-Employee Directors shall be made pursuant to
the following terms:

     (a)  AUTOMATIC AWARD. Each Director of the Company who is not otherwise an
Employee of the Company or any Subsidiary or Affiliate from and after the
effective date of the Plan shall, as of the first business day of each January
during such Director's term, automatically be granted Non-Qualified Stock
Options to purchase 1,000 shares of Common Stock having an exercise price per
share equal to 100% of the Fair Market Value of the Common Stock at the date of
grant of such Non-Qualified Stock Option. Each such Director, upon joining the
Board, shall also be awarded an initial grant of Non-Qualified Stock Options to
purchase 1,000 shares of Common Stock having an exercise price equal to 100% of
the Fair Market Value of the Common Stock as of such date. Any Options granted
to a Director pursuant to this Section 10 shall be immediately exercisable.

     (b)  ELIGIBILITY. An automatic Director Stock Option shall be granted
hereunder only if as of each date of grant (or, in the case of any initial
grant, from and after the effective date of the Plan) the Director (i) is not
otherwise an Employee of the Company or any Subsidiary or Affiliate, (ii) has
not been an Employee of the Company or any Subsidiary or Affiliate for any part
of the preceding fiscal year and (iii) has served on the Board continuously
since the commencement of his or her term.

     (c)  INSUFFICIENT SHARES. In the event that the number of Shares of Common
Stock available for future grant under the Plan is insufficient to make all
automatic grants required to be made on such date, then all non-Employee
Directors entitled to a grant on such date shall share ratably in the number of
options on Shares available for grant under the Plan.

     (d)  AMENDMENT. The provisions of paragraph (a) of this Section 10 may not
be amended more often than once every six months. Except as expressly provided
in this Section 10, any Stock Option granted hereunder shall be subject to the
terms and conditions of the Plan as if the grant were made pursuant to Sections
5 through 8 hereof.

     SECTION 11. NON-TRANSFERABILITY OF AWARDS.

     Unless otherwise specified by the Committee in the Award Agreement, an
Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by (i) will or by the laws of descent or
distribution or (ii) pursuant to a qualified domestic

                                     - 12 -
<Page>

relations order (as defined in the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder). Stock Options
may be exercised, during the lifetime of the Participant, only by the
Participant or by the guardian or legal representative of the Participant or by
an alternate payee pursuant to a qualified domestic relations order. If the
Committee makes an Award transferable, such Award shall contain such additional
terms and conditions as the Committee deems appropriate. Any attempt to assign,
pledge or otherwise transfer any Award or of any right or privileges conferred
thereby, contrary to this Plan, or the sale or levy or similar process upon the
rights and privileges conferred hereby, shall be void.

     SECTION 12. EFFECT OF CHANGE IN CONTROL.

     (a)  EFFECT. Notwithstanding any other provision of this Agreement, in the
event of a Change in Control (as defined below) after the Effective Date,

          (A)  a Recipient shall become 100% vested in his or her Stock Options,
if applicable; and

          (B)  the restrictions applicable to any Restricted Stock shall lapse
and such Restricted Stock shall become free of all restrictions and fully vested
and transferable to the full extent of the original grant.

     (b)  CHANGE IN CONTROL. For purposes of this Plan, a "Change in Control"
shall be deemed to have occurred upon the completion of any of the following
events:

     (A)  ACQUISITION. Any acquisition or series of related acquisitions
resulting in any "Person" (as defined in subparagraph (F) below) or group,
within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act,
beneficially owning (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 20% or more of either the then outstanding shares of Common Stock
or the combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors of the Company (a "Triggering
Acquisition"), provided that a Change in Control shall not be deemed to have
occurred if the Person described in the preceding provisions is an underwriter
or underwriting syndicate that has acquired the ownership of voting securities
of the Company solely in connection with a public offering of those securities;
and provided that the following shall not constitute a Triggering Acquisition:

               (i)     any acquisition directly from the Company, other than an
                       acquisition by any Person by virtue of the exercise of a
                       conversion privilege unless the security being so
                       converted was itself acquired by such Person directly
                       from the Company, GGP Limited Partnership or any other
                       entity in which the Company owns a direct or indirect
                       interest;

               (ii)    any acquisition by the Company, or members of the
                       Company's management, or any combination thereof;

               (iii)   any acquisition by any employee benefit plan (or related
                       trust) sponsored or maintained by the Company or any
                       corporation controlled by the Company; or

                                     - 13 -
<Page>

               (iv)    any acquisition by any Person pursuant to a transaction
                       which complies with clauses (i), (ii) and (iii) of
                       subsection (A) of this Section 12(b).

          (B)  REORGANIZATION. Any shareholder-approved reorganization, merger
or consolidation of the Company with any other Person, OTHER THAN a transaction
which would result in (A) the owners of voting securities of GGP outstanding
immediately prior thereto continuing to own directly or indirectly more than
sixty percent (60%) of the combined voting power of the voting securities of the
entity or entities surviving such reorganization, merger or consolidation that
own and conduct the business owned and conducted by the Company prior thereto;
and (B) no Person (other than the Company, any employee benefit plan or trust
sponsored or maintained by the Company or any corporation controlled by the
Company or such corporation resulting from such transaction) beneficially
owning, directly or indirectly, 20% or more of, respectively, the outstanding
shares of Common Stock of the corporation resulting from such transaction or the
combined voting power of the outstanding voting securities of such corporation
entitled to vote generally in the election of directors except to the extent
such ownership existed with respect to the Company prior to the transaction; and
(C) individuals who were members of the Incumbent Board (hereinafter defined)
constituting a majority of the members of the board of directors of the
corporation resulting from such transaction;

          (C)  ASSET SALE. The sale or other disposition by the Company, in one
transaction or a series of related transactions, of all or substantially all of
the assets of the Company;

          (D)  LIQUIDATION. The approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company; or

          (E)  BOARD CHANGE. A change in the composition of the Board such that
individuals who, as of the Effective Date, constitute the Board of Directors of
the Company (the "Incumbent Board") cease for any reason to constitute at least
a majority of the board of directors of the Company, provided that any
individual who becomes a director after the Effective Date whose election, or
nomination for election by stockholders, is approved by a vote of at least a
majority of the directors then comprising the relevant Incumbent Board shall be
considered to be a member of the relevant Incumbent Board. For purposes of the
definition of "Change in Control," references to the Company shall also refer to
its successors and assigns such that reorganizations or other corporate
transactions do not impair the substantive intent of these provisions.

          (F)  PERSON. For purposes of this Section, "Person" means an
individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity (or any department, agency, or political
subdivision thereof).

     SECTION 13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

     Subject to any required action by the stockholders of the Company, the
number of shares of Common Stock covered by each outstanding Award, and the
number of shares of Common

                                     - 14 -
<Page>

Stock which have been authorized for issuance under the Plan but as to which no
Awards have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Award, as well as the price per share of Common
Stock covered by each such outstanding Award, shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration;" and provided that the dilution effect of the
Shares authorized, plus the shares reserved for issuance pursuant to all other
stock-related plans of the Company, shall not exceed 10%. Such adjustment shall
be made by the Board in its sole discretion, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Award.

     SECTION 14. DATE OF GRANT.

     The date of grant of an Award shall be, for all purposes, the date on which
the Committee makes the determination granting such Award, or such other later
date as is determined by the Committee. Notice of the determination shall be
provided to each Participant by way of an Award Agreement within a reasonable
time after the date of such grant.

     SECTION 15. TERM; AMENDMENT AND TERMINATION OF THE PLAN.

     (a)  AMENDMENT AND TERMINATION. Subject to this Section 15 and Section
17(f), the Board may at any time amend, alter, suspend or terminate the Plan,
including without limitation to provide for the transferability of any or all
Options to comply with or take advantage of rules governing registration of
shares. Subject to Section 17(f) and the other terms of the Plan, the Committee
may amend the terms of any Stock Option theretofore granted, prospectively or
retroactively, but no such amendment shall impair the rights of any Recipient
without the Recipient's consent.

     (b)  STOCKHOLDER APPROVAL. The Company shall obtain stockholder approval of
any material Plan amendment and any amendment to the extent necessary and
desirable to comply with Section 422 of the Code (or any successor rule or
statute or other applicable law, rule or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed or
quoted). Such stockholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the Applicable Law, rule or
regulation.

     (c)  EFFECT OF AMENDMENT OR TERMINATION. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any
Participant, unless mutually agreed otherwise between the Participant and the
Committee, which agreement must be in writing and signed by the Participant and
the Company.

                                     - 15 -
<Page>

     SECTION 16. CONDITIONS UPON ISSUANCE OF SHARES.

     (a)  LEGAL COMPLIANCE. Shares shall not be issued pursuant to the exercise
of an Award unless the exercise of such Award and the issuance and delivery of
such Shares shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, Applicable Laws, and the requirements of
any stock exchange or quotation system upon which the Shares may then be listed
or quoted and shall be further subject to the approval of counsel for the
Company with respect to such compliance. The Committee may cause a legend or
legends to be placed on any certificates for Shares or other securities
delivered under the Plan as it may deem appropriate to make reference to such
legal rules and restrictions, or to impose any restrictions on transfer.

     (b)  WITHHOLDING OBLIGATIONS. No later than the date as of which an amount
first becomes includible in the gross income of the Recipient for federal income
tax purposes with respect to any Award under the Plan, the Recipient shall pay
to the Company, or make arrangements satisfactory to the Company regarding the
payment of, any federal, state, local or foreign taxes of any kind required by
law to be withheld with respect to such amount. Unless otherwise determined by
the Committee, withholding obligations may be settled with Common Stock,
including Common Stock that is part of the Award that gives rise to the
withholding requirement. The obligations of the Company under the Plan shall be
conditioned on such payment or arrangements, and the Company, its Subsidiaries
and its Affiliates shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment otherwise due to the Recipient. The
Committee may establish such procedures as it deems appropriate, including the
making of irrevocable elections, for the settlement of withholding obligations
with Common Stock.

     (c)  INABILITY TO OBTAIN AUTHORITY. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

     (d)  GRANTS EXCEEDING ALLOTTED SHARES. If the Awarded Stock covered by an
Award exceeds, as of the date of grant, the number of Shares which may be issued
under the Plan without additional stockholder approval, such Award shall be void
with respect to such excess Awarded Stock, unless stockholder approval of an
amendment sufficiently increasing the number of Shares subject to the Plan is
timely obtained in accordance with Applicable Law and Section 15(b).

     SECTION 17. GENERAL PROVISIONS.

     (a)  TERM OF PLAN. This Plan shall become effective as of the Company's May
7, 2003 Annual Shareholders Meeting, or upon its approval by the stockholders of
the Company, whichever is later ("Effective Date"). Such stockholder approval
shall be obtained in the manner and to the degree required under Applicable Laws
and the rules of any stock exchange upon

                                     - 16 -
<Page>

which the Common Stock is listed. It shall continue in effect for a term of ten
(10) years unless terminated earlier under Section 15 of the Plan.

     (b)  NO CONTRACT OF EMPLOYMENT. Neither the Plan nor any Award hereunder
shall confer upon any individual any right with respect to continuing such
individual's employment relationship with the Company, nor shall they interfere
in any way with such individual's right or the Company's right to terminate such
employment relationship at any time, with or without cause.

     (c)  SEVERABILITY. In the event that any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.

     (d)  GOVERNING LAW. The Plan and all Awards made and actions thereunder
shall be governed by and construed in accordance with the laws of the state of
Delaware.

     (e)  DIVIDENDS. The reinvestment of dividends in additional Restricted
Stock at the time of any dividend payment shall be permissible only if
sufficient shares of Common Stock are available under the Plan for such
reinvestment (taking into account then-outstanding Stock Options and other
Awards).

     (f)  PROHIBITION ON REPRICING. Notwithstanding any other provision of the
Plan, the Committee shall not "reprice" any Stock Option granted under the Plan
if the effect of such repricing would be to decrease the exercise price per
Share applicable to such Stock Option. For this purpose, a "repricing" would
include a tandem cancellation and regrant or any other amendment or action that
would have substantially the same effect as decreasing the exercise price of
outstanding Stock Options.

     (g)  PROHIBITION ON LOANS TO PARTICIPANTS. The Company shall not lend funds
to any Participant for the purpose of paying the exercise or base price
associated with any Award or for the purpose of paying any taxes associated with
the exercise or vesting of an Award.

     (h)  PERFORMANCE-BASED COMPENSATION. The Committee may designate any Award
as "performance-based compensation" for purposes of Section 162(m) of the Code.
Any Awards designated as "performance-based compensation" shall be conditioned
on the achievement of one or more performance measures, and the measurement may
be stated in absolute terms or relative to comparable companies.

     (i)  UNFUNDED STATUS OF PLAN. It is intended that the Plan constitute an
"unfunded" plan for incentive and deferred compensation. The Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Common Stock or make payment; provided,
however, that, unless the Committee otherwise determines, the existence of such
trusts or other arrangements is consistent with the "unfunded" status of the
Plan.

     (j)  LIABILITY OF COMMITTEE MEMBERS. Except as provided under Applicable
Law, no member of the Board or the Committee will be liable for any action or
determination made in

                                     - 17 -
<Page>

good faith by the Board or the Committee with respect to the Plan or any Award
under it. Neither the Company, the Board of Directors nor the Committee, nor any
Subsidiary or Affiliate, nor any directors, officers or employees thereof, shall
be liable to any Participant or other person if it is determined for any reason
by the Internal Revenue Service or any court that an Incentive Stock Option
granted hereunder does not qualify for tax treatment as an "incentive stock
option" under Section 422 of the Code.

                                     - 18 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}]]