Document:

<PAGE>   1

                  Upon the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.

                  As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other securities, which may
be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events.

                  This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the

                                       3
<PAGE>   2

Company and the holders of the Rights Certificates, which limitations of rights
include the temporary suspension of the exercisability of such Rights under the
specific circumstances set forth in the Rights Agreement. Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent and are
also available upon written request to the Rights Agent.

                  This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one one-hundredths
of a share of Preferred Stock as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such holder to purchase.
If this Rights Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.

                  Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right at any time prior to the earlier of the close
of business on (i) the tenth Business Day following the Stock Acquisition Date
(as such time period may be extended pursuant to the Rights Agreement), and (ii)
the Final Expiration Date. In addition, under certain circumstances following
the Stock

                                       4
<PAGE>   3

Acquisition Date, the Rights may be exchanged, in whole or in part, for shares
of the Common Stock, or shares of preferred stock of the Company having
essentially the same value or economic rights as such shares. Immediately upon
the action of the Board of Directors of the Company authorizing any such
exchange, and without any further action or any notice, the Rights (other than
Rights which are not subject to such exchange) will terminate and the Rights
will only enable holders to receive the shares issuable upon such exchange.

                  No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than fractions
which are integral multiples of one one-hundredth of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depositary receipts),
but in lieu thereof a cash payment will be made, as provided in the Rights
Agreement. The Company, at its election, may require that a number of Rights be
exercised so that only whole shares of Preferred Stock would be issued.

                  No holder of this Rights Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter

                                       5
<PAGE>   4

submitted to stockholders at any meeting thereof, or to give consent to or
withhold consent from any corporate action, or, to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.

                  This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.

                                       6
<PAGE>   5

                  WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of _________ __, ____

                                   LENDINGTREE INC.

                                   By:  _______________________________
                                   Name: Douglas R. Lebda
                                   Title:  Chief Executive Officer and President

                                       7
<PAGE>   6

                  [Form of Reverse Side of Rights Certificate]

                               FORM OF ASSIGNMENT

                (To be executed by the registered holder if such
               holder desires to transfer the Rights Certificate.)

                           FOR VALUE RECEIVED_________________________________
hereby sells, assigns and transfers unto______________________________________

______________________________________________________________________________
                  (Please print name and address of transferee)

______________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________ Attorney,
to transfer the within Rights Certificate on the books of the within named
Company, with full power of substitution.

Dated: __________________, _____

                                            __________________________________
                                            Signature

Signature Guaranteed:

                                   Certificate

<PAGE>   7

                  The undersigned hereby certifies by checking the appropriate
                  boxes that:

                  (1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);

                  (2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.

Dated: _______________, _____               __________________________________
                                            Signature

Signature Guaranteed:

<PAGE>   8

                                     NOTICE

                  The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.

<PAGE>   9

                          FORM OF ELECTION TO PURCHASE

                  (To be executed if holder desires to exercise Rights repre-
                  sented by the Rights Certificate.)

To: LENDINGTREE INC.:

                  The undersigned hereby irrevocably elects to exercise
__________ Rights represented by this Rights Certificate to purchase the shares
of Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be
issued in the name of and delivered to:

Please insert social security
or other identifying number

______________________________________________________________________________
                         (Please print name and address)

______________________________________________________________________________

                  If such number of Rights shall not be all the Rights evidenced
by this Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:

<PAGE>   10

Please insert social security
or other identifying number

______________________________________________________________________________
                         (Please print name and address)

______________________________________________________________________________

______________________________________________________________________________

Dated:  _______________, _____

                                            __________________________________
                                            Signature

Signature Guaranteed:

                                   Certificate

                  The undersigned hereby certifies by checking the appropriate
                  boxes that:

                  (1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);

<PAGE>   11

                  (2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.

Dated: ______________, _____                __________________________________

                                            Signature

Signature Guaranteed:

<PAGE>   12

                                     NOTICE

                  The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.

<PAGE>   13

                                                                       Exhibit C

                          SUMMARY OF RIGHTS TO PURCHASE
                                 PREFERRED STOCK

                  On [ ], 2000, the Board of Directors of LendingTree Inc. (the
"Company") declared a dividend distribution of one Right for each outstanding
share of Company Common Stock to stockholders of record at the close of business
on [ ], 2000 (the date of the consummation of the initial public offering of the
Common Stock) (the "Record Date"). Each Right entitles the registered holder to
purchase from the Company a unit consisting of one one-hundredth of a share (a
"Unit") of Series A Junior Participating Preferred Stock, par value $0.01 per
share (the "Series A Preferred Stock") at a Purchase Price of $    per Unit (the
amount equal to the product of four times the average closing price of the
Common Stock for the first five days of trading subsequent to the consummation
of the initial public offering of the Common Stock), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and ________________ , as Rights Agent.

<PAGE>   14

                  Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. Subject to certain exceptions specified in the
Rights Agreement, the Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 business days following
a public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date"), other than
persons who acquire 15% beneficial ownership as a result of repurchases of stock
by the Company or certain inadvertent actions by institutional or certain other
stockholders or, in certain circumstances, persons who are holders of shares of
Common Stock prior to the initial public offering and upon consummation thereof,
become beneficial owners of 15% or more of the outstanding shares of Common
Stock, or (ii) 10 business days (or such later date as the Board shall
determine) following the commencement of a tender offer or exchange offer that
would result in a person or group becoming an Acquiring Person. Until the
Distribution Date, (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock cer-
tificates, (ii) new Common Stock certificates issued after the Record Date will
contain a notation incorporating the Rights Agreement by reference and (iii)
the surrender for transfer of any certificates for Common Stock outstanding
will also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. Pursuant to the Rights Agreement, the Company
reserves the right to

<PAGE>   15

require prior to the occurrence of a Triggering Event (as defined below) that,
upon any exercise of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock will be issued.

                  The Rights are not exercisable until the Distribution Date and
will expire at 5:00 P.M. (New York City time) on          , 2010 (the tenth
anniversary of the date of the consummation of the initial public offering of
the Common Stock), unless such date is extended or the Rights are earlier
redeemed or exchanged by the Company as described below.

                  As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.

                  In the event that a Person becomes an Acquiring Person, except
pursuant to an offer for all outstanding shares of Common Stock which the
independent directors determine to be fair and not inadequate to and to
otherwise be in the best interests of the Company and its stockholders, after
receiving advice from one or more investment banking firms (a "Qualified
Offer"), each holder of a Right will<PAGE>   1
                                                                   Exhibit 10.17

                              AMENDED AND RESTATED

                            1999 STOCK INCENTIVE PLAN

                              OF LENDINGTREE, INC.

1.       PURPOSE AND TYPES OF AWARDS

         The purpose of the Amended and Restated 1999 Stock Incentive Plan of
LendingTree, Inc. (the "Plan") is to promote the long-term growth and
profitability of LendingTree, Inc. (the "Company") by (i) providing key people
with incentives to improve stockholder value and to contribute to the growth and
financial success of the Company, and (ii) enabling the Company to attract,
retain and reward the best available persons for positions of substantial
responsibility.

         The Plan permits the granting of Options (including Incentive Stock
Options), Restricted Stock, Phantom Stock Units, Stock Bonuses and Other
Stock-Based Awards.

2.       DEFINITIONS

         Under the Plan, except where the context otherwise indicates, the
following definitions apply:

         (a) "Affiliate" shall mean any entity, whether now or hereafter
existing, that controls, is controlled by, or is under common control with, the
Company (including, but not limited to, joint ventures, limited liability
companies, and partnerships). For this purpose, "control" shall mean ownership
of 50% or more of the voting power of the entity.

         (b) "Award" shall mean any Option, Restricted Stock, Phantom Stock
Unit, Stock Bonus or Other Award granted under the Plan.

         (c) "Award Agreement" shall mean a written agreement between the
Company and a Grantee memorializing the terms and conditions of an Award granted
pursuant to the Plan.

         (d) "Board" shall mean the Board of Directors of the Company.
<PAGE>   2
         (e) "Cause" shall mean, unless the Grantee is a party to a written
employ ment agreement with the Company or an affiliate which contains a
definition of "cause," "termination for cause" or any other similar term or
phrase, in which case "Cause" shall have the meaning set forth in such
agreement: (i) any substantiated act by the Grantee involving dishonesty or bad
faith against the Company or an affiliate, or any act or omission that
demonstrates a lack of integrity of Grantee with respect to the Company or an
affiliate; (ii) the Grantee engaging in acts or omissions that demonstrably and
materially injure the business and affairs of the Company or an affiliate,
monetarily or otherwise; (iii) a breach or threatened breach by the Grantee of
any non-competition or confidentiality agreement entered into between Grantee
and the Company or its affiliate; (iv) the chronic use of alcohol, drugs or
other similar substances affecting the Grantee's work performance; or (v) the
Grantee being convicted of, or pleading guilty or no lo contendere to, or being
indicted for a felony or other crime involving theft, fraud or moral turpitude.
The good faith determination by the Committee of whether a Grantee's employment
or service relationship was terminated by the Company for 'Cause' shall be final
and binding for all purposes hereunder.

         (f) "Change in Control" shall mean (i) the acquisition by any Person of
shares of the Company's stock representing more than 50.0% of the total voting
power of the Company; (ii) the following individuals cease for any reason to
constitute a majority of the number of directors then serving: individuals who,
on the date hereof, constitute the Board and any new director (other than a
director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the
Company's stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
on the date hereof or whose appointment, election or nomination for election was
previously so approved or recommended; (iii) any merger, share exchange,
consolidation or other reorganization or business combination in which the
Company is not the surviving or continuing corporation or in which the Company's
stockholders do not control greater than 50.0% of the voting power of the
surviving or continuing corporation, or in which the Company's stockholders
become entitled to receive cash, securities of the Company other than voting
common stock, or securities of another issuer; or (v) the stockholders of the
Company approve a plan of complete liquidation or dissolution of the Company or
there is consummated an agreement for the sale or disposition by the Company of
all or substantially all of the

                                       2
<PAGE>   3
Company's assets, other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at least 50.0% of the
combined voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.

         (g) "Code" shall mean the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.

         (h) "Committee" shall mean the Board or committee of Board members
appointed pursuant to Section 3 to administer the Plan.

         (i) "Common Stock" shall mean shares of the Company's common stock, par
value one cent ($0.01) per share.

         (j) "Disability" shall mean the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impair ment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than twelve months. The
Committee may require such proof of Disability as the Committee in its sole
discretion deems appropriate and the Committee's determination as to whether
Grantee is Disabled shall be final and binding on all parties concerned.

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

         (l) "Fair Market Value" of a share of the Common Stock for any purpose
on a particular date shall be determined in a manner such as the Committee shall
in good faith determine to be appropriate; provided, however, that in the case
of Incentive Stock Options, the determination of Fair Market Value shall be made
by the Committee in good faith in conformance with the Treasury Regulations
under Section 422 of the Code; and provided, further, that with respect to
Awards granted on the date of the consummation of the Initial Public Offering,
the "Fair Market Value" of a share of Common Stock on such date shall be the
initial price to the public as set forth in the final prospectus included within
the registration statement on form S-1 filed with the Securities and Exchange
Commission for the Initial Public Offering.

                                       3
<PAGE>   4
         (m) "Grant Date" shall mean the date on which the Committee formally
acts to grant an Award to a Grantee or such other date as the Committee shall so
designate at the time of taking such formal action.

         (n) "Grantee" shall mean a person granted an Award pursuant to the
Plan.

         (o) "Incentive Stock Option" shall mean an Option that is an 'Incentive
Stock Option' within the meaning of Section 422 of the Code, or any successor
provision, and that is designated by the Committee as an Incentive Stock Option.

         (p) "Initial Public Offering" shall mean the initial public offering of
shares of Common Stock, as registered with the Securities and Exchange
Commission.

         (q) "Issue Date" shall mean the date established by the Committee on
which certificates representing Restricted Stock shall be issued by the Company
pursuant to the terms of Section 7(a).

         (r) "Non-Qualified Option" shall mean an Option other than an Incentive
Stock Option.

         (s) "Option" shall mean an option to purchase Common Stock granted
pursuant to Section 6.

         (t) "Other Stock-Based Award" shall mean an award granted pursuant to
Section 10.

         (u) "Outside Director" shall mean each Director who is not an employee
or executive officer of the Company and who is (i) during the period prior to
and including the date of consummation of the Initial Public Offering, the
beneficial owner (as such term is defined in Rule 13d-3 promulgated under the
Exchange Act) of less than one percent of the combined voting power of the
Company or (ii) following the date on which the Initial Public Offering is
consummated, the beneficial owner (as such term is defined in Rule 13d-3
promulgated under the Exchange Act) of less than five percent of the combined
voting power of the Company.

         (v) "Parent" shall mean a corporation, whether now or hereafter
existing, within the meaning of the definition of "parent corporation" provided
in Section 424(e) of the Code, or any successor thereto of similar import.

                                       4
<PAGE>   5
         (w) "Performance Goals" shall mean performance goals determined by the
Committee in its sole discretion. Such goals may be based on one or more or none
of the following criteria: (i) pre-tax income or after-tax income, (ii)
operating profit, (iii) return on equity, assets, capital or investment, (iv)
earnings or book value per share, (v) sales or revenues, (vi) operating
expenses, (vii) Common Stock price appreciation; (viii) implementation or
completion of critical projects or processes; (ix) increase in the volume of
qualification forms completed or submitted, which goals may be expressed in
terms of absolute numbers and/or as a percentage in crease; (x) comparison of
actual performance during a performance period against budget for such period;
(xi) increase in the number of loans closed, which increase may be measured by
type(s) of loan or in the aggregate; (xii) growth of revenue, which growth may
be expressed in terms of absolute numbers and/or as a percentage increase; or
(xiii) reductions in expenses, which reductions may be expressed in terms of
absolute numbers and/or as a percentage decrease; provided that with respect to
clauses (xi) through (xiii), such achievement may be measured against budget for
the same period. Where applicable, the Performance Goals may be expressed in
terms of attaining a specified level of the particular criteria or the attain
ment of a percentage increase or decrease in the particular criteria, and may be
applied to one or more of the Company, a Subsidiary or Affiliate, or a division
or strategic business unit of the Company, or may be applied to the performance
of the Company relative to a market index, a group of other companies or a
combination thereof, all as determined by the Committee. The Performance Goals
may include a threshold level of performance below which no vesting will occur,
levels of performance at which specified vesting will occur, and a maximum
level of performance at which full vesting will occur. Each of the foregoing
Performance Goals shall be determined in accordance with generally accepted
accounting principles and shall be subject to certification by the Committee;
provided that the Committee shall have the authority to make equitable
adjustments to the Performance Goals in recognition of unusual or non-recurring
events affecting the Company or any Subsidiary or Affiliate or the financial
statements of the Company or any Subsidiary or Affiliate in response to changes
in applicable laws or regulations, or to account for items of gain, loss or
expense determined to be extraordinary or unusual in nature or infrequent in
occurrence or related to the disposal of a segment of a business or related to
a change in accounting principles.

         (x) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include: (i) the Company or any of its subsidiaries;
(ii) a trustee

                                       5
<PAGE>   6
or other fiduciary holding securities under an employee benefit plan of the
Company or any of its Affiliates; (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities; or (iv) a corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

         (y) "Phantom Stock" shall mean the right, granted pursuant to Section
8, to receive in cash or shares the Fair Market Value of a share of Common
Stock.

         (z) "Restricted Stock" shall mean a share of Common Stock which is
granted pursuant to the terms of Section 7 and which is subject to the
restrictions set forth in Section 7(c).

         (aa) "Retirement" shall mean termination of a Grantee's employment or
service, other than for Cause, on or after attainment of age 65.

         (bb) "Rule 16b-3" shall mean Rule 16b-3 as in effect under the Exchange
Act on the effective date of the Plan, or any successor provision prescribing
conditions necessary to exempt the issuance of securities under the Plan (and
further transactions in such securities) from Section 16(b) of the Exchange Act.

         (cc) "Stock Bonus" shall mean a bonus payable in shares of Company
Stock granted pursuant to Section 9.

         (dd) "Subsidiary" and "Subsidiaries" shall mean only a corporation or
corporations, whether now or hereafter existing, within the meaning of the
definition of "subsidiary corporation" provided in Section 424(f) of the Code,
or any successor thereto of similar import.

         (ee) "Ten Percent Stockholder" shall mean a Grantee who owns (within
the meaning of Section 422(b)(6) of the Code, after the application of the
attribution rules in Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of shares of the Company, or its Parent or
Subsidiary corporations.

         (ff) "Vesting Date" shall mean the date established by the Committee on
which Restricted Stock or Phantom Stock may vest.

3.       ADMINISTRATION

                                       6
<PAGE>   7
         (a) Procedure. The Plan shall be administered by the Board. In the
alternative, the Board may appoint a Committee consisting of not less than two
members of the Board to administer the Plan on behalf of the Board, subject to
such terms and conditions as the Board may prescribe. The members of the
Committee shall be both "non-employee directors" within the meaning of Rule
16b-3 and, to the extent that the Board has resolved to take actions necessary
to enable compensation arising with respect to Awards under the Plan to
constitute performance-based compensation for purposes of Section 162(m) of the
Code, "outside directors" within the meaning of Section 162(m) of the Code. Once
appointed, the Committee shall continue to serve until otherwise directed by the
Board. The Board or the Committee may delegate to senior management of the
Company authority to make grants of Awards to employees of the Company who are
not executive officers or directors of the Company. From time to time, the Board
may increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and, thereafter, directly administer the Plan. In the event that the
Board is the administrator of the Plan in lieu of a Commit tee, the term
"Committee" as used herein shall be deemed to mean the Board.

                  The Committee shall meet at such times and places and upon
such notice as it may determine. A majority of the Committee shall constitute a
quorum. Any acts by the Committee may be taken at any meeting at which a quorum
is present and shall be by majority vote of those members entitled to vote.
Addition ally, any acts reduced to writing or approved in writing by all of the
members of the Committee shall be valid acts of the Committee.

                  Members of the Board or the Committee who are either eligible
for Awards or have been granted Awards may vote on any matters affecting the
administration of the Plan or the grant of Awards pursuant to the Plan, except
that no such member shall act upon the granting of an Award to himself or
herself, but any such member may be counted in determining the existence of a
quorum at any meeting of the Board or the Committee during which action is taken
with respect to the granting of an Award to him or her.

         (b) Powers of the Committee. The Committee shall have all the powers
vested in it by the terms of the Plan, such powers to include authority, in its
sole and absolute discretion, to grant Awards under the Plan, prescribe Award
Agreements evidencing such Awards and establish programs for granting Awards.
The Commit-

                                       7
<PAGE>   8
tee shall have full power and authority to take all other actions necessary to
carry out the purpose and intent of the Plan, including, but not limited to, the
authority to:

                  (i) determine the eligible persons to whom, and the time or
         times at which, Awards shall be granted;

                  (ii) determine the types of Awards to be granted;

                  (iii) determine the number of shares to be covered by each
         Award;

                  (iv) impose such terms, limitations, restrictions and
         conditions upon any such Award as the Committee shall deem appropriate;

                  (v) modify, extend or renew outstanding Awards, accept the
         surrender of outstanding Awards and substitute new Awards;

                  (vi) accelerate or otherwise change the time in which an Award
         may be exercised or become payable and to waive or accelerate the
         lapse, in whole or in part, of any restriction or condition with
         respect to such Award, including, but not limited to, any restriction
         or condition with respect to the vesting or exercisability of an Award
         following termination of any Grantee's employ ment or service; and

                  (vii) to establish objectives and conditions, if any, for
         earning the grant of an Award.

The Committee shall have full power and authority to administer and interpret
the Plan and to adopt such rules, regulations, agreements, guidelines and
instruments for the administration of the Plan and for the conduct of its
business as the Committee deems necessary or advisable and to interpret same,
all within the Committee's sole and absolute discretion.

         (c) Limited Liability. To the maximum extent permitted by law, no
member of the Board or Committee shall be liable for any action taken or
decision made in good faith relating to the Plan or any Award thereunder.

         (d) Indemnification. To the maximum extent permitted by law and the
Company's charter or by-laws, the members of the Board and Committee shall be
indemnified by the Company in respect of all their activities under the Plan.

                                       8
<PAGE>   9
         (e) Effect of Committee's Decision. All actions taken and decisions and
determinations made by the Committee on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Committee's sole
and absolute discretion and shall be conclusive and binding on all parties
concerned, including the Company, its stockholders, any participants in the Plan
and any other employee of the Company, and their respective successors in
interest.

4.       SHARES AVAILABLE FOR THE PLAN

         Subject to adjustments as provided in Section 13, the shares of stock
that may be delivered or purchased with respect to Awards granted under the
Plan, including with respect to Incentive Stock Options intended to qualify
under Section 422 of the Code, shall not exceed an aggregate of 1,800,000 shares
of Common Stock of the Company. The Company shall reserve such number of shares
for Awards under the Plan, subject to adjustments as provided below. Following
an Initial Public Offering, the maximum number of shares of Common Stock that
may be made subject to Options with respect to any executive officer of the
Company with respect to any 12- month period during the term of the Plan shall
be 1,800,000. If any Award, or portion of an Award, under the Plan expires or
terminates unexercised, becomes unexercisable or is forfeited or otherwise
terminated, surrendered or canceled as to any shares without the delivery of
shares of Common Stock or other consideration, the shares subject to such Award
shall thereafter be shares with respect to which further Awards may be granted
under the Plan.

         In the event that the Committee shall determine that any
reclassification, recapitalization, stock split, dividend or other distribution
(whether in the form of cash, stock or other property), combination, merger,
consolidation, spin-off, share exchange, repurchase or other similar corporate
transaction or event affects the Common Stock such that an adjustment is
appropriate in order to prevent dilution or enlargement of the rights of
Grantees under the Plan, the maximum number and kind of shares reserved for
issuance or with respect to which Awards may be granted under the Plan shall be
adjusted to reflect such event, and the Committee shall make such adjustments as
it deems appropriate and equitable in the number, kind and price of shares
covered by outstanding Awards previously granted under the Plan, and in any
other matters which relate to Awards and which are affected by the changes in
the Common Stock referred to above; provided, however, that with respect to
Incentive Stock Options, such adjustment shall be made in accordance with
Section 424(h) of the Code.

                                       9
<PAGE>   10
         The Committee is authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in the
preceding paragraph of this Section 13) affecting the Company, or the financial
statements of the Company or any Subsidiary, or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan.

5.       PARTICIPATION

         Participation in the Plan shall be open to all employees, directors,
officers and consultants of the Company, or of any Affiliate of the Company, as
may be selected by the Committee from time to time. Notwithstanding the
foregoing, participation in the Plan with respect to grants of Incentive Stock
Options shall be limited to employees of the Company or of any Parent or
Subsidiary of the Company.

         Awards may be granted to such eligible persons and for such number of
shares of Common Stock as the Committee shall determine, subject to the
limitations in Section 4. A grant of any type of Award made in any one year to
an eligible person shall neither guarantee nor preclude a further grant of that
or any other type of Award to such person in that year or subsequent years.

6.       STOCK OPTIONS

         Subject to the other applicable provisions of the Plan, the Committee
may from time to time grant to eligible participants Awards of Incentive Stock
Options or Non-Qualified Stock Options. In addition to such terms and conditions
as may not inconsistent with the terms of the Plan and shall be set forth in the
applicable Award Agreement, Options shall be subject to the following terms and
conditions.

         (a) Grant of Option. The grant of an Option shall be evidenced by a
Award Agreement, executed by the Company and the Grantee, stating the number of
shares of Common Stock subject to the Option evidenced thereby and the terms and
conditions of such Option, in such form as the Committee may from time to time
determine.

         (b) Price. The price per share payable upon the exercise of each Option
("exercise price") shall be determined by the Committee in its discretion;
provided,

                                       10
<PAGE>   11
however, that in the case of Incentive Stock Options, the exercise price shall
not be less than 100% of the Fair Market Value of a share of Common Stock on the
Grant Date.

         (c) Term and Exercisability. Unless otherwise determined by the
Committee at the time of grant, the term of each Option shall be no longer than
10 years from the Grant Date; provided, however, that in the case of Incentive
Stock Options, the term of such option shall not exceed 10 years from the Grant
Date. Unless earlier terminated pursuant to the provisions of the Plan or the
Award Agreement, each Option shall become vested in accordance with the vesting
schedule specified in the Award Agreement, which vesting schedule shall be
determined by the Committee in its discretion.

         (d) Payment. Options may be exercised in whole or in part by payment of
the exercise price of the shares to be acquired in accordance with the
provisions of the Award Agreement, or such rules and regulations as the
Committee may have prescribed, or such determinations, orders, or decisions as
the Committee may have made. Payment may be made by one or a combination of the
following methods: (i) in cash (or cash equivalents acceptable to the
Committee); (ii) the surrender of previously acquired shares of Common Stock
having a Fair Market Value less than or equal to the aggregate exercise price,
which shares shall have been held by the Grantee for at least six months prior
to the date of such surrender; (iii) if so deter mined by the Committee as of
the Grant Date and set forth in the applicable Award Agreement, authorization
for the Company to withhold a number of shares otherwise payable pursuant to the
exercise of an Option having a Fair market Value less than or equal to the
aggregate exercise price; or (iv) by delivery of a properly executed exercise
notice, together with irrevocable instructions: (1) to a brokerage firm
designated by the Grantee and approved by the Company to deliver promptly to the
Company the aggregate amount of sale or loan proceeds to pay the exercise price
and any withholding tax obligations that may arise in connection with the
exercise, and (2) to the Company to deliver the certificates for such purchased
shares directly to such brokerage firm. The Committee may, in its sole
discretion, authorize the Company to make or guarantee loans to Grantees to
assist Grantees in exercising Options.

         (e) Exercise of Options Following Termination of Employment or Service
Relationship. Subject to Section 6(f) (with respect to Incentive Stock Options)
and unless otherwise determined by the Committee in its discretion,

                                       11
<PAGE>   12
Options shall be subject to the following conditions with respect to their
post-termination exercisability.

                  (i) Following Termination of Employment or Service
         Relationship for Reasons Other Than Death, Disability or Retirement.
         Unless otherwise determined by the Committee in its sole discretion,
         the vested portion of any then outstanding Option held by such Grantee
         shall remain exercisable for 90 days after the date the Grantee is no
         longer employed by, nor in a service relationship with, the Company and
         its affiliates for any reason other than the Grantee's death,
         Disability, or Retirement, following which period the Option shall
         terminate. Notwithstanding the foregoing, a Grantee's Options shall
         terminate in their entirety, whether or not vested, upon termination of
         the employment or service relationship of the Grantee by the Company or
         an affiliate for Cause.

                  (ii) Following Grantee's Death. Unless otherwise determined by
         the Committee in its sole discretion, following a Grantee's death such
         Grantee's executor, personal representative, or the person to whom an
         Option shall have been transferred by will or the laws of descent and
         distribution, as the case may be, may exercise the vested portion of
         any then outstanding Option transferred to such individual for one
         year; provided, that the Committee may, in its sole discretion, provide
         that an Option originally granted to a non-employee director may remain
         exercisable following such director's death for up to three years.

                  (iii) Following Termination of Employment or Service
         Relationship by Reason of Disability or Retirement. Unless otherwise
         determined by the Committee in its sole discretion, in the event that a
         Grantee ceases, by reason of Disability or Retirement, to be an
         employee of or in a service relationship with the Company or an
         Affiliate, the vested portion of an outstanding Option then held by
         such Grantee may be exercised in whole or in part at any time within
         one year after the date of Disability or Retirement, as the case may
         be, following which period the Option shall terminate.

                  (iv) Notwithstanding anything to the contrary in the Plan, no
         Option shall remain exercisable beyond the original term of such
         Option, as stated in the Award Agreement evidencing such Option.

                                       12
<PAGE>   13
         (f) Restrictions on Incentive Stock Options. Incentive Stock Options
granted under the Plan shall comply in all respects with Section 422 of the Code
and, as such, shall meet the following additional requirements:

                  (i) Designation. No Option shall be an Incentive Stock Option
         unless so designated by the Committee at the time of grant in the Award
         Agreement.

                  (ii) Exercise Price and Term. The exercise price per share of
         an Incentive Stock Option shall be not less than 100% of the Fair
         Market Value of a share of Common Stock on the Grant Date, and the term
         of such Option shall not exceed ten years; provided, however, that the
         exercise price of any Incentive Stock Option granted to a Ten Percent
         Stockholder shall be not less than 110% of the Fair Market Value of the
         Common Stock on the Grant Date, and the term of such Option shall not
         exceed five years.

                  (iii) Limitation on Shares. The aggregate Fair Market Value
         (deter mined as of the Grant Date) of shares of Common Stock with
         respect to which any Incentive Stock Options first become exercisable
         by a Grantee in any calendar year under this or any other plan of the
         Company and its Parent and Subsidiary corporations may not exceed
         $100,000 or such other amount as may be permitted from time to time
         under Section 422 of the Code. To the extent that such aggregate Fair
         Market Value shall exceed $100,000, or other applicable amount, such
         Options shall be treated as Non-Qualified Stock Options. In such case,
         the Company may designate the shares of Common Stock that are to be
         treated as stock acquired pursuant to the exercise of an Incentive
         Stock Option by issuing a separate certificate for such shares and
         identifying the certificate as Incentive Stock Option shares in the
         stock transfer records of the Company.

                  (iv) Grantee. Incentive Stock Options shall only be issued to
         employees of the Company, or of a Parent or Subsidiary of the Company.

                  (v) Tandem Awards Prohibited. An Incentive Stock Option may
         not be granted in tandem with any other Award in such a manner that the
         exercise of one affects a Grantee's right under the other.

                  (vi)  Post-Termination Exercisability.

                                       13
<PAGE>   14
                           (1)      In the event that the employment of a
                                    Grantee with the Company and its Affiliates
                                    is terminated for Cause, all outstanding
                                    Incentive Stock Options held by such
                                    Grantee, whether or not vested, shall be
                                    immediately forfeited and cancelled as of
                                    the effective date of such termination.

                           (2)      In the event that the employment of a
                                    Grantee with the Company and its Affiliates
                                    is terminated due to such Grantee's
                                    Disability, all outstanding Incentive Stock
                                    Options held by such Grantee (or such
                                    Grantee's beneficiary, if applicable) may
                                    be exercised, to the extent exercisable at
                                    the effective date of such termination, for
                                    a period not to exceed one year following
                                    the effective date of such termination.

                           (3)      In the event that the employment of a
                                    Grantee is terminated for any other reason,
                                    all outstanding Incentive Stock Options held
                                    by such Grantee may be exercised, to the
                                    extent exercisable at the effective date of
                                    such termination, for a period not to exceed
                                    three months following the effective date of
                                    such termination.

         (g) Outside Director Program. Outside Directors shall be entitled to
grants of Options under the terms and conditions set forth in this Section 6(g)
and otherwise in accordance with the terms and conditions of the Plan.

                  (i) Identification of Options. Each Option granted under this
         Section 6(g) shall be designated a Non-Qualified Stock Option in the
         Award Agree ment evidencing such Option.

                  (ii) Initial Grant of Options. Each Outside Director serving
         as of the Initial Public Offering shall be granted, without further
         action on the part of the Board or the Committee, an Option to purchase
         15,000 shares of Common Stock.

                  (iii) Grant Upon Election or Appointment. Following the
         Initial Public Offering, at the time of the initial election or
         appointment of an Outside Director to the Board, such Outside Director
         shall be granted,

                                       14
<PAGE>   15
         without further action on the part of the Board or the Committee, an
         Option to purchase 15,000 shares of Common Stock.

                  (iv) Annual Grants. Immediately following each annual meeting
         of the Company's stockholders, each Outside Director then serving shall
         be granted, without further action on the part of the Board or the
         Committee, an Option to purchase 5,000 shares of Common Stock.

                  (v) Exercise Price. Each Agreement with respect to an Option
         granted under this Section 6(g) shall set forth the exercise price per
         share of Common Stock payable by the Grantee to the Company upon
         exercise of the Option. The exercise price per share of Common Stock
         shall be the Fair Market Value of a share of Common Stock on the date
         the Option is granted.

                  (vi) Term and Exercise of Options.

                           (1)      Each Option granted under this Section 6(g)
                                    shall have a term of ten years.

                           (2)      Each Option granted under this Section 6(g)
                                    shall be come exercisable in full on the
                                    second anniversary of the date such Option
                                    was granted, provided that the Grantee is
                                    serving as an Outside Director as of such
                                    vesting date.

                           (3)      Each Option granted under this Section 6(g)
                                    may be exercised, in whole or in part, with
                                    respect to whole shares of Common Stock, to
                                    the extent then exercisable.

                           (4)      Each Option granted under this Section 6(g)
                                    shall be exercised by delivering notice to
                                    the Company's principal office, to the
                                    attention of its Secretary. Such notice
                                    shall be accompanied by the applicable Award
                                    Agree ment, shall specify the number of
                                    whole shares of Common Stock with respect to
                                    which the Option is being exercised and the
                                    effective date of the proposed exercise and
                                    shall be signed by the Grantee or other
                                    person then having the right to exercise the
                                    Option.

                                       15
<PAGE>   16
                                    The methods of payment with respect to the
                                    exercise price of Options granted under this
                                    Section 6(g) shall be consistent with
                                    Section 6(d).

         (h) Exercise Prior to Vesting. The Committee may in its sole discretion
provide at the time of grant of any Option that the Grantee may elect at any
time during both (1) the term of such Option and (2) the period during which
such Grantee is employed by or providing services to the Company or any of its
Affiliates, that the Grantee may exercise all or any portion of such Option,
including the unvested portion of such Option; provided, however, that

                  (i) a partial exercise of such Option shall be deemed to cover
         first vested shares and then the earliest vesting installment of
         unvested shares;

                  (ii) any shares so purchased from installments which have not
         vested as of the date of exercise shall be subject to a repurchase
         option in favor of the Company, the terms of which shall be set forth
         in the Award Agreement evidencing such Option;

                  (iii) the Grantee shall enter into a form of Early Exercise
         Stock Purchase Agreement with a vesting schedule that will result in
         the same vesting as if no early exercise had occurred; and

                  (iv) if such Option is an Incentive Stock Option, then, the
         maximum vesting provisions of Section 6(f)(iii) shall continue to apply
         with respect to such shares.

         (i) Restrictions on Transfer. The Committee may in its sole discretion
provide at the time of grant of any Option that, upon its exercise, the shares
of Common Stock to be issued to the Grantee shall be subject to such
restrictions on transfer as the Committee may determine are advisable.

7.       RESTRICTED STOCK

         (a) Issue Date and Vesting Date. At the time of the grant of an Award
of Restricted Stock, the Committee shall establish an Issue Date or Issue Dates
and a Vesting Date or Vesting Dates with respect to such shares. The Committee
may divide such shares into classes and assign a different Issue Date and/or
Vesting Date for each class. If the Grantee is employed by or providing services
to the Company

                                       16
<PAGE>   17
on an Issue Date (which may be the Grant Date), the specified number of shares
of Restricted Stock shall be issued in accordance with the provisions of Section
7(e). Provided that all conditions to the vesting of a share of Restricted Stock
imposed pursuant to Section 7(b) are satisfied, and except as provided in
Section 7(g), upon the occurrence of the Vesting Date with respect to a share of
Restricted Stock, such share shall vest and the restrictions of Section 7(c)
shall lapse.

         (b) Conditions to Vesting. At the time of the grant of shares of
Restricted Stock, the Committee may impose such restrictions or conditions to
the vesting of such shares as it, in its absolute discretion, deems appropriate.

         (c) Restrictions on Transfer Prior to Vesting. Prior to the vesting of
a share of Restricted Stock, no transfer of a Grantee's rights with respect to
such share, whether voluntary or involuntary, by operation of law or otherwise,
shall be permitted. Immediately upon any attempt to transfer such rights, such
share, and all of the rights related thereto, shall be forfeited by the Grantee.

         (d) Dividends on Restricted Stock. The Committee in its discretion may
require that any dividends paid on shares of Restricted Stock be held in escrow
until all restrictions on such shares have lapsed.

         (e) Issuance of Certificates.

                  (i) Reasonably promptly after the Issue Date with respect to
         shares of Restricted Stock, the Company shall cause to be issued a
         stock certificate, registered in the name of the Grantee to whom such
         shares were granted, evidencing such shares; provided, that the Company
         shall not cause such a stock certificate to be issued unless it has
         received a stock power duly endorsed in blank with respect to such
         shares. Each such stock certificate shall bear the following legend:

                  THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF
                  STOCK REPRESENTED HEREBY ARE SUBJECT TO THE RESTRICTIONS,
                  TERMS AND CONDITIONS (INCLUDING FORFEITURE PROVISIONS AND
                  RESTRICTIONS AGAINST TRANSFER) CONTAINED IN THE AMENDED AND
                  RESTATED 1999 STOCK INCENTIVE PLAN OF LENDINGTREE, INC. AND AN
                  AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER OF SUCH
                  SHARES AND THE COMPANY. A COPY OF THE PLAN AND AGREEMENT IS ON
                  FILE IN THE OFFICE OF THE SECRETARY

                                       17
<PAGE>   18
                  OF THE COMPANY, 6701 CARMEL RD., SUITE 205, CHARLOTTE,

                  NC  28226.

         Such legend shall not be removed until such shares vest pursuant to the
         terms hereof.

                  (ii) Each certificate issued pursuant to this Section 7(e),
         together with the stock powers relating to the shares of Restricted
         Stock evidenced by such certificate, shall be held by the Company
         unless the Committee determines otherwise.

         (f) Consequences of Vesting. Upon the vesting of a share of Restricted
Stock pursuant to the terms hereof, the restrictions of Section 7(c) shall lapse
with respect to such share. Reasonably promptly after a share of Restricted
Stock vests, the Company shall cause to be delivered to the Grantee to whom such
shares were granted, a certificate evidencing such share, free of the legend set
forth in Section 7(e).

         (g) Effect of Termination of Employment. Subject to such other
provision as the Committee may set forth in the applicable Agreement, and to the
Committee's amendment authority pursuant to Section 15, upon the termination of
a Grantee's employment for any reason, any and all shares to which restrictions
on transferability apply shall be immediately forfeited by the Grantee and
transferred to, and reacquired by, the Company. In the event of a forfeiture of
shares pursuant to this Section 7(g), the Company shall repay to the Grantee (or
the Grantee's estate) any amount paid by the Grantee for such shares. In the
event that the Company requires a return of shares, it shall also have the right
to require the return of all dividends paid on such shares, whether by
termination of any escrow arrangement under which such dividends are held or
otherwise.

         (h) Special Provisions Regarding Restricted Stock. Notwithstanding
anything to the contrary contained herein, Restricted Stock granted pursuant to
this Section 7 may be based on the attainment of Performance Goals. Such shares
of Restricted Stock shall be released from restrictions only after the
attainment of such Performance Goals has been certified by the Committee.

8.       PHANTOM STOCK

                                       18
<PAGE>   19
         (a) Vesting Date. At the time of the grant of shares of Phantom Stock,
the Committee shall establish a Vesting Date or Vesting Dates with respect to
such shares. The Committee may divide such shares into classes and assign a
different Vesting Date for each class. Provided that all conditions to the
vesting of a share of Phantom Stock imposed pursuant to Section 8(c) are
satisfied, and except as provided in Section 8(d), upon the occurrence of the
Vesting Date with respect to a share of Phantom Stock, such share shall vest.

         (b) Benefit Upon Vesting. Upon the vesting of a share of Phantom Stock,
the Grantee shall be entitled to receive, within 30 days of the date on which
such share vests, an amount, in cash and/or shares of Common Stock, as
determined by the Committee, equal to the sum of (i) the Fair Market Value of a
share of Common Stock on the date on which such share of Phantom Stock vests and
(ii) the aggregate amount of cash dividends paid with respect to a share of
Common Stock during the period commencing on the date on which the share of
Phantom Stock was granted and terminating on the date on which such share vests.

         (c) Conditions to Vesting. At the time of the grant of shares of
Phantom Stock, the Committee may impose such restrictions or conditions to the
vesting of such shares as it, in its absolute discretion, deems appropriate.

         (d) Effect of Termination of Employment. Subject to such other
provision as the Committee may set forth in the applicable Agreement, and to
the Committee's amendment authority pursuant to Section 15, shares of Phantom
Stock that have not vested, together with any dividends credited on such
shares, shall be for feited upon the Grantee's termination of employment for
any reason.

         (e) Special Provisions Regarding Awards. Notwithstanding anything to
the contrary contained herein, the vesting of Phantom Stock granted pursuant to
this Section 8 may be based on the attainment by the Company of one or more
Performance Goals. No payment in respect of any such Phantom Stock award will
be paid until the attainment of the respective Performance Goals have been
certified by the Committee.

9.       STOCK BONUSES

         In the event that the Committee grants a Stock Bonus, a certificate for
the shares of Common Stock comprising such Stock Bonus shall be issued in the
name

                                       19
<PAGE>   20
of the Grantee to whom such Award was granted and delivered to such Grantee as
soon as practicable after the date on which such Stock Bonus is payable.

10.      OTHER STOCK-BASED AWARDS

         Other forms of Awards ("Other Stock-Based Awards") valued in whole or
in part by reference to, or otherwise based on, Common Stock may be granted
either alone or in addition to other Awards under the Plan. Subject to the
provisions of the Plan, the Committee shall have sole and complete authority to
determine the persons to whom and the time or times at which such Other
Stock-Based Awards shall be granted, the number of shares of Common Stock to be
granted pursuant to such Other Stock-Based Awards and all other conditions of
such Other Stock-Based Awards.

11.      WITHHOLDING OF TAXES

         The Company may require, as a condition to the exercise of any Option
under the Plan or the delivery of certificates for shares issued or payments of
cash to a Grantee pursuant to the Plan or an Award Agreement (hereinafter
collectively referred to as a "taxable event"), that the Grantee pay to the
Company in cash any federal, state or local taxes of any kind required by law to
be withheld with respect to any taxable event under the Plan. The Company, to
the extent permitted or required by law, shall have the right to deduct from any
payment of any kind (including salary or bonus) otherwise due to a Grantee any
federal, state or local taxes of any kind required by law to be withheld with
respect to any taxable event under the Plan, or to retain or sell without notice
a sufficient number of the shares to be issued to such Grantee to cover any such
taxes. If shares of Common Stock are to be withheld by the Company from shares
of Common Stock otherwise to be issued upon the exercise of an Option or in
satisfaction or settlement of any Award, for purposes of satisfying withholding
tax obligations, the number of shares to be so withheld shall be calculated
using the minimum statutory withholding rates for federal and state tax
purposes, including payroll taxes, that are applicable to the taxable event then
applicable to such Award. The Committee may, in its sole discretion, authorize
the Company to make or guarantee loans to Grantees to assist Grantees in
satisfying such withholding obligation.

12.      TRANSFERABILITY

         Except as otherwise determined by the Committee, and in any event in
the case of an Incentive Stock Option, no Award granted under the Plan shall be
transfer-

                                       20
<PAGE>   21
able by a Grantee otherwise than by will or the laws of descent and
distribution. Unless otherwise determined by the Committee in accord with the
provisions of the immediately preceding sentence, an Option may be exercised
during the lifetime of the Grantee, only by the Grantee or, during the period
the Grantee is under a legal disability, by the Grantee's guardian or legal
representative.

13.      CHANGE IN CONTROL

         In the event of a Change in Control, 50% of the time-vesting portion of
any outstanding Award (i.e., that portion of an Award that vests or becomes
exercisable only through the passage of time and is not subject to any
Performance Goal) that is not then vested and/or exercisable shall become
immediately vested and/or exercisable. In addition to the acceleration provided
for in the immediately preceding sentence, the Committee may, in its sole
discretion, provide that all or any part of the remaining portion of an
outstanding Award that is not then vested and/or exercisable shall become
immediately vested and/or exercisable.

14.      TERMINATION AND MODIFICATION OF THE PLAN

         The Board, without further approval of the stockholders, may modify or
terminate the Plan or any portion thereof at any time, except that no
modification shall become effective without prior approval of the stockholders
of the Company if stockholder approval is necessary to comply with any tax or
regulatory requirement or rule of any exchange or listing or quotation system
established by the National Association of Securities Dealers, Inc. ("Nasdaq
System") upon which the Common Stock is listed or quoted; including for this
purpose stockholder approval that is required to enable the Committee to grant
Incentive Stock Options pursuant to the Plan or to qualify compensation paid
under the plan as "performance based compensation" within the meaning of
Section 162(m) of the Code.

         The Committee shall be authorized to make minor or administrative
modifications to the Plan as well as modifications to the Plan that may be
dictated by requirements of federal or state laws applicable to the Company or
that may be authorized or made desirable by such laws. The Committee may amend
or modify any outstanding Award in any manner to the extent that the Committee
would have had the authority to make such Award as so modified or amended.

15.      NON-GUARANTEE OF EMPLOYMENT OR SERVICE

                                       21
<PAGE>   22
         Nothing in the Plan or in any Award Agreement thereunder shall confer
any right on an employee, director, or consultant to continue in the employ or
service of the Company or shall interfere in any way with the right of the
Company to terminate an employee or sever any service relationship of an
individual at any time.

16.      TERMINATION OF EMPLOYMENT

         For purposes of maintaining a Grantee's continuous status as an
employee and accrual of rights under any Award granted pursuant to the Plan,
transfer of an employee among the Company and the Company's affiliates shall not
be considered a termination of employment with the employer.

17.      WRITTEN AGREEMENT

         Each Award Agreement entered into between the Company and a Grantee
with respect to an Award granted under the Plan shall incorporate the terms of
this Plan and shall contain such provisions, consistent with the provisions of
the Plan, as may be established by the Committee.

18.      NON-UNIFORM DETERMINATIONS

         The Committee's determinations under the Plan (including without
limitation determinations of the persons to receive Awards, the form, amount and
timing of such Awards, the terms and provisions of such Awards and the
agreements evidencing same) need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, Awards under
the Plan, whether or not such persons are similarly situated.

19.      APPLICATION OF FUNDS

         The proceeds received by the Company from the sale of Common Stock
pursuant to Awards granted under the Plan will be used for general corporate
purposes.

20.      LISTING AND REGISTRATION

         If the Company determines that the listing, registration or
qualification upon any securities exchange or upon any Nasdaq System or under
any law, of shares

                                       22
<PAGE>   23
subject to any Award is necessary or desirable as a condition of, or in
connection with, the granting of same or the issue or purchase of shares
thereunder, no such Award may be exercised in whole or in part, unless such
listing, registration or qualification is effected free of any conditions not
acceptable to the Company.

21.      COMPLIANCE WITH SECURITIES LAW

         Common Stock shall not be issued with respect to an Award granted under
the Plan unless the issuance and delivery of share certificates for such Common
Stock pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, the Exchange Act, the
rules and regulations promulgated thereunder, and the requirements of any
national securities exchange or Nasdaq System upon which the Common Stock may
then be listed or quoted, and shall be further subject to the approval of
counsel for the Company with respect to such compliance to the extent such
approval is sought by the Committee. All certificates for Common Stock delivered
under the Plan pursuant to any Award or the exercise thereof shall be subject to
such stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations, and other requirements of
the Securities and Exchange Commission, any stock exchange or Nasdaq System upon
which such securities are then listed or quoted, and any applicable Federal or
state laws, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.

22.      NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS

         Nothing contained in the Plan shall prevent the Company or its Parent
or any of its Subsidiaries from adopting or continuing in effect other
compensation arrangements (whether such arrangements be generally applicable or
applicable only in specific cases) as the Committee in its discretion determines
desirable, including without limitation the granting of stock-based incentive
awards otherwise than under the Plan.

23.      NO TRUST OR FUND CREATED

         Neither the Plan nor any Award shall create or be construed to create a
trust or separate fund of any kind or a fiduciary relationship between the
Company and a Grantee or any other person. To the extent that any Grantee or
other person acquires

                                       23
<PAGE>   24
a right to receive payments from the Company pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company.

24.      GOVERNING LAW

         The validity, construction and effect of the Plan, of Award Agreements
entered into pursuant to the Plan, and of any rules, regulations, determinations
or decisions made by the Board or Committee relating to the Plan or such Award
Agreements, and the rights of any and all persons having or claiming to have any
interest therein or thereunder, shall be determined exclusively in accordance
with applicable federal laws and the laws of the State of North Carolina,
without regard to its conflict of laws rules and principles.

25.      PLAN SUBJECT TO CHARTER AND BY-LAWS

         This Plan is subject to the Charter and By-Laws of the Company, as they
may be amended from time to time.

26.      EFFECTIVE DATE; TERMINATION DATE

         The Plan, as amended and restated, is effective as of the date on which
the Plan is approved by the Board, or such other date as the Board may specify
as the effective date, subject to approval of the stockholders within twelve
months before or after such date. No Award shall be granted under the Plan after
the close of business on the day immediately preceding the tenth anniversary of
the effective date of the Plan. Subject to other applicable provisions of the
Plan, all Awards made under the Plan prior to such termination of the Plan shall
remain in effect until such Awards have been satisfied or terminated in
accordance with the Plan and the terms of such Awards.

Date Approved by the Board:  January __, 2000.

Date Approved by the Shareholders: ___________________

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