Document:

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                                                                    EXHIBIT 10.2

                         SYBRON DENTAL SPECIALTIES, INC.

                    2000 OUTSIDE DIRECTORS' STOCK OPTION PLAN

I.       INTRODUCTION

         1.01 PURPOSE. This plan shall be known as the Sybron Dental
Specialties, Inc. 2000 Outside Directors' Stock Option Plan (the "Plan"). The
purpose of the Plan is to provide an incentive for Outside Directors of Sybron
Dental Specialties, Inc. to improve corporate performance on a long-term basis.
It is intended that the Plan and its operation comply with the provisions of
Rule 16b-3 under the Securities Exchange Act of 1934 (or any successor rule). If
any provision of the Plan or any grant hereunder would disqualify the Plan or
such grant under, or would not comply with, Rule 16b-3 (or any successor rule),
such provision or grant shall be construed or deemed amended to conform to Rule
16b-3.

         1.02 EFFECTIVE DATE. The Plan shall be effective as of _______________,
2000.

II.      PLAN DEFINITIONS

         2.01 DEFINITIONS. For Plan purposes, except where the context clearly
indicates otherwise, the following terms shall have the meanings set forth
below:

                  (a) "Board" shall mean the Board of Directors of the Company.

                  (b) "Committee" shall have the meaning ascribed to such term
         in Section 4.01 hereof.

                  (c) "Company" shall mean Sybron Dental Specialties, Inc., a
         Delaware corporation, or any successor thereto as provided in Section
         6.07 hereof.

                  (d) "Company Stock" shall mean the Company's Common Stock, par
         value $.01 per share, and such other stock and securities as may be
         substituted therefor pursuant to Section 3.02 hereof.

                  (e) "Director" shall mean any individual who is a member of
         the Board.

                  (f) "Fair Market Value" means the average of the highest and
         lowest quoted selling prices for the Company Stock on the relevant
         date, or (if there were no sales on such date) the average of the means
         between the highest and lowest quoted selling prices on the nearest day
         before and the nearest day after the relevant date, as reported in The
         Wall Street Journal or a similar publication selected by the Committee.
<PAGE>   2
                  (g) "Grantee" shall mean any person who has been granted an
         option under the Plan.

                  (h) "Outside Director" shall mean a Director who is not also
         an active full-time employee of the Company or a corporation in which
         the Company owns, directly or indirectly, a voting stock interest of
         more than fifty percent (50%).

III.     SHARES SUBJECT TO OPTION

         3.01 AVAILABLE SHARES. The total number of shares of Company Stock that
may be issued under the Plan shall not exceed Two Hundred Fifty Thousand
(250,000) shares. Shares subject to and not issued under an option which
expires, terminates, or is canceled for any reason under the Plan shall again
become available for granting of options.

         3.02 CHANGES IN COMMON STOCK. If any stock dividend is declared upon
the Company Stock, or if there is any stock split, stock distribution, or other
recapitalization of the Company with respect to the Company Stock, resulting in
a split or combination or exchange of shares, the aggregate number and kind of
shares which may thereafter be granted under the Plan shall be proportionately
and appropriately adjusted and the number and kind of shares then subject to
options under the Plan and the per share option price therefor shall be
proportionately and appropriately adjusted, without any change in the aggregate
purchase prices to be paid therefor.

IV.      ADMINISTRATION

         4.01 ADMINISTRATION BY THE COMMITTEE. The Plan shall be administered by
the Compensation Committee (the "Committee") of the Board (or any successor
committee) which shall have the power, subject to and within the limits of the
express provisions of the Plan, to exercise such powers and to perform such acts
as are deemed necessary or expedient to promote the best interests of the
Company with respect to the Plan.

V.       STOCK OPTIONS

         5.01 OPTION AGREEMENTS. Each option granted under the Plan shall be
evidenced by a stock option agreement between the Company and the Grantee which
shall contain the terms and conditions required by this Article V, and such
other terms and conditions, not inconsistent herewith, as the Committee may deem
appropriate in each case. The holder of an option shall not have any rights as a
shareholder with respect to the shares covered by an option until such shares
have been delivered to him or her.

                                        2
<PAGE>   3
         5.02 OPTION GRANT SIZE AND GRANT DATE.

                  (a) AUTOMATIC GRANTS. Upon the first meeting of the Board
         following the Company's 2001, 2002, 2003, 2004 and 2005 annual meetings
         of shareholders, each person then serving the Company as an Outside
         Director shall automatically be granted a nonqualified stock option to
         purchase Ten Thousand (10,000) shares, subject to adjustment under
         Section 3.02 hereof.

                  (b) SPECIAL RULE. If at any time there are not sufficient
         available shares under the Plan to grant each Outside Director an
         option to purchase the number of shares provided above, each Outside
         Director shall receive an option to purchase an equal number of the
         remaining available shares, determined by dividing the remaining
         available shares by the number of Outside Directors.

         5.03 EXERCISE PRICE. The price at which each share of Company Stock
covered by an option may be purchased shall be one hundred percent (100%) of the
Fair Market Value of the Company Stock on the date the option is granted.

         5.04 PERIOD FOR EXERCISE OF OPTIONS. Each stock option granted under
this Plan shall be exercisable immediately upon grant. All rights to exercise an
option shall terminate upon the earlier of (a) ten (10) years from the date the
option is granted, or (b) two (2) years from the date the Grantee ceases to be a
Director.

         5.05 METHOD OF EXERCISE. Subject to Section 5.04, each option may be
exercised in whole or in part from time to time as specified in the stock option
agreement. Each Grantee may exercise an option by giving written notice of the
exercise to the Company, specifying the number of shares to be purchased,
accompanied by payment in full of the exercise price therefor. The exercise
price may be paid in cash, by check, or by delivering shares of Company Stock
which have been beneficially owned by the Grantee, the Grantee's spouse, or both
of them for a period of at least six months prior to the time of exercise
("Delivered Stock") or a combination of cash and Delivered Stock. Delivered
Stock shall be valued at its Fair Market Value determined as of the date of
exercise of the option. No Grantee shall be under any obligation to exercise any
option hereunder.

VI.      GENERAL

         6.01 NONTRANSFERABILITY. No option granted under the Plan shall be
transferable or assignable except by last will and testament or the laws of
descent and distribution; provided, however, that the Committee may, in its
discretion, grant stock options that are transferable to family members of the
Grantee or to trusts or partnerships for such family members. The Committee may
also amend outstanding stock options to provide for such transferability. In the
event of the Grantee's death, the Grantee's beneficiary designated pursuant to
Section 6.08

                                        3
<PAGE>   4
hereof or, in the absence of any such designation, the personal representative
of the Grantee's estate or the person or persons to whom the option is
transferred by will or the laws of descent and distribution may exercise the
option in accordance with its terms.

         6.02 GENERAL RESTRICTION. Each option shall be subject to the
requirement that if at any time the Board shall determine, in its discretion,
that the listing, registration, or qualification of securities upon any
securities exchange or under any state or federal law, or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such option or the issue or
purchase of securities thereunder, such option may not 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.

         6.03 EXPIRATION AND TERMINATION OF THE PLAN. Options may be granted
under the Plan at any time and from time to time, prior to September 30, 2005,
the date on which the Plan will expire, except as to options then outstanding
under the Plan, which shall remain in effect until they have been exercised or
have expired. The Plan may be abandoned or terminated at any time by the Board
except with respect to any options then outstanding under the Plan.

         6.04 AMENDMENT, MODIFICATION AND TERMINATION. With approval of the
Board, at any time and from time to time, the Committee may terminate, amend, or
modify the Plan. However, no such amendment, modification, or termination of the
Plan may be made without the approval of the shareholders of the Company, if
such approval is required by the Internal Revenue Code of 1986, as amended, by
the insider trading rules of Section 16 of the Securities Exchange Act of 1934,
by any national securities exchange or system on which the Company Stock is then
listed or reported, or by a regulatory body having jurisdiction with respect
thereto. No termination, amendment, or modification of the Plan shall in any
material manner adversely affect any option previously granted under the Plan,
without the written consent of the Grantee holding such option.

         6.05 WITHHOLDING TAXES. The Company shall have the power and the right
to deduct or withhold, or require a Grantee to remit to the Company, an amount
sufficient to satisfy any federal, state and local taxes required by law to be
withheld with respect to any grant, exercise, or payment made under or as a
result of the Plan. With respect to tax withholding which may be required upon
the exercise of options, Grantees may elect, subject to the approval of the
Committee, to satisfy such withholding requirement, in whole or in part, by
having the Company withhold shares of Company Stock having a Fair Market Value
on the date the tax is to be determined, equal to the minimum marginal total tax
which could be imposed on the transaction. All elections shall be irrevocable,
made in writing, and signed by the Grantee.

         6.06 CONSTRUCTION. Except as otherwise required by applicable federal
laws, the Plan shall be governed by, and construed in accordance with, the laws
of the state of the Company's incorporation.

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<PAGE>   5
         6.07 SUCCESSORS. All obligations of the Company under the Plan shall be
binding on any successor to the Company, whether the existence of such successor
is the result of a direct or indirect purchase, merger, consolidation, or
otherwise, of all or substantially all of the business and/or assets of the
Company.

         6.08 BENEFICIARY DESIGNATION. Each Grantee may, from time to time, name
any beneficiary or beneficiaries (who may be named contingently or successively)
who shall be entitled to exercise his or her options in accordance with their
terms in the event of his or her death before he or she exercises all of his or
her outstanding options. Each such designation shall revoke all prior
designations by the same Grantee, shall be in a form prescribed by the Company,
and will be effective only when filed by the Grantee in writing with the Human
Resource Department of the Company during the Grantee's lifetime.

                                        5<PAGE>   1
                                                                    EXHIBIT 10.3

                         SYBRON DENTAL SPECIALTIES, INC.
                  SENIOR EXECUTIVE INCENTIVE COMPENSATION PLAN

                                POLICY STATEMENT

1.     OBJECTIVES

       The Sybron Dental Specialties, Inc. Senior Executive Incentive
       Compensation Plan (the "Incentive Plan") is designed to:

       -      Focus the efforts of the organization on improving shareholder
              value.

       -      Effectively motivate and reward key employees according to their
              contributions to organizational success.

       -      Serve as a management tool in directing the energies of key
              employees towards the achievement of agreed upon operating goals
              for Sybron Dental Specialties, Inc. (the "Corporation") and
              its subsidiaries.

       -      Equate personal financial success with organizational financial
              success.

       -      Assist in retaining and attracting qualified, managerial employees
              by providing a total compensation opportunity competitive with the
              marketplace.

2.     ADMINISTRATION

       The Incentive Plan shall be administered by the Compensation Committee of
the board of directors (the "Committee"). No member of the Committee shall be
eligible for awards under the Incentive Plan.

       The Committee shall interpret the Incentive Plan, establish rules and
regulations for the administration thereof, and make all determinations deemed
necessary or advisable for the administration of the Incentive Plan. The
Committee shall be assisted by the Corporation's Human Resources Department
staff in fulfilling its administrative responsibilities.

3.     ELIGIBILITY

       Key executives whom the Committee has identified as having the ability to
directly influence the financial results of the Corporation or its subsidiaries
shall constitute the employees eligible for participation in the Incentive Plan.

       An individual's eligibility to participate in the Incentive Plan shall be
determined annually by the Committee. Participation in the Incentive Plan during
a fiscal year shall not imply the right of participation in any following year.

4.     DETERMINATION OF INCENTIVE AWARDS

       A participant's Incentive Award will be determined by multiplying the
participant's total Target Bonus Amount by a Success Factor.

5.     TARGET BONUS AMOUNTS

       Target Bonus Amounts for all participants shall be a percentage of the
participant's actual annual base salary as of the end of each fiscal year for
which an Incentive Award is payable. The percentage shall be determined from the
salary grade to which the participant is assigned as of the end of the fiscal
year, all as set forth in the Administrative Guidelines for the Incentive Plan
which are included by reference herein.

<PAGE>   2
6.     SUCCESS FACTOR

       The Success Factor is the aggregate of two different components of
financial performance; namely, operating income compared with budget and growth
in operating income over prior year. The budgeted operating income component
cannot exceed 100%.

       Composition of the Success Factor is as follows:

<TABLE>
<S>                                                                       <C>
          Operating income performance vs. budget (capped at 100%)        =   a

          Growth in operating income performance                          =   b
                                                                           -----
          Success Factor                                                  =  a+b
                                                                           =====
</TABLE>

       Section 3 of the Administrative Guidelines defines the components of the
Success Factor in detail and a rather complete example of how an individual's
Incentive Award is computed can be found in Section 8 of the Administrative
Guidelines.

       Notwithstanding any other provision of this Incentive Plan, in no event
shall the Incentive Award for a fiscal year for any participant exceed
$2,000,000 (the "Maximum Dollar Amount").

7.     CHANGE IN EMPLOYMENT STATUS

       Participants who terminate employment (except for termination due to
retirement, disability or death) with the Corporation or a subsidiary of the
Corporation, or whose employment is terminated by the Corporation or one of its
subsidiaries, at any time during a fiscal year, or before award payments for a
fiscal year are made, shall not be entitled to receive any award under the
Incentive Plan for that fiscal year, unless an award is specifically approved by
the Committee.

       Participants (or their beneficiaries or legal representatives) who
retire, become disabled or die during a fiscal year shall receive a prorated
Incentive Award that is calculated by multiplying the participant's calculated
Incentive Award by a percent equal to the percent of the fiscal year for which
the participant was actively employed.

8.     METHOD OF PAYMENT

       Awards under the Incentive Plan shall be paid in cash as soon as
practicable after financial results for the fiscal year have been determined and
verified.

9.     COMMITTEE DISCRETION

       In the event of special circumstances of an unusual or significant nature
outside the course of normal business operations, the Committee may adjust
previously approved financial objectives of the Corporation or any of its
subsidiaries or the amount of the Incentive Awards earned, when it believes the
integrity, purpose and fairness of the Incentive Plan will be better served. Any
such adjustment made after the beginning of the period in which the awards are
earned shall not, however, permit Incentive Awards, either to any person or in
the aggregate, to be greater than they otherwise would have been under the
financial objectives approved prior to the beginning of such period.

10.    AMENDMENT, SUSPENSION OR TERMINATION OF THE INCENTIVE PLAN

       The Committee may, at any time, amend, suspend or terminate the Incentive
Plan.

                                       2
<PAGE>   3
                            ADMINISTRATIVE GUIDELINES

       These Administrative Guidelines ("Guidelines") have been approved by the
Compensation Committee (the "Committee") of the board of directors, and shall
remain in effect until changed by the Committee. These Guidelines, combined with
the Sybron Dental Specialties, Inc. Senior Executive Compensation Incentive Plan
Policy Statement shall govern the amounts and terms of Incentive Awards payable
to eligible participants under the Incentive Plan.

1.     INCENTIVE AWARDS

       A participant's Incentive Award will be determined by multiplying the
participant's total Target Bonus amount by a Success Factor, provided that no
Incentive Award for any fiscal year for any participant shall exceed the
Maximum Dollar Amount.

2.     TARGET BONUS AMOUNTS

       Target Bonus Amounts shall be determined from a participant's salary
grade. Current salary grades and Target Bonus Amount percentages for U.S. and
non-U.S. participants are included in Section 7 below. The Target Bonus Amount
for all participants shall be the pre-determined percentage for the
participant's salary grade applied against the base salary of the participant as
of the end of each fiscal year.

3.     SUCCESS FACTOR

       The Success Factor is calculated by totaling the percentages determined
from a comparison of actual performance with respect to certain financial
measurement components to the goals set for such components. The financial
measurement components of the success factor are as follows:

       (i)    Actual operating income compared with budget.*

              This component will be zero until 90% of budgeted operating income
              is achieved. Maximum award will be equal to 100% when budgeted
              operating income is achieved. Performance between 90% and 100% of
              budgeted operating income would result in a proportional award
              being earned.

              OPERATING INCOME

<TABLE>
              <S>                   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>
              Budget
              Amount ($000)

              Percent Achievement    90    91    92    93    94    95    96    97    98    99   100
</TABLE>

       (ii)   Actual rate of growth in operating income over prior year.*

              -      This component will be zero until 6% growth in operating
                     income over prior year is achieved. At a growth level of
                     6%, this component will be equal to 80%.

              -      At 8% growth, this component will be equal to 100%. For
                     each percentage point of growth beyond 8% there is an
                     increase in this component of 12.5 percentage points.
                     Thus, at 10% growth, this component will equal 125%, at 12%
                     growth this component will equal 150%, at 14% growth this
                     component will equal 175%, continuing on a linear basis, in
                     an unlimited fashion.

OPERATING INCOME GROWTH

<TABLE>
<S>                          <C>    <C>   <C>    <C>    <C>    <C>    <C>    <C>    <C>   <C>
Percent Growth Achieved        6      8     10     12     14     16     18     20     22    24
----------------------------------------------------------------------------------------------

Percent Achievement           80    100    125    150    175    200    225    250    275   300
----------------------------------------------------------------------------------------------
</TABLE>

                     *Earnings from acquired businesses will also be included,
                     subject to adjustment as described below.

                                       3
<PAGE>   4
4.     EARNINGS FROM ACQUISITIONS

       An important goal of this Incentive Plan is to encourage the acquisition
of suitable companies and/or product lines as a way of growing operating income.

       Earnings from acquisitions will, therefore, be included in the Success
Factor components after an adjustment is made to the basis of measurement to
offset the imputed cost of funding the acquisition and the amortization of
intangibles associated with the acquisition.

5.     IMPUTED COST OF CAPITAL

       With respect to acquisitions, there will be charged an imputed cost of
capital equal to 8% of the purchase price of the acquired business for the first
twelve months following an acquisition. Thereafter, this charge will be
decreased by 1 percentage point each year to reflect the anticipated positive
cash flow from the earnings of the acquired entity.

       An imputed cost of capital of 8% will be charged when the amount by which
the applicable fiscal year's working capital ratio (computed on a 13-month
average, September through September, basis) exceeds the average of the previous
four years' working capital ratios (computed on a similar basis). The charge is
calculated by multiplying such excess, if any, by the applicable fiscal year's
sales, and charging 8% of such product. Additionally, an imputed cost of capital
of 8% will be charged for the amount by which the applicable fiscal year's
capital expenditures exceed such year's depreciation if such excess occurs.

       From time to time the percentage imputed cost of capital charge may
change if commercial interest rates change.

6.     DEFINITION OF OPERATING INCOME

       For purposes of this Incentive Plan, operating income is operating income
as adjusted, which means operating income as reported on management accounting
statements, less amortization of intangible assets, less the imputed cost of
capital.

EXAMPLE

<TABLE>
<S>                                                                       <C>
      Operating income for applicable fiscal year excluding acquisition   $100,000,000
      Acquisition cost of "NEWCO" made 10/1 of year 1..................      5,000,000
      Net book value of "NEWCO" .......................................      3,000,000
      "NEWCO" goodwill.................................................      2,000,000
      "NEWCO" annual operating earnings................................      1,000,000
      Applicable fiscal year's sales...................................    425,000,000
      Applicable fiscal year's working capital ratio...................          25.1%
      Average of previous four years' working capital ratios...........          23.4%
      Capital expenditures for applicable fiscal year..................     10,000,000
      Depreciation for applicable fiscal year..........................      8,000,000
</TABLE>

                                       4
<PAGE>   5
       A. COST OF CAPITAL CHARGE FOR ACQUISITIONS ($ IN THOUSANDS)

<TABLE>
<CAPTION>
       -------------------------------------------------------------------------
                                  YEAR 1    YEAR 2    YEAR 3    YEAR 4    YEAR 5
       -------------------------------------------------------------------------

<S>                               <C>       <C>       <C>       <C>      <C>
       Cost of Capital Rate            8%        7%        6%        5%       4%
       Purchase Cost of "NEWCO"     5,000     5,000     5,000     5,000    5,000
       Cost of Capital Charge       (400)     (350)     (300)     (250)    (200)
       -------------------------------------------------------------------------
</TABLE>

       B. COST OF CAPITAL CHARGE FOR EXCESS WORKING CAPITAL ($ IN THOUSANDS)

<TABLE>
<S>                                                                <C>
        -    Applicable Fiscal Year's Working Capital Ratio          25.1%
        -    Average of Prior Four Years' Working Capital Ratio      23.4%
        -    Applicable Fiscal Year's Sales                        425,000
        ------------------------------------------------------------------

        Working Capital Charge   425,000 x (.251-.234) x .08           578
</TABLE>

       C. COST OF CAPITAL CHARGE FOR EXCESS CAPITAL EXPENDITURES ($ IN
       THOUSANDS)

<TABLE>
<S>                                                                 <C>
       Applicable Fiscal Year's Capital Expenditures                10,000
       Applicable Fiscal Year's Depreciation                         8,000
       -------------------------------------------------------------------

       Cost of Capital Charge   (10,000 - 8,000) x .08                 160
</TABLE>

       D. ADJUSTED OPERATING INCOME COMPUTATION ($ IN THOUSANDS)

<TABLE>
<CAPTION>
                                                       YEAR 1      YEAR 2     YEAR 3     YEAR 4    YEAR 5
   -------------------------------------------------------------------------------------------------------

<S>                                                    <C>        <C>        <C>        <C>        <C>
   -    Subsidiary Earnings                            100,000    100,000    100,000    100,000    100,000
        Excluding Acquisition
   -    "NEWCO" Earnings                                 1,000      1,000      1,000      1,000      1,000
   -    Amortization of Goodwill                          (100)      (100)      (100)      (100)      (100)
   -    Cost of Capital - Acquisitions                    (400)      (350)      (300)      (250)      (200)
   -    Cost of Capital - Excess Working Capital          (578)
   -    Cost of Capital -Excess Capital Expenditures      (160)         *          *          *          *

                                                                        *          *          *          *
   -------------------------------------------------------------------------------------------------------

   Adjusted Operating Income                            99,762    100,550    100,600    100,650    100,700
</TABLE>

* Amount depends on working capital, capital expenditures and depreciation
calculations for three years.

                                       5
<PAGE>   6
7.   SALARY GRADES/TARGET BONUS AMOUNT PERCENTAGES

                                 SALARY GRADES/
                         TARGET BONUS AMOUNT PERCENTAGES

<TABLE>
<CAPTION>
                       U.S.                               NON-U.S.
          --------------------------------------------------------------------

               Salary         TARGET BONUS        Salary        TARGET BONUS
               Grade            AMOUNT %          Grade            AMOUNT %
          --------------------------------------------------------------------

<S>                           <C>                 <C>           <C>
                    3             16%                   3            11%
                    4             18%                   4            13%
                    5             20%                   5            15%
                    6             22%                   6            17%
                    7             24%                   7            19%
                    8             26%                   8            21%
                    9             28%                   9            23%
                   10             30%                  10            25%
                   11             33%
                   12             36%
                   13             39%
                   14             42%
                   15             45%
                   16             48%
                   17             50%
                   18             52%
                   19             53%
                   20             54%
                   21             55%
</TABLE>

8.     FORMULA FOR CALCULATION OF INCENTIVE AWARD

       Target Bonus Amount

             Base Salary at 9/30 x  Salary Grade Target   =  Target Bonus Amount
                              Bonus Amount Percent

       Success Factor Components

             Operating Income Percent Achieved (capped at 100%)
       +     Operating Income Growth Percent Achieved
             ----------------------------------------
       =     Success Factor

       Incentive Award

             Target Bonus Award x Success Factor = Incentive Award

                                       6
<PAGE>   7
       EXAMPLE

              Assumptions:

                1.  U.S. executive - Grade 12
                2.  Base Salary - $150,000
                3.  Budgeted operating income - $112,000,000
                4.  Actual operating income - $112,000,000
                5.  Prior year's operating income - $100,000,000
                6.  Operating income growth - 12%

              Determination of Success Factor

                (i)   Operating Income Achievement

<TABLE>
<S>                                            <C>
                      Actual                   $112,000,000
                      -------------------------------------
                      Budget                   $112,000,000
</TABLE>

                      Performance equals 100%, therefore,
                      component is equal to the maximum of 100%

                (ii)  Operating Income Growth

                      Actual growth = 12%
                      Component therefore equals 150%

<TABLE>
<S>                                                                   <C>
                      Operating Income Percent Achieved               =  100%
                    + Operating Income Growth Percent Achieved        =  150%
                                                                         ----
                      Success Factor                                     250%
                                                                         ===
</TABLE>

             Target Bonus Amount

                  Grade 12 Target Bonus Award % = 36%

                  0.36  x  $150,000 = $54,000

             Incentive Award

                  Success Factor x Target Bonus Amount = Incentive Award (not to
                                                         exceed Maximum Dollar
                                                         Amount.)
                  250%    x    $54,000    =     $135,000

                                       7
<PAGE>   8
                  SENIOR EXECUTIVE INCENTIVE COMPENSATION PLAN

                         FINANCIAL MEASUREMENT CRITERIA

                                   DEFINITIONS

       1.     OPERATING INCOME, AS ADJUSTED

                  Net Sales
              -   (Cost of Sales)
              -   (Commercial Expenses)
              -   (Cost of Capital Imputation)
              -   (Amortization of Intangibles)
                  -----------------------------
              =   Adjusted Operating Income

       2.     WORKING CAPITAL

                  Trade Accounts Receivable
              +   Inventory
              -   (Trade Accounts Payable)
                  ------------------------
              =   Working Capital

       3.     WORKING CAPITAL RATIO

              Working Capital   x   100%
              ---------------
                  Sales

       4.     COST OF CAPITAL

              For imputation on acquisition earnings = 8% of transaction cost.

              For imputation on excess working capital = 8% of the product of
              the amount (if any) by which the applicable year's working capital
              ratio exceeds the average of the previous four years' working
              capital ratios, multiplied by the applicable fiscal year's sales.

              For imputation on excess capital expenditures = 8% of the amount
              (if any) by which the applicable fiscal year's capital
              expenditures exceed such fiscal year's depreciation.

              (Rate subject to annual review.)

                                       8

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