Document:

<PAGE>   1

                                                                    EXHIBIT 10.6

                        ALTERNATIVE PUBLIC SCHOOLS, INC.
                             1995 STOCK OPTION PLAN

         1.       Purpose. The purpose of the Alternative Public Schools, Inc.
1995 Stock Option Plan (the "Plan") is to advance the growth and prosperity of
Alternative Public Schools, Inc. (the "Company") and its subsidiaries (if any)
by providing key employees with an additional incentive to contribute to the
best interests of the Company. Without prejudice to other compensation programs
approved from time to time by the Board of Directors (the "Board") and/or
shareholders of the Company, such additional incentive is to be given key
employees by means of stock options provided for under the Plan. In the
discretion of the Committee hereinafter provided for and the Board, such options
may be "Incentive Stock Options" within the meaning of Section 422A of the
Internal Revenue Code of 1986, as amended (the "Code"), or "non-statutory" stock
options.

         2.       Administration of the Plan.

                  (a)      The Plan shall be administered by the Board unless
and until such time as the Board delegates administration to a committee
pursuant to subparagraph 2(c) (the "Committee"). Upon such date as the Company
has a class of equity security registered under Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Board shall
administer the Plan only if all of its members are disinterested persons. For
the purposes of this paragraph 2, disinterested person shall mean a person who
has not at any time within one year prior to the date in question participated
in the Plan or any other plan of the Company or any of its subsidiaries
entitling the participants therein to acquire stock or stock options of the
Company; provided, however, that a disinterested person may participate in a
plan that meets any of the exceptions contained in Rule 16b-3(c)(2) as
promulgated under the Exchange Act, as it may be amended from time to time.

                  (b)      The Board shall have the power, subject to, and
within, the limits of the express provisions of the Plan:

                           (i)      To determine from time to time which of the
                  eligible persons shall be granted options under the Plan, the
                  term of each granted option, the time or times during the term
                  of each option within which all or portions of each option may
                  be exercised, whether the options granted shall be Incentive
                  Stock Options or non-statutory options, and the number of
                  shares for which each option shall be granted.

                           (ii)     To construe and interpret the Plan and
                  options granted under it, and to establish, amend and revoke
                  rules and regulations for its administration. The Board, in
                  the exercise of this power, shall generally determine all
                  questions of policy and expediency that may arise and may
                  correct any defect, omission or

<PAGE>   2

                  inconsistency in the Plan or in any option agreement in a
                  manner and to the extent it shall deem necessary or expedient
                  to make the Plan fully effective.

                           (iii)    To prescribe the terms and provisions of
                  each option granted (which need not be identical).

                           (iv)     To amend the Plan as provided herein.

                           (v)      Generally, to exercise such powers and to
                  perform such acts as are deemed necessary or expedient to
                  promote the best interests of the Company.

                  (c)      The Board, by resolution, may delegate administration
of the Plan (including, without limitation, the Board's powers under
subparagraph 2(b)) to a Committee composed of not less than two (2) members,
which committee, upon such time as the Company has a class of equity security
registered under Section 12 of the Exchange Act, will be constituted so as to
permit the Plan to comply with Rule 16b-3 thereunder. If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
subject, however, to such constraints, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. The Board at any
time may remove members from or add members to the Committee or may abolish the
Committee and revest in the Board the administration of the Plan. Vacancies on
the Committee, howsoever caused, shall be filled by the Board.

                  (d)      The interpretation and construction by the Board of
any provisions of the Plan or of any option granted under it shall be final, and
the interpretation or construction by any Committee appointed pursuant to
subparagraph 2(c) of any such provisions or option shall also, unless otherwise
determined by the Board, be final. No member of such Committee or of the Board
shall be liable for any action or determination made in good faith with respect
to the Plan or any option granted under it.

         3.       Eligible Employees. The Board or the Committee shall determine
from time to time those officers, key employees and consultants of the Company
and its subsidiaries to whom options shall be granted and, pursuant to the
provisions of the Plan, the amount thereof and the terms and conditions,
including requirements as to continued employment by the participant, upon which
such options or rights are granted and are exercisable. Directors of the Company
who are not also employees of the Company or its subsidiaries shall not be
eligible to participate in the Plan.

         4.       The Stock. The stock subject to the options and other
provisions of the Plan shall be shares of the Company's authorized and unissued
Common Stock, no par value, or reacquired Common Stock held in the treasury. The
total number of shares of the Company's Common Stock that may be transferred
pursuant to the exercise of stock options under the Plan shall not exceed in the
aggregate 40,000 shares. Shares subject to options which terminate or expire
prior to exercise shall be available for further option hereunder.

                                       2
<PAGE>   3

         Each option granted under this Plan shall be subject to the requirement
that if at any time the Board or the Committee shall determine that the listing,
registration or qualification of the shares subject thereto upon any securities
exchange or under any state or Federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable in connection with the
issue or transfer of shares subject thereto, no such option may be exercised in
whole or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Board or the Committee. If required at any time by the Board
or the Committee, an option may not be exercised until the optionee has
delivered an investment letter to the Company containing the representations
that all shares being purchased are being acquired for investment and not with a
view to, or for resale in connection with, any distribution of such shares.

         5.       Terms and Conditions of Options. All stock options granted
pursuant to the Plan shall be in such form as the Board or the Committee shall
from time to time determine, shall clearly indicate whether such option is an
Incentive Stock Option or a non-statutory stock option, and shall be subject to
the following terms and conditions:

                  (a)      Option Price. The price per share for Common Stock
under each option granted under the Plan shall be determined and fixed by the
Board or the Committee but, in the case of Incentive Stock Options, shall in no
event be less than 100% of the fair market value of the Common Stock on the date
of grant of such option, and, in the case of non-statutory stock options, shall
in no event be less than 50% of the fair market value of the Common Stock on the
date of grant of such option. In the case of the grant of an Incentive Stock
Option to an individual who, at the time of the grant, owns more than 10% of the
total combined voting power of all classes of stock of the Company, such price
per share shall not be less than 110% of the fair market value of the Common
Stock on the date of grant of the option.

                  (b)      Option Period. The period during which an option may
be exercised shall be determined by the Board or the Committee, provided,
however, that in no event shall an Incentive Stock Option be exercisable after
the expiration of 10 years from the date such option was granted; and provided
further that in the case of the grant of an Incentive Stock Option to an
individual who, at the time of the grant, owns more than 10% of the total
combined voting power of all classes of stock of the Company, in no event shall
such option be exercisable more than five years from the date of the grant.
Options may be made exercisable in installments, and such options or
installments thereof may be exercised in part from time to time after they
become exercisable. The maturity of any installment or installments may be
accelerated at the discretion of the Board or the Committee.

         In the event that a participant shall cease to be employed by or a
consultant to the Company or one of its subsidiaries for any reason other than
his death, all options held by him pursuant to the Plan and not previously
exercised at the date of such termination shall terminate immediately and become
void and of no effect; provided, however, that the Board or the Committee shall
have

                                       3
<PAGE>   4

the right to extend the exercise period not in excess of one year following the
date of termination of the participant's employment, subject to the further
condition, however, that no Incentive Stock Option shall be exercisable after
the expiration of 10 years from the date it is granted, and subject to the
further condition that in the case of the grant of an Incentive Stock Option to
an individual who, at the time of the grant, owns more than 10% of the total
combined voting power of all classes of stock of the Company, in no event shall
such option be exercisable more than five years from the date of the grant.
Notwithstanding the fore going, if the termination is due to disability, or to
retirement with the consent of the Company, such disabled or retiring
participant shall have the right to exercise his options which have not
previously been exercised at the date of such termination of employment at any
time within one year after such termination, subject to the condition that no
Incentive Stock Option shall be exercisable after the expiration of 10 years
from the date it is granted, and subject to the further condition that in the
case of the grant of an Incentive Stock Option to an individual who, at the time
of the grant, owns more than 10% of the total combined voting power of all
classes of stock of the Company, in no event shall such option be exercisable
more than five years from the date of the grant. Whether termination of
employment is due to disability or is to be considered retirement with the
consent of the Company shall be determined by the Board or the Committee, which
determination shall be final and conclusive.

         If the participant should die or become disabled (as defined in the
Company's long term disability insurance policy or by the Board of Directors)
while in the employ of the Company or a subsidiary of the Company or within a
period of one year after the termination of his employment by retirement and
shall not have fully exercised options granted under the Plan, such options may
be exercised in whole or in part at any time within 12 months following the
participant's death by the executors or administrators of the participant's
estate or by any person or persons who shall have acquired the options directly
from the participant by bequest or inheritance, subject to the condition that no
Incentive Stock Option shall be exercisable after the expiration of 10 years
from the date it is granted, and subject to the further condition that in the
case of the grant of an Incentive Stock Option to an individual who, at the time
of the grant, owns more than 10% of the total combined voting power of all
classes of stock of the Company, in no event shall such option be exercisable
more than five years from the date of the grant.

         The exercise of an option granted under the Plan shall not affect the
optionee's right or ability to exercise any other option granted under the Plan
or any other stock option plan of the Company or its subsidiaries.

                  (c)      Limitations on Grants. No Incentive Stock Option
shall be granted to any participant under the Plan if the aggregate fair market
value (as of the date the option is granted) of the Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by such
participant during any calendar year (under all such plans of the Company and
any subsidiary of the Company) exceeds $100,000.

                  (d)      Limitations on Disposition. To obtain the tax
benefits associated with Incentive Stock Options, the optionee must make no
disposition of shares acquired pursuant to the

                                       4
<PAGE>   5

exercise of an Incentive Stock Option within two years from the granting of such
Incentive Stock Option or within one year from the date of the exercise of such
Incentive Stock Option.

                  (e)      Holding Period. Upon such time as the Company has a
class of equity security registered under Section 12 of the Exchange Act, in
order for the grant of an option under the Plan to be exempt from Section 16(b)
of the Exchange Act, the optionee must make no disposition of the option (other
than upon exercise) or the shares acquired pursuant to the exercise of the
option, for a period of six months after the date of grant of such option.

         6.       Payment for Stock. Payment for shares subject to options
granted under the Plan shall be made by the optionee in the form of cash or by
means of unrestricted shares of the Company's Common Stock or any combination
thereof. Payment shall be made upon the exercise of the option. Payment in
currency or by check, bank draft, cashier's check or postal money order shall be
considered payment in cash. In the event of payment in the Company's Common
Stock, the shares used in payment of the purchase price shall be considered
payment to the extent of their fair market value on the date of exercise of the
option.

         7.       Non-Assignability. No option shall be transferable otherwise
than by will or the laws of descent and distribution and an option is
exercisable during the lifetime of the optionee only by him.

         8.       Adjustment Upon Changes in Stock.

                  (a)      The number of shares of Common Stock available for
the granting of options under the Plan and the number of shares and price per
share of Common Stock subject to outstanding options granted pursuant to the
Plan may be adjusted by the Board or the Committee in an equitable manner to
reflect changes in the capitalization of the Company, including, but not
limited to, such changes as result from merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares and
change in corporate structure. If any adjustment under this subparagraph 8(a)
would create a fractional share of Common Stock or a right to acquire a
fractional share of Common Stock, such fractional share shall be disregarded and
the number of shares available under the Plan and the number covered under any
options granted pursuant to the Plan shall be the next lower number of shares,
rounding all fractions downward.

                  (b)      Notwithstanding the foregoing, in the event of: (1) a
dissolution or liquidation of the Company; (2) a sale of all or substantially
all of the assets of the Company; (3) a merger or share exchange in which the
Company is not the surviving corporation; or (4) other capital reorganization in
which more than fifty percent (50%) of the shares of the Company entitled to
vote are exchanged, any outstanding options hereunder immediately shall be fully
exercisable by an optionee.

                                       5
<PAGE>   6

                  (c)      Any adjustment made by the Board or the Committee
under this paragraph 8 shall be conclusive and binding on all affected persons.
No Incentive Stock Option granted pursuant to the Plan shall be adjusted in a
manner that causes such Incentive Stock Option to fail to continue to qualify as
an Incentive Stock Option within the meaning of Section 422A of the Code.

         9.       Amendment. The Board from time to time may amend this Plan,
but except as provided above with respect to dilutions or other adjustments or
mergers or share exchanges, or with the approval of the Company's shareholders,
may not (a) increase the aggregate number of shares available for option
hereunder, (b) change the price at which options may be granted, (c) extend the
maximum period during which an option may be exercised, or (d) change the
eligibility requirements for options hereunder. Rights and obligations under any
option granted before amendment of the Plan shall not be altered or impaired by
amendment of the Plan, except with the consent of the person to whom the option
was granted.

         10.      Fair Market Value of Stock. Whenever pursuant to the terms of
the Plan the fair market value of the Company's Common Stock is required to be
determined as of a particular date, such fair market value shall equal the last
sale price of the Common Stock on the principal exchange on which the Common
Stock is then listed, or if the Common Stock is not then listed on any exchange,
on the National Association of Securities Dealers Automated Quotation National
Market System ("NMS"), or, if price quotations for the Common Stock are not
available on NMS, the mean between the closing bid and asked price of the Common
Stock on the National Association of Securities Dealers Automated Quotation
System ("NASDAQ"), or if no bid quotation is available on NASDAQ, the fair value
of such Common Stock as determined by the Board, in each case, on the business
day immediately preceding the date on which the determination is made. Fair
market value shall be determined in all cases without regard to any restriction
other than a restriction which, by its terms, will never lapse.

         11.      No Rights as Shareholder. A participant in the Plan shall have
no rights as a shareholder with respect to any shares covered by his option
until the date of the issuance of a stock certificate to him. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date such stock certificate is issued.

         12.      Indemnification of Committee. In addition to such other rights
of indemnification as they may have as directors or as members of the Committee,
the members of the Committee shall be indemnified by the Company against the
reasonable expenses, including attorneys' fees actually and necessarily incurred
in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan or any option granted thereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, except in relation to matters as to
which it

                                       6
<PAGE>   7

shall be adjudged in such action, suit or proceeding that such Committee member
is liable for negligence or misconduct in the performance of his duties;
provided that within 60 days after institution of any such action, suit or
proceeding, the Committee member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the same.

         13.      Termination. This Plan shall terminate on September ___, 2005,
unless sooner terminated by action of the Board. No option may be granted
hereunder after termination of the Plan, but such termination shall not affect
the validity of any option then outstanding.

         14.      Shareholder Approval. The Plan shall be subject to approval by
the holders of a majority of the outstanding shares of Common Stock of the
Company present and voting at a meeting of shareholders, which approval must
occur within the period ending 12 months after the date the Plan is adopted by
the Board, provided, however, that options may be granted thereunder when all
the conditions (other than shareholder approval) precedent to the granting of
options under the Plan have been completed by the Company.

Date Approved by Board: September 1, 1995

Date Approved by Shareholders: September 1, 1995

                                       7
<PAGE>   8

                        ALTERNATIVE PUBLIC SCHOOLS, INC.
                       AMENDMENT TO 1995 STOCK OPTION PLAN
                               (DECEMBER 1, 1995)

         In accordance with Section 9, Amendment, of the 1995 Stock Option Plan
of alternative Public Schools, Inc., and subject to shareholder approval, the
Plan is amended hereby so that the second sentence of Section 4 shall read as
follows:

         "The total number of shares of the Company's Common Stock that may be
         transferred pursuant to the exercise of stock options under the Plan
         shall not exceed in the aggregate 75,000 Shares."

                                       8<PAGE>   1

                                                                    EXHIBIT 10.7

                         ALTERNATIVE PUBLIC SCHOOLS LLC
                       1996 POINTS OF INTEREST OPTION PLAN

         1.       Purpose. The purpose of the Alternative Public Schools LLC
1996 Points of Interest Option Plan (the "Plan") is to advance the growth and
prosperity of Alternative Public Schools LLC (the "Company") and its
subsidiaries by providing key employees with an additional incentive to
contribute to the best interests of the Company. Without prejudice to other
compensation programs approved from time to time by the Managing Members of the
Company, such additional incentive is to be given key employees by means of
contribution allowance agreements as that term is defined in the Tennessee
Limited Liability Company Act, (the "Act"), provided for under the Plan.

         2.       Administration of the Plan.

                  (a)      The Plan shall be administered by the Managing
Members unless and until such time as the Managing Members delegate
administration to a committee pursuant to subparagraph 2(c) (the "Committee").

                  (b)      The Managing Members shall have the power, subject
to, and within, the limits of the express provisions of the Plan:

                           (i)      To determine from time to time which of the
                  eligible persons shall be granted options under the Plan, the
                  term of each granted option, the time or times during the term
                  of each option within which all or portions of each option may
                  be exercised, and the number of Class B points of interest
                  ("Class B Points of Interest") for which each option shall be
                  granted.

                           (ii)     To construe and interpret the Plan and
                  options granted under it, and to establish, amend and revoke
                  rules and regulations for its administration. The Managing
                  Members, in the exercise of this power, shall generally
                  determine all questions of policy and expediency that may
                  arise and may correct any defect, omission or inconsistency in
                  the Plan or in any contribution allowance agreement in a
                  manner and to the extent it shall deem necessary or expedient
                  to make the Plan fully effective.

                           (iii)    To prescribe the terms and provisions of
                  each option granted (which need not be identical).

                           (iv)     To amend the Plan as provided herein.

                           (v)      Generally, to exercise such powers and to
                  perform such acts as are deemed necessary or expedient to
                  promote the best interests of the Company.

                  (c)      The Managing Members may delegate administration of
the Plan (including, without limitation, the Managing Members' powers under
subparagraph 2(b)) to a Committee

<PAGE>   2

composed of not less than two (2) members. If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Managing Members, subject,
however, to such constraints, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Managing Members. The initial members
of the Committee shall be William R. Deloache, Jr. and John C. Eason. The
Managing Members at any time may remove members from or add members to the
Committee or may abolish the Committee and revest in the Managing Members the
administration of the Plan. Vacancies on the Committee, howsoever caused, shall
be filled by the Managing Members.

                  (d)      The interpretation and construction by the Managing
Members of any provisions of the Plan or of any option granted under it shall be
final, and the interpretation or construction by any Committee appointed
pursuant to subparagraph 2(c) of any such provisions or option shall also,
unless otherwise determined by the Managing Members, be final. No member of such
Committee or any of the Managing Members shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted
under it.

         3.       Eligible Employees. The Managing Members or the Committee
shall determine from time to time those officers, key employees and consultants
of the Company and its subsidiaries to whom options shall be granted and,
pursuant to the provisions of the Plan, the amount thereof and the terms and
conditions, including requirements as to continued employment by the
participant, upon which such options or rights are granted and are exercisable.
Managing Members of the Company who are not also employees of the Company or its
subsidiaries shall not be eligible to participate in the Plan.

         4.       The Points of Interest. The Points of Interest subject to the
options and other provisions of the Plan shall be Class B Points of Interest of
the Company. The total number of the Company's Class B Points of Interest that
may be transferred pursuant to the exercise of options under the Plan shall not
exceed in the aggregate 50,000 Class B Points of Interest. Interests subject to
options which terminate or expire prior to exercise shall be available for
further option hereunder.

         Each option granted under this Plan shall be subject to the requirement
that if at any time the Managing Members or the Committee shall determine that
the consent or approval of any governmental regulatory body is necessary or
desirable in connection with the issue or transfer of membership interests
subject thereto, no such option may be exercised in whole or in part unless such
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Managing Members or the Committee. If required at any time
by the Managing Members or the Committee, an option may not be exercised until
the optionee has delivered an investment letter to the Company containing the
representations that all interests being purchased are being acquired for
investment and not with a view to, or for resale in connection with, any
distribution of such interests.

                                       2
<PAGE>   3

         5.       Terms and Conditions of Options. All interest options granted
pursuant to the Plan shall be in such form as the Managing Members or the
Committee shall from time to time determine and shall be subject to the
following terms and conditions:

                  (a)      Option Price. The price per Class B Point of Interest
under each option granted under the Plan shall be determined and fixed by the
Managing Members or the Committee.

                  (b)      Option Period. The period during which an option may
be exercised shall be determined by the Managing Members or the Committee,
provided, however, that in no event shall an option be exercisable after the
expiration of 10 years from the date such option was granted. Options may be
made exercisable in installments, and such options or installments thereof may
be exercised in part from time to time after they become exercisable. The
maturity of any installment or installments may be accelerated at the discretion
of the Managing Members or the Committee.

         In the event that a participant shall cease to be employed by or a
consultant to the Company or one of its subsidiaries for any reason other than
his death, all options held by him pursuant to the Plan and not previously
exercised at the date of such termination shall terminate immediately and become
void and of no effect; provided, however, that the Managing Members or the
Committee shall have the right to extend the exercise period not in excess of
one year following the date of termination of the participant's employment.
Notwithstanding the fore going, if the termination is due to disability, or to
retirement with the consent of the Company, such disabled or retiring
participant shall have the right to exercise his options which have not
previously been exercised at the date of such termination of employment at any
time within one year after such termination. Whether termination of employment
is due to disability or is to be considered retirement with the consent of the
Company shall be determined by the Managing Members or the Committee, which
determination shall be final and conclusive.

         If the participant should die or become disabled (as defined in the
Company's long term disability insurance policy or by the Managing Members)
while in the employ of the Company or a subsidiary of the Company or within a
period of one year after the termination of his employment by retirement and
shall not have fully exercised vested options granted under the Plan, such
options may be exercised in whole or in part at any time within 12 months
following the participant's death by the executors or administrators of the
participant's estate or by any person or persons who shall have acquired the
options directly from the participant by bequest or inheritance.

         The exercise of an option granted under the Plan shall not affect the
optionee's right or ability to exercise any other option granted under the Plan
or any other points of interest option plan of the Company or its subsidiaries.

         6.       Contribution for Points of Interest. Contribution for Points
of Interest subject to options granted under the Plan shall be made by the
optionee in the form of cash. Payment shall

                                       3
<PAGE>   4

be made upon the exercise of the option. Payment in currency or by check, bank
draft, cashier's check or postal money order shall be considered payment in
cash.

         7.       Non-Assignability. No option shall be transferable otherwise
than by will or the laws of descent and distribution and an option is
exercisable during the lifetime of the optionee only by him.

         8.       Adjustment Upon Changes in Points of Interest.

                  (a)      The number of Class B Points of Interest available
for the granting of options under the Plan and the number of Class B Points of
Interest and price per Class B Point of Interest subject to outstanding options
granted pursuant to the Plan may be adjusted by the Managing Members or the
Committee in an equitable manner to reflect changes in the capitalization of the
Company, including, but not limited to, such changes as result from merger,
consolidation, reorganization, recapitalization, dividend in property other than
cash, points of interest split, liquidating dividend, exchange of points of
interest, and change in corporate structure. If any adjustment under this
subparagraph 8(a) would create a fractional interest or a right to acquire a
fractional membership interest, such fractional membership interest shall be
disregarded and the number of interests available under the Plan and the number
covered under any options granted pursuant to the Plan shall be the next lower
number of interests, rounding all fractions downward.

                  (b)      Notwithstanding the foregoing, in the event of: (1) a
dissolution or liquidation of the Company; (2) a sale of all or substantially
all of the assets of the Company; (3) a merger in which the Company is not the
surviving corporation; or (4) other capital reorganization in which more than
fifty percent (50%) of the ownership of the Company entitled to vote is
transferred, any outstanding options hereunder immediately shall be fully
exercisable by an optionee.

                  (c)      Any adjustment made by the Managing Members or the
Committee under this paragraph 8 shall be conclusive and binding on all affected
persons.

         9.       Amendment. The Managing Members from time to time may amend
this Plan, but except as provided above with respect to dilutions or other
adjustments or mergers or exchanges, or with the approval of the Company's
members, may not (a) increase the aggregate number of interests available for
option hereunder, (b) change the price at which options may be granted, (c)
extend the maximum period during which an option may be exercised, or (d) change
the eligibility requirements for options hereunder. Rights and obligations under
any option granted before amendment of the Plan shall not be altered or impaired
by amendment of the Plan, except with the consent of the person to whom the
option was granted.

         10.      Fair Market Value of Points of Interest. Whenever pursuant to
the terms of the Plan the fair market value of the Company's Class B Points of
Interest is required to be determined

                                       4
<PAGE>   5

as of a particular date, such fair market value shall equal the fair value of
such Class B Points of Interest as determined by the Managing Members, in each
case, on the business day immediately preceding the date on which the
determination is made. Fair market value shall be determined in all cases
without regard to any restriction other than a restriction which, by its terms,
will never lapse.

         11.      No Rights as Members. A participant in the Plan shall have no
rights as a member with respect to any shares covered by his option until the
date of the issuance of the points of interest to him. No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date such Points of Interest are purchased.

         12.      Indemnification of Committee. In addition to such other rights
of indemnification as they may have as Managing Members or as members of the
Committee, the members of the Committee shall be indemnified by the Company
against the reasonable expenses, including attorneys' fees actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan or any option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such Committee member is liable for negligence or misconduct in
the performance of his duties; provided that within 60 days after institution of
any such action, suit or proceeding, the Committee member shall in writing offer
the Company the opportunity, at its own expense, to handle and defend the same.

         13.      Termination. This Plan shall terminate on October 2, 2006,
unless sooner terminated by action of the Managing Members. No option may be
granted hereunder after termination of the Plan, but such termination shall not
affect the validity of any option then outstanding.

Date Approved by Managing Members: October 2, 1996

                                       5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}]]