Document:

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                                                                   Exhibit 10.10

                          WATER PIK TECHNOLOGIES, INC.
               1999 NON-EMPLOYEE DIRECTOR STOCK COMPENSATION PLAN

                                   ARTICLE I.
                                     GENERAL

         1.1. Purpose. It is the purpose of the Plan to promote the interests of
the Company and its stockholders by attracting, retaining and providing an
incentive to Non-Employee Directors through the acquisition of a proprietary
interest in the Company and an increased personal interest in its performance.
This purpose will be served by providing an opportunity for Non-Employee
Directors to elect to receive Stock Options and/or Common Stock in lieu of
Director's Retainer Fee Payments, the automatic payment of a portion of the
Director's Retainer Fee Payment in the form of Common Stock to those
Non-Employee Directors not electing to receive such portion in the form of Stock
Options and/or Common Stock and granting each Non-Employee Director annually an
option covering 1,000 shares of Common Stock.

         1.2. Adoption and Term. The Plan has been approved by the Board and
shall become effective as of the Effective Date (as hereinafter defined). The
Plan shall terminate without further action upon the earlier of (a) the tenth
anniversary of the effective date, and (b) the first date upon which no shares
of Common Stock remain available for issuance under the Plan.

         1.3. Definitions. As used herein the following terms have the following
meanings:

               (a) "Annual Options" means the Stock Options issuable under
               Section 4.4(a) of the Plan.

               (b)"Board" means the Board of Directors of the Company.

               (c) "Code" means the Internal Revenue Code of 1986, as amended.
               References to a section of the Code shall include that section
               and any comparable section or sections of any future legislation
               that amends, supplements or supersedes said section.

               (d)"Common Stock" means the common stock, par value $0.01 per
               share, of the Company.

               (e) "Company" means Water Pik Technologies, Inc., a Delaware
               corporation, and any successor thereto.

               (f) "Compensation Year" means each calendar year or portion
               thereof during which the Plan is in effect.

               (g)"Director" means a member of the Board.

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               (h) "Director's Retainer Fee Payment" means the dollar value of
               that portion of the annual retainer fee payable by the Company to
               a Non-Employee Director for serving as a Director and for serving
               as the chair of the Board or any committee of the Board as of a
               particular Payment Date, as established by the Board and in
               effect from time to time.

               (i) "Effective Date" means the effective date of the distribution
               by Allegheny Teledyne Incorporated to its stockholders of the
               Common Stock.

               (j) "Employee" means any employee of the Company or an affiliate.

               (k) "Exchange Act" means the Securities Exchange Act of 1934, as
               amended. References to a section of the Exchange Act or rule
               promulgated thereunder shall include that section or rule and any
               comparable section(s) or rule(s) of any future legislation or
               rulemaking that amends, supplements or supersedes said section or
               rule.

               (l) "Fair Market Value" means, as of any given date, the average
               of the high and low trading prices of the Common Stock on such
               date as reported on the New York Stock Exchange, or, if the
               Common Stock is not then traded on the New York Stock Exchange,
               on such other national securities exchange on which the Common
               Stock is admitted to trade, or, if none, on the National
               Association of Securities Dealers Automated Quotation System if
               the Common Stock is admitted for quotation thereon; provided,
               however, if there were no sales reported as of such date, Fair
               Market Value shall be computed as of the last date preceding such
               date on which a sale was reported; provided, further, that if any
               such exchange or quotation system is closed on any day on which
               Fair Market Value is to be determined, Fair Market Value shall be
               determined as of the first date immediately preceding such date
               on which such exchange or quotation system was open for trading.

               (m) "Non-Employee Director" means a Director who is not an
               Employee.

               (n) "Non-Employee Director Notice" means a written notice
               delivered in accordance with Section 4.2.

               (o) "Payment Date" means the first business day of January and
               July of each Compensation Year on which the Director's Retainer
               Fee Payment for serving as a Director is paid by the Company and
               the first business day of January of each Compensation Year on
               which the Director's Retainer Fee Payment for serving as the
               chair of the Board or any committee of the Board is paid by the
               Company.

               (p) "Plan" means this Water Pik Technologies, Inc. 1999
               Non-Employee Director Stock Compensation Plan, as it may
               hereafter be amended from time to

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               time.

               (q) "Retainer Fee Options" means the Stock Options issuable under
               Section 4.3 of the Plan.

               (r) "Stock Options" means options to purchase shares of Common
               Stock of the Company issuable hereunder.

         1.4. Shares Subject to the Plan. The shares to be offered under the
Plan shall consist of the Company's authorized but unissued Common Stock or
treasury shares and, subject to adjustment as provided in Section 5.1 hereof,
the aggregate amount of such stock which may be issued or subject to Stock
Options issued hereunder shall not exceed 100,000 shares. If any Stock Option
granted under the Plan shall expire or terminate for any reason, without having
been exercised or vested in full, as the case may be, the unpurchased shares
subject thereto shall again be available for issuance under the Plan. Stock
Options granted under the Plan will not be qualified as "incentive stock
options" under Section 422 of the Code.

                                   ARTICLE II.
                                 ADMINISTRATION

         2.1. The Board. The Plan shall be administered by the Board. Subject to
the provisions of the Plan, the Board shall interpret the Plan, promulgate,
amend, and rescind rules and regulations relating to the Plan and make all other
determinations necessary or advisable for its administration. Interpretation and
construction of any provision of the Plan by the Board shall be final and
conclusive. Notwithstanding the foregoing, the Board shall have or exercise no
discretion with respect to the selection of persons eligible to participate
hereunder, the determination of the number of shares of Common Stock or number
of Stock Options issuable to any person or any other aspect of Plan
administration with respect to which such discretion is not permitted in order
for grants of shares of Common Stock and Stock Options to be exempt under Rule
16b-3 promulgated under the Exchange Act.

                                  ARTICLE III.
                                  PARTICIPATION

         3.1. Participants. Each Non-Employee Director shall participate in the
Plan on the terms and conditions hereinafter set forth.

                                   ARTICLE IV.
                           PAYMENT OF DIRECTOR'S FEES

         4.1. General. The Director's Retainer Fee Payment shall be paid to each
Non-Employee Director, as of each Payment Date, as set forth in the Plan and
subject to such other payment policies and procedures as the Board may establish
from time to time. If, for the applicable Compensation Year, a Non-Employee
Director has not made an election pursuant to Section 4.2 to receive Stock
Options or Common Stock in lieu of at least twenty-

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five percent (25%) of the Director's Retainer Fee Payment, then seventy-five
percent (75%) of such director's Retainer Fee Payment shall be paid in cash and
twenty-five percent (25%) of the Director's Retainer Fee Payment shall be paid
in the form of Common Stock.

         4.2. Non-Employee Director Notice. A Non-Employee Director may file
with the Secretary of the Company or other designee of the Board of Directors
prior to the commencement of a Compensation Year a Non-Employee Director Notice
making an election to receive either twenty-five percent (25%), fifty percent
(50%), seventy-five percent (75%) or one hundred (100%) of his or her Director's
Retainer Fee Payment in the form of Stock Options and/or Common Stock with the
balance to be paid in cash. If a Director does not timely file an election, he
or she shall receive twenty-five percent (25%) of the Director's Retainer Fee
Payment in Common Stock and seventy-five percent (75%) in cash. Notwithstanding
the foregoing, elections to receive Common Stock or Stock Options may be made at
any time during a Compensation Year so long as such elections are made
irrevocably in advance of receiving the corresponding Common Stock or Stock
Options and approved in accordance with Rule 16b-3 under the Exchange Act.

         4.3 Conversion of Retainer Fee Payment to Shares. Each Non-Employee
Director who pursuant to Section 4.1 or 4.2 is to receive Common Stock as all or
part of his or her Director's Retainer Fee Payment with respect to a
Compensation Year and who is elected or reelected or is a continuing
Non-Employee Director as of the date of commencement of such Compensation Year
as of the applicable Payment Date, shall receive as of each Payment Date during
such Compensation Year a number of shares of Common Stock equal to the quotient
obtained by dividing (i) the amount of the Director's Retainer Fee Payment to be
paid in the form of Common Stock by (ii) the Fair Market Value of the Common
Stock per share on such Payment Date. Cash shall be paid in lieu of any
fractional shares.

         4.4      Stock Options

         (a) Annual Option Grants. An Annual Option covering 1,000 shares of
Common Stock shall be granted to each Non-Employee Director on the Effective
Date, subject to approval by the stockholders of the Company. Thereafter, an
Annual Option covering 1,000 shares of Common Stock will be granted to each
Non-Employee Director automatically at the conclusion of each Company Annual
Meeting. If, after the Effective Date, a director first becomes a Non-Employee
Director on a date other than an Annual Meeting date, an Annual Option covering
1,000 shares of Common Stock will be granted to such director on his or her
first date of Board service. The purchase price of the Common Stock covered by
each Annual Option will be the Fair Market Value of a share of Common Stock as
of the date of grant of the Annual Option.

         (b) Retainer Fees Options. Retainer Fee Options will be granted on the
Payment Dates of each Compensation Year. The number of shares of Common Stock to
be subject to a Retainer Fee Option shall be equal to the nearest number of
whole shares determined by multiplying the Fair Market Value of a share of
Company Common Stock on the date of grant by 0.3333 and dividing the result into
the applicable portion of the Director's Retainer Fee Payment elected to be
received as Stock Options by the Non-Employee Director for the

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Compensation Year. The purchase price of each share covered by each Retainer Fee
Option shall be equal to the Fair Market Value of a share of Common Stock on the
date of grant of the Retainer Fee Option multiplied by 0.6666.

         (c) Duration and Exercise of Stock Options. Subject to Section 4.4(f)
below, Annual Options and Retainer Fee Options become exercisable on the first
anniversary of the date on which they were granted. Stock Options shall
terminate upon the expiration of ten years from the date of grant. No Stock
Option may be exercised for a fraction of a share and no partial exercise of any
Stock Option may be for less than one hundred (100) shares.

         (d) Purchase Price. The purchase price for the shares shall be paid in
full at the time of exercise (i) in cash or by check payable to the order of the
Company, (ii) by delivery of shares of Common Stock of the Company already owned
by, and in the possession of Stock Option holder, or (iii) by delivering a
properly executed exercise notice together with irrevocable instructions to a
broker to deliver promptly to the Company the amount of sale or loan proceeds to
pay the Stock Option price (in which case the exercise will be effective upon
receipt of such proceeds by the Company). Shares of Common Stock used to satisfy
the exercise price of a Stock Option shall be valued at their Fair Market Value
on the date of exercise.

         (e) Transferability. Stock Options granted hereunder shall not be
transferable, other than by will or the laws of descent and distribution, and
shall be exercisable during a Stock Option holder's lifetime only by the Stock
Option holder or by his or her guardian or legal representative, except to the
extent transfer is (i) permitted by Rule 16b-3 promulgated under the Exchange
Act and (ii) approved by the Board or its designee. Subject to the foregoing,
Stock Options shall not be assigned, pledged or otherwise encumbered by the
holder thereof, either voluntarily or by operation of law.

         (f) Termination of Directorship. If a director ceases to be a director
of the Company for any reason other than death or removal by the Board of
Directors or the stockholders, the director's Stock Options shall continue to
vest as provided in Section 4.4 (c) above and the right of the Optionee to
exercise such Stock Options shall continue until the options expire in
accordance with Section 4.4(c). In no event may a Stock Option be exercised
after the expiration of the period specified in Section 4.4(c). In the event of
death of a director or former director who holds an outstanding Stock Option,
all unvested Stock Options shall automatically become fully vested as of the
date of death and the right of his or her estate or beneficiary to exercise the
Stock Options shall terminate upon the expiration of twelve months from the date
of death, but in no event may a Stock Option be exercised after the expiration
of the Option Period. In the event of removal of a director from the Board of
Directors, all rights of such director in a Stock Option that the director was
entitled to exercise on the date of removal shall terminate on the 30th day (or,
if such day is not a business day, on the next business day) after the date of
removal, but in no event may such Stock Options be exercised after the
expiration of the Option Period.

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                                   ARTICLE V.
                                  MISCELLANEOUS

         5.1. Adjustments Upon Changes in Common Stock. The number and kind of
shares available for issuance under the Plan, and the number and kind of shares
subject to, and the exercise price of, outstanding Stock Options, shall be
appropriately adjusted to prevent dilution or enlargement of rights by reason of
any stock dividend, stock split, combination or exchange of shares,
recapitalization, merger, consolidation or other change in capitalization with a
similar substantive effect upon the Plan or the shares issuable under the Plan.

         5.2. Amendment and Termination. The Board shall have complete power and
authority to amend the Plan at any time; provided, however, that the Board shall
not, without the affirmative approval of the stockholders of the Company, make
any amendment which requires stockholder approval under any applicable law or
regulation of a national stock exchange on which the Common Stock is traded. The
Board shall have the right and the power to terminate the Plan at any time. No
amendment or termination of the Plan may, without the consent of the
Non-Employee Director, adversely affect the right of such Non-Employee Director
with respect to any Stock Options then outstanding.

         5.3. Requirements of Law. The issuance of Common Stock under the Plan
shall be subject to all applicable laws, rules and regulations and to such
approval by governmental agencies as may be required.

         5.4. No Guarantee of Membership. Nothing in the Plan shall confer upon
a Non-Employee Director any right to continue to serve as a Director.

         5.5 Construction. Words of any gender used in the Plan shall be
construed to include any other gender, unless the context requires otherwise.

         5.6 Governing Law. This Plan shall be governed by, construed and
interpreted in accordance with the laws of the State of Delaware, without regard
to its principles of conflict of law, as to all matters, including matters of
validity, construction, effect, performance and remedies.

                                       6<PAGE>   1
                                                                   EXHIBIT 10.11

                          WATER PIK TECHNOLOGIES, INC.

                               1999 INCENTIVE PLAN
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                                TABLE OF CONTENTS

ARTICLE I  PURPOSE AND ADOPTION OF THE PLAN....................................1

     1.01. PURPOSE.............................................................1

     1.02. ADOPTION AND TERM...................................................1

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

     2.01. AWARD...............................................................2

     2.02. AWARD AGREEMENT.....................................................2

     2.03. AWARD PERIOD........................................................2

     2.04. BENEFICIARY.........................................................2

     2.05. BOARD...............................................................2

     2.06. CHANGE IN CONTROL...................................................2

     2.07. CODE................................................................3

     2.08. COMMITTEE...........................................................3

     2.09. COMPANY.............................................................3

     2.10. COMMON STOCK........................................................3

     2.11. COMPANY VOTING SECURITIES...........................................3

     2.12. DATE OF GRANT.......................................................3

     2.13. EXCHANGE ACT........................................................3

     2.14. EXERCISE PRICE......................................................3

     2.15. FAIR MARKET VALUE...................................................3

     2.16. INCENTIVE STOCK OPTION..............................................3

     2.17. MERGER..............................................................3

     2.18. NON-QUALIFIED STOCK OPTION..........................................3

     2.19. OPTIONS.............................................................4
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     2.20. OUTSTANDING COMMON STOCK............................................4

     2.21. PARTICIPANT.........................................................4

     2.22. PERFORMANCE AWARDS..................................................4

     2.23. PERFORMANCE GOALS...................................................4

     2.24. PLAN................................................................4

     2.25. PURCHASE PRICE......................................................4

     2.26. RESTORATION OPTION..................................................4

     2.27. RESTRICTED SHARES...................................................4

     2.28. RETIREMENT..........................................................4

     2.29. RULE 16B-3..........................................................4

     2.30. STOCK APPRECIATION RIGHTS...........................................4

     2.31. SUBSIDIARY..........................................................4

     2.32. TERMINATION OF EMPLOYMENT...........................................4

ARTICLE III  ADMINISTRATION....................................................6

     3.01. COMMITTEE...........................................................6

ARTICLE IV  SHARES.............................................................6

     4.01. NUMBER OF SHARES ISSUABLE...........................................6

     4.02. SHARES SUBJECT TO TERMINATED AWARDS.................................6

ARTICLE V  PARTICIPATION.......................................................7

     5.01. ELIGIBLE PARTICIPANTS...............................................7

ARTICLE VI  STOCK OPTIONS AND STOCK APPRECIATION RIGHTS........................7
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     6.01. OPTION AWARDS......................................................7

     6.02. STOCK APPRECIATION RIGHTS..........................................8

     6.03. TERMS OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS...............9

     6.04. EXERCISE PROCEDURES................................................10

     6.05. CHANGE IN CONTROL..................................................10

ARTICLE VII  RESTRICTED SHARES................................................10

     7.01. RESTRICTED SHARE AWARDS............................................10

     7.02. TERMS OF RESTRICTED SHARES.........................................11

     7.03. CHANGE IN CONTROL..................................................12

ARTICLE VIII  PERFORMANCE AWARDS..............................................12

     8.01. PERFORMANCE AWARDS.................................................12

     8.02. TERMS OF PERFORMANCE AWARDS........................................13

     8.03. CHANGE IN CONTROL..................................................14

ARTICLE IX  OTHER STOCK-BASED AWARDS..........................................14

     9.01. GRANT OF OTHER STOCK-BASED AWARDS..................................14

     9.02. TERMS OF OTHER STOCK-BASED AWARDS..................................14

     9.03. FOREIGN QUALIFIED AWARDS...........................................14

ARTICLE X  SHORT-TERM CASH INCENTIVE AWARDS...................................15

     10.01. ELIGIBILITY.......................................................15

     10.02. AWARDS............................................................15
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ARTICLE XI  TERMS APPLICABLE GENERALLY TO AWARDS GRANTED UNDER THE PLAN.......16

     11.01. PLAN PROVISIONS CONTROL AWARD TERMS...............................16

     11.02. AWARD AGREEMENT...................................................16

     11.03. MODIFICATION OF AWARD AFTER GRANT.................................16

     11.04. LIMITATION ON TRANSFER............................................16

     11.05. TAXES.............................................................16

     11.06. SURRENDER OF AWARDS...............................................17

     11.07. ADJUSTMENTS TO REFLECT CAPITAL CHANGES............................17

     11.08. NO RIGHT TO EMPLOYMENT............................................19

     11.09. AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES........................19

     11.10. GOVERNING LAW.....................................................19

     11.11. NO STRICT CONSTRUCTION............................................19

     11.12. COMPLIANCE WITH RULE 16B-3........................................19

     11.13. CAPTIONS..........................................................19

     11.14. SEVERABILITY......................................................20

     11.15. AMENDMENT AND TERMINATION.........................................19

     11.16. SPECIAL PROVISION RELATING TO CERTAIN STOCK ISSUANCES.............20
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                                    ARTICLE I

                        PURPOSE AND ADOPTION OF THE PLAN

1.01. PURPOSE. The purpose of the Water Pik Technologies, Inc. 1999 Incentive
Plan (hereinafter referred to as the "Plan") is to assist in attracting and
retaining highly competent employees, to act as an incentive in motivating
selected officers and other key employees of Water Pik Technologies, Inc. and
its Subsidiaries to achieve long-term corporate objectives and to enable cash
incentive awards to qualify as performance-based for purposes of the tax
deduction limitations under Section 162(m) of the Code.

1.02. ADOPTION AND TERM. The Plan has been approved by the Board of Directors of
Water Pik Technologies, Inc., to be effective as of the effective date of the
distribution by Allegheny Teledyne Incorporated to its stockholders of Water Pik
Technologies, Inc. Common Stock (the "Effective Date"), but is subject to the
approval of the stockholders of the Company. The Plan shall remain in effect
until terminated by action of the Board; provided, however, that no Incentive
Stock Option may be granted hereunder after the tenth anniversary of the
Effective Date and the provisions of Articles VII, VIII, IX and X with respect
to performance-based awards to "covered employees" under Section 162(m) of the
Code shall expire as of the fifth anniversary of the Effective Date.

                                   ARTICLE II

                                   DEFINITIONS

For the purpose of this Plan, capitalized terms shall have the following
meanings:
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2.01. AWARD means any one or a combination of Non-Qualified Stock Options or
Incentive Stock Options described in Article VI, Stock Appreciation Rights
described in Article VI, Restricted Shares described in Article VII, Performance
Awards described in Article VIII, Awards of cash or any other Award made under
the terms of the Plan.

2.02. AWARD AGREEMENT means a written agreement between the Company and a
Participant or a written acknowledgment from the Company to a Participant
specifically setting forth the terms and conditions of an Award granted under
the Plan.

2.03. AWARD PERIOD means, with respect to an Award, the period of time set forth
in the Award Agreement during which specified target performance goals must be
achieved or other conditions set forth in the Award Agreement must be satisfied.

2.04. BENEFICIARY means an individual, trust or estate who or which, by a
written designation of the Participant filed with the Company or by operation of
law, succeeds to the rights and obligations of the Participant under the Plan
and the Award Agreement upon the Participant's death.

2.05. BOARD means the Board of Directors of the Company.

2.06. CHANGE IN CONTROL means, and shall be deemed to have occurred upon the
occurrence of, any one of the following events:

(a) The acquisition in one or more transactions, other than from the Company, by
any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of a number of Company Voting
Securities in excess of 25% of the Company Voting Securities unless such
acquisition has been approved by the Board;

(b) Any election has occurred of persons to the Board that causes two-thirds of
the Board to consist of persons other than (i) persons who were members of the
Board on the Effective Date and (ii) persons who were nominated for elections as
members of the Board at a time when two-thirds of the Board consisted of persons
who were members of the Board on the Effective Date, provided, however, that any
person nominated for election by a Board at least two-thirds of whom constituted
persons described in clauses (i) and/or (ii) or by persons who were themselves
nominated by such Board shall, for this purpose, be deemed to have been
nominated by a Board composed of persons described in clause (i);

(c) Approval by the stockholders of the Company of a reorganization, merger or
consolidation, unless, following such reorganization, merger or consolidation,
all or substantially all of the individuals and entities who were the respective
beneficial owners of the Outstanding Common Stock and Company Voting Securities
immediately prior to such reorganization, merger or consolidation, following
such reorganization, merger or consolidation beneficially own, directly or
indirectly, more than seventy five (75%) of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors or
trustees, as the case may be, of the entity resulting from such reorganization,
merger or consolidation in substantially the same proportion

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as their ownership of the Outstanding Common Stock and Company Voting Securities
immediately prior to such reorganization, merger or consolidation, as the case
may be; or

(d) Approval by the stockholders of the Company of (i) a complete liquidation or
dissolution of the Company or (ii) a sale or other disposition of all or
substantially all the assets of the Company.

2.07. CODE means the Internal Revenue Code of 1986, as amended. References to a
section of the Code shall include that section and any comparable section or
sections of any future legislation that amends, supplements or supersedes said
section.

2.08. COMMITTEE means the Committee defined in Section 3.01.

2.09. COMPANY means Water Pik Technologies, Inc., a Delaware corporation, and
its successors.

2.10. COMMON STOCK means Common Stock of the Company, par value $0.01 per share.

2.11. COMPANY VOTING SECURITIES means the combined voting power of all
outstanding voting securities of the Company entitled to vote generally in the
election of directors to the Board.

2.12. DATE OF GRANT means the date designated by the Committee as the date as of
which it grants an Award, which shall not be earlier than the date on which the
Committee approves the granting of such Award.

2.13. EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.

2.14. EXERCISE PRICE means, with respect to a Stock Appreciation Right, the
amount established by the Committee in the Award Agreement which is to be
subtracted from the Fair Market Value on the date of exercise in order to
determine the amount of the payment to be made to the Participant, as further
described in Section 6.02(b).

2.15. FAIR MARKET VALUE means, on any date, the average of the high and low
quoted sales prices of a share of Common Stock, as reported on the Composite
Tape for New York Stock Exchange Listed Companies on such date or, if there were
no sales on such date, on the last date preceding such date on which a sale was
reported.

2.16. INCENTIVE STOCK OPTION means a stock option within the meaning of Section
422 of the Code.

2.17. MERGER means any merger, reorganization, consolidation, exchange, transfer
of assets or other transaction having similar effect involving the Company.

2.18. NON-QUALIFIED STOCK OPTION means a stock option which is not an Incentive
Stock Option.

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2.19. OPTIONS means all Non-Qualified Stock Options and Incentive Stock Options
granted at any time under the Plan.

2.20. OUTSTANDING COMMON STOCK means, at any time, the issued and outstanding
shares of Common Stock.

2.21. PARTICIPANT means a person designated to receive an Award under the Plan
in accordance with Section 5.01.

2.22. PERFORMANCE AWARDS means Awards granted in accordance with Article VIII.

2.23. PERFORMANCE GOALS means operating income, operating profit (earnings from
continuing operations before interest and taxes), earnings per share, return on
investment or working capital, return on stockholders' equity, economic value
added (the amount, if any, by which net operating profit after tax exceeds a
reference cost of capital), reductions in inventory, inventory turns and on-time
delivery performance, any one of which may be measured with respect to the
Company or any one or more of its Subsidiaries and divisions and either in
absolute terms or as compared to another company or companies, and quantifiable,
objective measures of individual performance relevant to the particular
individual's job responsibilities.

2.24. PLAN means the Water Pik Technologies, Inc. 1999 Incentive Plan as
described herein, as the same may be amended from time to time.

2.25. PURCHASE PRICE, with respect to Options, shall have the meaning set forth
in Section 6.01(b).

2.26. RESTORATION OPTION means a Non-Qualified Stock Option granted pursuant to
Section 6.01(f).

2.27. RESTRICTED SHARES means Common Stock subject to restrictions imposed in
connection with Awards granted under Article VII.

2.28. RETIREMENT means early or normal retirement under a pension plan or
arrangement of the Company or one of its Subsidiaries in which the Participant
participates.

2.29. RULE 16B-3 means Rule 16b-3 promulgated by the Securities and Exchange
Commission under Section 16 of the Exchange Act, as the same may be amended from
time to time, and any successor rule.

2.30. STOCK APPRECIATION RIGHTS means Awards granted in accordance with Article
VI.

2.31. SUBSIDIARY means a subsidiary of the Company within the meaning of Section
424(f) of the Code.

2.32. TERMINATION OF EMPLOYMENT means the voluntary or involuntary termination
of a Participant's employment with the Company or a Subsidiary for any reason,
including death, disability, retirement or as the result of the divestiture of
the Participant's employer or any similar

<PAGE>   10
transaction in which the Participant's employer ceases to be the Company or one
of its Subsidiaries. Whether entering military or other government service shall
constitute Termination of Employment, or whether a Termination of Employment
shall occur as a result of disability, shall be determined in each case by the
Committee in its sole discretion.

<PAGE>   11
                                   ARTICLE III

                                 ADMINISTRATION

3.01. COMMITTEE. The Plan shall be administered by a committee of the Board
("Committee") comprised of at least two persons. The Committee shall have
exclusive and final authority in each determination, interpretation or other
action affecting the Plan and its Participants. The Committee shall have the
sole discretionary authority to interpret the Plan, to establish and modify
administrative rules for the Plan, to impose such conditions and restrictions on
Awards as it determines appropriate, to cancel Awards (including those made
pursuant to other plans of the Company) and to substitute new Options for
previously awarded Options which, at the time of such substitution, have an
exercise price in excess of the Fair Market Value of the underlying Common Stock
(including options granted under other incentive compensation programs of the
Company) with the consent of the recipient, and to take such steps in connection
with the Plan and Awards granted hereunder as it may deem necessary or
advisable. The Committee shall not, however, have or exercise any discretion
that would disqualify amounts payable under Article X as performance-based
compensation for purposes of Section 162(m) of the Code. The Committee may
delegate such of its powers and authority under the Plan as it deems appropriate
to a subcommittee of the Committee and/or designated officers or employees of
the Company. In addition, the full Board may exercise any of the powers and
authority of the Committee under the Plan. In the event of such delegation of
authority or exercise of authority by the Board, references in the Plan to the
Committee shall be deemed to refer, as appropriate, to the delegate of the
Committee or the Board. Actions taken by the Committee or any subcommittee
thereof, and any delegation by the Committee to designated officers or
employees, under this Section 3.01 shall comply with Section 16(b) of the
Exchange Act, the performance-based provisions of Section 162(m) of the Code,
and the regulations promulgated under each of such statutory provisions, or the
respective successors to such statutory provisions or regulations, as in effect
from time to time, to the extent applicable.

                                   ARTICLE IV

                                     SHARES

4.01. NUMBER OF SHARES ISSUABLE. The total number of shares initially authorized
to be issued under the Plan shall equal 12% of the issued and outstanding shares
of Common Stock immediately following the effective date of the Plan. If the
number of issued and outstanding shares of Common Stock is increased after the
effective date of the Plan, the total number of shares available under the Plan
will be increased by 12% of such increase. No more than 945,000 shares of Common
Stock may be issued under the Plan as Incentive Stock Options. The number of
shares available for issuance under the Plan shall be further subject to
adjustment in accordance with Section 11.07. The shares to be offered under the
Plan shall be authorized and unissued Common Stock, or issued Common Stock which
shall have been reacquired by the Company.

4.02. SHARES SUBJECT TO TERMINATED AWARDS. Common Stock covered by any
unexercised portions of terminated Options (including canceled Options) granted
under Article VI, Common Stock forfeited as provided in Section 7.02(a) and
Common Stock subject to any Awards which are otherwise surrendered by the
Participant may again be subject to new Awards under the Plan. Common Stock
subject to Options, or portions thereof, which have been

<PAGE>   12
surrendered in connection with the exercise of Stock Appreciation Rights shall
not be available for subsequent Awards under the Plan, but Common Stock issued
in payment of such Stock Appreciation Rights shall not be charged against the
number of shares of Common Stock available for the grant of Awards hereunder.

                                    ARTICLE V

                                  PARTICIPATION

5.01. ELIGIBLE PARTICIPANTS. Participants in the Plan shall be such officers and
other key employees of the Company and its Subsidiaries, whether or not members
of the Board, as the Committee, in its sole discretion, may designate from time
to time. The Committee's designation of a Participant in any year shall not
require the Committee to designate such person to receive Awards or grants in
any other year. The designation of a Participant to receive awards or grants
under one portion of the Plan does not require the Committee to include such
Participant under other portions of the Plan. The Committee shall consider such
factors as it deems pertinent in selecting Participants and in determining the
type and amount of their respective Awards. Notwithstanding any provision herein
to the contrary, the Committee may grant Awards under the Plan, other than
Incentive Stock Options, to non-employees who, in the judgment of the Committee,
render significant services to the Company or any of its Subsidiaries, on such
terms and conditions as the Committee deems appropriate and consistent with the
intent of the Plan. Subject to adjustment in accordance with Section 11.07, in
any calendar year, no Participant shall be granted Awards in respect of more
than 500,000 shares of Common Stock (whether through grants of Options or Stock
Appreciation Rights or other grants of Common Stock or rights with respect
thereto) and $2,000,000 in cash.

                                   ARTICLE VI

                   STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

6.01.    OPTION AWARDS.

(a) GRANT OF OPTIONS. The Committee may grant, to such Participants as the
Committee may select, Options entitling the Participant to purchase shares of
Common Stock from the Company in such number, at such price, and on such terms
and subject to such conditions, not inconsistent with the terms of this Plan, as
may be established by the Committee. The terms of any Option granted under this
Plan shall be set forth in an Award Agreement.

(b) PURCHASE PRICE OF OPTIONS. The Purchase Price of each share of Common Stock
which may be purchased upon exercise of any Option granted under the Plan shall
be determined by the Committee; provided, however, that the Purchase Price of
the Common Stock purchased pursuant to Options designated by the Committee as
Incentive Stock Options shall be equal to or greater than the Fair Market Value
on the Date of Grant as required under Section 422 of the Code.

(c) DESIGNATION OF OPTIONS. Except as otherwise expressly provided in the Plan,
the Committee may designate, at the time of the grant of each Option, the Option
as an Incentive Stock Option or a Non-Qualified Stock Option.
<PAGE>   13
(d) INCENTIVE STOCK OPTION SHARE LIMITATION. No Participant may be granted
Incentive Stock Options under the Plan (or any other plans of the Company and
its Subsidiaries) which would result in shares with an aggregate Fair Market
Value (measured on the Date of Grant) of more than $100,000 first becoming
exercisable in any one calendar year.

(e) RIGHTS AS A STOCKHOLDER. A Participant or a transferee of an Option pursuant
to Section 11.04 shall have no rights as a stockholder with respect to Common
Stock covered by an Option until the Participant or transferee shall have become
the holder of record of any such shares, and no adjustment shall be made for
dividends in cash or other property or distributions or other rights with
respect to any such Common Stock for which the record date is prior to the date
on which the Participant or a transferee of the Option shall have become the
holder of record of any such shares covered by the Option; provided, however,
that Participants are entitled to share adjustments to reflect capital changes
under Section 11.07.

(f) RESTORATION OPTIONS UPON THE EXERCISE OF A NON-QUALIFIED STOCK OPTION. In
the event that any Participant delivers to the Company, or has withheld from the
shares otherwise issuable upon the exercise of a Non-Qualified Stock Option,
shares of Common Stock in payment of the Purchase Price of any Non-Qualified
Stock Option granted hereunder in accordance with Section 6.04, the Committee
shall have the authority to grant or provide for the automatic grant of a
Restoration Option to such Participant. The grant of a Restoration Option shall
be subject to the satisfaction of such conditions or criteria as the Committee
in its sole discretion shall establish from time to time. A Restoration Option
shall entitle the holder thereof to purchase a number of shares of Common Stock
equal to the number of such shares so delivered or withheld upon exercise of the
original Option and, in the discretion of the Committee, the number of shares,
if any, delivered or withheld to the Corporation to satisfy any withholding tax
liability arising in connection with the exercise of the original Option. A
Restoration Option shall have a per share Purchase Price of not less than 100%
of the per share Fair Market Value of the Common Stock on the date of grant of
such Restoration Option, a term not longer than the remaining term of the
original Option at the time of exercise thereof, and such other terms and
conditions as the Committee in its sole discretion shall determine.

6.02.    STOCK APPRECIATION RIGHTS.

(a) STOCK APPRECIATION RIGHT AWARDS. The Committee is authorized to grant to any
Participant one or more Stock Appreciation Rights. Such Stock Appreciation
Rights may be granted either independent of or in tandem with Options granted to
the same Participant. Stock Appreciation Rights granted in tandem with Options
may be granted simultaneously with, or, in the case of Non-Qualified Stock
Options, subsequent to, the grant to such Participant of the related Option;
provided however, that: (i) any Option covering any share of Common Stock shall
expire and not be exercisable upon the exercise of any Stock Appreciation Right
with respect to the same share, (ii) any Stock Appreciation Right covering any
share of Common Stock shall expire and not be exercisable upon the exercise of
any related Option with respect to the same share, and (iii) an Option and Stock
Appreciation Right covering the same share of Common Stock may not be exercised
simultaneously. Upon exercise of a Stock Appreciation Right with respect to a
share of Common Stock, the Participant shall be entitled to receive an amount
equal to the excess, if any, of (A) the Fair Market Value of a share of Common
Stock on the date of exercise over (B) the Exercise Price of such Stock
Appreciation Right established in the Award Agreement, which amount shall be
payable as provided in Section 6.02(c).

<PAGE>   14
(b) EXERCISE PRICE. The Exercise Price established under any Stock Appreciation
Right granted under this Plan shall be determined by the Committee, but in the
case of Stock Appreciation Rights granted in tandem with Options shall not be
less than the Purchase Price of the related Option. Upon exercise of Stock
Appreciation Rights granted in tandem with options, the number of shares subject
to exercise under any related Option shall automatically be reduced by the
number of shares of Common Stock represented by the Option or portion thereof
which are surrendered as a result of the exercise of such Stock Appreciation
Rights.

(c) PAYMENT OF INCREMENTAL VALUE. Any payment which may become due from the
Company by reason of a Participant's exercise of a Stock Appreciation Right may
be paid to the Participant as determined by the Committee (i) all in cash, (ii)
all in Common Stock, or (iii) in any combination of cash and Common Stock. In
the event that all or a portion of the payment is made in Common Stock, the
number of shares of Common Stock delivered in satisfaction of such payment shall
be determined by dividing the amount of such payment or portion thereof by the
Fair Market Value on the Exercise Date. No fractional share of Common Stock
shall be issued to make any payment in respect of Stock Appreciation Rights; if
any fractional share would be issuable, the combination of cash and Common Stock
payable to the Participant shall be adjusted as directed by the Committee to
avoid the issuance of any fractional share.

6.03. TERMS OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.

(a) CONDITIONS ON EXERCISE. An Award Agreement with respect to Options and/or
Stock Appreciation Rights may contain such waiting periods, exercise dates and
restrictions on exercise (including, but not limited to, periodic installments)
as may be determined by the Committee at the time of grant.

(b) DURATION OF OPTIONS AND STOCK APPRECIATION RIGHTS. Options and Stock
Appreciation Rights shall terminate upon the first to occur of the following
events:

(i) Expiration of the Option or Stock Appreciation Right as provided in the
Award Agreement; or

(ii) Termination of the Award in the event of a Participant's disability,
Retirement, death or other Termination of Employment as provided in the Award
Agreement; or

(iii) In the case of an Incentive Stock Option, ten years from the Date of
Grant; or

(iv) Solely in the case of a Stock Appreciation Right granted in tandem with an
Option, upon the expiration of the related Option.

(c) ACCELERATION OR EXTENSION OF EXERCISE TIME. The Committee, in its sole
discretion, shall have the right (but shall not be obligated), exercisable on or
at any time after the Date of Grant, to permit the exercise of an Option or
Stock Appreciation Right (i) prior to the time such Option or Stock Appreciation
Right would become exercisable under the terms of the Award Agreement, (ii)
after the termination of the Option or Stock Appreciation Right under the terms
of the Award Agreement, or (iii) after the expiration of the Option or Stock
Appreciation Right.

<PAGE>   15
6.04. EXERCISE PROCEDURES. Each Option and Stock Appreciation Right granted
under the Plan shall be exercised by accessing a telephonic voice/data response
system or internet web site maintained or otherwise approved by the Company or
its designated agent prior to the close of business on the expiration date of
the Option or Stock Appreciation Right (or by such other method as provided in
the Award Agreement or as the Committee may establish or approve from time to
time). The Purchase Price of shares purchased upon exercise of an Option granted
under the Plan shall be paid in full by means of a cashless exercise program
under which, if so instructed by the Participant, shares may be issued directly
to the Participant's broker or dealer upon the Participant's irrevocable
election. Alternatively, the Participant may pay the purchase price by cash or
any other method approved in advance by the Committee. In the event that any
Common Stock shall be transferred to the Company to satisfy all or any part of
the Purchase Price, the part of the Purchase Price deemed to have been satisfied
by such transfer of Common Stock shall be equal to the product derived by
multiplying the Fair Market Value as of the date of exercise times the number of
shares of Common Stock transferred to the Company. The Participant may not
transfer to the Company in satisfaction of the Purchase Price any fractional
share of Common Stock. Any part of the Purchase Price paid in cash upon the
exercise of any Option shall be added to the general funds of the Company and
may be used for any proper corporate purpose. Unless the Committee shall
otherwise determine, any Common Stock transferred to the Company as payment of
all or part of the Purchase Price upon the exercise of any Option shall be held
as treasury shares.

6.05. CHANGE IN CONTROL. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all Options
outstanding on the date of such Change in Control, and all Stock Appreciation
Rights shall become immediately and fully exercisable. The provisions of this
Section 6.05 shall not be applicable to any Options or Stock Appreciation Rights
granted to a Participant if any Change in Control results from such
Participant's beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of Common Stock or Company Voting Securities.

                                   ARTICLE VII

                                RESTRICTED SHARES

7.01. RESTRICTED SHARE AWARDS. The Committee may grant to any Participant an
Award of Common Stock in such number of shares, and on such terms, conditions
and restrictions, whether based on performance standards, periods of service,
retention by the Participant of ownership of purchased or designated shares of
Common Stock or other criteria, as the Committee shall establish. With respect
to performance-based Awards of Restricted Shares to "covered employees" (as
defined in Section 162(m) of the Code), performance targets will be limited to
specified levels of one or more of the Performance Goals. The terms of any
Restricted Share Award granted under this Plan shall be set forth in an Award
Agreement which shall contain provisions determined by the Committee and not
inconsistent with this Plan.

(a) ISSUANCE OF RESTRICTED SHARES. As soon as practicable after the Date of
Grant of a Restricted Share Award by the Committee, the Company shall cause to
be transferred on the books of the Company, or its agent, Common Stock,
registered on behalf of the Participant, evidencing the Restricted Shares
covered by the Award, but subject to forfeiture to the Company

<PAGE>   16
as of the Date of Grant if an Award Agreement with respect to the Restricted
Shares covered by the Award is not duly executed by the Participant and timely
returned to the Company. All Common Stock covered by Awards under this Article
VII shall be subject to the restrictions, terms and conditions contained in the
Plan and the Award Agreement entered into by the Participant. Until the lapse or
release of all restrictions applicable to an Award of Restricted Shares, the
share certificates representing such Restricted Shares may be held in custody by
the Company, its designee, or, if the certificates bear a restrictive legend, by
the Participant. Upon the lapse or release of all restrictions with respect to
an Award as described in Section 7.01(d), one or more share certificates,
registered in the name of the Participant, for an appropriate number of shares
as provided in Section 7.01(d), free of any restrictions set forth in the Plan
and the Award Agreement shall be delivered to the Participant.

(b) STOCKHOLDER RIGHTS. Beginning on the Date of Grant of the Restricted Share
Award and subject to execution of the Award Agreement as provided in Section
7.01(a), the Participant shall become a stockholder of the Company with respect
to all shares subject to the Award Agreement and shall have all of the rights of
a shareholder, including, but not limited to, the right to vote such shares and
the right to receive dividends; provided, however, that any Common Stock
distributed as a dividend or otherwise with respect to any Restricted Shares as
to which the restrictions have not yet lapsed, shall be subject to the same
restrictions as such Restricted Shares and held or restricted as provided in
Section 7.01(a).

(c) RESTRICTION ON TRANSFERABILITY. None of the Restricted Shares may be
assigned or transferred (other than by will or the laws of descent and
distribution, or to an inter vivos trust with respect to which the Participant
is treated as the owner under Sections 671 through 677 of the Code, except to
the extent that Section 16 of the Exchange Act limits a participant's right to
make such transfers), pledged or sold prior to lapse of the restrictions
applicable thereto.

(d) DELIVERY OF SHARES UPON VESTING. Upon expiration or earlier termination of
the forfeiture period without a forfeiture and the satisfaction of or release
from any other conditions prescribed by the Committee, or at such earlier time
as provided under the provisions of Section 7.03, the restrictions applicable to
the Restricted Shares shall lapse. As promptly as administratively feasible
thereafter, subject to the requirements of Section 11.05, the Company shall
deliver to the Participant or, in case of the Participant's death, to the
Participant's Beneficiary, one or more share certificates for the appropriate
number of shares of Common Stock, free of all such restrictions, except for any
restrictions that may be imposed by law.

7.02.    TERMS OF RESTRICTED SHARES.

(a) FORFEITURE OF RESTRICTED SHARES. Subject to Sections 7.02(b) and 7.03, all
Restricted Shares shall be forfeited and returned to the Company and all rights
of the Participant with respect to such Restricted Shares shall terminate unless
the Participant continues in the service of the Company or a Subsidiary as an
employee until the expiration of the forfeiture period for such Restricted
Shares and satisfies any and all other conditions set forth in the Award
Agreement. The Committee shall determine the forfeiture period (which may, but
need not, lapse in installments) and any other terms and conditions applicable
with respect to any Restricted Share Award.

<PAGE>   17
(b) WAIVER OF FORFEITURE PERIOD. Notwithstanding anything contained in this
Article VII to the contrary, the Committee may, in its sole discretion, waive
the forfeiture period and any other conditions set forth in any Award Agreement
under appropriate circumstances (including the death, disability or Retirement
of the Participant or a material change in circumstances arising after the date
of an Award) and subject to such terms and conditions (including forfeiture of a
proportionate number of the Restricted Shares) as the Committee shall deem
appropriate.

7.03. CHANGE IN CONTROL. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all
restrictions applicable to the Restricted Share Award shall terminate fully and
the Participant shall immediately have the right to the delivery of share
certificate or certificates for such shares in accordance with Section 7.01(d).

                                  ARTICLE VIII

                               PERFORMANCE AWARDS

8.01. PERFORMANCE AWARDS.

(a) AWARD PERIODS AND CALCULATIONS OF POTENTIAL INCENTIVE AMOUNTS. The Committee
may grant Performance Awards to Participants. A Performance Award shall consist
of the right to receive a payment (measured by the Fair Market Value of a
specified number of shares of Common Stock, increases in such Fair Market Value
during the Award Period and/or a fixed cash amount) contingent upon the extent
to which certain predetermined performance targets have been met during an Award
Period. Performance Awards may be made in conjunction with, or in addition to,
Restricted Share Awards made under Article VII. The Award Period shall be two or
more fiscal or calendar years as determined by the Committee. The Committee, in
its discretion and under such terms as it deems appropriate, may permit newly
eligible employees, such as those who are promoted or newly hired, to receive
Performance Awards after an Award Period has commenced.

(b) PERFORMANCE TARGETS. The performance targets may include such goals related
to the performance of the Company or, where relevant, any one or more of its
Subsidiaries or divisions and/or the performance of a Participant as may be
established by the Committee in its discretion. In the case of Performance
Awards to "covered employees" (as defined in Section 162(m) of the Code), the
targets will be limited to specified levels of one or more of the Performance
Goals. The performance targets established by the Committee may vary for
different Award Periods and need not be the same for each Participant receiving
a Performance Award in an Award Period. Except to the extent inconsistent with
the performance-based compensation exception under Section 162(m) of the Code,
in the case of Performance Awards granted to employees to whom such section is
applicable, the Committee, in its discretion, but only under extraordinary
circumstances as determined by the Committee, may change any prior determination
of performance targets for any Award Period at any time prior to the final
determination of the Award when events or transactions occur to cause the
performance targets to be an inappropriate measure of achievement.

<PAGE>   18
(c) EARNING PERFORMANCE AWARDS. The Committee, at or as soon as practicable
after the Date of Grant, shall prescribe a formula to determine the percentage
of the Performance Award to be earned based upon the degree of attainment of
performance targets.

(d) PAYMENT OF EARNED PERFORMANCE AWARDS. Subject to the requirements of Section
11.05, payments of earned Performance Awards shall be made in cash or Common
Stock, or a combination of cash and Common Stock, in the discretion of the
Committee. The Committee, in its sole discretion, may define such terms and
conditions with respect to the payment of earned Performance Awards as it may
deem desirable.

8.02. TERMS OF PERFORMANCE AWARDS.

(a) TERMINATION OF EMPLOYMENT. Unless otherwise provided below or in Section
8.03, in the case of a Participant's Termination of Employment prior to the end
of an Award Period, the Participant will not have earned any Performance Awards.

(b) RETIREMENT. If a Participant's Termination of Employment is because of
Retirement prior to the end of an Award Period, the Participant will not be paid
any Performance Awards, unless the Committee, in its sole and exclusive
discretion, determines that an Award should be paid. In such a case, the
Participant shall be entitled to receive a pro-rata portion of his or her Award
as determined under Subsection (d).

(c) DEATH OR DISABILITY. If a Participant's Termination of Employment is due to
death or disability (as determined in the sole and exclusive discretion of the
Committee) prior to the end of an Award Period, the Participant or the
Participant's personal representative shall be entitled to receive a pro-rata
share of his or her Award as determined under Subsection (d).

(d) PRO-RATA PAYMENT. The amount of any payment made to a Participant whose
employment is terminated by Retirement, death or disability (under circumstances
described in Subsections (b) and (c)) will be the amount determined by
multiplying the amount of the Performance Award which would have been earned,
determined at the end of the Award Period, had such employment not been
terminated, by a fraction, the numerator of which is the number of whole months
such Participant was employed during the Award Period, and the denominator of
which is the total number of months of the Award Period. Any such payment made
to a Participant whose employment is terminated prior to the end of an Award
Period under this Section 8.02 shall be made at the end of the respective Award
Period, unless otherwise determined by the Committee in its sole discretion. Any
partial payment previously made or credited to a deferred account for the
benefit of a Participant as provided under Section 8.01(d) of the Plan shall be
subtracted from the amount otherwise determined as payable as provided in this
Section.

(e) OTHER EVENTS. Notwithstanding anything to the contrary in this Article VIII,
the Committee may, in its sole and exclusive discretion, determine to pay all or
any portion of a Performance Award to a Participant who has terminated
employment prior to the end of an Award Period under certain circumstances
(including the death, disability or retirement of the Participant or a material
change in circumstances arising after the Date of Grant) and subject to such
terms and conditions as the Committee shall deem appropriate.

<PAGE>   19
8.03. CHANGE IN CONTROL. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all Performance
Awards for all Award Periods shall immediately become fully payable to all
Participants and shall be paid to Participants in accordance with Section
8.02(d), within 30 days after such Change in Control.

                                   ARTICLE IX

                            OTHER STOCK-BASED AWARDS

9.01. GRANT OF OTHER STOCK-BASED AWARDS. Other stock-based awards, consisting of
stock purchase rights (with or without loans to Participants by the Company
containing such terms as the Committee shall determine), Awards of cash, Awards
of Common Stock, or 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
or in conjunction with 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 Awards shall be made, the
number of shares of Common Stock to be granted pursuant to such Awards, and all
other conditions of the Awards. Any such Award shall be confirmed by an Award
Agreement executed by the Committee and the Participant, which Award Agreement
shall contain such provisions as the Committee determines to be necessary or
appropriate to carry out the intent of this Plan with respect to such Award.

9.02. TERMS OF OTHER STOCK-BASED AWARDS. In addition to the terms and conditions
specified in the Award Agreement, Awards made pursuant to this Article IX shall
be subject to the following:

(a) Any Common Stock subject to Awards made under this Article IX may not be
sold, assigned, transferred, pledged or otherwise encumbered prior to the date
on which the shares are issued, or, if later, the date on which any applicable
restriction, performance or deferral period lapses; and

(b) If specified by the Committee in the Award Agreement, the recipient of an
Award under this Article IX shall be entitled to receive, currently or on a
deferred basis, interest or dividends or dividend equivalents with respect to
the Common Stock or other securities covered by the Award; and

(c) The Award Agreement with respect to any Award shall contain provisions
dealing with the disposition of such Award in the event of a Termination of
Employment prior to the exercise, realization or payment of such Award, whether
such termination occurs because of Retirement, disability, death or other
reason, with such provisions to take account of the specific nature and purpose
of the Award.

9.03. FOREIGN QUALIFIED AWARDS. Awards under the Plan may be granted to such
employees of the Company and its Subsidiaries who are residing in foreign
jurisdictions as the Committee in its sole discretion may determine from time to
time. The Committee may adopt such supplements to the Plan as may be necessary
or appropriate to comply with the applicable laws of such foreign jurisdictions
and to afford Participants favorable treatment under such laws;

<PAGE>   20
provided, however, that no Award shall be granted under any such supplement with
terms or conditions inconsistent with the provision set forth in the Plan.

                                    ARTICLE X

                        SHORT-TERM CASH INCENTIVE AWARDS

10.01. ELIGIBILITY.

Executive officers of the Company who are from time to time determined by the
Committee to be "covered employees" for purposes of Section 162(m) of the Code
will be eligible to receive short-term cash incentive awards under this Article
X.

10.02. AWARDS.

(a) PERFORMANCE TARGETS. For each fiscal year of the Company after fiscal year
1999, the Committee shall establish objective performance targets based on
specified levels of one or more of the Performance Goals. Such performance
targets shall be established by the Committee on a timely basis to ensure that
the targets are considered "preestablished" for purposes of Section 162(m) of
the Code.

(b) AMOUNTS OF AWARDS. In conjunction with the establishment of performance
targets for a fiscal year, the Committee shall adopt an objective formula (on
the basis of percentages of Participants' salaries, shares in a bonus pool or
otherwise) for computing the respective amounts payable under the Plan to
Participants if and to the extent that the performance targets are attained.
Such formula shall comply with the requirements applicable to performance-based
compensation plans under Section 162(m) of the Code and, to the extent based on
percentages of a bonus pool, such percentages shall not exceed 100% in the
aggregate.

(c) PAYMENT OF AWARDS. Awards will be payable to Participants in cash each year
upon prior written certification by the Committee of attainment of the specified
performance targets for the preceding fiscal year.

(d) NEGATIVE DISCRETION. Notwithstanding the attainment by the Company of the
specified performance targets, the Committee shall have the discretion, which
need not be exercised uniformly among the Participants, to reduce or eliminate
the award that would be otherwise paid.

(e) GUIDELINES. The Committee shall adopt from time to time written policies for
its implementation of this Article X. Such guidelines shall reflect the
intention of the Company that all payments hereunder qualify as
performance-based compensation under Section 162(m) of the Code.

(f) NON-EXCLUSIVE ARRANGEMENT. The adoption and operation of this Article X
shall not preclude the Board or the Committee from approving other short-term
incentive compensation arrangements for the benefit of individuals who are
Participants hereunder as the Board or Committee, as the case may be, deems
appropriate and in the best of the Company.

<PAGE>   21
                                   ARTICLE XI

           TERMS APPLICABLE GENERALLY TO AWARDS GRANTED UNDER THE PLAN

11.01. PLAN PROVISIONS CONTROL AWARD TERMS. Except as provided in Section 11.16,
the terms of the Plan shall govern all Awards granted under the Plan, and in no
event shall the Committee have the power to grant any Award under the Plan which
is contrary to any of the provisions of the Plan. In the event any provision of
any Award granted under the Plan shall conflict with any term in the Plan as
constituted on the Date of Grant of such Award, the term in the Plan as
constituted on the Date of Grant of such Award shall control. Except as provided
in Section 11.03 and Section 11.07, the terms of any Award granted under the
Plan may not be changed after the Date of Grant of such Award so as to
materially decrease the value of the Award without the express written approval
of the holder.

11.02. AWARD AGREEMENT. No person shall have any rights under any Award granted
under the Plan unless and until the Company and the Participant to whom such
Award shall have been granted shall have executed and delivered an Award
Agreement or received any other Award acknowledgment authorized by the Committee
expressly granting the Award to such person and containing provisions setting
forth the terms of the Award.

11.03. MODIFICATION OF AWARD AFTER GRANT. No Award granted under the Plan to a
Participant may be modified (unless such modification does not materially
decrease the value of the Award) after the Date of Grant except by express
written agreement between the Company and the Participant, provided that any
such change (a) shall not be inconsistent with the terms of the Plan, and (b)
shall be approved by the Committee.

11.04. LIMITATION ON TRANSFER. Except as provided in Section 7.01(c) in the case
of Restricted Shares, a Participant's rights and interest under the Plan may not
be assigned or transferred other than by will or the laws of descent and
distribution, and during the lifetime of a Participant, only the Participant
personally (or the Participant's personal representative) may exercise rights
under the Plan. The Participant's Beneficiary may exercise the Participant's
rights to the extent they are exercisable under the Plan following the death of
the Participant. Notwithstanding the foregoing, to the extent permitted under
Section 16(b) of the Exchange Act with respect to Participants subject to such
Section, the Committee may grant Non-Qualified Stock Options that are
transferable, without payment of consideration, to immediate family members of
the Participant or to trusts or partnerships for such family members, and the
Committee may also amend outstanding Non-Qualified Stock Options to provide for
such transferability.

11.05. TAXES. The Company shall be entitled, if the Committee deems it necessary
or desirable, to withhold (or secure payment from the Participant in lieu of
withholding) the amount of any withholding or other tax required by law to be
withheld or paid by the Company with respect to any amount payable and/or shares
issuable under such Participant's Award, or with respect to any income
recognized upon a disqualifying disposition of shares received pursuant to the
exercise of an Incentive Stock Option, and the Company may defer payment or
issuance of the cash or shares upon exercise or vesting of an Award unless
indemnified to its satisfaction against any liability for any such tax. The
amount of such withholding or tax payment shall be

<PAGE>   22
determined by the Committee and shall be payable by the Participant at such time
as the Committee determines in accordance with the following rules:

(a) The Participant shall have the right to elect to meet his or her withholding
requirement (i) by having withheld from such Award at the appropriate time that
number of shares of Common Stock, rounded up to the next whole share, whose Fair
Market Value is equal to the amount of withholding taxes due, (ii) by direct
payment to the Company in cash of the amount of any taxes required to be
withheld with respect to such Award or (iii) by a combination of shares and
cash.

(b) The Committee shall have the discretion as to any Award, to cause the
Company to pay to tax authorities for the benefit of any Participant, or to
reimburse such Participant for the individual taxes which are due on the grant,
exercise or vesting of any share Award, or the lapse of any restriction on any
share Award (whether by reason of a Participant's filing of an election under
Section 83(b) of the Code or otherwise), including, but not limited to, Federal
income tax, state income tax, local income tax and excise tax under Section 4999
of the Code, as well as for any such taxes as may be imposed upon such tax
payment or reimbursement.

(c) In the case of Participants who are subject to Section 16 of the Exchange
Act, the Committee may impose such limitations and restrictions as it deems
necessary or appropriate with respect to the delivery or withholding of shares
of Common Stock to meet tax withholding obligations.

11.06. SURRENDER OF AWARDS. Any Award granted under the Plan may be surrendered
to the Company for cancellation on such terms as the Committee and the holder
approve.

11.07. ADJUSTMENTS TO REFLECT CAPITAL CHANGES.

(a) RECAPITALIZATION. The number and kind of shares subject to outstanding
Awards, the Purchase Price or Exercise Price for such shares, the number and
kind of shares available for Awards subsequently granted under the Plan and the
maximum number of shares in respect of which Awards can be made to any
Participant in any calendar year shall be appropriately adjusted to reflect any
stock dividend, stock split, combination or exchange of shares, merger,
consolidation or other change in capitalization with a similar substantive
effect upon the Plan or the Awards granted under the Plan. The maximum number of
shares in respect of which Awards can be made to any Participant in any calendar
year shall be proportionately adjusted to reflect any other event that results
in an increase in the number of issued and outstanding shares of Common Stock.
The Committee shall have the power and sole discretion to determine the amount
of the adjustment to be made in each case.

(b) MERGER. After any Merger in which the Company is the surviving corporation,
each Participant shall, at no additional cost, be entitled upon any exercise of
all Options or receipt of other Award to receive (subject to any required action
by shareholders), in lieu of the number of shares of Common Stock receivable or
exercisable pursuant to such Award, the number and class of shares or other
securities to which such Participant would have been entitled pursuant to the
terms of the Merger if, at the time of the Merger, such Participant had been the
holder of record of a number of shares equal to the number of shares receivable
or exercisable pursuant to such Award. Comparable rights shall accrue to each
Participant in the event of successive Mergers of the character described above.
In the event of a Merger in which the Company is not the

<PAGE>   23
surviving corporation, the surviving, continuing, successor, or purchasing
corporation, as the case may be (the "Acquiring Corporation"), shall either
assume the Company's rights and obligations under outstanding Award Agreements
or substitute awards in respect of the Acquiring Corporation's stock for such
outstanding Awards. In the event the Acquiring Corporation fails to assume or
substitute for such outstanding Awards, the Board shall provide that any
unexercisable and/or unvested portion of the outstanding Awards shall be
immediately exercisable and vested as of a date prior to such Merger, as the
Board so determines. The exercise and/or vesting of any Award that was
permissible solely by reason of this Section 11.07(b) shall be conditioned upon
the consummation of the Merger. Any Options which are neither assumed by the
Acquiring Corporation nor exercised as of the date of the Merger shall terminate
effective as of the effective date of the Merger.

(c) OPTIONS TO PURCHASE SHARES OR STOCK OF ACQUIRED COMPANIES. After any Merger
in which the Company or a Subsidiary shall be a surviving corporation, the
Committee may grant substituted options under the provisions of the Plan,
pursuant to Section 424 of the Code, replacing old options granted under a plan
of another party to the Merger whose shares or stock subject to the old options
may no longer be issued following the Merger. The foregoing adjustments and
manner of application of the foregoing provisions shall be determined by the
Committee in its sole discretion. Any such adjustments may provide for the
elimination of any fractional shares which might otherwise become subject to any
Options.

<PAGE>   24
11.08. NO RIGHT TO EMPLOYMENT. No employee or other person shall have any claim
of right to be granted an Award under this Plan. Neither the Plan nor any action
taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any of its Subsidiaries.

11.09. AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES. Payments received by a
Participant pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any pension, group insurance or other benefit
plan applicable to the Participant which is maintained by the Company or any of
its Subsidiaries, except as may be provided under the terms of such plans or
determined by the Board.

11.10. GOVERNING LAW. All determinations made and actions taken pursuant to the
Plan shall be governed by the laws of the State of Delaware and construed in
accordance therewith.

11.11. NO STRICT CONSTRUCTION. No rule of strict construction shall be implied
against the Company, the Committee, or any other person in the interpretation of
any of the terms of the Plan, any Award granted under the Plan or any rule or
procedure established by the Committee.

11.12. COMPLIANCE WITH RULE 16B-3. It is intended that, unless the Committee
determines otherwise, Awards under the Plan be eligible for exemption under Rule
16b-3. The Board is authorized to amend the Plan and to make any such
modifications to Award Agreements to comply with Rule 16b-3, as it may be
amended from time to time, and to make any other such amendments or
modifications as it deems necessary or appropriate to better accomplish the
purposes of the Plan in light of any amendments made to Rule 16b-3.

11.13. CAPTIONS. The captions (i.e., all Section headings) used in the Plan are
for convenience only, do not constitute a part of the Plan, and shall not be
deemed to limit, characterize or affect in any way any provisions of the Plan,
and all provisions of the Plan shall be construed as if no captions have been
used in the Plan.

11.14. SEVERABILITY. Whenever possible, each provision in the Plan and every
Award at any time granted under the Plan shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of the Plan
or any Award at any time granted under the Plan shall be held to be prohibited
by or invalid under applicable law, then (a) such provision shall be deemed
amended to accomplish the objectives of the provision as originally written to
the fullest extent permitted by law and (b) all other provisions of the Plan and
every other Award at any time granted under the Plan shall remain in full force
and effect.

11.15.   AMENDMENT AND TERMINATION.

(a) AMENDMENT. The Board shall have complete power and authority to amend the
Plan at any time; provided, however, that the Board shall not, without the
requisite affirmative approval of shareholders of the Company, make any
amendment which requires shareholder approval under the Code or under any other
applicable law or rule of any stock exchange which lists Common Stock or Company
Voting Securities. No termination or amendment of the Plan may, without the
consent of the Participant to whom any Award shall theretofore have been granted
under the Plan, adversely affect the right of such individual under such Award.

<PAGE>   25
(b) TERMINATION. The Board shall have the right and the power to terminate the
Plan at any time. No Award shall be granted under the Plan after the termination
of the Plan, but the termination of the Plan shall not have any other effect and
any Award outstanding at the time of the termination of the Plan may be
exercised after termination of the Plan at any time prior to the expiration date
of such Award to the same extent such Award would have been exercisable had the
Plan not terminated.

11.16. SPECIAL PROVISION RELATING TO CERTAIN STOCK ISSUANCES. Notwithstanding
anything to the contrary contained in this Plan, shares of Common Stock
authorized to be issued under this Plan may be issued to pay awards originally
made under and satisfy options originally granted under the Allegheny Teledyne
Incorporated 1996 Incentive Plan or any other stock compensation plan adopted by
ATI (an "ATI Plan"), as provided in the Employee Benefits Agreement dated as of
November 12, 1999, between the Company and Allegheny Teledyne Incorporated. All
shares of Common Stock issued in payment of an award or grant shall be governed
exclusively by the terms of such award or grant under the applicable ATI Plan,
and any terms of this Plan inconsistent therewith shall be inapplicable to such
shares.

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