Document:

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                                                                 EXHIBIT 10.1(a)

                         FRIENDLY ICE CREAM CORPORATION

                             1997 STOCK OPTION PLAN

                      (as amended effective March 27, 2000)

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                                TABLE OF CONTENTS

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SECTION 1  .................................................................1
      GENERAL...............................................................1
           1.1.  Purpose....................................................1
           1.2.  Participation..............................................1

SECTION 2   ................................................................2
      OPTIONS ..............................................................2
           2.1.  Definition.................................................2
           2.2.  Eligibility................................................2
           2.3.  Price......................................................2
           2.4.  Exercise...................................................3
           2.5.  Post-Exercise Limitations..................................3
           2.6.  Expiration Date............................................3
           2.7.  Reload Provision...........................................4

SECTION 3  .................................................................5
      STOCK APPRECIATION RIGHTS.............................................5
           3.1.  Definition.................................................5
           3.2.  Eligibility................................................5
           3.3.  Exercise...................................................5
           3.4.  Settlement of Award........................................6
           3.5.  Post-Exercise Limitations..................................6
           3.6.  Expiration Date............................................6

SECTION 4  .................................................................6
      OPERATION OF THE PLAN.................................................6
           4.1.  Effective Date.............................................6
           4.2.  Shares Subject to Plan.....................................7
           4.3.  Individual Limits on Awards................................7
           4.4.  Adjustments to Shares......................................7
           4.5.  Limit on Distribution......................................8
           4.6.  Withholding................................................8
           4.7.  Transferability............................................8
           4.8.  Notices....................................................8
           4.9.  Form and Time of Elections.................................9
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SECTION 4
      OPERATION OF THE PLAN ................................................
           4.10. Agreement With Company.....................................9
           4.11. Limitation of Implied Rights...............................9
           4.12. Evidence...................................................9
           4.13. Action by Company or Related Company......................10
           4.14. Gender and Number.........................................10

SECTION 5  ................................................................10
      ADMINISTRATION.......................................................10

SECTION 6  ................................................................11
      CHANGE IN CONTROL....................................................11

SECTION 7  ................................................................12
      AMENDMENT AND TERMINATION............................................12
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                         FRIENDLY ICE CREAM CORPORATION
                             1997 STOCK OPTION PLAN

                      (as amended effective March 27, 2000)

SECTION 1

GENERAL

       1.1.   PURPOSE. The Friendly Ice Cream Corporation 1997 Stock Option Plan
              (the "Plan") has been established by Friendly Ice Cream
              Corporation (the "Company") to:

              (a)    attract and retain employees and other persons providing
                     services to the Company and the Related Companies (as
                     defined below);

              (b)    motivate Participants, by means of appropriate incentives,
                     to achieve long-range goals;

              (c)    provide incentive compensation opportunities that are
                     competitive with those of other major corporations; and

              (d)    further identify Participants' interests with those of the
                     Company's other stockholders through compensation that is
                     based on the Company's common stock;

              and thereby promote the long-term financial interest of the
              Company and the Related Companies, including the growth in value
              of the Company's equity and enhancement of long-term stockholder
              return. The term "Related Company" means any company during any
              period in which it is a "subsidiary corporation" (as that term is
              defined in section 424(f) of the Internal Revenue Code of 1986, as
              amended (the "Code")) with respect to the Company.

       1.2.   PARTICIPATION. Subject to the terms and conditions of the Plan,
              the Board (as described in Section 5)shall determine and
              designate, from time to time, from among the Eligible Individuals,
              those persons who will be granted one or more awards under
              Sections 2 or 3 of the Plan (an "Award"), and thereby become
              "Participants" in the Plan. For purposes of the Plan, the term
              "Eligible Individual" shall mean any employee of the Company or a
              Related Company who is classified as salary grade 107 or above,
              and any other person providing material services to the Company or
              a Related Company that is designated by the Board as eligible for
              participation in the Plan.

                                        1                                3/27/00
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SECTION 2

OPTIONS

       2.1.   DEFINITIONS. The grant of an "Option" under this Section 2
              entitles the Participant to purchase shares of common stock of the
              Company ("Stock") at a price fixed at the time the Option is
              granted, subject to the terms of this Section. Options granted
              under this Section may be either Incentive Stock Options or
              Non-Qualified Stock Options, as determined in the discretion of
              the Board. An "Incentive Stock Option" is an Option that is
              intended to satisfy the requirements applicable to an "incentive
              stock option" described in section 422 of the Code. A "Non-
              Qualified Stock Option" is an Option that is not intended to be an
              Incentive Stock Option.

       2.2.   ELIGIBILITY. The Board shall designate the Participants to whom
              Options are to be granted under this Section and shall determine
              the number of shares of Stock subject to each such Option. To the
              extent that the aggregate fair market value of Stock with respect
              to which Incentive Stock Options are exercisable for the first
              time by any individual during any calendar year (under all plans
              of the Company and all Related Companies) exceeds $100,000, such
              options shall be treated as Non-Qualified Stock Options, to the
              extent required by section 422 of the Code.

       2.3.   PRICE. The determination and payment of the purchase price of a
              share of Stock under each Option granted under this Section shall
              be subject to the following:

              (a)    The purchase price shall be established by the Board at the
                     time the Option is granted; provided, however, that in no
                     event shall such price be less than the greater of (i) the
                     Fair Market Value (defined below) or (ii) the par value of
                     a share of Stock on such date.

              (b)    Subject to the following provisions of this subsection, the
                     full purchase price of each share of Stock purchased upon
                     the exercise of any Option shall be paid at the time of
                     such exercise and, as soon as practicable thereafter, a
                     certificate representing the shares so purchased shall be
                     delivered to the person entitled thereto.

              (c)    The purchase price shall be payable in cash or in shares of
                     Stock (valued at Fair Market Value as of the day of
                     exercise) that have been held by the Participant at least
                     six months, or in any combination thereof, as determined by
                     the Board.

              (d)    A Participant may elect to pay the purchase price upon the
                     exercise of an Option through a cashless exercise
                     arrangement to the extent provided by the Board.

                                        2                                3/27/00
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              (e)    The "Fair Market Value" of a share of Stock of the Company
                     as of any date shall be the closing sales price per share
                     of the Stock on the NASDAQ or OTC for that date as reported
                     in the Wall Street Journal (or other reliable source of
                     financial information as determined by the Company) on the
                     next following business date, or, if there shall have been
                     no such sale so reported on that date, on the last
                     preceding date on which such a sale was so reported.

       2.4.   EXERCISE. Except as otherwise expressly provided in the Plan, an
              Option granted under this Section shall be exercisable in
              accordance with the following terms of this subsection:

              (a)    The terms and conditions relating to exercise of an Option
                     shall be established by the Board, and may include, without
                     limitation, conditions relating to completion of a
                     specified period of service, achievement of performance
                     standards prior to exercise of the Option or achievement of
                     Stock ownership objectives by the Participant. The Board,
                     in its sole discretion, may accelerate the vesting of any
                     Option under circumstances designated by it at the time the
                     Option is granted or thereafter.

              (b)    No Option may be exercised by a Participant after the
                     Expiration Date (as defined in subsection 2.6) applicable
                     to that Option.

              (c)    The exercise of an Option will result in the surrender of
                     the corresponding rights under a tandem Stock Appreciation
                     Right (as described in Section 3), if any.

       2.5.   POST-EXERCISE LIMITATIONS. The Board, in its discretion, may
              impose such restrictions on shares of Stock acquired pursuant to
              the exercise of an Option (including stock acquired pursuant to
              the exercise of a tandem Stock Appreciation Right) as it
              determines to be desirable, including, without limitation,
              restrictions relating to disposition of the shares and forfeiture
              restrictions based on service, performance, Stock ownership by the
              Participant and such other factors as the Board determines to be
              appropriate.

       2.6.   EXPIRATION DATE. Unless determined otherwise by the Board at the
              time an Option is granted, the "Expiration Date" with respect to
              an Option means the earliest to occur of:

              (a)    the ten-year anniversary of the date on which the Option is
                     granted;

              (b)    if the Participant's Date of Termination occurs by reason
                     of death or Disability, the one-year anniversary of such
                     Date of Termination;

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              (c)    if the Participant's Date of Termination occurs by reason
                     of Retirement, the three-year anniversary of such Date of
                     Termination; or

              (d)    if the Participant's Date of Termination occurs for reasons
                     other than Retirement, death or Disability, the three-month
                     anniversary of such Date of Termination, or such earlier
                     date as may be established by the Board.

              For purposes of the Plan, a Participant's "Date of Termination"
              shall be the date on which he both ceases to be an employee of the
              Company and the Related Companies and ceases to perform material
              services (including, but not limited to, consulting services or
              service as a member of the Board) for the Company and the Related
              Companies, regardless of the reason for the cessation; provided
              that a "Date of Termination" shall not be considered to have
              occurred during the period in which the reason for the cessation
              of services is a leave of absence approved by the Company or the
              Related Company which was the recipient of the Participant's
              services. Except as otherwise provided by the Board, a Participant
              shall be considered to have a "Disability" during the period in
              which he is unable, by reason of a medically determinable physical
              or mental impairment, to engage in any substantial gainful
              activity, which condition, in the opinion of a physician selected
              by the Board, is expected to have a duration of not less than 180
              days. "Retirement" of a Participant shall mean the occurrence of a
              Participant's Date of Termination after providing at least five
              years of service to the Company or the Related Companies and
              attaining age 55.

       2.7.   RELOAD PROVISION. In the event the Participant exercises an Option
              and pays all or a portion of the purchase price in Stock in the
              manner permitted by subsection 2.3, or satisfies withholding
              obligations in Stock if permitted under subsection 4.6, such
              Participant (either pursuant to the terms of the Option Award, or
              pursuant to the exercise of Board discretion at the time the
              Option is exercised) may be issued a new Option to purchase
              additional shares of Stock equal to the number of shares of Stock
              surrendered to the Company in such payment. Such new Option shall
              have an exercise price equal to the Fair Market Value per share on
              the date such new Option is granted, shall first be exercisable
              six months from the date of grant of the new Option and shall have
              an Expiration Date on the same date as the Expiration Date of the
              original Option so exercised by payment of the purchase price or
              withholding in shares of Stock.

                                        4                                3/27/00
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SECTION 3

STOCK APPRECIATION RIGHTS

       3.1.   DEFINITION. Subject to the terms of this Section, a "Stock
              Appreciation Right" granted under the Plan entitles the
              Participant to receive, in cash or Stock (as determined in
              accordance with subsection 3.4), value equal to all or a portion
              of the excess of: (a) the Fair Market Value of a specified number
              of shares of Stock at the time of exercise over (b) a specified
              price designated at the time the Stock Appreciation Right is
              granted which price shall not be less than the Fair Market Value
              of a share of Stock on such date or, if granted in tandem with an
              Option, the exercise price with respect to shares under the tandem
              Option.

       3.2.   ELIGIBILITY. Subject to the provisions of the Plan, the Board
              shall designate the Participants to whom Stock Appreciation Rights
              are to be granted under the Plan, shall determine the exercise
              price or a method by which the price shall be established with
              respect to each such Stock Appreciation Right and shall determine
              the number of shares of Stock on which each Stock Appreciation
              Right is based. A Stock Appreciation Right may be granted in
              connection with all or any portion of a previously or
              contemporaneously-granted Option or not in connection with an
              Option. If a Stock Appreciation Right is granted in connection
              with an Option then, in the discretion of the Board, the Stock
              Appreciation Right may, but need not, be granted in tandem with
              the Option.

       3.3.   EXERCISE. The exercise of Stock Appreciation Rights shall be
              subject to the following:

              (a)    If a Stock Appreciation Right is not in tandem with an
                     Option, then the Stock Appreciation Right shall be
                     exercisable in accordance with the terms established by the
                     Board in connection with such rights; and may include,
                     without limitation, conditions relating to completion of a
                     specified period of service, achievement of performance
                     standards prior to exercise of the Stock Appreciation
                     Rights or achievement of objectives relating to Stock
                     ownership by the Participant. The Board, in its sole
                     discretion, may accelerate the vesting of any Stock
                     Appreciation Right under circumstances designated by it at
                     the time the Stock Appreciation Right is granted or
                     thereafter. No Stock Appreciation Right subject to this
                     paragraph may be exercised by a Participant after the
                     Expiration Date (as defined in subsection 3.6) applicable
                     to that Stock Appreciation Right.

              (b)    If a Stock Appreciation Right is in tandem with an Option,
                     then the Stock Appreciation Right shall be exercisable at
                     the time the tandem Option is exercisable. The exercise of
                     a Stock Appreciation Right will result in the surrender of
                     the corresponding rights under the tandem Option.

                                        5                                3/27/00
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       3.4.   SETTLEMENT OF AWARD. Upon the exercise of a Stock Appreciation
              Right, the value to be distributed to the Participant, in
              accordance with subsection 3.1, shall be distributed in shares of
              Stock (valued at their Fair Market Value at the time of exercise),
              in cash or in a combination thereof, in the discretion of the
              Board.

       3.5.   POST-EXERCISE LIMITATIONS. The Board, in its discretion, may
              impose such restrictions on shares of Stock acquired pursuant to
              the exercise of a Stock Appreciation Right as it determines to be
              desirable, including, without limitation, restrictions relating to
              disposition of the shares and forfeiture restrictions based on
              service, performance, ownership of Stock by the Participant and
              such other factors as the Board determines to be appropriate.

       3.6.   EXPIRATION DATE. If a Stock Appreciation Right is in tandem with
              an Option, then the "Expiration Date" for the Stock Appreciation
              Right shall be the Expiration Date for the related Option. If a
              Stock Appreciation Right is not in tandem with an Option, then
              unless determined otherwise by the Board, the "Expiration Date"
              for the Stock Appreciation Right shall be the earliest to occur
              of:

              (a)    the ten-year anniversary of the date on which the Stock
                     Appreciation Right is granted;

              (b)    if the Participant's Date of Termination occurs by reason
                     of death or Disability, the one-year anniversary of such
                     Date of Termination; or

              (c)    if the Participant's Date of Termination occurs by reason
                     of Retirement, the three-year anniversary of such Date of
                     Termination; or

              (d)    if the Participant's Date of Termination occurs by reason
                     other than Retirement, death or Disability, the three-month
                     anniversary of such Date of Termination.

SECTION 4

OPERATION OF PLAN

       4.1.   EFFECTIVE DATE. The Plan shall be effective as of the date it is
              adopted by the Board; provided, however, that Awards granted under
              the Plan prior to its approval by stockholders will be contingent
              on approval of the Plan by the Company's stockholders. The Plan
              shall be unlimited in duration and, in the event of Plan
              termination, shall remain in effect as long as any shares of Stock
              awarded under it are outstanding and not fully vested; provided,
              however, that no new Awards shall be made under the Plan on or
              after the tenth anniversary of the date on which the Plan is
              adopted by the Board.

                                        6                                3/27/00
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       4.2.   SHARES SUBJECT TO PLAN. The shares of Stock with respect to which
              Awards may be made under the Plan shall be shares currently
              authorized but unissued or currently held or subsequently acquired
              by the Company as treasury shares, including shares purchased in
              the open market or in private transactions. Subject to the
              provisions of subsection 4.4, the number of shares of Stock which
              may be issued with respect to Awards under the Plan shall not
              exceed 839,970 shares in the aggregate, representing an increase
              of 439,970 shares effective March 27, 2000 which incremental
              shares may only be issued as NQSO's. Except as otherwise provided
              herein, any shares subject to an Award which for any reason
              expires or is terminated without issuance of shares (whether or
              not cash or other consideration is paid to a Participant in
              respect of such shares) shall again be available under the Plan.

       4.3.   INDIVIDUAL LIMITS ON AWARDS. Notwithstanding any other provision
              of the Plan to the contrary, no Participant shall receive any
              Award of an Option or Stock Appreciation Right under the Plan to
              the extent that the sum of:

              (a)    the number of shares of Stock subject to such Award;

              (b)    the number of shares of Stock subject to all other prior
                     Awards of Options and Stock Appreciation Rights under the
                     Plan during the one-year period ending on the date of the
                     Award; and

              (c)    the number of shares of Stock subject to all other prior
                     stock options and stock appreciation rights granted to the
                     Participant under other plans or arrangements of the
                     Company and Related Companies during the one-year period
                     ending on the date of the Award;

              would exceed the Participant's Individual Limit under the Plan.
              The determination made under the foregoing provisions of this
              subsection shall be based on the shares subject to the awards at
              the time of grant, regardless of when the awards become
              exercisable. Subject to the provisions of subsection 4.4, a
              Participant's "Individual Limit" shall be 100,000 shares.

       4.4.   ADJUSTMENTS TO SHARES. In the event of any merger, consolidation,
              reorganization, recapitalization, spinoff, stock dividend, stock
              split, reverse stock split, exchange or other distribution with
              respect to shares of Stock or other change in the corporate
              structure or capitalization affecting the Stock, the type and
              number of shares of stock which are or may be subject to awards
              under the Plan and the terms of any outstanding awards (including
              the price at which shares of stock may be issued pursuant to an
              outstanding award) shall be equitably adjusted by the Board, in
              its sole discretion, to preserve the value of benefits awarded or
              to be awarded to Participants under the Plan; provided, however,
              in the event of a merger or sale of substantially all of the
              assets of the Company, the Board, in its sole discretion, may
              substitute awards of equal value for awards under the Plan or

                                        7                                3/27/00
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              cancel outstanding awards, provided that the Participant receives
              an amount that the Board believes is reasonable payment therefor.

       4.5.   LIMIT ON DISTRIBUTION. Distribution of shares of Stock or other
              amounts under the Plan shall be subject to the following:

              (a)    Notwithstanding any other provision of the Plan, the
                     Company shall have no liability to deliver any shares of
                     Stock under the Plan or make any other distribution of
                     benefits under the Plan unless such delivery or
                     distribution would comply with all applicable laws and the
                     applicable requirements of any securities exchange or
                     similar entity.

              (b)    In the case of a Participant who is subject to Section
                     16(a) and 16(b) of the Securities Exchange Act of 1934, the
                     Board may, at any time, add such conditions and limitations
                     to any Award to such Participant, or any feature of any
                     such Award, as the Board, in its sole discretion, deems
                     necessary or desirable to comply with Section 16(a) or
                     16(b) and the rules and regulations thereunder or to obtain
                     any exemption therefrom.

              (c)    To the extent that the Plan provides for issuance of
                     certificates to reflect the transfer of shares of Stock,
                     the transfer of such shares may be effected on a
                     non-certificated basis, to the extent not prohibited by
                     applicable law or the rules of any stock exchange.

       4.6.   WITHHOLDING. All Awards under the Plan are subject to withholding
              of all applicable taxes, which withholding obligations may be
              satisfied, with the consent of the Board, through the surrender of
              shares of Stock which the Participant already owns or to which a
              Participant is otherwise entitled under the Plan.

       4.7.   TRANSFERABILITY. Awards under the Plan are not transferable except
              as designated by the Participant by will or by the laws of descent
              and distribution. To the extent that the Participant who receives
              an Award under the Plan has the right to exercise such Award, the
              Award may be exercised during the lifetime of the Participant only
              by the Participant. Notwithstanding the foregoing provisions of
              this subsection, the Board may permit Awards under the Plan to be
              transferred to or for the benefit of the Participant's family
              (including, without limitation, to a trust for the benefit of a
              Participant's family), subject to such limits as the Board may
              establish.

       4.8.   NOTICES. Any notice or document required to be filed with the
              Board under the Plan will be properly filed if delivered or mailed
              by registered mail, postage prepaid, to the Board, in care of the
              Company, at its principal executive offices. The Board may, by
              advance written notice to affected persons, revise such notice
              procedure from time to time. Any notice required under the Plan
              (other than a notice of election) may be waived by the person
              entitled to notice.

                                        8                                3/27/00
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       4.9.   FORM AND TIME OF ELECTIONS. Unless otherwise specified herein,
              each election required or permitted to be made by any Participant
              or other person entitled to benefits under the Plan, and any
              permitted modification or revocation thereof, shall be in writing
              filed with the Board at such times, in such form, and subject to
              such restrictions and limitations, not inconsistent with the terms
              of the Plan, as the Board shall require.

       4.10.  AGREEMENT WITH COMPANY. At the time of an Award to a Participant
              under the Plan, the Board may require a Participant to enter into
              an agreement with the Company (the "Agreement") in a form
              specified by the Board, agreeing to the terms and conditions of
              the Plan and to such additional terms and conditions, not
              inconsistent with the Plan, as the Board may, in its sole
              discretion, prescribe.

       4.11.  LIMITATION OF IMPLIED RIGHTS.

              (a)    Neither a Participant nor any other person shall, by reason
                     of the Plan, acquire any right in or title to any assets,
                     funds or property of the Company or any Related Company
                     whatsoever, including, without limitation, any specific
                     funds, assets, or other property which the Company or any
                     Related Company, in its sole discretion, may set aside in
                     anticipation of a liability under the Plan. A Participant
                     shall have only a contractual right to the amounts, if any,
                     payable under the Plan, unsecured by any assets of the
                     Company and any Related Company. Nothing contained in the
                     Plan shall constitute a guarantee by the Company or any
                     Related Company that the assets of such companies shall be
                     sufficient to pay any benefits to any person.

              (b)    The Plan does not constitute a contract of employment, and
                     selection as a Participant will not give any employee the
                     right to be retained in the employ of the Company or any
                     Related Company, nor any right or claim to any benefit
                     under the Plan, unless such right or claim has specifically
                     accrued under the terms of the Plan. Except as otherwise
                     provided in the Plan, no Award under the Plan shall confer
                     upon the holder thereof any right as a stockholder of the
                     Company prior to the date on which he fulfills all service
                     requirements and other conditions for receipt of such
                     rights and shares of Stock are registered in his name.

       4.12.  EVIDENCE. Evidence required of anyone under the Plan may be by
              certificate, affidavit, document or other information which the
              person acting on it considers pertinent and reliable, and signed,
              made or presented by the proper party or parties.

                                        9                                3/27/00
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       4.13.  ACTION BY COMPANY OR RELATED COMPANY. Any action required or
              permitted to be taken by the Company or any Related Company shall
              be by resolution of its board of directors, or by action of one or
              more members of the board (including a committee of the board) who
              are duly authorized to act for the board or (except to the extent
              prohibited by applicable law or the rules of any stock exchange)
              by a duly authorized officer of the company.

       4.14.  GENDER AND NUMBER. Where the context admits, words in any gender
              shall include any other gender, words in the singular shall
              include the plural and the plural shall include the singular.

SECTION 5

ADMINISTRATION

The authority to control and manage the operation and administration of the Plan
shall be vested in the Board of Directors of the Company (the "Board"), subject
to the following:

              (a)    Subject to the provisions of the Plan, the Board will have
                     the authority and discretion to select employees to receive
                     Awards, to determine the time or times of receipt, to
                     determine the types of Awards and the number of shares
                     covered by the Awards, to establish the terms, conditions,
                     performance criteria, restrictions, and other provisions of
                     such Awards, and to cancel or suspend Awards. In making
                     such Award determinations, the Board may take into account
                     the nature of services rendered by the respective employee,
                     his present and potential contribution to the Company's
                     success and such other factors as the Board deems relevant.

              (b)    The Board will have the authority and discretion to
                     interpret the Plan, to establish, amend and rescind any
                     rules and regulations relating to the Plan, to determine
                     the terms and provisions of any agreements made pursuant to
                     the Plan and to make all other determinations that may be
                     necessary or advisable for the administration of the Plan.

              (c)    Any interpretation of the Plan by the Board and any
                     decision made by it under the Plan is final and binding on
                     all persons.

              (d)    Except as otherwise expressly provided in the Plan, where
                     the Board is authorized to make a determination with
                     respect to any Award, such determination shall be made at
                     the time the Award is made, except that the Board may
                     reserve the authority to have such determination made by
                     the Board in the future (but only if such reservation is
                     made at the time the Award is granted and is expressly
                     stated in the Agreement reflecting the Award);

                                       10                                3/27/00
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provided, however, the Board, in its sole discretion, may delegate any or all of
its authority under the Plan to a committee of the Board and, to the extent so
delegated, references to the Board hereunder shall be deemed to refer such
committee. Except to the extent prohibited by applicable law or the rules of any
stock exchange, the Board or, if applicable, the committee of the Board, may
allocate all or any portion of its responsibilities and powers to any one or
more of its members and may delegate all or any part of its responsibilities and
powers to any person or persons selected by it. Any such allocation or
delegation may be revoked by the Board or committee, if applicable, at any time.

SECTION 6

CHANGE IN CONTROL

Except as otherwise provided in the agreement reflecting the applicable Award,
upon the occurrence of a Change in Control all outstanding Options and Stock
Appreciation Rights shall become immediately exercisable. For purposes of the
Plan, a "Change in Control" shall be deemed to occur on the earliest of the
existence of one of the following events:

              (a)    (i) any "person" (as such term is used in Sections 13(d) or
                     14(d) of the Exchange Act), other than one or more
                     Permitted Holders (as defined below), is or becomes the
                     beneficial owner (as defined in Rules 13d-3 and 13d-5 under
                     the Exchange Act), directly or indirectly, of more than 35%
                     of the total voting power of the Voting Stock (as defined
                     below) of the Company and (ii) the Permitted Holders
                     "beneficially own" (as defined in Rules 13d-3 and 13d-5
                     under the Exchange Act), directly or indirectly, in the
                     aggregate a lesser percentage of the voting power of the
                     Voting Stock of the Company than such other person and do
                     not have the right or ability by voting power, contract or
                     otherwise to elect or designate for election a majority of
                     the Board of Directors of the Company;

              (b)    individuals who, as of the date hereof, constitute the
                     Board (as of the date hereof the "Incumbent Board") cease
                     for any reason to constitute at least a majority of the
                     Board, provided that any individual becoming a director
                     subsequent to the date hereof whose election, or nomination
                     for election by the Company's shareholders, was approved by
                     a vote of at least a majority of the directors then
                     comprising the Incumbent Board shall be considered as
                     though such individual were a member of the Incumbent
                     Board, but excluding, for this purpose, any such individual
                     whose initial assumption of office is in connection with an
                     actual or threatened "election contest" relating to the
                     election of the directors of the Company (as such term is
                     used in Rule 14a-11 of Regulation 14A promulgated under the
                     Exchange Act); or

                                       11                                3/27/00
<Page>

              (c)    approval by the Company's shareholders of a reorganization,
                     merger or consolidation of the Company, in each case, with
                     respect to which all or substantially all of the
                     individuals and entities who were the respective beneficial
                     owners of the common stock and voting securities of the
                     Company immediately prior to such reorganization, merger or
                     consolidation do not, following such reorganization, merger
                     or consolidation, beneficially own, directly and
                     indirectly, more than 70% of, respectively, 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, as the case
                     may be, of the corporation resulting from such
                     reorganization, merger or consolidation, or of a complete
                     liquidation or dissolution of the Company or of the sale or
                     other disposition of all or substantially all of the assets
                     of the Company.

For purposes of this Section 6, the term "Permitted Holders" means
Donald N. Smith, The Equitable Life Assurance Society of the U.S., the Company's
then existing senior management and their respective affiliates. The term
"Voting Stock" of the Company means all classes of capital stock of the Company
then outstanding and normally entitled to vote in the election of directors.

SECTION 7

AMENDMENT AND TERMINATION

The Board may, at any time, amend or terminate the Plan, provided that, subject
to subsection 4.4 (relating to certain adjustments to shares), no amendment or
termination may materially adversely affect the rights of any Participant or
beneficiary under any Award made under the Plan prior to the date such amendment
is adopted by the Board.

                                       12                                3/27/00<Page>

                                                                 EXHIBIT 10.1(b)

                         FRIENDLY ICE CREAM CORPORATION

                             1997 STOCK OPTION PLAN

                     (as amended effective October 24, 2001)

<Page>

                                TABLE OF CONTENTS

<Table>
<S>                                                                       <C>
SECTION 1   ..............................................................1
      GENERAL.............................................................1
            1.1.  Purpose.................................................1
            1.2.  Participation...........................................1

SECTION 2   ..............................................................2
      OPTIONS.............................................................2
            2.1.  Definition..............................................2
            2.2.  Eligibility.............................................2
            2.3.  Price...................................................2
            2.4.  Exercise................................................3
            2.5.  Post-Exercise Limitations...............................3
            2.6.  Expiration Date.........................................3
            2.7.  Reload Provision........................................4

SECTION 3   ..............................................................5
      STOCK APPRECIATION RIGHTS...........................................5
            3.1.  Definition..............................................5
            3.2.  Eligibility.............................................5
            3.3.  Exercise................................................5
            3.4.  Settlement of Award.....................................6
            3.5.  Post-Exercise Limitations...............................6
            3.6.  Expiration Date.........................................6

SECTION 4   ..............................................................6
      OPERATION OF THE PLAN...............................................6
            4.1.  Effective Date..........................................6
            4.2.  Shares Subject to Plan..................................7
            4.3.  Individual Limits on Awards.............................7
            4.4.  Adjustments to Shares...................................7
            4.5.  Limit on Distribution...................................8
            4.6.  Withholding.............................................8
            4.7.  Transferability.........................................8
            4.8.  Notices.................................................8
            4.9.  Form and Time of Elections..............................9
</Table>

                                        i                               10/24/01
<Page>

<Table>
<S>                                                                      <C>
SECTION 4
      OPERATION OF THE PLAN ...............................................
            4.10. Agreement With Company..................................9
            4.11. Limitation of Implied Rights............................9
            4.12. Evidence................................................9
            4.13. Action by Company or Related Company...................10
            4.14. Gender and Number......................................10

SECTION 5   .............................................................10
      ADMINISTRATION.....................................................10

SECTION 6   .............................................................11
      CHANGE IN CONTROL..................................................11

SECTION 7   .............................................................12
      AMENDMENT AND TERMINATION..........................................12
</Table>

                                       ii                               10/24/01
<Page>

                         FRIENDLY ICE CREAM CORPORATION
                             1997 STOCK OPTION PLAN

                     (as amended effective October 24, 2001)

SECTION 1

GENERAL

       1.1.   PURPOSE. The Friendly Ice Cream Corporation 1997 Stock Option Plan
              (the "Plan") has been established by Friendly Ice Cream
              Corporation (the "Company") to:

              (a)    attract and retain employees and other persons providing
                     services to the Company and the Related Companies (as
                     defined below);

              (b)    motivate Participants, by means of appropriate incentives,
                     to achieve long-range goals;

              (c)    provide incentive compensation opportunities that are
                     competitive with those of other major corporations; and

              (d)    further identify Participants' interests with those of the
                     Company's other stockholders through compensation that is
                     based on the Company's common stock;

              and thereby promote the long-term financial interest of the
              Company and the Related Companies, including the growth in value
              of the Company's equity and enhancement of long-term stockholder
              return. The term "Related Company" means any company during any
              period in which it is a "subsidiary corporation" (as that term is
              defined in section 424(f) of the Internal Revenue Code of 1986, as
              amended (the "Code")) with respect to the Company.

       1.2.   PARTICIPATION. Subject to the terms and conditions of the Plan,
              the Board (as described in Section 5)shall determine and
              designate, from time to time, from among the Eligible Individuals,
              those persons who will be granted one or more awards under
              Sections 2 or 3 of the Plan (an "Award"), and thereby become
              "Participants" in the Plan. For purposes of the Plan, the term
              "Eligible Individual" shall mean any employee of the Company or a
              Related Company who is classified as salary grade 107 or above,
              and any other person providing material services to the Company or
              a Related Company that is designated by the Board as eligible for
              participation in the Plan.

                                        1                               10/24/01
<Page>

SECTION 2

OPTIONS

       2.1.   DEFINITIONS. The grant of an "Option" under this Section 2
              entitles the Participant to purchase shares of common stock of the
              Company ("Stock") at a price fixed at the time the Option is
              granted, subject to the terms of this Section. Options granted
              under this Section may be either Incentive Stock Options or
              Non-Qualified Stock Options, as determined in the discretion of
              the Board. An "Incentive Stock Option" is an Option that is
              intended to satisfy the requirements applicable to an "incentive
              stock option" described in section 422 of the Code. A "Non-
              Qualified Stock Option" is an Option that is not intended to be an
              Incentive Stock Option.

       2.2.   ELIGIBILITY. The Board shall designate the Participants to whom
              Options are to be granted under this Section and shall determine
              the number of shares of Stock subject to each such Option. To the
              extent that the aggregate fair market value of Stock with respect
              to which Incentive Stock Options are exercisable for the first
              time by any individual during any calendar year (under all plans
              of the Company and all Related Companies) exceeds $100,000, such
              options shall be treated as Non-Qualified Stock Options, to the
              extent required by section 422 of the Code.

       2.3.   PRICE. The determination and payment of the purchase price of a
              share of Stock under each Option granted under this Section shall
              be subject to the following:

              (a)    The purchase price shall be established by the Board at the
                     time the Option is granted; provided, however, that in no
                     event shall such price be less than the greater of (i) the
                     Fair Market Value (defined below) or (ii) the par value of
                     a share of Stock on such date.

              (b)    Subject to the following provisions of this subsection, the
                     full purchase price of each share of Stock purchased upon
                     the exercise of any Option shall be paid at the time of
                     such exercise and, as soon as practicable thereafter, a
                     certificate representing the shares so purchased shall be
                     delivered to the person entitled thereto.

              (c)    The purchase price shall be payable in cash or in shares of
                     Stock (valued at Fair Market Value as of the day of
                     exercise) that have been held by the Participant at least
                     six months, or in any combination thereof, as determined by
                     the Board.

              (d)    A Participant may elect to pay the purchase price upon the
                     exercise of an Option through a cashless exercise
                     arrangement to the extent provided by the Board.

                                        2                               10/24/01
<Page>

              (e)    The "Fair Market Value" of a share of Stock of the Company
                     as of any date shall be the closing sales price per share
                     of the Stock on the NASDAQ or OTC for that date as reported
                     in the Wall Street Journal (or other reliable source of
                     financial information as determined by the Company) on the
                     next following business date, or, if there shall have been
                     no such sale so reported on that date, on the last
                     preceding date on which such a sale was so reported.

       2.4.   EXERCISE. Except as otherwise expressly provided in the Plan, an
              Option granted under this Section shall be exercisable in
              accordance with the following terms of this subsection:

              (a)    The terms and conditions relating to exercise of an Option
                     shall be established by the Board, and may include, without
                     limitation, conditions relating to completion of a
                     specified period of service, achievement of performance
                     standards prior to exercise of the Option or achievement of
                     Stock ownership objectives by the Participant. The Board,
                     in its sole discretion, may accelerate the vesting of any
                     Option under circumstances designated by it at the time the
                     Option is granted or thereafter.

              (b)    No Option may be exercised by a Participant after the
                     Expiration Date (as defined in subsection 2.6) applicable
                     to that Option.

              (c)    The exercise of an Option will result in the surrender of
                     the corresponding rights under a tandem Stock Appreciation
                     Right (as described in Section 3), if any.

       2.5.   POST-EXERCISE LIMITATIONS. The Board, in its discretion, may
              impose such restrictions on shares of Stock acquired pursuant to
              the exercise of an Option (including stock acquired pursuant to
              the exercise of a tandem Stock Appreciation Right) as it
              determines to be desirable, including, without limitation,
              restrictions relating to disposition of the shares and forfeiture
              restrictions based on service, performance, Stock ownership by the
              Participant and such other factors as the Board determines to be
              appropriate.

       2.6.   EXPIRATION DATE. Unless determined otherwise by the Board at the
              time an Option is granted, the "Expiration Date" with respect to
              an Option means the earliest to occur of:

              (a)    the ten-year anniversary of the date on which the Option is
                     granted;

              (b)    if the Participant's Date of Termination occurs by reason
                     of death or Disability, the one-year anniversary of such
                     Date of Termination;

                                        3                               10/24/01
<Page>

              (c)    if the Participant's Date of Termination occurs by reason
                     of Retirement, the three-year anniversary of such Date of
                     Termination; or

              (d)    if the Participant's Date of Termination occurs for reasons
                     other than Retirement, death or Disability, the three-month
                     anniversary of such Date of Termination, or such earlier
                     date as may be established by the Board.

              For purposes of the Plan, a Participant's "Date of Termination"
              shall be the date on which he both ceases to be an employee of the
              Company and the Related Companies and ceases to perform material
              services (including, but not limited to, consulting services or
              service as a member of the Board) for the Company and the Related
              Companies, regardless of the reason for the cessation; provided
              that a "Date of Termination" shall not be considered to have
              occurred during the period in which the reason for the cessation
              of services is a leave of absence approved by the Company or the
              Related Company which was the recipient of the Participant's
              services. Except as otherwise provided by the Board, a Participant
              shall be considered to have a "Disability" during the period in
              which he is unable, by reason of a medically determinable physical
              or mental impairment, to engage in any substantial gainful
              activity, which condition, in the opinion of a physician selected
              by the Board, is expected to have a duration of not less than 180
              days. "Retirement" of a Participant shall mean the occurrence of a
              Participant's Date of Termination after providing at least five
              years of service to the Company or the Related Companies and
              attaining age 55.

       2.7.   RELOAD PROVISION. In the event the Participant exercises an Option
              and pays all or a portion of the purchase price in Stock in the
              manner permitted by subsection 2.3, or satisfies withholding
              obligations in Stock if permitted under subsection 4.6, such
              Participant (either pursuant to the terms of the Option Award, or
              pursuant to the exercise of Board discretion at the time the
              Option is exercised) may be issued a new Option to purchase
              additional shares of Stock equal to the number of shares of Stock
              surrendered to the Company in such payment. Such new Option shall
              have an exercise price equal to the Fair Market Value per share on
              the date such new Option is granted, shall first be exercisable
              six months from the date of grant of the new Option and shall have
              an Expiration Date on the same date as the Expiration Date of the
              original Option so exercised by payment of the purchase price or
              withholding in shares of Stock.

                                        4                               10/24/01
<Page>

SECTION 3

STOCK APPRECIATION RIGHTS

       3.1.   DEFINITION. Subject to the terms of this Section, a "Stock
              Appreciation Right" granted under the Plan entitles the
              Participant to receive, in cash or Stock (as determined in
              accordance with subsection 3.4), value equal to all or a portion
              of the excess of: (a) the Fair Market Value of a specified number
              of shares of Stock at the time of exercise over (b) a specified
              price designated at the time the Stock Appreciation Right is
              granted which price shall not be less than the Fair Market Value
              of a share of Stock on such date or, if granted in tandem with an
              Option, the exercise price with respect to shares under the tandem
              Option.

       3.2.   ELIGIBILITY. Subject to the provisions of the Plan, the Board
              shall designate the Participants to whom Stock Appreciation Rights
              are to be granted under the Plan, shall determine the exercise
              price or a method by which the price shall be established with
              respect to each such Stock Appreciation Right and shall determine
              the number of shares of Stock on which each Stock Appreciation
              Right is based. A Stock Appreciation Right may be granted in
              connection with all or any portion of a previously or
              contemporaneously-granted Option or not in connection with an
              Option. If a Stock Appreciation Right is granted in connection
              with an Option then, in the discretion of the Board, the Stock
              Appreciation Right may, but need not, be granted in tandem with
              the Option.

       3.3.   EXERCISE. The exercise of Stock Appreciation Rights shall be
              subject to the following:

              (a)    If a Stock Appreciation Right is not in tandem with an
                     Option, then the Stock Appreciation Right shall be
                     exercisable in accordance with the terms established by the
                     Board in connection with such rights; and may include,
                     without limitation, conditions relating to completion of a
                     specified period of service, achievement of performance
                     standards prior to exercise of the Stock Appreciation
                     Rights or achievement of objectives relating to Stock
                     ownership by the Participant. The Board, in its sole
                     discretion, may accelerate the vesting of any Stock
                     Appreciation Right under circumstances designated by it at
                     the time the Stock Appreciation Right is granted or
                     thereafter. No Stock Appreciation Right subject to this
                     paragraph may be exercised by a Participant after the
                     Expiration Date (as defined in subsection 3.6) applicable
                     to that Stock Appreciation Right.

              (b)    If a Stock Appreciation Right is in tandem with an Option,
                     then the Stock Appreciation Right shall be exercisable at
                     the time the tandem Option is exercisable. The exercise of
                     a Stock Appreciation Right will result in the surrender of
                     the corresponding rights under the tandem Option.

                                        5                               10/24/01
<Page>

       3.4.   SETTLEMENT OF AWARD. Upon the exercise of a Stock Appreciation
              Right, the value to be distributed to the Participant, in
              accordance with subsection 3.1, shall be distributed in shares of
              Stock (valued at their Fair Market Value at the time of exercise),
              in cash or in a combination thereof, in the discretion of the
              Board.

       3.5.   POST-EXERCISE LIMITATIONS. The Board, in its discretion, may
              impose such restrictions on shares of Stock acquired pursuant to
              the exercise of a Stock Appreciation Right as it determines to be
              desirable, including, without limitation, restrictions relating to
              disposition of the shares and forfeiture restrictions based on
              service, performance, ownership of Stock by the Participant and
              such other factors as the Board determines to be appropriate.

       3.6.   EXPIRATION DATE. If a Stock Appreciation Right is in tandem with
              an Option, then the "Expiration Date" for the Stock Appreciation
              Right shall be the Expiration Date for the related Option. If a
              Stock Appreciation Right is not in tandem with an Option, then
              unless determined otherwise by the Board, the "Expiration Date"
              for the Stock Appreciation Right shall be the earliest to occur
              of:

              (a)    the ten-year anniversary of the date on which the Stock
                     Appreciation Right is granted;

              (b)    if the Participant's Date of Termination occurs by reason
                     of death or Disability, the one-year anniversary of such
                     Date of Termination; or

              (c)    if the Participant's Date of Termination occurs by reason
                     of Retirement, the three-year anniversary of such Date of
                     Termination; or

              (d)    if the Participant's Date of Termination occurs by reason
                     other than Retirement, death or Disability, the three-month
                     anniversary of such Date of Termination.

SECTION 4

OPERATION OF PLAN

       4.1.   EFFECTIVE DATE. The Plan shall be effective as of the date it is
              adopted by the Board; provided, however, that Awards granted under
              the Plan prior to its approval by stockholders will be contingent
              on approval of the Plan by the Company's stockholders. The Plan
              shall be unlimited in duration and, in the event of Plan
              termination, shall remain in effect as long as any shares of Stock
              awarded under it are outstanding and not fully vested; provided,
              however, that no new Awards shall be made under the Plan on or
              after the tenth anniversary of the date on which the Plan is
              adopted by the Board.

                                        6                               10/24/01
<Page>

       4.2.   SHARES SUBJECT TO PLAN. The shares of Stock with respect to which
              Awards may be made under the Plan shall be shares currently
              authorized but unissued or currently held or subsequently acquired
              by the Company as treasury shares, including shares purchased in
              the open market or in private transactions. Subject to the
              provisions of subsection 4.4, the number of shares of Stock which
              may be issued with respect to Awards under the Plan shall not
              exceed 1,034,970 shares in the aggregate, representing an increase
              of 439,970 shares effective March 27, 2000 and an additional
              increase of 200,000 shares effective October 24, 2001 which
              incremental shares may only be issued as NQSO's. Except as
              otherwise provided herein, any shares subject to an Award which
              for any reason expires or is terminated without issuance of shares
              (whether or not cash or other consideration is paid to a
              Participant in respect of such shares) shall again be available
              under the Plan.

       4.3.   INDIVIDUAL LIMITS ON AWARDS. Notwithstanding any other provision
              of the Plan to the contrary, no Participant shall receive any
              Award of an Option or Stock Appreciation Right under the Plan to
              the extent that the sum of:

              (a)    the number of shares of Stock subject to such Award;

              (b)    the number of shares of Stock subject to all other prior
                     Awards of Options and Stock Appreciation Rights under the
                     Plan during the one-year period ending on the date of the
                     Award; and

              (c)    the number of shares of Stock subject to all other prior
                     stock options and stock appreciation rights granted to the
                     Participant under other plans or arrangements of the
                     Company and Related Companies during the one-year period
                     ending on the date of the Award;

              would exceed the Participant's Individual Limit under the Plan.
              The determination made under the foregoing provisions of this
              subsection shall be based on the shares subject to the awards at
              the time of grant, regardless of when the awards become
              exercisable. Subject to the provisions of subsection 4.4, a
              Participant's "Individual Limit" shall be 100,000 shares.

       4.4.   ADJUSTMENTS TO SHARES. In the event of any merger, consolidation,
              reorganization, recapitalization, spinoff, stock dividend, stock
              split, reverse stock split, exchange or other distribution with
              respect to shares of Stock or other change in the corporate
              structure or capitalization affecting the Stock, the type and
              number of shares of stock which are or may be subject to awards
              under the Plan and the terms of any outstanding awards (including
              the price at which shares of stock may be issued pursuant to an
              outstanding award) shall be equitably adjusted by the Board, in
              its sole discretion, to preserve the value of benefits awarded or
              to be awarded to Participants under the Plan; provided, however,
              in the event of a merger or sale of substantially all of the
              assets of the Company, the Board, in its

                                        7                               10/24/01
<Page>

              sole discretion, may substitute awards of equal value for awards
              under the Plan or cancel outstanding awards, provided that the
              Participant receives an amount that the Board believes is
              reasonable payment therefor.

       4.5.   LIMIT ON DISTRIBUTION. Distribution of shares of Stock or other
              amounts under the Plan shall be subject to the following:

              (a)    Notwithstanding any other provision of the Plan, the
                     Company shall have no liability to deliver any shares of
                     Stock under the Plan or make any other distribution of
                     benefits under the Plan unless such delivery or
                     distribution would comply with all applicable laws and the
                     applicable requirements of any securities exchange or
                     similar entity.

              (b)    In the case of a Participant who is subject to Section
                     16(a) and 16(b) of the Securities Exchange Act of 1934, the
                     Board may, at any time, add such conditions and limitations
                     to any Award to such Participant, or any feature of any
                     such Award, as the Board, in its sole discretion, deems
                     necessary or desirable to comply with Section 16(a) or
                     16(b) and the rules and regulations thereunder or to obtain
                     any exemption therefrom.

              (c)    To the extent that the Plan provides for issuance of
                     certificates to reflect the transfer of shares of Stock,
                     the transfer of such shares may be effected on a
                     non-certificated basis, to the extent not prohibited by
                     applicable law or the rules of any stock exchange.

       4.6.   WITHHOLDING. All Awards under the Plan are subject to withholding
              of all applicable taxes, which withholding obligations may be
              satisfied, with the consent of the Board, through the surrender of
              shares of Stock which the Participant already owns or to which a
              Participant is otherwise entitled under the Plan.

       4.7.   TRANSFERABILITY. Awards under the Plan are not transferable except
              as designated by the Participant by will or by the laws of descent
              and distribution. To the extent that the Participant who receives
              an Award under the Plan has the right to exercise such Award, the
              Award may be exercised during the lifetime of the Participant only
              by the Participant. Notwithstanding the foregoing provisions of
              this subsection, the Board may permit Awards under the Plan to be
              transferred to or for the benefit of the Participant's family
              (including, without limitation, to a trust for the benefit of a
              Participant's family), subject to such limits as the Board may
              establish.

       4.8.   NOTICES. Any notice or document required to be filed with the
              Board under the Plan will be properly filed if delivered or mailed
              by registered mail, postage prepaid, to the Board, in care of the
              Company, at its principal executive offices. The Board may, by
              advance written notice to affected persons, revise such notice
              procedure from time to time. Any notice required under the Plan
              (other than a

                                        8                               10/24/01
<Page>

              notice of election) may be waived by the person entitled to
              notice.

       4.9.   FORM AND TIME OF ELECTIONS. Unless otherwise specified herein,
              each election required or permitted to be made by any Participant
              or other person entitled to benefits under the Plan, and any
              permitted modification or revocation thereof, shall be in writing
              filed with the Board at such times, in such form, and subject to
              such restrictions and limitations, not inconsistent with the terms
              of the Plan, as the Board shall require.

       4.10.  AGREEMENT WITH COMPANY. At the time of an Award to a Participant
              under the Plan, the Board may require a Participant to enter into
              an agreement with the Company (the "Agreement") in a form
              specified by the Board, agreeing to the terms and conditions of
              the Plan and to such additional terms and conditions, not
              inconsistent with the Plan, as the Board may, in its sole
              discretion, prescribe.

       4.11.  LIMITATION OF IMPLIED RIGHTS.

              (a)    Neither a Participant nor any other person shall, by reason
                     of the Plan, acquire any right in or title to any assets,
                     funds or property of the Company or any Related Company
                     whatsoever, including, without limitation, any specific
                     funds, assets, or other property which the Company or any
                     Related Company, in its sole discretion, may set aside in
                     anticipation of a liability under the Plan. A Participant
                     shall have only a contractual right to the amounts, if any,
                     payable under the Plan, unsecured by any assets of the
                     Company and any Related Company. Nothing contained in the
                     Plan shall constitute a guarantee by the Company or any
                     Related Company that the assets of such companies shall be
                     sufficient to pay any benefits to any person.

              (b)    The Plan does not constitute a contract of employment, and
                     selection as a Participant will not give any employee the
                     right to be retained in the employ of the Company or any
                     Related Company, nor any right or claim to any benefit
                     under the Plan, unless such right or claim has specifically
                     accrued under the terms of the Plan. Except as otherwise
                     provided in the Plan, no Award under the Plan shall confer
                     upon the holder thereof any right as a stockholder of the
                     Company prior to the date on which he fulfills all service
                     requirements and other conditions for receipt of such
                     rights and shares of Stock are registered in his name.

       4.12.  EVIDENCE. Evidence required of anyone under the Plan may be by
              certificate, affidavit, document or other information which the
              person acting on it considers pertinent and reliable, and signed,
              made or presented by the proper party or parties.

                                        9                               10/24/01
<Page>

       4.13.  ACTION BY COMPANY OR RELATED COMPANY. Any action required or
              permitted to be taken by the Company or any Related Company shall
              be by resolution of its board of directors, or by action of one or
              more members of the board (including a committee of the board) who
              are duly authorized to act for the board or (except to the extent
              prohibited by applicable law or the rules of any stock exchange)
              by a duly authorized officer of the company.

       4.14.  GENDER AND NUMBER. Where the context admits, words in any gender
              shall include any other gender, words in the singular shall
              include the plural and the plural shall include the singular.

SECTION 5

ADMINISTRATION

The authority to control and manage the operation and administration of the Plan
shall be vested in the Board of Directors of the Company (the "Board"), subject
to the following:

              (a)    Subject to the provisions of the Plan, the Board will have
                     the authority and discretion to select employees to receive
                     Awards, to determine the time or times of receipt, to
                     determine the types of Awards and the number of shares
                     covered by the Awards, to establish the terms, conditions,
                     performance criteria, restrictions, and other provisions of
                     such Awards, and to cancel or suspend Awards. In making
                     such Award determinations, the Board may take into account
                     the nature of services rendered by the respective employee,
                     his present and potential contribution to the Company's
                     success and such other factors as the Board deems relevant.

              (b)    The Board will have the authority and discretion to
                     interpret the Plan, to establish, amend and rescind any
                     rules and regulations relating to the Plan, to determine
                     the terms and provisions of any agreements made pursuant to
                     the Plan and to make all other determinations that may be
                     necessary or advisable for the administration of the Plan.

              (c)    Any interpretation of the Plan by the Board and any
                     decision made by it under the Plan is final and binding on
                     all persons.

              (d)    Except as otherwise expressly provided in the Plan, where
                     the Board is authorized to make a determination with
                     respect to any Award, such determination shall be made at
                     the time the Award is made, except that the Board may
                     reserve the authority to have such determination made by
                     the Board in the future (but only if such reservation is
                     made at the time the Award is granted and is expressly
                     stated in the Agreement reflecting the

                                       10                               10/24/01
<Page>

                     Award);

provided, however, the Board, in its sole discretion, may delegate any or all of
its authority under the Plan to a committee of the Board and, to the extent so
delegated, references to the Board hereunder shall be deemed to refer such
committee. Except to the extent prohibited by applicable law or the rules of any
stock exchange, the Board or, if applicable, the committee of the Board, may
allocate all or any portion of its responsibilities and powers to any one or
more of its members and may delegate all or any part of its responsibilities and
powers to any person or persons selected by it. Any such allocation or
delegation may be revoked by the Board or committee, if applicable, at any time.

SECTION 6

CHANGE IN CONTROL

Except as otherwise provided in the agreement reflecting the applicable Award,
upon the occurrence of a Change in Control all outstanding Options and Stock
Appreciation Rights shall become immediately exercisable. For purposes of the
Plan, a "Change in Control" shall be deemed to occur on the earliest of the
existence of one of the following events:

              (a)    (i) any "person" (as such term is used in Sections 13(d) or
                     14(d) of the Exchange Act), other than one or more
                     Permitted Holders (as defined below), is or becomes the
                     beneficial owner (as defined in Rules 13d-3 and 13d-5 under
                     the Exchange Act), directly or indirectly, of more than 35%
                     of the total voting power of the Voting Stock (as defined
                     below) of the Company and (ii) the Permitted Holders
                     "beneficially own" (as defined in Rules 13d-3 and 13d-5
                     under the Exchange Act), directly or indirectly, in the
                     aggregate a lesser percentage of the voting power of the
                     Voting Stock of the Company than such other person and do
                     not have the right or ability by voting power, contract or
                     otherwise to elect or designate for election a majority of
                     the Board of Directors of the Company;

              (b)    individuals who, as of the date hereof, constitute the
                     Board (as of the date hereof the "Incumbent Board") cease
                     for any reason to constitute at least a majority of the
                     Board, provided that any individual becoming a director
                     subsequent to the date hereof whose election, or nomination
                     for election by the Company's shareholders, was approved by
                     a vote of at least a majority of the directors then
                     comprising the Incumbent Board shall be considered as
                     though such individual were a member of the Incumbent
                     Board, but excluding, for this purpose, any such individual
                     whose initial assumption of office is in connection with an
                     actual or threatened "election contest" relating to the
                     election of the directors of the Company (as such term is
                     used in Rule 14a-11 of Regulation 14A promulgated under the
                     Exchange Act); or

                                       11                               10/24/01
<Page>

              (c)    approval by the Company's shareholders of a reorganization,
                     merger or consolidation of the Company, in each case, with
                     respect to which all or substantially all of the
                     individuals and entities who were the respective beneficial
                     owners of the common stock and voting securities of the
                     Company immediately prior to such reorganization, merger or
                     consolidation do not, following such reorganization, merger
                     or consolidation, beneficially own, directly and
                     indirectly, more than 70% of, respectively, 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, as the case
                     may be, of the corporation resulting from such
                     reorganization, merger or consolidation, or of a complete
                     liquidation or dissolution of the Company or of the sale or
                     other disposition of all or substantially all of the assets
                     of the Company.

For purposes of this Section 6, the term "Permitted Holders" means Donald N.
Smith, The Equitable Life Assurance Society of the U.S., the Company's then
existing senior management and their respective affiliates. The term "Voting
Stock" of the Company means all classes of capital stock of the Company then
outstanding and normally entitled to vote in the election of directors.

SECTION 7

AMENDMENT AND TERMINATION

The Board may, at any time, amend or terminate the Plan, provided that, subject
to subsection 4.4 (relating to certain adjustments to shares), no amendment or
termination may materially adversely affect the rights of any Participant or
beneficiary under any Award made under the Plan prior to the date such amendment
is adopted by the Board.

                                       12                               10/24/01

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