Document:

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                                                                    EXHIBIT 10.5

                         COLLINS & AIKMAN PRODUCTS CO.
                   2000 EXECUTIVE INCENTIVE COMPENSATION PLAN

ARTICLE 1.  INTRODUCTION: PLAN SUMMARY AND OBJECTIVES

1.1      PLAN SUMMARY. The Collins & Aikman Products Co. (the "Company") 2000
         Executive Incentive Compensation Plan (the "Plan") establishes the
         annual (fiscal year) bonus program for key employees ("Participants")
         who are in a position to have an impact on the attainment of the goals
         of the Company, and the Company's operating divisions. The Plan
         provides for substantial awards to Participants whose unit meets or
         exceeds the specified performance goal.

         The bonuses of Participants in the 2000 Plan will be based primarily
         on two financial measures: Earnings Before Taxes ("EBT") and Free Cash
         Flow (FCF) of the Participant's unit and Corporate financial
         objectives. Threshold, Target and Stretch performance goals will be
         established for this financial measure. These goals shall be
         associated, respectively, with lowest, expected and stretch bonus
         levels for each measure.

         Awards are determined by assigning each Participant a "Target Bonus"
         or expected bonus level that is equal to a specified percent of base
         salary. The bonus actually paid to the Participant will be based on
         the extent to which the performance of his or her unit as well as
         overall corporate performance, and on the Participant's performance
         relative to other Plan Participants. The division/corporate stretch
         goal will equal 200% of the Target Bonus for EBT and equal to 200% of
         the Target Bonus for FCF. Fifty percent of the Target Bonus will be
         based upon EBT and fifty percent based upon FCF.

1.2      PLAN OBJECTIVES. The Plan objectives are:

         a.       to motivate key employees and achieve or exceed the specified
                  financial objectives,

         b.       to maintain management's focus on the importance of earnings,

         c.       to attract and retain the quality and quantity of key
                  employees required to successfully manage the Company's
                  operations.

         d.       to attract and retain the quality and quantity of key
                  employees required to successfully manage the Company's
                  operations.

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ARTICLE 2.  PLAN DEFINITIONS

2.1      "Base Salary" means the annual base rate of pay, exclusive of bonuses,
         long term incentive awards, benefits, car allowances, awards under
         this Plan and any other non-salary items, as in effect for a
         Participant on the last day of the fiscal year ending in the Plan Year
         for which an incentive award is made.

2.2      "Board" means the Board of Directors of the Company.

2.3      "Cause" means

         a.       fraud, misappropriation or gross misconduct with respect to
                  any business of the Company or an affiliate of the Company or
                  intentional material damage to any property or business, or
                  the reputation, of the Company or an affiliate of the
                  Company,

         b.       willful failure by a Participant to perform his/her duties
                  and responsibilities and to carry out his/her authority,

         c.       willful malfeasance or misfeasance or breach of duty or
                  representation to the Company or an affiliate of the Company,

         d.       willful failure to act in accordance with any specific lawful
                  instructions of a majority of the Board of Directors of the
                  Company, or breach of any written agreement between
                  Participant and the Company or an affiliate of the Company,
                  or

         e.       felony conviction of a Participant.

2.4      "Committee" shall mean the Compensation Committee of the Board of
         Directors of the Company or any parent company, whose members are
         determined and appointed by the Board or by the Board of Directors of
         any parent company in their sole discretion.

2.5      "Company" shall mean Collins & Aikman Products Co.

2.6      "Division" means an operating division of the Company for which EBT
         performance goals are established and approved by the Committee and
         the Chairman and CEO.

2.7      "Earnings Before Taxes" ("EBT") means earnings before taxes as
         determined by the Company in accordance with generally accepted
         accounting principles.

2.8      "Effective Date" means December 26, 1999.

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2.9      "Free Cash Flow" ("FCF") means earnings before taxes under this Plan
         plus depreciation and amortization +/- operating asset adjustments
         minus capital spending. This includes all operating assets, not just
         inventory, receivables, and payables.

2.10     "Stretch Performance Goal" means the highest level of performance
         specified for the EBT & FCF financial measures. Performance at (and
         above) this level is associated with the stretch level of bonus
         payouts for each measure.

2.11     "Participant" means a key executive or staff person designated as
         being eligible for an award under the Plan.

2.12     "Plan Year" means the 2000 fiscal year ending December 30, 2000.

2.13     "Target Bonus" means a specified percentage of a Participant's Base
         Salary as determined pursuant to the provisions of the Plan.

2.14     "Target Performance Goal" is the expected level of performance
         established for the EBT & FCF financial performance measures based on
         the Company's and, where applicable, Division's budget and other
         considerations. This level of performance is associated with the
         Target Bonus level of bonus payouts.

2.15     "Threshold Performance Goal" is the lowest acceptable level of
         performance specified for the EBT & FCF financial performance
         measures. This level of performance is associated with the lowest
         level of bonus payouts.

ARTICLE 3. ELIGIBLE EXECUTIVES

3.1      ELIGIBLE EXECUTIVES. Key executives and staff of the Company and
         Divisions are eligible to be named Participants in the Plan for the
         Plan Year. Generally, only those executives and staff whose potential
         contributions are deemed to be important to the success of the Company
         or Division in achieving its objectives will be designated as
         Participants. The designation of eligible executives shall be the
         responsibility of the Sr. Vice President - Human Resources and the
         Chairman and CEO of the Company. See Article 5 regarding Participant
         selection.

ARTICLE 4. SETTING PERFORMANCE GOALS

4.1      BUDGETS AND PERFORMANCE GOALS

         The annual budget of the Company shall form the initial basis for
         setting financial performance goals.

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         Threshold, Target and Stretch EBT and FCF Performance Goals will be
         established for the Company and each Division. Threshold and Stretch
         goals may or may not be pre-determined based on a fixed percent of the
         Target goal.

         The final determination of goals shall be subject to the approval of
         the Committee, in their sole discretion.

4.2      PERFORMANCE GOAL SETTING PROCESS

         a.       Performance Goal Recommendations: Upon finalization of the
                  Company's budget, the Chairman and CEO shall submit to the
                  Committee recommended Threshold, Target and Stretch EBT and
                  FCF Performance Goals and any interim goals.

         b.       Performance Goal Approval: Final approval of the performance
                  goals shall be the responsibility of the Committee. It is
                  contemplated that such goals, once set, will not change for
                  any reason during the fiscal year. The Committee may, in its
                  sole discretion, alter or amend these goals if deemed
                  necessary or appropriate.

ARTICLE 5. SELECTING PLAN PARTICIPANTS; ASSIGNING TARGET BONUSES

5.1      PARTICIPANT SELECTION.

         The Chairman and CEO and each Division head (as appropriate) shall
         recommend as a Plan Participant any executive or key employee whose
         potential contributions to his/her unit's performance are considered
         important to the success of their unit. Such recommendations are
         subject to the Plan and the final approval of the Sr. Vice President -
         Human Resources and the Chairman and CEO.

         a.       Eligible Group. The group of eligible employees shall
                  include, but not be limited to, senior executives and their
                  direct reports at the Company staff level, Division heads and
                  senior management of the Divisions and their direct reports.
                  Key employees salary grade 28 and above with a job title of
                  manager may be included.

         b.       Approval. No employee shall become a participant in the Plan,
                  nor shall Plan participation be discussed with an employee,
                  until approval is received in writing from the Sr. Vice
                  President - Human Resources.

5.2      ASSIGNMENT OF TARGET BONUSES

         a.       Target Bonus Guidelines Generally, the target bonus levels
                  are related to the salary grade. The Sr. Vice President -
                  Human Resources and the Chairman and CEO have the
                  responsibility for final approval of the Target Bonus for
                  each Participant. The recommended Target Bonus, will take
                  into account the

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                  Participant's: a) position relative to those of other
                  Participants, b) anticipated contribution to the
                  organization's performance and c) external competitive bonus
                  rates for similar positions in similar industries.

         b.       Target Bonus Changes. From time to time, due primarily to
                  changes in position, it may be necessary to modify an
                  assigned Target Bonus. The Sr. Vice President - Human
                  Resources and the Chairman and CEO shall have the authority
                  to make such modifications subject to the terms of this Plan.

5.3      COMMUNICATION OF PERFORMANCE GOALS, PARTICIPANT ELIGIBILITY AND TARGET
         BONUSES

         The Sr. Vice President - Human Resources has the responsibility to
         communicate to the Division head his or her unit=s performance goals.
         Participant eligibility and Participant Target Bonus shall be
         communicated by the Division head, provided: a) the necessary
         approvals have been obtained before any communication takes place, b)
         any communication regarding the Target Bonus, written or otherwise, is
         fully consistent with this Plan, c) it is clear that the
         recommendation for program participation and bonus eligibility is not
         a guarantee of payment or amount.

ARTICLE 6. GRANTING PARTICIPANT BONUSES

6.1      INTRODUCTION

         Bonuses based on EBT/FCF performance will be paid only if the
         Participant's unit (i.e., Division or Company, as appropriate) hits
         its EBT/FCF Threshold. It is not necessary for the Company to achieve
         its EBT/FCF threshold for a Division to receive a bonus based on
         EBT/FCF. However, 70% of the Division bonus calculation will be based
         on that unit=s performance and the remaining 30% based on overall
         Company performance. The Corporate unit employee=s bonus will be based
         100% upon the consolidated division and Company performance.

         The Division performance of EBT and FCF are independent of one another
         and payment may be based upon one or both budget categories.

         All bonuses are subject to the final approval of the Committee.

6.2      EBT/FCF BONUS CALCULATION. When the EBT/FCF bonus is determined, it is
         calculated as a percent of the Target Bonus per the following
         schedule:

<TABLE>
<CAPTION>
         Company/Division
         Performance Level Achieved:              Threshold         Target       Stretch
                                                  ---------         ------       -------

         <S>                                      <C>               <C>          <C>
         EBT Payout as a % of Target Bonus           75%             100%          200%
         FCF Payout as a % of Target Bonus           75%             100%          200%
</TABLE>

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         Straight line interpolation is used between Threshold and Target; and
         between Target and Stretch. The FCF calculation is based upon an 18
         month rolling period or June 30, 1999 through December 30, 2000.

6.3      BONUS RECOMMENDATIONS, APPROVALS AND DISTRIBUTION

         a.       Bonus Recommendations. The Chairman and CEO shall, as soon as
                  possible following the determination of year-end results,
                  submit to the Committee a list of payment recommendations.

                  In arriving at the recommended awards, the Sr. Vice President
                  - Human Resources shall work with each Division head in
                  considering the Participants' Target Bonus levels, the
                  calculated awards based on actual EBT/FCF performance, and
                  the Participants' relative contributions to the unit's
                  performance. The Division head has, therefore, the discretion
                  to modify individual calculated awards by 100% not to exceed
                  250% of target to account for different performance levels.
                  If one individual's award is modified upward, however, other
                  awards must be adjusted such that the net change of all
                  modifications is $0. In other words, the sum of all awards
                  calculated must stay the same regardless of any changes in
                  individual awards. No employee is guaranteed a payment under
                  the Plan and the payment is determined by individual
                  performance and modified accordingly.

                  Subject to the other provisions hereof, a Participant who is
                  eligible for a calculated award can have his/her award
                  reduced to 0% of the award as calculated if specifically
                  approved by the Chairman and CEO and the Sr. Vice President
                  -- Human Resources. Recommendations for Corporate staff shall
                  normally be based entirely on the actual performance of the
                  Company as a whole.

         b.       Final Approval. The Committee shall have final approval of
                  Company and Division operating results to be used in bonus
                  calculations and the timing of all bonus payments.

         c.       Bonus Distribution. Final approval by the Committee shall
                  authorize the Chairman and CEO to initiate bonus payment. The
                  Sr. Vice President - Human Resources shall effect the payment
                  of the bonus as soon as is administratively practicable once
                  the bonuses are approved.

ARTICLE 7. PLAN ADMINISTRATION

7.1      ADMINISTRATIVE RESPONSIBILITIES

         a.       Overall Plan administration shall be the responsibility of
                  the Committee who shall have absolute and final discretion
                  regarding interpretation of Plan and sole authority to make
                  all decisions with respect to Plan.

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         b.       The Committee shall have the authority to, at their
                  discretion, approve all performance goals, actual performance
                  results, Plan interpretations and modifications and to take
                  any and all other actions at any time they deem necessary or
                  appropriate for the administration of the Plan.

         c.       Responsibility for plan implementation and operation has been
                  delegated by the Committee to the Chairman and CEO and the
                  Sr. Vice President - Human Resources who shall have the
                  responsibility for:

                  1.       approving Participant rosters and Participant Target
                           Bonuses,

                  2.       ensuring that performance goals are submitted,
                           reviewed and approved on a timely basis;

                  3.       ensuring that year-end results and recommended
                           bonuses for all eligible Participants are submitted,
                           reviewed and approved on a timely basis; and

                  4.       maintaining appropriate records with respect to
                           performance goals, eligible Participants, Target
                           Bonuses, actual awards, all necessary written
                           approvals and other records as appropriate.

7.2      AWARD PAYMENTS

         a.       Payment of awards shall be made as soon as practical and
                  prior to March 15 of the year immediately following the year
                  for which the performance goals have been set but in no event
                  later than April 30.

         b.       In the event of a change of assignment or transfer that would
                  result in a change of Target Bonus during the course of the
                  year, the participant's bonus calculation shall be determined
                  by mutual agreement with the Division head, the Chairman and
                  CEO and the Sr. Vice President - Human Resources.

         c.       If a person is not an active employee at the time bonuses are
                  paid, a bonus will not be paid regardless of length of
                  service or reason for termination except as noted herein.
                  Exceptions may be made by the Sr. Vice President - Human
                  Resources and the Chairman and CEO in their sole discretion
                  for terminations prior to the end of the fiscal year due to
                  death, total and permanent disability (as defined by the
                  applicable disability plan(s)), and Early or Normal
                  Retirement (as defined by the applicable retirement plan(s)).
                  An exception may also be made for employees on approved
                  leaves of absence. A pro rata bonus based on the executive's
                  contributions to his/her objectives may be payable under
                  these circumstances. In the event of the death of a
                  Participant, the Participant's beneficiaries shall be
                  entitled to the awards, if any, to which the Participant
                  would have otherwise been entitled.

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                  An additional exception may be made in the event of the sale
                  of a unit. In such cases, the Committee may, in its sole
                  discretion, award discretionary bonuses based on performance
                  to date. The sale of a unit does not necessarily entitle a
                  Plan participant to a bonus under this Plan.

         d.       A former Plan Participant who is not an active employee when
                  awards are distributed but who was an active employee at the
                  end of the fiscal year, shall generally not be entitled to a
                  bonus, subject to the terms of this Plan.

         e.       An employee discharged for Cause, as defined above, shall
                  forfeit any and all rights to a bonus under this Plan.

7.3      GENERAL PROVISIONS

         a.       The Plan is intended to constitute an "unfunded" plan for the
                  incentive compensation of a select group of key management
                  employees of the Company and its Divisions.

         b.       Neither the Plan nor any action taken under the Plan shall be
                  construed as:

                  1)       giving any employee any right to be retained in the
                           employ of the Company, or Division.

                  2)       affecting the right of the above-mentioned entities
                           to terminate the employment of any individual at any
                           time for any reason; or

                  3)       interfering with the rights created under any
                           separate written employment or severance agreement.

         c.       Should the provisions of a Participant's employment contract
                  not be consistent with the provisions of the Plan, the
                  provisions of the employment contract or agreement shall
                  control.

         d.       The Committee may alter, amend or terminate the Plan at any
                  time or from time to time.

         e.       Neither the Board nor the Committee, nor the Company nor any
                  Division, nor any officers, directors or employees shall have
                  any liability to any Participant (or his/her beneficiaries)
                  under the Plan or otherwise on account of any action taken,
                  or not taken, in good faith by any of the foregoing persons
                  with respect to the business or operations of such entities
                  notwithstanding the fact that any such action or inaction in
                  any way whatsoever may adversely affect the value of any
                  awards, rights or benefits of a Participant (or his/her
                  beneficiaries) under the Plan. Unless the Participant
                  specifies otherwise in writing to the Committee,
                  beneficiaries, for the purposes of this Plan, shall mean the
                  beneficiaries identified by the Participant for his/her
                  qualified pension or retirement plan(s).

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         f.       The Plan and all actions taken pursuant to the Plan shall be
                  governed by, and construed in accordance with, the internal
                  laws of the State of Michigan.

         g.       The invalidity or unenforceability of any one or more
                  provisions of the Plan shall not affect the validity or
                  enforceability of any other provisions of the Plan, which
                  shall remain in full force and effect.

         h.       Correspondence regarding this Plan should be sent to the Sr.
                  Vice President - Human Resources, Collins & Aikman Products
                  Co., 5755 New King Court, Troy, MI 48098.

                                                                              9<PAGE>   1
                                                                    EXHIBIT 10.6

                          COLLINS & AIKMAN CORPORATION

                        2000 EMPLOYEE STOCK OPTION PLAN

                                                     As Adopted January 1, 2000

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                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                 Page
                                                                                                                 ----

<S>                                                                                                              <C>
I.   PURPOSES OF THE PLAN....................................................................................       1

II.  DEFINITIONS.............................................................................................       1

III. EFFECTIVE DATE..........................................................................................       4

IV.  ADMINISTRATION..........................................................................................       4

     A.    Duties of the Committee...........................................................................       4
     B.    Advisors..........................................................................................       5
     C.    Indemnification...................................................................................       5
     D.    Meetings of the Committee.........................................................................       5
     E.    Determinations....................................................................................       5

V.   SHARES; ADJUSTMENT UPON CERTAIN EVENTS..................................................................       6

     A.    Shares to be Delivered; Fractional Shares.........................................................       6
     B.    Number of Shares..................................................................................       6
     C.    Adjustments; Recapitalization, etc................................................................       6

VI.  AWARDS AND TERMS OF OPTIONS.............................................................................       7

     A.    Grant.............................................................................................       7
     B.    Exercise Price....................................................................................       7
     C.    Number of Shares..................................................................................       7
     D.    Exercisability....................................................................................       7
     E.    Acceleration of Exercisability....................................................................       7
     F.    Exercise of Options...............................................................................       8
     G.    [Reserved]........................................................................................       9
     H.    Non-Competition and Other Provisions..............................................................       9
     I.    [Reserved]........................................................................................       9
     J.    Incentive Stock Option Limitations................................................................       9

VII. EFFECT OF TERMINATION OF RELATIONSHIP...................................................................      10

     A.    Death, Disability, Retirement, etc................................................................      10
     B.    Cause.............................................................................................      10
     C.    Other Termination.................................................................................      10
     D.    Cancellation of Options...........................................................................      11

VIII.      TRANSFERABILITY OF OPTIONS........................................................................      11
</TABLE>

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<TABLE>
<S>                                                                                                                <C>
IX.        RIGHTS AS A STOCKHOLDER...........................................................................      11

X.         TERMINATION, AMENDMENT AND MODIFICATION...........................................................      11

     A.    General Amendments................................................................................      11

XI.        USE OF PROCEEDS...................................................................................      12

XII. GENERAL PROVISIONS......................................................................................      12

     A.    Right to Terminate Employment ....................................................................      12
     B.    Purchase for Investment...........................................................................      12
     C.    Trusts, etc.......................................................................................      12
     D.    Notices...........................................................................................      13
     E.    Severability of Provisions........................................................................      13
     F.    Payment to Minors, Etc............................................................................      13
     G.    Headings and Captions.............................................................................      13
     H.    Controlling Law...................................................................................      13
     I.    Section 162(m) Deduction Limitation...............................................................      13
     J.    Section 16(b) of the Act..........................................................................      13

XIII.      ISSUANCE OF STOCK CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES......................................      14

     A.    Stock Certificates................................................................................      14
     B.    Legends...........................................................................................      14
     C.    Payment of Expenses...............................................................................      14

XIV.       LISTING OF SHARES AND RELATED MATTERS.............................................................      14

XV.        WITHHOLDING TAXES.................................................................................      14

</TABLE>

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                          Collins & Aikman Corporation

                        2000 Employee Stock Option Plan

                           (Adopted January 1, 2000)

I.       PURPOSES OF THE PLAN

                  The purposes of this 2000 Employee Stock Option Plan are to
enable Collins & Aikman Corporation (formerly Collins & Aikman Holdings
Corporation) (the "Company") and Related Persons (as defined herein) to
attract, retain and motivate the employees and consultants who are important to
the success and growth of the business of the Company and Related Persons and
to create a long-term mutuality of interest between the Key Employees and
Executive Consultants (as defined herein) and the stockholders of the Company
by granting the Key Employees and Executive Consultants options to purchase
Common Stock (as defined herein). This document shall supersede all other
material describing this Plan, including, but not limited to, prior drafts
hereof and any documents incorporating the terms and provisions of any such
prior drafts.

II.      DEFINITIONS

                  In addition to the terms defined elsewhere herein, for
purposes of this Plan, the following terms will have the following meanings
when used herein with initial capital letters:

                  A.       "Act" means the Securities Exchange Act of 1934, as
amended, and all rules and regulations promulgated thereunder.

                  B.       "Board" means the Board of Directors of the Company.

                  C.       "Cause" means that the Committee shall have
determined that any of the following events has occurred: (1) an act of fraud,
embezzlement, misappropriation of business or theft committed by a Participant
in the course of his or her employment or consultancy or any intentional or
gross negligent misconduct of a Participant which injures the business or
reputation of the Company or Related Persons; (2) intentional or gross
negligent damage committed by a Participant to the property of the Company or
Related Persons; (3) a Participant's willful failure or refusal to perform the
customary duties and responsibilities of his or her position or consultancy
with the Company or Related Persons; (4) a Participant's breach of fiduciary
duty, or the making of a false representation, to the Company or Related
Persons; (5) a Participant's material breach of any covenant, condition or
obligation required to be performed by him or her pursuant to this Plan, the
Option Agreement or any other agreement between him or her and the Company or
Related Persons or a Participant's intentional or gross negligent violation of
any material written policy of the Company or Related Persons; (6) a Key
Employee's willful failure or refusal to act in accordance with any specific
lawful instructions of a majority of the Board of Directors of the Company; or
(7) commission by a Participant of a felony or a crime involving moral
turpitude.

Cause shall be deemed to exist as of the date any of the above events occur
even if the Committee's determination is later and whether or not such
determination is made before or after Termination of Employment or Termination
of Consultancy.

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                  D.       "Code" means the Internal Revenue Code of 1986, as
amended (or any successor statute).

                  E.       "Committee" means such committee, if any, appointed
by the Board to administer the Plan, consisting of two or more directors as may
be appointed from time to time by the Board, provided however that for the
purpose of determining any compensation under the Plan of a "covered employee",
within the meaning of Section 162(m) of the Code and the regulations relating
thereto ("Section 162(m)"), which is intended to qualify as "performance-based"
within the meaning of Section 162(m) ("Qualified Compensation") and deciding
all matters related to Qualified Compensation which are required under Section
162(m) to be decided by "outside directors" (including without limitation
making grants and determining material terms of grants), "Committee" shall mean
the Section 162(m) Committee of the Board. If the Board does not appoint a
committee for this purpose, "Committee" means the Board.

                  F.       "Common Stock" means the common stock of the Company,
par value $.01 per share, any Common Stock into which the Common Stock may be
converted and any Common Stock resulting from any reclassification of the
Common Stock.

                  G.       "Company" means Collins & Aikman Corporation, a
Delaware corporation.

                  H.       "Competitive Activity" means (a) being employed by,
consulting to or being a director of any business, or engaging directly or
indirectly in any business activity, that is competitive with any material
business of any of the Company, a Related Person or of the division that the
Participant is or was employed by or (b) soliciting for employment or
consulting, employing or retaining, or assisting another Person to employ or
retain, directly or indirectly, any employees of the Company or Related Persons
or any Person who was an employee of the Company or Related Persons in the prior
six months, provided, however, that employing or retaining, or assisting another
Person to employ or retain, any Person whose employment or consultancy with the
Company or a Related Person has been terminated without Cause or any Person that
is non-exempt under the Federal Fair Labor Standards Act, 29 USC Section
213(a)(1) shall not be considered Competitive Activity.

                  I.       "Disability" means a permanent and total disability,
as determined by the Committee in its sole discretion. A Disability shall only
be deemed to occur at the time of the determination by the Committee of the
Disability.

                  J.       "Executive Consultants" shall mean executive-level
consultants of the Company or Related Persons, as determined by the Committee,
provided, however, that no managing director, general partner, limited partner,
director, officer or employee of Wasserstein Perella & Co., Inc. or The
Blackstone Group L.P. that is a director of the Company will be eligible to
participate in the Plan.

                  K.       "Fair Market Value" shall mean, for purposes of this
Plan, unless otherwise required by any applicable provision of the Code or any
regulations issued thereunder, as of any date, the last sales prices reported
for the Common Stock on the applicable date, (i) as reported by the principal
national securities exchange in the United States on which it is then traded,
or (ii) if not traded on any such national securities exchange, as quoted on an
automated quotation system sponsored by the National Association of Securities
Dealers, or if the sale of the Common Stock shall not have been reported or
quoted on such date, on the first day prior thereto on which the Common Stock
was reported or quoted. If the Common Stock is not readily tradeable on a
national securities exchange or any system sponsored

                                                                              2
<PAGE>   6

by the National Association of Securities Dealers, its Fair Market Value shall
be set by the Committee based upon its assessment of the cash price that would
be paid between a fully informed buyer and seller under no compulsion to buy or
sell (without giving effect to any discount for a minority interest or any
restrictions on transferability or any lack of liquidity of the stock).

                  L.       "Incentive Stock Option" shall mean any Option
awarded under this Plan intended to be and designated as an "Incentive Stock
Option" within the meaning of Section 422 of the Code.

                  M.       "Key Employee" means any person who is an executive
officer or other valuable employee of the Company or a Related Person, as
determined by the Committee, provided, however, that no managing director,
general partner, limited partner, director, officer or employee of Wasserstein
Perella & Co., Inc. or The Blackstone Group L.P. that is a director of the
Company will be eligible to participate in the Plan. A Key Employee may, but
need not, be an officer or director of the Company or a Related Person.

                  N.       "Non-Qualified Stock Option" shall mean any Option
awarded under this Plan that is not an Incentive Stock Option.

                  O.       "Option" means the right to purchase one Share at a
prescribed purchase price on the terms specified in the Plan.

                  P.       "Participant" means a Key Employee or Executive
Consultant who is granted Options under the Plan which Options have not
expired; provided, however, that any Executive Consultant shall be a
Participant for purposes of the Plan solely with respect to grants of
Non-Qualified Stock Options and shall be ineligible for Incentive Stock
Options.

                  Q.       "Person" means any individual or entity, and the
heirs, executors, administrators, legal representatives, successors and assigns
of such Person as the context may require.

                  R.       [Reserved]

                  S.       "Related Person or Related Persons" means (a) any
corporation that is defined as a subsidiary corporation in Section 424(f) of
the Code or (b) any corporation that is defined as a parent corporation in
Section 424(e) of the Code. An entity shall be deemed a Related Person only for
such periods as the requisite ownership relationship is maintained.

                  T.       "Securities Act" means the Securities Act of 1933, as
amended, and all rules and regulations promulgated thereunder.

                  U.       "Share" means a share of Common Stock.

                  V.       "Ten Percent Shareholder" shall mean a person owning
Common Stock of the Company possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company as defined in
Section 422 of the Code.

                                                                              3
<PAGE>   7

                  W.       "Termination of Consultancy" with respect to an
individual means that individual is no longer acting as an Executive Consultant
to the Company or a Related Person. In the event an entity shall cease to be a
Related Person, there shall be deemed a Termination of Consultancy of any
individual who is not otherwise an Executive Consultant of the Company or
another Related Person at the time the entity ceases to be a Related Person.

                  X.       "Termination of Employment" with respect to an
individual means that individual is no longer actively employed by the Company
or a Related Person on a full-time basis, irrespective of whether or not such
employee is receiving salary continuance pay, is continuing to participate in
other employee benefit programs or is otherwise receiving severance type
payments. In the event an entity shall cease to be a Related Person, there
shall be deemed a Termination of Employment of any individual who is not
otherwise an employee of the Company or another Related Person at the time the
entity ceases to be a Related Person. A Termination of Employment shall not
include a leave of absence approved for purposes of the Plan by the Committee.

                  Y.       "Termination of Relationship" means a Termination of
Consultancy or a Termination of Employment where the individual is no longer a
consultant to, or employee of, the Company.

III.     EFFECTIVE DATE

                  The Plan became effective on January 1, 2000 (the "Effective
Date"). Grants of Options by the Committee under the Plan may be made, provided
that all such grants of Options shall be subject to approval of the Plan, by
the holders of a majority of the Common Stock (at the time of approval) . If
the Plan is not so approved by the holders of a majority of the Common Stock
(at the time of approval), all Options which have been granted by the Committee
shall be null and void. No Options may be exercised prior to the approval of
the Plan, by the holders of a majority of the Common Stock (at the time of
approval).

IV.      ADMINISTRATION

                  A.       Duties of the Committee The Plan shall be
administered by the Committee. The Committee shall have full authority to
interpret the Plan and to decide any questions and settle all controversies and
disputes that may arise in connection with the Plan; to establish, amend and
rescind rules for carrying out the Plan; to administer the Plan, subject to its
provisions; to select Participants in, and grant Options under, the Plan; to
determine the terms, exercise price and form of exercise payment for each
Option granted under the Plan; to determine the consideration to be received by
the Company in exchange for the grant of the Options; to determine whether and
to what extent Incentive Stock Options and Non-Qualified Stock Options, or any
combination thereof, are to be granted hereunder to one or more Key Employees
and to determine whether and to what extent Non-Qualified Stock Options are to
be granted hereunder to one or more Executive Consultants; to prescribe the
form or forms of instruments evidencing Options and any other instruments
required under the Plan (which need not be uniform) and to change such forms
from time to time; and to make all other determinations and to take all such
steps in connection with the Plan and the Options as the Committee, in its sole
discretion, deems necessary or desirable. The Committee shall not be bound to
any standards of uniformity or similarity of action, interpretation or conduct
in the discharge of its duties hereunder, regardless of the apparent similarity
of

                                                                              4
<PAGE>   8

the matters coming before it. Any determination, action or conclusion of the
Committee shall be final, conclusive and binding on all parties. Anything in
the Plan to the contrary notwithstanding, no term of this Plan relating to
Incentive Stock Options shall be interpreted, amended or altered, nor shall any
discretion or authority granted under the Plan be so exercised, so as to
disqualify the Plan under Section 422 of the Code, or, without the consent of
the Participants affected, to disqualify any Incentive Stock Option under such
Section 422.

                  B.       Advisors. The Committee may employ such legal
counsel, consultants and agents as it may deem desirable for the administration
of the Plan, and may rely upon any advice or opinion received from any such
counsel or consultant and any computation received from any such consultant or
agent. Expenses incurred by the Committee in the engagement of such counsel,
consultant or agent shall be paid by the Company.

                  C.       Indemnification. To the maximum extent permitted by
applicable law, no officer of the Company or member or former member of the
Committee or of the Board shall be liable for any action or determination made
in good faith with respect to the Plan or any Option granted under it. To the
maximum extent permitted by applicable law or the Certificate of Incorporation
or By-Laws of the Company, each officer and member or former member of the
Committee or of the Board shall be indemnified and held harmless by the Company
against any cost or expense (including reasonable fees of counsel reasonably
acceptable to the Company) or liability (including any sum paid in settlement
of a claim with the approval of the Company), and advanced amounts necessary to
pay the foregoing at the earliest time and to the fullest extent permitted,
arising out of any act or omission to act in connection with the Plan, except
to the extent arising out of such officer's, member's or former member's own
fraud or bad faith. Such indemnification shall be in addition to any rights of
indemnification the officers, members or former members may have as directors
under applicable law or under the Certificate of Incorporation or By-Laws of
the Company or Related Person.

                  D.       Meetings of the Committee. The Committee shall adopt
such rules and regulations as it shall deem appropriate concerning the holding
of its meetings and the transaction of its business. Any member of the
Committee may be removed from the Committee at any time either with or without
cause by resolution adopted by the Board, and any vacancy on the Committee may
at any time be filled by resolution adopted by the Board. All determinations by
the Committee shall be made by the affirmative vote of a majority of its
members. Any such determination may be made at a meeting duly called and held
at which a majority of the members of the Committee are in attendance in person
or through telephonic communication. Any determination set forth in writing and
signed by all the members of the Committee shall be as fully effective as if it
had been made by a majority vote of the members at a meeting duly called and
held.

                  E.       Determinations. Each determination, interpretation or
other action made or taken pursuant to the provisions of this Plan by the
Committee shall be final, conclusive and binding for all purposes and upon all
persons, including, without limitation, the Participants, the Company and
Related Persons, directors, officers and other employees of the Company and
Related Persons, and the respective heirs, executors, administrators, personal
representatives and other successors in interest of each of the foregoing.

                                                                              5
<PAGE>   9

V.       SHARES; ADJUSTMENT UPON CERTAIN EVENTS

                  A.       Shares to be Delivered; Fractional Shares. Shares to
be issued under the Plan shall be made available on an annual basis, at the
sole discretion of the Committee, either from authorized but unissued Shares or
from Shares reacquired by the Company and held in treasury.

                  No fractional Shares will be issued or transferred upon the
exercise of any Option. In lieu thereof, the Company shall pay a cash
adjustment equal to the same fraction of the Fair Market Value of one Share on
the date of exercise.

                  B.       Number of Shares. Subject to adjustment as provided
in this Article V, the maximum aggregate number of Shares that may be issued
under the Plan shall be 6,000,000. If Options are for any reason canceled, or
expire or terminate unexercised, the Shares covered by such Options shall again
be available for the grant of Options, subject to the foregoing limit.

                  C.       Adjustments; Recapitalization, etc. The existence of
the Plan and the Options granted hereunder shall not affect in any way the
right or power of the Board or the stockholders of the Company to make or
authorize any adjustment, recapitalization, reorganization or other change in
the Company's capital structure or its business, any merger or consolidation of
the Company, any issue of bonds, debentures, preferred or prior preference
stocks ahead of or affecting Common Stock, the dissolution or liquidation of
the Company or Related Persons, any sale or transfer of all or part of its
assets or business or any other corporate act or proceeding. The Committee may
make or provide for such adjustments in the maximum number of Shares specified
in Article V(B) and VI(A), in the number of Shares covered by outstanding
Options granted hereunder, and/or in the Purchase Price (as hereinafter
defined) applicable to such Options or such other adjustments in the number and
kind of securities received upon the exercise of Options, as the Committee in
its sole discretion may determine is equitably required to prevent dilution or
enlargement of the rights of Participants or to otherwise recognize the effect
that otherwise would result from any stock dividend, stock split, combination
of shares, recapitalization or other change in the capital structure of the
Company, merger, consolidation, spin-off, reorganization, partial or complete
liquidation, issuance of rights or warrants to purchase securities or any other
corporate transaction or event having an effect similar to any of the
foregoing. In the event of a merger or consolidation in which the Company is
not the surviving entity or in the event of any transaction that results in the
acquisition of substantially all of Company's outstanding Common Stock by a
single person or entity or by a group of persons and/or entities acting in
concert, or in the event of the sale or transfer of all of the Company's assets
(the foregoing being referred to as "Acquisition Events"), then the Committee
may in its sole discretion terminate all outstanding Options effective as of
the consummation of the Acquisition Event by delivering notice of termination
to each Participant at least 20 days prior to the date of consummation of the
Acquisition Event; provided that, during the period from the date on which such
notice of termination is delivered to the consummation of the Acquisition
Event, each Participant shall have the right to exercise in full all the
Options that are then outstanding (without regard to limitations on exercise
otherwise contained in the Options) but contingent on occurrence of the
Acquisition Event, and, provided that, if the Acquisition Event does not take
place within a specified period after giving such notice for any reason
whatsoever, the notice and exercise shall be null and void. Except as
hereinbefore expressly provided, the issuance by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class, for
cash, property, labor or services, upon direct sale, upon the exercise of
rights or warrants to subscribe therefor or upon conversion of shares or other
securities, and in any case whether

                                                                               6

<PAGE>   10

or not for fair value, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number and class of shares and/or other
securities or property subject to Options theretofore granted or the Purchase
Price (as hereinafter defined).

VI.      AWARDS AND TERMS OF OPTIONS

                  A.       Grant. The Committee may grant Non-Qualified Stock
Options or Incentive Stock Options, or any combination thereof to Key Employees
and may grant Non-Qualified Stock Options to Executive Consultants, provided,
that the maximum number of Shares with respect to which Options may be granted
to any Key Employee or Executive Consultant during any calendar year may not
exceed 1,000,000, except that in the year of the first grant of Options to a
Key Employee or Executive Consultant. To the extent that the maximum number of
authorized Shares with respect to which Options may be granted are not granted
in a particular calendar year to a Participant (beginning with the year in
which the Participant receives his or her first grant of Options hereunder),
such ungranted Options for any year shall increase the maximum number of Shares
with respect to which Options may be granted to such Participant in subsequent
calendar years during the term of the Plan until used. Any Incentive Stock
Option shall be granted within ten years of the date the Plan is adopted by the
Board or approved by shareholders, whichever is earlier. To the extent that any
Option does not qualify as an Incentive Stock Option (whether because of its
provisions or the time or manner of its exercise or otherwise), such Option or
the portion thereof which does not qualify, shall constitute a separate
Non-Qualified Stock Option. Each Option shall be evidenced by an Option
agreement (the "Option Agreement") in such form as the Committee shall approve
from time to time.

                  B.       Exercise Price. The purchase price per Share (the
"Purchase Price") deliverable upon the exercise of a Non-Qualified Stock Option
or an Incentive Stock Option shall be determined by the Committee and set forth
in a Participant's Option Agreement but shall be not less than 100% of the Fair
Market Value of a Share at the time of grant; provided, however, if an
Incentive Stock Option is granted to a Ten Percent Shareholder, the Purchase
Price shall be no less than 110% of the Fair Market Value of a Share.

                  C.       Number of Shares The Option Agreement shall specify
the number of Options granted to the Participant, as determined by the
Committee in its sole discretion.

                  D.       Exercisability. At the time of grant, the Committee
shall specify when and on what terms the Options granted shall be exercisable.
In the case of Options not immediately exercisable in full, the Committee may
at any time accelerate the time at which all or any part of the Options may be
exercised and may waive any other conditions to exercise. No Option shall be
exercisable after the expiration of ten years from the date of grant; provided,
however, the term of an Incentive Stock Option granted to a Ten Percent
Shareholder may not exceed five years. Each Option shall be subject to earlier
termination as provided in Article V above and Article VII below.

                  E.       Acceleration of Exercisability.

                           All Options granted and not previously exercisable
         shall become fully exercisable immediately upon a Change of Control
         (as defined herein). For this purpose, a "Change of Control" shall be
         deemed to have occurred upon:

                                                                              7
<PAGE>   11

                                    (a)      an acquisition by any individual,
                  entity or group (within the meaning of Section 13d-3 or 14d-1
                  of the Act) of beneficial ownership (within the meaning of
                  Rule 13d-3 promulgated under the Act) of more than 80% of the
                  combined voting power of the then outstanding voting
                  securities of the Company entitled to vote generally in the
                  election of directors, including, but not limited to, by
                  merger, consolidation or similar corporate transaction or by
                  purchase; excluding, however, the following: (x) any
                  acquisition by the Company, Related Persons, Wasserstein
                  Perella Partners, L.P., Blackstone Capital Partners L.P. or
                  an affiliate of any of the foregoing, or (y) any acquisition
                  by an employee benefit plan (or related trust) sponsored or
                  maintained by the Company or Related Persons; or

                                    (b)      the approval of the stockholders of
                  the Company of (i) a complete liquidation or dissolution of
                  the Company or (ii) the sale or other disposition of more
                  than 80% of the gross assets of the Company and Related
                  Persons on a consolidated basis (determined under generally
                  accepted accounting principles as determined in good faith by
                  the Committee); excluding, however, such a sale or other
                  disposition to a corporation with respect to which, following
                  such sale or other disposition, (x) more than 20% of the
                  combined voting power of the then outstanding voting
                  securities of such corporation entitled to vote generally in
                  the election of directors will be then beneficially owned,
                  directly or indirectly, by the individuals and entities who
                  were the beneficial owners of the outstanding Shares
                  immediately prior to such sale or other disposition, (y) no
                  Person (other than the Company, Related Persons, and any
                  employee benefit plan (or related trust) of the Company or
                  Related Persons or such corporation and any Person
                  beneficially owning, immediately prior to such sale or other
                  disposition, directly or indirectly, 20% or more of the
                  outstanding Shares) will beneficially own, directly or
                  indirectly, 20% or more of the combined voting power of the
                  then outstanding voting securities of such corporation
                  entitled to vote generally in the election of directors and
                  (z) individuals who were members of the Board will constitute
                  at least a majority of the members of the board of directors
                  of such corporation.

                  F.       Exercise of Options.

                           1.       A Participant may elect to exercise one or
more Options by giving written notice to the Committee of such election and of
the number of Options such Participant has elected to exercise, accompanied by
payment in full of the aggregate Purchase Price for the number of Shares for
which the Options are being exercised; provided, however, that, in the case of
a notice of exercise delivered to the Committee by facsimile, such payment may
be made by delivery of payment to the Committee on the business day next
following the date on which such notice of exercise is delivered (such delivery
being deemed to have been duly made if the Participant giving such facsimile
notice shall have dispatched such payment by a nationally recognized overnight
courier service guaranteeing delivery on such next business day, provided such
payment is actually received by the Company).

                           2.       Shares purchased pursuant to the exercise of
Options shall be paid for as follows:

                                    (a)      in cash or by check, bank draft or
                  money order payable to the

                                                                              8
<PAGE>   12

                  order of Company;

                                    (b)      if the Shares are traded on a
                  national securities exchange, through the delivery of
                  irrevocable instructions to a broker to deliver promptly to
                  the Company an amount equal to the aggregate Purchase Price;
                  or

                                    (c)      on such other terms and conditions
                  as may be acceptable to the Committee (which may include
                  payment in full or in part by the transfer of Shares which
                  have been owned by the Participant for at least 6 months or
                  the surrender of Options owned by Participant) and in
                  accordance with applicable law.

                           3.       Upon receipt of payment, the Company shall
         deliver to the Participant as soon as practicable a certificate or
         certificates for the Shares then purchased.

                  G.       [Reserved]

                  H.       Non-Competition and Other Provisions. In
consideration of the grant of Options, by accepting the grant of Options the
Participant agrees during employment and, in the event any Options vest, for a
period ending one year following the date of the Participant's Termination of
Employment, not to engage in any Competitive Activity, except to the extent
consented to by the Committee in writing. Each Participant by accepting a grant
of Options hereunder acknowledges that the Company or a Related Person will
suffer irreparable harm in the event such Participant engages in any
Competitive Activity during this period, and agrees that in addition to its
remedies at law, the Company and a Related Person shall be entitled to
injunctive relief as a consequence of a violation or threatened violation of
this covenant. Notwithstanding the foregoing, nothing in this Plan shall
prohibit or penalize ownership by a Participant of the shares of a business
that is registered under Section 12 of the Act and constitutes, together with
all such shares owned by any immediate family member or affiliate of, or person
acting in concert with, such Participant, less than 2% of the outstanding
registered shares of such business. The Committee will have the discretion to
impose in a Participant's Option Agreement such other conditions, limitations
and restrictions as it determines are appropriate in its sole discretion,
including any waivers of rights which a Participant may have.

                  I.       [Reserved]

                  J.       Incentive Stock Option Limitations. To the extent
that the aggregate Fair Market Value (determined as of the time of grant) of
the Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by the Participant during any calendar year under the Plan
and/or any other stock option plan of the Company or any subsidiary or parent
corporation (within the meaning of Section 424 of the Code) exceeds $100,000,
such Options shall be treated as Options which are not Incentive Stock Options.

                  To the extent permitted under Section 422 of the Code, or the
applicable regulations thereunder or any applicable Internal Revenue Service
pronouncement, if (i) a Participant's employment with the Company or Related
Person is terminated by reason of death, Disability, retirement or termination
without Cause, and (ii) the portion of any Incentive Stock Option that would be
exercisable during the post-

                                                                              9
<PAGE>   13

termination period specified under Article VII but for the $100,000 limitation
currently contained in Section 422(d) of the Code, is greater than the portion
of such Stock Option that is immediately exercisable as an `incentive stock
option' during such post-termination period under Section 422, such excess
shall be treated as a Non-Qualified Stock Option. If the exercise of an
Incentive Stock Option is accelerated for any reason, any portion of such
Option that is not exercisable as an Incentive Stock Option by reason of the
$100,000 limitation contained in Section 422(d) of the Code shall be treated as
a Non-Qualified Stock Option.

                  Should any of the foregoing provisions not be necessary in
order for the Options to qualify as Incentive Stock Options, or should any
additional provisions be required, the Committee may amend the Plan
accordingly, without the necessity of obtaining the approval of the
shareholders of the Company, except as otherwise required by law.

VII.     EFFECT OF TERMINATION OF RELATIONSHIP

                  A.       Death, Disability, Retirement, etc Except as
otherwise provided in the Participant's Option Agreement, upon Termination of
Relationship, all outstanding Options then exercisable and not exercised by the
Participant prior to such Termination of Relationship (and any Options not
previously exercisable but made exercisable by the Committee at or after the
Termination of Relationship) shall remain exercisable by the Participant to the
extent not exercised for the following time periods, or, if earlier, the prior
expiration of the Option in accordance with the terms of the Plan and grant:

                      1.   In the event of the Participant's death or
         Disability, such Options shall remain exercisable by the Participant
         (or by the Participant's estate or by the person given authority to
         exercise such Options by the Participant's will or by operation of
         law) for a period of one year from the date of the Participant's death
         or Disability, provided that the Committee, in its sole discretion,
         may at any time extend such time period.

                      2.   In the event the Participant retires from employment
         at or after age 65 (or, with the consent of the Committee or under an
         early retirement policy of the Company or a Related Person, before age
         65), or if the Participant's employment is terminated by the Company
         or a Related Person without Cause, such Options shall remain
         exercisable for 90 days from the date of the Participant's Termination
         of Employment, provided that the Committee, in its sole discretion,
         may at any time extend such time period.

                  B.       Cause. Upon the Termination of Relationship of a
Participant for Cause, or if the Company or a Related Person obtains or
discovers information after Termination of Relationship that such Participant
had engaged in conduct that would have justified a Termination of Relationship
for Cause during employment or consultancy, all outstanding Options of such
Participant shall immediately be canceled.

                  C.       Other Termination. In the event of Termination of
Relationship for any reason other than as provided in Article VII(A) or VII(B),
all outstanding Options not exercised by the Participant prior to such
Termination of Relationship shall remain exercisable (to the extent exercisable
by such Participant immediately before such termination) for a period of 30
days after such termination, provided that the Committee, in its sole
discretion, may at any time extend such time period.

                                                                             10
<PAGE>   14

                  D.       Cancellation of Options. Except as otherwise provided
in Article VI(E), no Options that were not exercisable during the period of
employment or consultancy shall thereafter become exercisable upon a
Termination of Relationship for any reason or no reason whatsoever, and such
Options shall terminate and become null and void upon a Termination of
Relationship, unless the Committee determines in its sole discretion that such
Options shall be exercisable.

VIII.    TRANSFERABILITY OF OPTIONS

                  Except as provided in this Article VIII, each Option granted
hereunder shall by its terms not be assignable or transferable other than by
will or the laws of descent and distribution and may be exercised, during the
Participant=s lifetime, only by the Participant. A Non-Qualified Stock Option
may be transferred to any family member (as hereinafter defined) of the
Participant or transferred to entities controlled by the Participant and/or
such family members for or without consideration. For purposes of this Article
VIII, "family member" shall mean any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in law, or
sister-in-law, including adoptive relationships, any person sharing the
Participant=s household (other than a tenant or employee), a trust in which
these persons have more than fifty percent of the beneficial interest, a
foundation in which these persons (or the Participant) control the management
of assets, and any other entity in which these persons (or the Participant) own
more than fifty percent of the voting interests.

IX.      RIGHTS AS A STOCKHOLDER

                  A Participant (or a permitted transferee of an Option) shall
have no rights as a stockholder with respect to any Shares covered by such
Participant's Option until such Participant (or permitted transferee) shall
have become the holder of record of such Shares, and no adjustments shall be
made for dividends in cash or other property or distributions or other rights
in respect to any such Shares, except as otherwise specifically provided in
this Plan.

X.       TERMINATION, AMENDMENT AND MODIFICATION

                  A.       General Amendments. At any time the Committee may
amend or terminate the Plan or suspend the Plan in whole or in part.

                  The Committee may at any time, and from time to time, amend,
in whole or in part, any or all of the provisions of the Plan (including any
amendment deemed necessary to ensure that the Company may comply with any
regulatory requirement referred to in Article XII), or suspend or terminate it
entirely, retroactively or otherwise; provided, however, that, unless otherwise
required by law or specifically provided herein, the rights of a Participant
with respect to Options granted prior to such amendment, suspension or
termination, may not be materially impaired without the consent of such
Participant and, provided further, without the approval of the stockholders of
the Company entitled to vote, no amendment may be made which would require the
approval of the stockholders of the Company for listing of the Shares issuable
upon exercise of the Options on the New York Stock Exchange.

                                                                             11
<PAGE>   15

                  The Committee may amend the terms of any Option granted,
prospectively or retroactively, but, subject to Article VI above or as
otherwise provided herein, no such amendment or other action by the Committee
shall materially impair the rights of any Participant without the Participant's
consent. No modification of an Option shall adversely affect the status of an
Incentive Stock Option as an incentive stock option under Section 422 of the
Code. Notwithstanding the foregoing, however, no such amendment may, without
the approval of the stockholders of the Company, effect any change that would
require stockholder approval under applicable law.

XI.      USE OF PROCEEDS

                  The proceeds of the sale of Shares subject to Options under
the Plan are to be added to the general funds of Company and used for its
general corporate purposes as the Board shall determine.

XII.     GENERAL PROVISIONS

                  A.       Right to Terminate Employment. Neither the adoption
of the Plan nor the grant of Options shall impose any obligation on the Company
or Related Persons to continue the employment of any Participant, nor shall it
impose any obligation on the part of any Participant to remain in the employ of
the Company or Related Persons.

                  B.       Purchase for Investment. If the Board or the
Committee determines that the law so requires, the holder of an Option granted
hereunder shall, upon any exercise or conversion thereof, execute and deliver
to the Company a written statement, in form satisfactory to the Company,
representing and warranting that such Participant is purchasing or accepting
the Shares then acquired for such Participant's own account and not with a view
to the resale or distribution thereof, that any subsequent offer for sale or
sale of any such Shares shall be made either pursuant to (i) a Registration
Statement on an appropriate form under the Securities Act, which Registration
Statement shall have become effective and shall be current with respect to the
Shares being offered and sold, or (ii) a specific exemption from the
registration requirements of the Securities Act, and that in claiming such
exemption the holder will, prior to any offer for sale or sale of such Shares,
obtain a favorable written opinion, satisfactory in form and substance to the
Company, from counsel acceptable to the Company as to the availability of such
exemption.

                  C.       Trusts, etc Nothing contained in the Plan and no
action taken pursuant to the Plan (including, without limitation, the grant of
any Option thereunder) shall create or be construed to create a trust of any
kind, or a fiduciary relationship, between the Company and any Participant or
the executor, administrator or other personal representative or designated
beneficiary of such Participant, or any other persons. Any reserves that may be
established by the Company in connection with the Plan shall continue to be
part of the general funds of the Company, and no individual or entity other
than the Company shall have any interest in such funds until paid to a
Participant. If and to the extent that any Participant or such Participant's
executor, administrator or other personal representative, as the case may be,
acquires a right to receive any payment from the Company pursuant to the Plan,
such right shall be no greater than the right of an unsecured general creditor
of the Company.

                                                                             12
<PAGE>   16

                  D.       Notices. Any notice to the Company required by or in
respect of this Plan will be addressed to the Company at 5755 New King Court,
Troy, MI 48098, Attention: Sr. Vice President, Human Resources, or such other
place of business as shall become the Company's principal executive offices
from time to time, or sent to the Company by facsimile to (248) 824-1613,
Attention: Sr. Vice President, Human Resources, or to such other facsimile
number as the Company shall notify each Participant. Each Participant shall be
responsible for furnishing the Committee with the current and proper address
for the mailing to such Participant of notices and the delivery to such
Participant of agreements, Shares and payments. Any such notice to the
Participant will, if the Company has received notice that the Participant is
then deceased, be given to the Participant's personal representative if such
representative has previously informed the Company of his status and address
(and has provided such reasonable substantiating information as the Company may
request) by written notice under this Section. Any notice required by or in
respect of this Plan will be deemed to have been duly given when delivered in
person or when dispatched by telegram or, in the case of notice to the Company,
by facsimile as described above, or one business day after having been
dispatched by a nationally recognized overnight courier service or three
business days after having been mailed by United States registered or certified
mail, return receipt requested, postage prepaid. The Company assumes no
responsibility or obligation to deliver any item mailed to such address that is
returned as undeliverable to the addressee and any further mailings will be
suspended until the Participant furnishes the proper address.

                  E.       Severability of Provisions. If any provisions of the
Plan shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions of the Plan, and the
Plan shall be construed and enforced as if such provisions had not been
included.

                  F.       Payment to Minors, Etc. Any benefit payable to or for
the benefit of a minor, an incompetent person or other person incapable of
receipt thereof shall be deemed paid when paid to such person's guardian or to
the party providing or reasonably appearing to provide for the care of such
person, and such payment shall fully discharge the Committee, the Company and
their employees, agents and representatives with respect thereto.

                  G.       Headings and Captions. The headings and captions
herein are provided for reference and convenience only. They shall not be
considered part of the Plan and shall not be employed in the construction of
the Plan.

                  H.       Controlling Law. The Plan shall be construed and
enforced according to the laws of the State of Delaware.

                  I.       Section 162(m) Deduction Limitation The Committee at
any time may in its sole discretion limit the number of Options that can be
exercised in any taxable year of the Company, to the extent necessary to
prevent the application of Section 162(m) of the Code (or any similar or
successor provision), provided that the Committee may not postpone the earliest
date on which Options can be exercised beyond the last day of the stated term
of such Options.

                  J.       Section 16(b) of the Act. All elections and
transactions under the Plan by persons subject to Section 16 of the Act
involving shares of Common Stock are intended to comply with all exemptive
conditions under Rule 16b-3 promulgated under Section 16(b) of the Act. The
Committee may establish and adopt written administrative guidelines, designed
to facilitate compliance with Section 16(b) of the Act, as it may deem
necessary or proper for the administration and operation of the Plan and the

                                                                             13
<PAGE>   17

transaction of business thereunder.

XIII.    ISSUANCE OF STOCK CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES

                  A.       Stock Certificates. Upon any exercise of an Option
and payment of the exercise price as provided in such Option, a certificate or
certificates for the Shares as to which such Option has been exercised shall be
issued by the Company or a book entry shall be made by the Company in the name
of the person or persons exercising such Option and shall be delivered to or
upon the order of such person or persons.

                  B.       Legends. Certificates for Shares issued upon exercise
of an Option shall bear such legend or legends as the Committee, in its sole
discretion, determines to be necessary or appropriate to prevent a violation
of, or to perfect an exemption from, the registration requirements of the
Securities Act or to implement the provisions of any agreements between Company
and the Participant with respect to such Shares.

                  C.       Payment of Expenses. The Company shall pay all issue
or transfer taxes with respect to the issuance or transfer of Shares, as well
as all fees and expenses necessarily incurred by the Company in connection with
such issuance or transfer and with the administration of the Plan.

XIV.     LISTING OF SHARES AND RELATED MATTERS

                  If at any time the Board or the Committee shall determine in
its sole discretion that the listing, registration or qualification of the
Shares covered by the Plan upon any national securities exchange or under any
state or federal law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in connection with, the
grant of Options or the award or sale of Shares under the Plan, no Option grant
shall be effective and no Shares will be delivered, as the case may be, unless
and until such listing, registration, qualification, consent or approval shall
have been effected or obtained, or otherwise provided for, free of any
conditions not acceptable to the Board.

XV.      WITHHOLDING TAXES

                  The Company shall have the right to require prior to the
issuance or delivery of any shares of Common Stock payment by the Participant
of any Federal, state or local taxes required by law to be withheld.

                  The Committee may permit any such withholding obligation to
be satisfied by reducing the number of shares of Common Stock otherwise
deliverable. A person required to file reports under Section 16(a) of the Act
with respect to securities of the Company may elect to have a sufficient number
of shares of Common Stock withheld to fulfill such tax obligations (hereinafter
a "Withholding Election") only if the election complies with such conditions as
are necessary to prevent the withholding of such shares from being subject to
Section 16(b) of the Act. To the extent necessary under then current law, such
conditions shall include the following: the Withholding Election shall be
subject to the approval of the full Board of Directors of the Company or a
committee of the Board which consists of "non-employee directors" within the
meaning of Rule 16b-3 promulgated under Section 16(b) of the Act. Any fraction
of a share of Common Stock required to satisfy such tax obligations shall be
disregarded and the amount due shall be paid instead in cash by the
Participant.

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