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                                                                   EXHIBIT 4.3

                              HAMILTON BANCORP INC.

                   1998 EXECUTIVE INCENTIVE COMPENSATION PLAN

         1. PURPOSE. The purpose of this Plan is to advance the interests of
Hamilton Bancorp Inc. (the "Company") by providing an additional incentive to
attract and retain qualified and competent persons who are key employees or
directors of the Company or its subsidiaries or affiliated entities, and upon
whose efforts and judgment the success of the Company is largely dependent.

         2. DEFINITIONS. As used herein, the following terms shall have the
meaning indicated:

         (a) "Affiliate" shall mean any corporation other than the Company that
         is a member of an affiliated group of corporations, as defined in
         Section 1504 (determined without regard to Section 1504(b)) of the
         Internal Revenue Code, of which the Company is a member.

         (b) "Annual Incentive Award" shall mean a conditional right granted to
         a Participant under Section 13(c) hereof to receive a cash payment or
         other Award, unless otherwise determined by the Committee, after the
         end of a specified fiscal year.

         (c) "Award" shall mean any Option, Performance Award or Annual
         Incentive Award, together with any other right or interest granted to a
         Participant under the Plan.

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

         (e) "Committee" shall mean the compensation committee appointed by the
         Board (as described in Section 14 hereof) or, if such a committee does
         not exist, the Board.

         (f) "Common Stock" shall mean the 1 cent par value Common Stock of the
         Company.

         (g) "Covered Employee" shall mean any individual who, on the last day
         of the taxable year of the Company, is (i) the Chief Executive Officer
         of the Company or is acting in such capacity (the "CEO"), (ii) among
         the four highest compensated officers of the Company and its Affiliates
         (other than the CEO), or (iii) otherwise considered to be a "Covered
         Employee" within the meaning of Section 162(m) of the Internal Revenue
         Code and the regulations promulgated thereunder.

         (h) "Director" shall mean a member of the Board.

         (i) "Eligible Person" means each Officer of the Company (as defined
         under the Exchange Act) and other officers, directors and employees of

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         the Company or of any Subsidiary. An employee on leave of absence may
         be considered as still in the employ of the Company or a Subsidiary for
         purposes of eligibility for participation in the Plan.

         (j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
         amended.

         (k) "Fair Market Value" of a Share on any date of reference shall be
         the "Closing Price" (as defined below) of the Common Stock on the
         business day immediately preceding such date or, if there are no sales
         on that date, then on the last previous day on which a sale was
         reported, unless the Committee in its sole discretion shall determine
         otherwise in a fair and uniform manner. For the purpose of determining
         Fair Market Value, the "Closing Price" of the Common Stock on any
         business day shall be (i) if the Common Stock is listed or admitted for
         trading on any United States national securities exchange, or if actual
         transactions are otherwise reported on a consolidated transaction
         reporting system, the last reported sale price of Common Stock on such
         exchange or reporting system, as reported in any newspaper of general
         circulation, (ii) if the Common Stock is quoted on the National
         Association of Securities Dealers Automated Quotations System
         ("Nasdaq"), or any similar system of automated dissemination of
         quotations of securities prices in common use, the last reported sale
         price of Common Stock for such day on such system, or (ii) if neither
         clause (i) or (ii) is applicable, the mean between the high bid and low
         asked quotations for the Common Stock as reported by the National
         Quotation Bureau, Incorporated if at least two securities dealers have
         inserted both bid and asked quotations for Common Stock on at least
         five of the ten preceding days. If neither (i), (ii), or (iii) above is
         applicable, then Fair Market Value shall be determined in good faith by
         the Committee in a fair and uniform manner.

         (l) "Incentive Stock Option" shall mean an incentive stock option as
         defined in Section 422 of the Internal Revenue Code.

         (m) "Internal Revenue Code" shall mean the Internal Revenue Code of
         1986, as amended from time to time.

         (n) "Non-Employee Director" shall refer to a Director who is not an
         employee of the Company or any Subsidiary.

         (o) "Non-Qualified Stock Option" shall mean an Option which is not an
         Incentive Stock Option.

         (p) "Officer" shall mean the Company's president, principal financial
         officer, principal accounting officer and any other person who the
         Company identifies as an executive officer.

         (q) "Option" shall mean any option granted under this Plan.

         (r) "Outside Director" shall mean a member of the Board who (i) is not
         a current employee of the Company or any Affiliate; (ii) is not a
         former employee of the Company or any Affiliate who receives
         compensation for prior services (other than benefits under a
         tax-qualified retirement plan) during the taxable year; (iii) has not
         been an officer of the Company or any Affiliate; (iv) does not receive
         remuneration either directly or indirectly, in any capacity other than

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         as a director; and (v) satisfies any other conditions that shall from
         time to time be required to qualify as an "outside director" under
         Section 162(m) of the Internal Revenue Code and the regulations
         thereunder and as a "Non-Employee Director" under Rule 16b-3
         promulgated under the Exchange Act. For this purpose, "Remuneration"
         shall have the meaning afforded that term pursuant to Treasury
         Regulations issued under Section 162(m) of the Internal Revenue Code,
         and shall exclude any de minimis remuneration excluded under those
         Treasury Regulations.

         (s) "Participant" shall mean a person to whom an Award is granted under
         this Plan or any person who succeeds to the rights of such person under
         this Plan by reason of the death of such person;

         (t) "Performance Award" means a right, granted to a Eligible Person
         under Section 13 hereof, to receive Awards based upon performance
         criteria specified by the Committee or the Board.

         (u) "Plan" shall mean this Executive Incentive Compensation Plan.

         (v) "Share" shall mean a share of the Common Stock.

         (w) "Subsidiary" shall mean any corporation (other than the Company) in
         any unbroken chain of corporations beginning with the Company if, at
         the time of the granting of the Option, each of the corporations other
         than the last corporation in the unbroken chain owns stock possessing
         50 percent or more of the total combined voting power of all classes of
         stock in one of the other corporations in such chain.

         3. SHARES AND OPTIONS. The Company may grant to Participants from time
to time Options to purchase an aggregate of up to One Hundred Twenty-two
Thousand Five Hundred (122,500) Shares from Shares held in the Company's
treasury or from authorized and unissued Shares. If any Option granted under the
Plan shall terminate, expire, or be canceled or surrendered as to any Shares,
new Options may thereafter be granted covering such Shares. An Option granted
hereunder shall be either an Incentive Stock Option or a Non-Qualified Stock
Option as determined by the Committee at the time of grant of such Option, and
shall clearly state, whether it is an Incentive Stock Option or Non-Qualified
Stock Option. All Options shall be granted within 10 years from the effective
date of this Plan.

         4. DOLLAR LIMITATION. Options otherwise qualifying as Incentive Stock
Options hereunder will not be treated as Incentive Stock Options to the extent
that the aggregate fair market value (determined at the time the Option is
granted) of the Shares, with respect to which Options meeting the requirements
of Internal Revenue Code Section 422(b) are exercisable for the first time by
any individual during any calendar year (under all plans of the Company),
exceeds $100,000.

         5. CONDITIONS FOR GRANT OF OPTIONS

         (a) Each Option shall be evidenced by an option agreement that may
         contain any term deemed necessary or desirable by the Committee,
         provided such terms are not inconsistent with this Plan or any
         applicable law. Participants shall be those persons selected by the

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         Committee in its sole discretion. Any person who files with the
         Committee, in a form satisfactory to the Committee, a written waiver of
         eligibility to receive any Option under this Plan shall not be eligible
         to receive any Option under this Plan for the duration of such waiver.

         (b) In granting Options, the Committee may take into consideration the
         contribution the person has made to the success of the Company and its
         subsidiaries and such other factors as the Committee shall determine.
         The Committee shall also have the authority to consult with and receive
         recommendations from Officers and other personnel of the Company with
         regard to these matters. The Committee may from time in granting
         Options under the Plan prescribe such other terms and conditions
         concerning such Options as it deems appropriate, including, without
         limitation, (i) prescribing the date or dates on which the Option
         becomes exercisable, (ii) providing that the Option rights accrue or
         become exercisable in installments over a period of years, or upon the
         attainment of stated goals or both, or (iii) if applicable, relating an
         Option to the continued employment of the Participant for a specified
         period of time, provided that such terms and conditions are not more
         favorable to a Participant than those expressly permitted herein.

         (c) If applicable, the Options granted to employees under this Plan
         shall be in addition to regular salaries, pension, life insurance or
         other benefits related to their employment or other relationship with
         the Company. Neither the Plan nor any Option granted under the Plan
         shall confer upon any person any right to employment or continuance of
         employment by the Company.

         (d) Notwithstanding any other provision of this Plan, and in addition
         to any other requirements of this Plan, the aggregate number of Shares
         with respect to which Options may be granted to any one Participant may
         not exceed 61,250, subject to adjustment as provided in Section 10(a)
         hereof.

         (e) Notwithstanding any other provision of this Plan, and in addition
         to any other requirements of this plan, Options may not be granted to a
         Covered Employee unless the grant of such Option is authorized by, and
         all of the terms of such Options are determined by, a Committee that is
         appointed in accordance with Section 14 of this Plan and all of whose
         members are Outside Directors.

         (f) Incentive Stock Options may not be granted to any Non-Employee
         Directors.

         6. EXERCISE PRICE. The exercise price per Share of any Option shall be
any price determined by the Committee but shall not be less than the par value
per Share; provided, however, that in no event shall the exercise price per
Share of any Incentive Stock Option be less than the Fair Market Value of the
Shares underlying such Option on the date such Option is granted.

         7. EXERCISE OF OPTIONS.

         (a) An Option shall be deemed exercised when (i) the Company has
         received written notice of such exercise in accordance with the terms

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         of the Option (ii) full payment of the aggregate exercise price of the
         Shares as to which the Option is exercised has been made and (iii)
         arrangements that are satisfactory to the Committee, in its sole
         discretion, have been made for the Participant's payment to the Company
         of the amount that is necessary for the Company employing the
         Participant to withhold in accordance with applicable Federal or state
         tax withholding requirements.

         (b) Unless further limited by the Committee in any Option, the option
         price of any Shares purchased shall be paid (i) in cash, (ii) by
         certified or official bank check, (iii) by money order, (iv) with
         Shares owned by the Participant that have been owned by the Participant
         for more than 6 months on the date of surrender or such other period as
         may be required to avoid a charge to the Company's earnings for
         financial accounting purposes, (v) by authorization for the Company to
         withhold Shares issuable upon exercise of the Option, (vi) by
         arrangement with a broker that is acceptable to the Committee where
         payment of the Option price is made pursuant to an irrevocable
         direction to the broker to deliver all or part of the proceeds from the
         sale of the Option Shares to the Company in payment of the Option
         price, or (vii) any combination of the foregoing. The Committee in its
         sole discretion may accept a personal check in full or partial payment
         of any Shares. If the exercise price is paid in whole or in part with
         Shares, the value of the Shares surrendered shall be their Fair Market
         Value on the date the Option is exercises. The Company in its sole
         discretion may, on an individual basis or pursuant to a general program
         established in connection with this Plan, and subject to applicable
         law, lend money to a Participant, guarantee a loan to a Participant, or
         otherwise assist a Participant to obtain the cash necessary to exercise
         all or a portion of an Option granted hereunder or to pay any tax
         liability of the Participant attributable to such exercise. If the
         exercise price is paid in whole or part with Participant's promissory
         note, such note shall (i) provide for full recourse to the maker, (ii)
         be collateralized by the pledge of the Shares that the Participant
         purchases upon exercise of such option, (iii) bear interest at a rate
         no less than the prime rate of the Company's principal bank subsidiary
         and (iv) contain such other terms as the Board in its sole discretion
         shall reasonably require.

         (c) No Participant shall be deemed to be a holder of any Shares subject
         to an Option unless and until a stock certificate or certificates for
         such Shares are issued to such person(s) under the terms of this Plan.
         No adjustment shall be made for dividends (ordinary or extraordinary,
         whether in cash, securities or other property) or distributions or
         other rights for which the record date is prior to the date such stock
         certificate is issued, except as expressly provided in Section 10
         hereof.

         8. EXERCISABILITV OF OPTIONS. Any Option shall become exercisable in
such amounts, at such intervals and upon such terms as the Committee shall
provide in such Option, except as otherwise provided in this Section 8.

         (a) The expiration date of an Option shall be determined by the
         Committee at the time of grant, but in no event shall an Option be
         exercisable after the expiration of 10 years from the date of grant of
         the Option.

         (b) Unless otherwise provided in any Option, each outstanding Option
         shall become immediately fully exercisable:

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                  (i)      if there occurs any transaction (which shall include
                           a series of transactions occurring, within 60 days or
                           occurring pursuant to a plan), that has the result
                           that stockholders of the Company immediately before
                           such transaction cease to own at least fifty percent
                           (50%) of the voting stock of the Company or of any
                           entity that results from the participation of the
                           Company in a reorganization, consolidation, merger,
                           liquidation or any other form of corporate
                           transaction;

                  (ii)     if the stockholders of the Company shall approve a
                           plan of merger, consolidation, reorganization,
                           liquidation or dissolution in which the Company does
                           not survive (unless the approved merger,
                           consolidation, reorganization, liquidation or
                           dissolution is subsequently abandoned); or

                  (iii)    if the stockholders of the Company shall approve a
                           plan for the sale, lease, exchange or other
                           disposition of all or substantially all the property
                           and assets of the Company (unless such plan is
                           subsequently abandoned).

         (c) The Committee may in its sole discretion accelerate the date on
         which any Option may be exercised and may accelerate the vesting of any
         Shares subject to any Option or previously acquired by the exercise of
         any Option.

         9. TERMINATION OF OPTION PERIOD.

         (a) The unexercised portion of any Option granted to a Participant
         shall automatically and without notice terminate and become null and
         void at the time of the earliest to occur of the following:

                  (i)      three months after the date on which the
                           Participant's employment with the Company or any
                           Subsidiary, or service as a Director or as a director
                           of any Subsidiary, is terminated or, in the case of a
                           Non-Qualified Stock Option and unless the Committee
                           shall otherwise determine in writing in its sole
                           discretion, the date on which the Participant's
                           employment with the Company or any Subsidiary, or
                           service as a Director or as a director of any
                           Subsidiary, is terminated, in either case for any
                           reason other than by reason of (a) Cause, which shall
                           mean "Cause" under such Participant's employment
                           agreement, if any, and which, solely for purposes of
                           this Plan, also shall mean the termination of the
                           Participant's employment or the removal of the
                           Participant as a Director or as a director of any
                           Subsidiary by reason of the Participant's willful
                           misconduct or gross negligence, (b) the Participant's
                           mental or physical disability (within the meaning of
                           Internal Revenue Code Section 22(e)) as determined by
                           a medical doctor satisfactory to the Committee or (c)
                           the Participant's death;

                  (ii)     immediately upon the termination of the Participant's
                           employment with the Company or any Subsidiary, or
                           service as a Director or as a director of any
                           Subsidiary, for Cause;

                  (iii)    twelve months after the date on which the
                           Participant's employment with the Company or any

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                           Subsidiary, or service as a Director or as a director
                           of any Subsidiary, is terminated by reason of mental
                           or physical disability (within the meaning of
                           Internal Revenue Code Section 22(e)) as determined by
                           a medical doctor satisfactory to the Committee, or

                  (iv)     (a) twelve months after the date of the Participant's
                           death or (b) three months after the date of the
                           Participant's death if such death shall occur during
                           the twelve month period specified in Subsection
                           9(a)(iii) hereof.

         (b) The Committee in its sole discretion may by giving written notice
         ("cancellation notice") cancel, effective upon the date of the
         consummation of any corporate transaction described in Subsections
         8(b)(ii) or (iii) hereof, any Option that remains unexercised on such
         date. Such cancellation notice shall be given a reasonable period of
         time prior to the proposed date of such cancellation and may be given
         either before or after approval of such corporate transaction.

         10. ADJUSTMENT OF SHARES.

         (a) If at any time while the Plan is in effect or unexercised Options
         are outstanding, there shall be any increase or decrease in the number
         of issued and outstanding Shares through the declaration of a stock
         dividend or through any recapitalization resulting in a stock split-up,
         combination or exchange of Shares, then and in such event:

                  (i)      appropriate adjustment shall be made in the maximum
                           number of shares available for grant under the Plan,
                           so that the same percentage of the Company's issued
                           and outstanding Shares shall continue to be subject
                           to being so optioned; and

                  (ii)     appropriate adjustment shall be made in the number of
                           Shares and the exercise price per Share thereof then
                           subject to any outstanding Option, so that the same
                           percentage of the Company's issued and outstanding
                           Shares shall remain subject to purchase at the same
                           aggregate exercise price.

         (b) Subject to the specific terms of any Option, the Committee may
         change the terms of Options outstanding under this Plan, with respect
         to the option price or the number of Shares subject to the Options, or
         both, when, in the Committee's sole discretion, such adjustments become
         appropriate by reason of a corporate transaction described in
         Subsections 8(b)(ii) or (iii) hereof.

         (c) Except as otherwise expressly provided herein, the issuance by the
         Company of shares of its capital stock of any class, or securities
         convertible into shares of capital stock of any class, either in
         connection with direct sale or upon the exercise of rights or warrants
         to subscribe thereof, or upon conversion of shares or obligations of
         the Company convertible into such shares or other securities, shall not
         affect, and no adjustment by reason thereof shall be made with respect
         to the number of or exercise price of Shares then subject to
         outstanding Options granted under the Plan.

         (d) Without limiting the generality of the foregoing, the existence of
         outstanding Options granted under the Plan shall not affect in any

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         manner the right or power of the Company to make, authorize or
         consummate (i) any or all adjustments, recapitalizations,
         reorganizations or other changes in the Company's capital structure or
         its business; (ii) any merger or consolidation of the Company; (iii)
         any issue by the Company of debt securities, or preferred or preference
         stock that would rank above the Shares subject to outstanding Options;
         (iv) the dissolution or liquidation of the Company; (v) any sale,
         transfer or assignment of all or any part of the assets or business of
         the Company; or (vi) any other corporate act or proceeding, whether of
         a similar character or otherwise.

         11. TRANSFERABILITY OF OPTIONS AND SHARES.

         (a) No Incentive Stock Option, and unless the Committee's prior written
         consent is obtained (which consent may be obtained at the time an
         Option is granted) and the transaction does not violate the
         requirements of Rule 16-B-3 promulgated under the Exchange Act no
         Non-Qualified Stock Option, shall be subject to alienation, assignment,
         pledge, charge or other transfer other than by the Participant by will
         or the laws of descent and distribution, and any attempt to make any
         such prohibited transfer shall be void. Each Option shall be
         exercisable during the Participant's lifetime only by the Participant,
         or in the case of a Non-Qualified Stock Option that has been assigned
         or otherwise transferred with the Committee's prior written consent,
         only by the assignee consented to by the Committee.

         (b) Unless the Committee's prior written consent is obtained (which
         consent may be obtained at the time an Option is granted) and the
         transaction does not violate the requirements of Rule 16b-3 promulgated
         under the Exchange Act, no Shares acquired by an Officer, as that term
         is defined under Rule 16b-3, of the Company or Director or a director
         of any Subsidiary pursuant to the exercise of an Option may be sold,
         assigned, pledged or otherwise transferred prior to the expiration of
         the six-month period following the date on which the Option was
         granted.

         12. ISSUANCE OF SHARES. As a condition of any sale or issuance of
Shares upon exercise of any Option, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to assure
compliance with any such law or regulation including, but not limited to, the
following:

         (a) a representation and warranty by the Participant to the Company, at
         the time any Option is exercised, that he is acquiring the Shares to be
         issued to him for investment and not with a view to, or for sale in
         connection with, the distribution of any such Shares; and

         (b) a representation, warranty and/or agreement to be bound by any
         legends that are, in the opinion of the Committee, necessary or
         appropriate to comply with the provisions of any securities law deemed
         by the Committee to be applicable to the issuance of the Shares and are
         endorsed upon the Share certificates.

         13. PERFORMANCE AND ANNUAL INCENTIVE AWARDS.

         (a) Performance Conditions. The right of a Participant to exercise or
         receive a grant or settlement of any Award, and the timing thereof, may
         be subject to such performance conditions as may be specified by the
         Committee or the Board. The Committee or the Board may use such

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         business criteria and other measures of performance as it may deem
         appropriate in establishing any performance conditions, and may
         exercise its discretion to reduce the amounts payable under any Award
         subject to performance conditions, except as limited under Sections
         13(b) and 13(c) hereof in the case of a Performance Award or Annual
         Incentive Award intended to qualify under Code Section 162(m). If and
         to the extent required under Code Section 162(m), any power or
         authority relating to a Performance Award or Annual Incentive Award
         intended to qualify under Code Section 162(m), shall be exercised by
         the Committee and not the Board.

         (b) Performance Awards Granted to Designated Covered Employees. If and
         to the extent that the Committee determines that a Performance Award to
         be granted to an Eligible Person who is designated by the Committee as
         likely to be a Covered Employee should qualify as "performance-based
         compensation" for purposes of Code Section 162(m), the grant, exercise
         and/or settlement of such Performance Award shall be contingent upon
         achievement of preestablished performance goals and other terms set
         forth in this Section 13(b).

                  (i)      Performance Goals Generally. The performance goals
                           for such Performance Awards shall consist of one or
                           more business criteria and a targeted level or levels
                           of performance with respect to each of such criteria,
                           as specified by the Committee consistent with this
                           Section 13(b). Performance goals shall be objective
                           and shall otherwise meet the requirements of Code
                           Section 162(m) and regulations thereunder including
                           the requirement that the level or levels of
                           performance targeted by the Committee result in the
                           achievement of performance goals being "substantially
                           uncertain." The Committee may determine that such
                           Performance Awards shall be granted, exercised and/or
                           settled upon achievement of any one performance goal
                           or that two or more of the performance goals must be
                           achieved as a condition to grant, exercise and/or
                           settlement of such Performance Awards. Performance
                           goals may differ for Performance Awards granted to
                           any one Participant or to different Participants.

                  (ii)     Business Criteria. One or more of the following
                           business criteria for the Company, on a consolidated
                           basis, and/or specified subsidiaries or business
                           units of the Company (except with respect to the
                           total stockholder return and earnings per share
                           criteria), shall be used exclusively by the Committee
                           in establishing performance goals for such
                           Performance Awards: (1) total stockholder return; (2)
                           such total stockholder return as compared to total
                           return (on a comparable basis) of a publicly
                           available index such as, but not limited to, the
                           Standard & Poor's 500 Stock Index or the S&P
                           Specialty Retailer Index; (3) net income; (4) pretax
                           earnings; (5) earnings before interest expense,
                           taxes, depreciation and amortization; (6) pretax
                           operating earnings after interest expense and before
                           bonuses, service fees, and extraordinary or special
                           items; (7) operating margin; (8) earnings per share;
                           (9) return on equity; (10) return on capital; (11)
                           return on investment; (12) operating earnings; (13)

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                           working capital or inventory; and (14) ratio of debt
                           to stockholders' equity. One or more of the foregoing
                           business criteria shall also be exclusively used in
                           establishing performance goals for Annual Incentive
                           Awards granted to a Covered Employee under Section
                           13(c) hereof that are intended to qualify as
                           "performance-based compensation" under Code Section
                           162(m).

                  (iii)    Performance Period; Timing For Establishing
                           Performance Goals. Achievement of performance goals
                           in respect of such Performance Awards shall be
                           measured over a performance period of up to ten
                           years, as specified by the Committee. Performance
                           goals shall be established not later than 90 days
                           after the beginning of any performance period
                           applicable to such Performance Awards, or at such
                           other date as may be required or permitted for
                           "performance-based compensation" under Code Section
                           162(m).

                  (iv)     Performance Award Pool. The Committee may establish a
                           Performance Award pool, which shall be an unfunded
                           pool, for purposes of measuring Company performance
                           in connection with Performance Awards. The amount of
                           such Performance Award pool shall be based upon the
                           achievement of a performance goal or goals based on
                           one or more of the business criteria set forth in
                           Section 13(b)(ii) hereof during the given performance
                           period, as specified by the Committee in accordance
                           with Section 13(b)(iii) hereof. The Committee may
                           specify the amount of the Performance Award pool as a
                           percentage of any of such business criteria, a
                           percentage thereof in excess of a threshold amount,
                           or as another amount which need not bear a strictly
                           mathematical relationship to such business criteria.

                  (v)      Settlement of Performance Awards; Other Terms.
                           Settlement of such Performance Awards shall be in
                           cash, Shares, other Awards or other property, in the
                           discretion of the Committee. The Committee may, in
                           its discretion, reduce the amount of a settlement
                           otherwise to be made in connection with such
                           Performance Awards. The Committee shall specify the
                           circumstances in which such Performance Awards shall
                           be paid or forfeited in the event of termination of
                           employment by the Participant prior to the end of a
                           performance period or settlement of Performance
                           Awards.

         (c) Annual Incentive Awards Granted to Designated Covered Employees. If
         and to the extent that the Committee determines that an Annual
         Incentive Award to be granted to an Eligible Person who is designated
         by the Committee as likely to be a Covered Employee should qualify as
         "performance-based compensation" for purposes of Code Section 162(m),
         the grant, exercise and/or settlement of such Annual Incentive Award
         shall be contingent upon achievement of preestablished performance
         goals and other terms set forth in this Section 13(c).

                  (i)      Annual Incentive Award Pool. The Committee may
                           establish an Annual Incentive Award pool, which shall
                           be an unfunded pool, for purposes of measuring
                           Company performance in connection with Annual

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                           Incentive Awards. The amount of such Annual Incentive
                           Award pool shall be based upon the achievement of a
                           performance goal or goals based on one or more of the
                           business criteria set forth in Section 13(b)(ii)
                           hereof during the given performance period, as
                           specified by the Committee in accordance with Section
                           13(b)(iii) hereof. The Committee may specify the
                           amount of the Annual Incentive Award pool as a
                           percentage of any such business criteria, a
                           percentage thereof in excess of a threshold amount,
                           or as another amount which need not bear a strictly
                           mathematical relationship to such business criteria.

                  (ii)     Potential Annual Incentive Awards. Not later than the
                           end of the 90th day of each fiscal year, or at such
                           other date as may be required or permitted in the
                           case of Awards intended to be "performance-based
                           compensation" under Code Section 162(m), the
                           Committee shall determine the Eligible Persons who
                           will potentially receive Annual Incentive Awards, and
                           the amounts potentially payable thereunder, for that
                           fiscal year, either out of an Annual Incentive Award
                           pool established by such date under Section 13(c)(i)
                           hereof or as individual Annual Incentive Awards. In
                           the case of individual Annual Incentive Awards
                           intended to qualify under Code Section 162(m), the
                           amount potentially payable shall be based upon the
                           achievement of a performance goal or goals based on
                           one or more of the business criteria set forth in
                           Section 13(b)(ii) hereof in the given performance
                           year, as specified by the Committee; in other cases,
                           such amount shall be based on such criteria as shall
                           be established by the Committee.

                  (iii)    Payout of Annual Incentive Awards. After the end of
                           each fiscal year, the Committee shall determine the
                           amount, if any, of (A) the Annual Incentive Award
                           pool, and the maximum amount of potential Annual
                           Incentive Award payable to each Participant in the
                           Annual Incentive Award pool, or (B) the amount of
                           potential Annual Incentive Award otherwise payable to
                           each Participant. The Committee may, in its
                           discretion, determine that the amount payable to any
                           Participant as an Annual Incentive Award shall be
                           reduced from the amount of his or her potential
                           Annual Incentive Award, including a determination to
                           make no Award whatsoever. The Committee shall specify
                           the circumstances in which an Annual Incentive Award
                           shall be paid or forfeited in the event of
                           termination of employment by the Participant prior to
                           the end of a fiscal year or settlement of such Annual
                           Incentive Award.

         (d) Written Determinations. All determinations by the Committee as to
         the establishment of performance goals, the amount of any Performance
         Award pool or potential individual Performance Awards and as to the
         achievement of performance goals relating to Performance Awards under
         Section 13(b), and the amount of any Annual Incentive Award pool or
         potential individual Annual Incentive Awards and the amount of final
         Annual Incentive Awards under Section 13(c), shall be made in writing
         in the case of any Award intended to qualify under Code Section 162(m).
         The Committee may not delegate any responsibility relating to such

                                     II-12
<PAGE>   12

         Performance Awards or Annual Incentive Awards if and to the extent
         required to comply with Code Section 162(m).

         (e) Maximum Performance Award and Annual Incentive Award. The maximum
         amount that may be earned as an Annual Incentive Award or other cash
         Award in any fiscal year by any one Participant, and the maximum amount
         that may be earned as a Performance Award or other cash Award in
         respect of a performance period by any one Participant, shall be
         $5,000,000.

         (f) Status of Section 13(b) and Section 13(c) Awards Under Code Section
         162(m). It is the intent of the Company that Performance Awards and
         Annual Incentive Awards under Section 13(b) and 13(c) hereof granted to
         persons who are designated by the Committee as likely to be Covered
         Employees within the meaning of Code Section 162(m) and regulations
         thereunder shall, if so designated by the Committee, constitute
         "qualified performance-based compensation" within the meaning of Code
         Section 162(m) and regulations thereunder. Accordingly, the terms of
         Sections 13(b), (c), (d), (e) and (f), including the definitions of
         Covered Employee and other terms used therein, shall be interpreted in
         a manner consistent with Code Section 162(m) and regulations
         thereunder. The foregoing notwithstanding, because the Committee cannot
         determine with certainty whether a given Participant will be a Covered
         Employee with respect to a fiscal year that has not yet been completed,
         the term Covered Employee as used herein shall mean only a person
         designated by the Committee, at the time of grant of Performance Awards
         or an Annual Incentive Award, as likely to be a Covered Employee with
         respect to that fiscal year. If any provision of the Plan or any
         agreement relating to such Performance Awards or Annual Incentive
         Awards does not comply or is inconsistent with the requirements of Code
         Section 162(m) or regulations thereunder, such provision shall be
         construed or deemed amended to the extent necessary to conform to such
         requirements.

         14. ADMINISTRATION OF THE PLAN.

         (a) The Plan shall be administered by the Committee, which shall
         consist of not less than two Directors, each of whom shall be Outside
         Directors. The Committee shall have all of the powers of the Board with
         respect to the Plan. Any member of the Committee may be removed at any
         time, with or without cause, by resolution of the Board and any vacancy
         occurring in the membership of the Committee may be filled by
         appointment of the Board.

         (b) The Committee, from time to time, may adopt rules and regulations
         for carrying out the purposes of the Plan. The Committee's
         determinations and its interpretation and construction of any provision
         of the Plan shall be final and conclusive.

         (c) Any and all decisions or determinations of the Committee shall be
         made either (i) by a majority vote of the members of the Committee at a
         meeting or (ii) without a meeting by the unanimous written approval of
         the members of the Committee.

         (d) The Board may reserve to itself the power to grant Options to
         employees or Directors of the Company or any Subsidiary who are not
         Covered Employees. If and to the extent that the Board reserves such
         powers, then all references herein to the Committee shall refer to the
         Board with respect to the Options granted by the Board.

                                     II-13
<PAGE>   13

         15. INCENTIVE OPTIONS FOR 10% STOCKHOLDERS. Notwithstanding any other
provisions of the Plan to the contrary, an Incentive Stock Option shall not be
granted to any person owning directly or indirectly (through attribution under
Section 424(d) of the Internal Revenue Code) at the date of grant, stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company (or of its subsidiary [as defined in Section 424 of the
Internal Revenue Code] at the date of grant) unless the option price of such
Option is at least 110% of the Fair Market Value of the Shares subject to such
Option on the date the Option is granted, and such Option by its terms is not
exercisable after the expiration of five years from the date such Option is
granted.

         16. INTERPRETATION

         (a) The Plan shall be administered and interpreted so that all
         Incentive Stock Options granted under the plan will qualify as
         Incentive Stock Options under section 422 of the Internal Revenue Code.
         If any provision of the Plan should be held invalid for the granting of
         Incentive Stock Options or illegal for any reason, such determination
         shall not affect the remaining provisions hereof, but instead the Plan
         shall be construed and enforced as if such provision had never been
         included in the Plan.

         (b) This Plan shall be governed by the laws of the State of Florida.

         (c) Headings contained in this Plan are for convenience only and shall
         in no manner be construed as part of the Plan.

         (d) Any reference to the masculine, feminine, or neuter gender shall be
         a reference to such other gender as is appropriate.

         (e) As it is the intent of the Company that the Plan comply in all
         respects with Rule 16b-3 promulgated under the Exchange Act ("Rule
         16b-3"), any ambiguities or inconsistencies in construction of the Plan
         shall be interpreted to give effect to such intention, and if any
         provision of the Plan is found not to be in compliance with Rule 16b-3,
         such provision shall be deemed null and void to the extent required to
         permit the Plan to comply with Rule 16b-3. The Board and the Committee
         each may from time to time adopt rules and regulations under, and
         amend, the Plan in furtherance of the intent of the foregoing.

         17. AMENDMENT AND DISCONTINUATION OF THE PLAN. Either the Board or the
Committee may from time to time amend the Plan or any Option; provided, however,
that, except to the extent provided in Section 10, no such amendment may,
without approval by the stockholders of the Company, (a) materially increase the
benefits accruing to participants under the Plan, (b) materially increase the
number of securities which may be issued under the Plan, or (c) materially
modify the requirements as to eligibility for participation in the Plan; and
provided further, that, except to the extent provided in Section 9, no amendment
or suspension of the Plan or any Option issued hereunder shall substantially
impair any Option previously granted to any Participant without the consent of
such Participant.

         18. EFFECTIVE DATE AND TERMINATION DATE. The effective date of the Plan
is January 1, 1998, provided that the stockholders of the Company have approved
the Plan on or before September 1, 1998, and the Plan shall terminate on the
10th anniversary of the effective date.

                                     II-14<PAGE>   1
                                                                    EXHIBIT 10.1

                     ---------------------------------------

                              APPLICA INCORPORATED
                             2000 STOCK OPTION PLAN

                     ---------------------------------------

         1.       PURPOSE. The purpose of this Plan is to advance the interests
of APPLICA INCORPORATED, a Florida corporation (the "Company"), and its
Subsidiaries by providing an additional incentive to attract and retain
qualified and competent persons who provide services to the Company and its
Subsidiaries, and upon whose efforts and judgment the success of the Company and
its Subsidiaries is largely dependent, through the encouragement of stock
ownership in the Company by such persons.

         2.       DEFINITIONS. As used herein, the following terms shall have
the meaning indicated:

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

                  (b)      "Committee" shall mean the committee appointed by the
Board pursuant to Section 13(a) hereof.

                  (c)      "Common Stock" shall mean the Company's Common Stock,
par value $.10 per share.

                  (d)      "Director" shall mean a member of the Board.

                  (e)      "Fair Market Value" of a Share on any date of
reference shall mean the "Closing Price" (as defined below) of the Common Stock
on the business day immediately preceding such date, unless the Committee or the
Board in its sole discretion shall determine otherwise in a fair and uniform
manner. For the purpose of determining Fair Market Value, the "Closing Price" of
the Common Stock on any business day shall be (i) if the Common Stock is listed
or admitted for trading on any United States national securities exchange, or if
actual transactions are otherwise reported on a consolidated transaction
reporting system, the last reported sale price of Common Stock on such exchange
or reporting system, as reported in any newspaper of general circulation, (ii)
if the Common Stock is quoted on the National Association of Securities Dealers
Automated Quotations System ("Nasdaq"), or any similar system of automated
dissemination of quotations of securities prices in common use, the last
reported sale price of Common Stock on such system or, if sales prices are not
reported, the mean between the closing high bid and low asked quotations for
such day of Common Stock on such system, as reported in any newspaper of general
circulation or (iii) if neither clause (i) or (ii) is applicable, the mean
between the high bid and low asked quotations for the Common Stock as reported
by the National Quotation Bureau, Incorporated if at least two securities
dealers have inserted both bid and asked quotations for Common Stock on at least
five of the ten preceding days. If neither (i), (ii), or (iii) above is
applicable, then Fair Market Value shall be determined in good faith by the
Committee or the Board in a fair and uniform manner.

                  (f)      "Incentive Stock Option" shall mean an incentive
stock option as defined in Section 422 of the Internal Revenue Code.

                  (g)      "Internal Revenue Code" shall mean the Internal
Revenue Code of 1986, as amended from time to time.

<PAGE>   2

                  (h) "Non-Qualified Stock Option" shall mean an Option which is
not an Incentive Stock Option.

                  (i) "Officer" shall mean the Company's Chairman of the Board,
President, Chief Executive Officer, principal financial officer, principal
accounting officer, any vice-president of the Company in charge of a principal
business unit, division or function (such as sales, administration or finance),
any other officer who performs a policy-making function, or any other person who
performs similar policy-making functions for the Company. Officers of
Subsidiaries shall be deemed Officers of the Company if they perform such
policy-making functions for the Company. As used in this paragraph, the phrase
"policy-making function" does not include policy-making functions that are not
significant. If pursuant to Item 401(b) of Regulation S-K (17 C.F.R. ss.
229.401(b)) the Company identifies a person as an "executive officer," the
person so identified shall be deemed an "Officer" even though such person may
not otherwise be an "Officer" pursuant to the foregoing provisions of this
paragraph.

                  (j) "Option" (when capitalized) shall mean any option granted
under this Plan.

                  (k) "Optionee" shall mean a person to whom a stock option is
granted under this Plan or any person who succeeds to the rights of such person
under this Plan by reason of the death of such person.

                  (l) "Outside Director" shall mean a member of the Board who
qualifies as an "outside director" under Section 162(m) of the Internal Revenue
Code and the regulations thereunder and as a "Non-Employee Director" under Rule
16b-3 promulgated under the Securities Exchange Act.

                  (m) "Plan" shall mean this 2000 Stock Option Plan for the
Company.

                  (n) "Securities Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.

                  (o)      "Share" shall mean a share of Common Stock.

                  (p) "Subsidiary" shall mean any corporation (other than the
Company) in any unbroken chain of corporations beginning with the Company if, at
the time of the granting of the Option, each of the corporations other than the
last corporation in the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

         3.       SHARES AVAILABLE FOR OPTION GRANTS. The Committee or the Board
may grant to Optionees from time to time Options to purchase an aggregate of up
to One Million (1,000,000) Shares from the Company's authorized and unissued
Shares. If any Option granted under the Plan shall terminate, expire, or be
cancelled or surrendered as to any Shares, new Options may thereafter be granted
covering such Shares.

         4.       INCENTIVE AND NON-QUALIFIED OPTIONS.

                  (a) An Option granted hereunder shall be either an Incentive
Stock Option or a Non-Qualified Stock Option as determined by the Committee or
the Board at the time of grant of such Option and shall clearly state whether it
is an Incentive Stock Option or a Non-Qualified Stock Option. All Incentive
Stock Options shall be granted within 10 years from the effective date of this
Plan. Incentive Stock Options may not be granted to any person who is not an
employee of the Company or any Subsidiary.

                  (b) Options otherwise qualifying as Incentive Stock Options
hereunder will not be treated as Incentive Stock Options to the extent that the
aggregate fair market value (determined at the time the Option is granted) of

                                       2
<PAGE>   3

the Shares, with respect to which Options meeting the requirements of Section
422(b) of the Internal Revenue Code are exercisable for the first time by any
individual during any calendar year (under all plans of the Company and its
parent and subsidiary corporations as defined in Section 424 of the Internal
Revenue Code), exceeds $100,000.

         5.       CONDITIONS FOR GRANT OF OPTIONS.

                  (a) Each Option shall be evidenced by an option agreement that
may contain any term deemed necessary or desirable by the Committee or the
Board, provided such terms are not inconsistent with this Plan or any applicable
law. Optionees shall be (i) those persons selected by the Committee or the Board
from the class of all regular employees of, or persons who provide consulting or
other services as independent contractors to, the Company or its Subsidiaries,
including Directors and Officers who are regular employees, and (ii) Directors
who are not employees of the Company or of any Subsidiaries. However, persons
who are ineligible for registration of shares under a Form S-8 shall not be
granted Options hereunder including, without limitation, consultants and
advisors who participate in the offer and sale of the Company's securities in a
capital-raising transaction or promote or maintain a market for the Company's
securities. Any person who files with the Committee or the Board, in a form
satisfactory to the Committee or the Board, a written waiver of eligibility to
receive any Option under this Plan shall not be eligible to receive any Option
under this Plan for the duration of such waiver.

                  (b) In granting Options, the Committee or the Board shall take
into consideration the contribution the person has made to the success of the
Company or its Subsidiaries and such other factors as the Committee or the Board
shall determine. The Committee or the Board shall also have the authority to
consult with and receive recommendations from officers and other personnel of
the Company and its Subsidiaries with regard to these matters. The Committee or
the Board may from time to time in granting Options under the Plan prescribe
such other terms and conditions concerning such Options as it deems appropriate,
including, without limitation, (i) prescribing the date or dates on which the
Option becomes exercisable, (ii) providing that the Option rights accrue or
become exercisable in installments over a period of years, or upon the
attainment of stated goals or both, or (iii) relating an Option to the continued
employment of the Optionee for a specified period of time, provided that such
terms and conditions are not more favorable to an Optionee than those expressly
permitted herein.

                  (c) The Options granted to employees under this Plan shall be
in addition to regular salaries, pension, life insurance or other benefits
related to their employment with the Company or its Subsidiaries. Neither the
Plan nor any Option granted under the Plan shall confer upon any person any
right to employment or continuance of employment by the Company or its
Subsidiaries.

                  (d) Each Director of the Company on June 1, 2000 and on each
anniversary thereof during the term of the Plan shall receive a grant, as soon
after such date as reasonably possible, of Non-Qualified Stock Options to
purchase an amount equal to the excess of (i) 1,500 shares of Common Stock, less
(ii) the number of Options automatically granted to the Director on that date
pursuant to the Company's other stock option plans, at a price not less than
100% of the Fair Market Value of the Common Stock on the date of the particular
option grant.

                  (e) Notwithstanding any other provision of this Plan, an
Incentive Stock Option shall not be granted to any person owning directly or
indirectly (through attribution under Section 424(d) of the Internal Revenue
Code) at the date of grant, stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company (or of its parent or
subsidiary corporation (as defined in Section 424 of the Internal Revenue Code)
at the date of grant) unless the option price of such Option is at least 110% of
the Fair Market Value of the Shares subject to such Option on the date the
Option is granted, and such Option by its terms is not exercisable after the
expiration of five years from the date such Option is granted.

                                       3
<PAGE>   4

                  (f) Notwithstanding any other provision of this Plan, and in
addition to any other requirements of this Plan, the aggregate number of Options
granted to any one Optionee may not exceed 500,000, subject to adjustment as
provided in Section 10 hereof.

         6.       OPTION PRICE. The option price per Share of any Option shall
be any price determined by the Committee or the Board but shall not be less than
the par value per Share; provided, however, that in no event shall the option
price per Share of any Incentive Stock Option be less than the Fair Market Value
of the Shares underlying such Option on the date such Option is granted.

         7.       EXERCISE OF OPTIONS. An Option shall be deemed exercised when
(i) the Company has received written notice of such exercise in accordance with
the terms of the Option, (ii) full payment of the aggregate option price of the
Shares as to which the Option is exercised has been made, and (iii) arrangements
that are satisfactory to the Committee or the Board in its sole discretion have
been made for the Optionee's payment to the Company of the amount that is
necessary for the Company or Subsidiary employing the Optionee to withhold in
accordance with applicable Federal or state tax withholding requirements. The
consideration to be paid for the Shares to be issued upon exercise of an Option
as well as the method of payment of the exercise price and of any withholding
and employment taxes applicable thereto, shall be determined by the Committee or
the Board and may in the discretion of the Committee or the Board consist of:
(1) cash, (2) certified or official bank check, (3) money order, (4) Shares that
have been held by the Optionee for at least six months (or such other Shares as
the Company determines will not cause the Company to recognize for financial
accounting purposes a charge for compensation expense), (5) the withholding of
Shares issuable upon exercise of the Option, (6) pursuant to a "cashless
exercise" procedure, by delivery of a properly executed exercise notice together
with such other documentation, and subject to such guidelines, as the Board or
the Committee shall require to effect an exercise of the Option and delivery to
the Company by a licensed broker acceptable to the Company of proceeds from the
sale of Shares or a margin loan sufficient to pay the exercise price and any
applicable income or employment taxes, or (7) such other consideration as the
Committee or the Board deems appropriate, or by a combination of the above. In
the case of an Incentive Stock Option, the permissible methods of payment shall
be specified at the time the Option is granted. The Committee or the Board in
its sole discretion may accept a personal check in full or partial payment of
any Shares. If the exercise price is paid in whole or in part with Shares, or
through the withholding of Shares issuable upon exercise of the Option, the
value of the Shares surrendered or withheld shall be their Fair Market Value on
the date the Option is exercised. The Company in its sole discretion may, on an
individual basis or pursuant to a general program established in connection with
this Plan, lend money to an Optionee, guarantee a loan to an Optionee, or
otherwise assist an Optionee to obtain the cash necessary to exercise all or a
portion of an Option granted hereunder or to pay any tax liability of the
Optionee attributable to such exercise. If the exercise price is paid in whole
or part with Optionee's promissory note, such note shall (i) provide for full
recourse to the maker, (ii) be collateralized by the pledge of Shares of Common
Stock, (iii) bear interest at the prime rate, as shall be set from time to time
by the Company's principal lender, and (iv) contain such other terms as the
Committee or the Board in its sole discretion shall reasonably require. No
Optionee shall be deemed to be a holder of any Shares subject to an Option
unless and until a stock certificate or certificates for such Shares are issued
to such person(s) under the terms of this Plan. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is prior to
the date such stock certificate is issued, except as expressly provided in
Section 10 hereof.

         8.       EXERCISABILITY OF OPTIONS. Any Option shall become exercisable
in such amounts, at such intervals and upon such terms as the Committee or the
Board shall provide in such Option, except as otherwise provided in this Section
8.

                  (a) The expiration date of an Option shall be determined by
the Committee or the Board at the time of grant, but in no event shall an Option
be exercisable after the expiration of 10 years from the date on which the
Option is granted.

                                       4
<PAGE>   5

                  (b)      Unless otherwise provided in any Option, each
outstanding Option shall become immediately fully exercisable in the event of a
"Change in Control" or in the event that the Committee or the Board exercises
its discretion to provide a cancellation notice with respect to the Option
pursuant to Section 9(b) hereof. For this purpose, the term "Change in Control"
shall mean:

                           (i)      if there occurs any transaction (which shall
include a series of transactions occurring within 60 days or occurring pursuant
to a plan) that has the result that shareholders of the Company immediately
before such transaction cease to own at least 51% of the voting stock of the
Company or of any entity that results from the participation of the Company in a
reorganization, consolidation, merger, liquidation or any other form of
corporate transaction; or

                           (ii)     if the shareholders of the Company shall
approve a plan of merger, consolidation, reorganization, liquidation or
dissolution in which the Company does not survive (unless the approved merger,
consolidation, reorganization, liquidation or dissolution is subsequently
abandoned); or

                           (iii)    if the shareholders of the Company shall
approve a plan for the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Company (unless such plan is
subsequently abandoned).

                  (c)      The Committee or the Board may in its sole
discretion, accelerate the date on which any Option may be exercised and may
accelerate the vesting of any Shares subject to any Option or previously
acquired by the exercise of any Option.

         9.       TERMINATION OF OPTION PERIOD.

                  (a)      Unless otherwise provided in any Option agreement,
the unexercised portion of any Option shall automatically and without notice
terminate and become null and void at the time of the earliest to occur of the
following:

                           (i)      three months after the date on which the
Optionee's employment is terminated other than by reason of (A) Cause, which,
solely for purposes of this Plan, shall mean the termination of the Optionee's
employment by reason of the Optionee's willful misconduct or gross negligence,
(B) a mental or physical disability (within the meaning of Internal Revenue Code
Section 22(e)) of the Optionee as determined by a medical doctor satisfactory to
the Committee, or (C) death of the Optionee;

                           (ii)     immediately upon the termination of the
Optionee's employment for Cause;

                           (iii)    twelve months after the date on which the
Optionee's employment is terminated by reason of a mental or physical disability
(within the meaning of Internal Revenue Code Section 22(e)) as determined by a
medical doctor satisfactory to the Committee or the Board;

                           (iv) (A) twelve months after the date of termination
of the Optionee's employment by reason of death of the Optionee, or, if later,
(B) three months after the date on which the Optionee shall die if such death
shall occur during the one year period specified in Subsection 9(a)(iii) hereof.

All references herein to the termination of the Optionee's employment shall, in
the case of a Optionee who is not an employee of the Company or a Subsidiary,
refer to the termination of the Optionee's service with the Company.

                  (b)      To the extent not previously exercised,

                                       5
<PAGE>   6

                           (i)      each Option shall terminate immediately in
the event of (1) the liquidation or dissolution of the Company, or (2) any
reorganization, merger, consolidation or other form of corporate transaction in
which the Company does not survive, unless the successor corporation, or a
parent or subsidiary of such successor corporation, assumes the Option or
substitutes an equivalent option or right pursuant to Section 10(c) hereof, and

                           (ii)     the Committee or the Board, in its sole
discretion, may by written notice ("cancellation notice") cancel, effective upon
the consummation of any corporate transaction described in Subsection 8(b)(i)
hereof in which the Company does survive, any Option that remains unexercised on
such date.

                  The Committee or the Board shall give written notice of any
proposed transaction referred to in this Section 9(b) a reasonable period of
time prior to the closing date for such transaction (which notice may be given
either before or after approval of such transaction), in order that Optionees
may have a reasonable period of time prior to the closing date of such
transaction within which to exercise any Options that then are exercisable
(including any Options that may become exercisable upon the closing date of such
transaction). An Optionee may condition his exercise of any Option upon the
consummation of a transaction referred to in this Section 9(b).

                  (c)      Notwithstanding the provisions of this Section 9 or
any other provision in this Plan, unless otherwise determined in the sole
discretion of the Board or the Committee, if, at any time within (i) one year
prior to termination of an Optionee's employment or (ii) one year after
termination of an Optionee's employment (the "Default Period"), an Optionee is
employed by, or renders advice or services to, any business or person which
competes or could reasonably be likely to compete with the Company (as
determined in the sole discretion of the Board or the Committee) (a
"Competitor") or engages in any activity which is adverse, adverse or harmful to
the interests of the Company, including, but not limited to, (A) conduct related
to the Optionee's employment for which either criminal or civil penalties
against the Optionee are sought, (B) violations of Company policies, including,
without limitation, the Company's insider trading policy, (C) the Optionee's
acceptance of employment with or serving as a consultant, advisor or in any
other capacity to a Competitor or a company acting against the interests of the
Company, including employing or recruiting any present, former or future
employee of the Company, (D) disclosing or misusing any confidential information
or material concerning the Company or (E) participating in a hostile takeover
attempt, then (x) the unexercised portion of any Option granted pursuant hereto
shall be terminated effective the date on which the Optionee enters into such
activity, unless terminated sooner by operation of another term or condition of
the Option or this Plan, (y) with respect to any shares of Common Stock acquired
pursuant to the exercise of Options during the Default Period, the Optionee
shall pay the Company an amount in immediately available funds equal to the
difference between the closing price of the Common Stock on the date of the
Optionee's termination of employment with the Company and the Exercise Price for
such shares and (z) with respect to any shares of Common Stock acquired pursuant
to the exercise of Options during the Default Period which have been sold, the
Optionee shall pay the Company an amount in immediately available funds equal to
the gain realized on such sale.

                  (d)      The Company shall be entitled to offset against any
and all amounts owing to an Optionee (including, but not limited to,
compensation, fringe benefits or vacation pay) all amounts owed to the Company
by an Optionee pursuant to the provisions of this Plan.

         10.      ADJUSTMENT OF SHARES.

                  (a)      If at any time while the Plan is in effect or
unexercised Options are outstanding, there shall be any increase or decrease in
the number of issued and outstanding Shares through the declaration of a stock
dividend or through any recapitalization resulting in a stock split-up,
combination or exchange of Shares, then and in such event:

                                       6
<PAGE>   7

                           (i)      appropriate adjustment shall be made in the
maximum number of Shares available for grant under the Plan, or available for
grant to any person under the Plan, so that the same percentage of the Company's
issued and outstanding Shares shall continue to be subject to being so optioned;
and

                           (ii)     the Board or the Committee may, in its
discretion, make any adjustments it deems appropriate in the number of Shares
and the exercise price per Share thereof then subject to any outstanding Option,
so that the same percentage of the Company's issued and outstanding Shares shall
remain subject to purchase at the same aggregate exercise price.

                  (b)      Unless otherwise provided in any Option, the
Committee or the Board may change the terms of Options outstanding under this
Plan, with respect to the option price or the number of Shares subject to the
Options, or both, when, in the Committee's or Board's sole discretion, such
adjustments become appropriate so as to preserve but not increase benefits under
the Plan.

                  (c)      In the event of a proposed sale of all or
substantially all of the Company's assets or any reorganization, merger,
consolidation or other form of corporate transaction in which the Company does
not survive, where the securities of the successor corporation, or its parent
company, are issued to the Company's shareholders, then the successor
corporation or a parent of the successor corporation may, with the consent of
the Committee or the Board, assume each outstanding Option or substitute an
equivalent option or right. If the successor corporation, or its parent, does
not cause such an assumption or substitution to occur, or the Committee or the
Board does not consent to such an assumption or substitution, then each Option
shall terminate pursuant to Section 9(b) hereof upon the consummation of sale,
merger, consolidation or other corporate transaction.

                  (d)      Except as otherwise expressly provided herein, the
issuance by the Company of shares of its capital stock of any class, or
securities convertible into shares of capital stock of any class, either in
connection with a direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made to, the number of or exercise price
for Shares then subject to outstanding Options granted under the Plan.

                  (e)      Without limiting the generality of the foregoing, the
existence of outstanding Options granted under the Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate (i)
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business; (ii) any merger or
consolidation of the Company; (iii) any issue by the Company of debt securities,
or preferred or preference stock that would rank above the Shares subject to
outstanding Options; (iv) the dissolution or liquidation of the Company; (v) any
sale, transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.

         11.      TRANSFERABILITY OF OPTIONS AND SHARES.

                  (a)      No Incentive Stock Option, and unless the prior
written consent of the Committee or the Board is obtained (which consent may be
withheld for any reason) and the transaction does not violate the requirements
of Rule 16b-3 promulgated under the Securities Exchange Act, no Non-Qualified
Stock Option, shall be subject to alienation, assignment, pledge, charge or
other transfer other than by the Optionee by will or the laws of descent and
distribution, and any attempt to make any such prohibited transfer shall be
void. Each Option shall be exercisable during the Optionee's lifetime only by
the Optionee, or in the case of a Non-Qualified Stock Option that has been
assigned or transferred with the prior written consent of the Committee or the
Board, only by the permitted assignee.

                  (b)      No Shares acquired by an Officer or Director pursuant
to the exercise of an Option may be sold, assigned, pledged or otherwise

                                       7
<PAGE>   8

transferred prior to the expiration of the six-month period following the date
on which the Option was granted, unless the transaction does not violate the
requirements of Rule 16b-3 promulgated under the Securities Exchange Act.

         12.      ISSUANCE OF SHARES.

                  (a)      Notwithstanding any other provision of this Plan, the
Company shall not be obligated to issue any Shares unless it is advised by
counsel of its selection that it may do so without violation of the applicable
Federal and State laws pertaining to the issuance of securities, and may require
any stock so issued to bear a legend, may give its transfer agent instructions,
and may take such other steps, as in its judgment are reasonably required to
prevent any such violation.

                  (b)      As a condition to any sale or issuance of Shares upon
exercise of any Option, the Committee or the Board may require such agreements
or undertakings as the Committee or the Board may deem necessary or advisable to
facilitate compliance with any applicable law or regulation including, but not
limited to, the following:

                           (i)      a representation and warranty by the
Optionee to the Company, at the time any Option is exercised, that he is
acquiring the Shares to be issued to him for investment and not with a view to,
or for sale in connection with, the distribution of any such Shares; and

                           (ii)     a representation, warranty and/or agreement
to be bound by any legends endorsed upon the certificate(s) for such Shares that
are, in the opinion of the Committee or the Board, necessary or appropriate to
facilitate compliance with the provisions of any securities laws deemed by the
Committee or the Board to be applicable to the issuance and transfer of such
Shares.

         13.      ADMINISTRATION OF THE PLAN.

                  (a)      The Plan shall be administered by the Board or by a
committee appointed by the Board (the "Committee") which shall be composed of
two or more Directors all of whom shall be Outside Directors. The membership of
the Committee shall be constituted so as to comply at all times with the
applicable requirements of Rule 16b-3 promulgated under the Securities Exchange
Act and Section 162(m) of the Internal Revenue Code. The Committee shall serve
at the pleasure of the Board and shall have the powers designated herein and
such other powers as the Board may from time to time confer upon it.

                  (b)      The Committee or the Board, from time to time, may
adopt rules and regulations for carrying out the purposes of the Plan. The
determinations by the Committee or the Board, and the interpretation and
construction of any provision of the Plan or any Option by the Committee or the
Board, shall be final and conclusive.

                  (c)      Any and all decisions or determinations of the
Committee shall be made either (i) by a majority vote of the members of the
Committee at a meeting or (ii) without a meeting by the unanimous written
approval of the members of the Committee.

         14.      WITHHOLDING OR DEDUCTION FOR TAXES. If at any time specified
herein for the making of any issuance or delivery of any Option or Common Stock
to any Optionee or beneficiary, any law or regulation of any governmental
authority having jurisdiction in the premises shall require the Company to
withhold, or to make any deduction for, any taxes or take any other action in
connection with the issuance or delivery then to be made, such issuance or
delivery shall be deferred until such withholding or deduction shall have been
provided for by the Optionee or beneficiary, or other appropriate action shall
have been taken.

                                       8
<PAGE>   9

         15.      INTERPRETATION.

                  (a) As it is the intent of the Company that the Plan comply in
all respects with Rule 16b-3 promulgated under the Securities Exchange Act
("Rule 16b-3"), any ambiguities or inconsistencies in construction of the Plan
shall be interpreted to give effect to such intention, and if any provision of
the Plan is found not to be in compliance with Rule 16b-3, such provision shall
be deemed null and void to the extent required to permit the Plan to comply with
Rule 16b-3. The Committee or the Board may from time to time adopt rules and
regulations under, and amend, the Plan in furtherance of the intent of the
foregoing.

                  (b) The Plan and any Option agreements entered into pursuant
to the Plan shall be administered and interpreted so that all Incentive Stock
Options granted under the Plan will qualify as Incentive Stock Options under
section 422 of the Internal Revenue Code. If any provision of the Plan or any
such Option agreement should be held invalid for the granting of Incentive Stock
Options or illegal for any reason, such determination shall not affect the
remaining provisions hereof, but instead the Plan and the Option agreement shall
be construed and enforced as if such provision had never been included in the
Plan or the Option agreement.

                  (c) This Plan shall be governed by the laws of the State of
Florida.

                  (d) Headings contained in this Plan are for convenience only
and shall in no manner be construed as part of this Plan.

                  (e) Any reference to the masculine, feminine, or neuter gender
shall be a reference to such other gender as is appropriate.

         16.      AMENDMENT AND DISCONTINUATION OF THE PLAN. The Committee or
the Board may from time to time amend, suspend or terminate the Plan or any
Option; provided, however, that, any amendment to the Plan shall be subject to
the approval of the Company's shareholders if such shareholder approval is
required by any federal or state law or regulation (including, without
limitation, Rule 16b-3 or to comply with Section 162(m) of the Internal Revenue
Code) or the rules of any stock exchange or automated quotation system on which
the Common Stock may then be listed or granted. Except to the extent provided in
Sections 9 and 10 hereof, no amendment, suspension or termination of the Plan or
any Option issued hereunder shall substantially impair the rights or benefits of
any Optionee pursuant to any Option previously granted without the consent of
the Optionee.

         17.      EFFECTIVE DATE AND TERMINATION DATE. The effective date of the
Plan is March 20, 2000, and the Plan shall terminate on March 19, 2010. The Plan
shall be submitted to the shareholders of the Company for their approval and
adoption and Options hereunder may be granted prior to such approval and
adoption but are contingent upon such approval and adoption.

         18.      REPRICING. Notwithstanding anything herein to the contrary, no
Option granted pursuant to the Plan shall be repriced.

                                       9

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