DOLLAR TREE STORES, INC.
 
                           2003 EQUITY INCENTIVE PLAN
 
                                    ARTICLE I
                                     GENERAL
 
     Section 1.1. PURPOSE. The Dollar Tree Stores, Inc. 2003 Equity Incentive
Plan (the "Plan") has been established by Dollar Tree Stores, Inc. (the
"Company") to (i) attract and retain persons eligible to participate in the
Plan; (ii) motivate Participants, by means of appropriate incentives, to achieve
long-range goals; (iii) provide incentive compensation opportunities that are
competitive with those of other similar companies; and (iv) further identify
Participants' interests with those of the Company's other shareholders through
compensation that is based on the Company's common stock; and thereby promote
the long-term financial interest of the Company and the Subsidiaries, including
the growth in value of the Company's equity and enhancement of long-term
shareholder return.
 
     Section 1.2. PARTICIPATION. Subject to the terms and conditions of the
Plan, the Committee shall determine and designate, from time to time, from among
the Eligible Recipients (including transferees of Eligible Recipients to the
extent the transfer is permitted by the Plan and the applicable Award
Agreement), those persons who will be granted one or more Awards under the Plan,
and thereby become "Participants" in the Plan.
 
     Section 1.3. OPERATION, ADMINISTRATION, AND DEFINITIONS. The operation and
administration of the Plan, including the Awards made under the Plan, shall be
subject to the provisions of Article 4 (relating to operation and
administration). Capitalized terms in the Plan shall be defined as set forth in
the Plan (including the definition provisions of Section 8 of the Plan).
 
                                    ARTICLE 2
                                OPTIONS AND SARS
 
     Section 2.1. DEFINITIONS.
 
          (a)   The grant of an "Option" entitles the Participant to purchase
shares of Stock at an Exercise Price established by the Committee. Any Option
granted under this Article 2 may be either an incentive stock option (an "ISO")
or a nonqualified option (an "NQO"), as determined in the discretion of the
Committee. An "ISO" is an Option that is intended to satisfy the requirements
applicable to an "incentive stock option" described in section 422(b) of the
Code. An "NQO" is an Option that is not intended to be an "incentive stock
option" as that term is described in section 422(b) of the Code.
 
          (b)   A stock appreciation right (an "SAR") entitles the Participant
to receive, in cash or Stock (as determined in accordance with Section 2.5),
value equal to (or otherwise based on) the excess of: (a) the Fair Market Value
of a specified number of shares of Stock at the time of exercise; over (b) an
Exercise Price established by the Committee. The Committee may limit the amount
that can be received when an SAR is exercised.
 
     Section 2.2. EXERCISE PRICE. The "Exercise Price" of each Option and SAR
granted under this Article 2 shall be established by the Committee or shall be
determined by a method established by the Committee at the time the Option or
SAR is granted; except that the Exercise Price shall not be less than 100% of
the Fair Market Value of a share of Stock on the date of grant (or, if greater,
the par value of a share of Stock). Repricing of Options and SAR Awards granted
under this Article 2 after the date of grant shall not be permitted.
 
     Section 2.3. EXERCISE. An Option and an SAR shall be exercisable in
accordance with such terms and conditions and during such periods as may be
established by the Committee.
 
     Section 2.4. PAYMENT OF OPTION EXERCISE PRICE. The payment of the Exercise
Price of an Option granted under this Article 2 shall be subject to the
following:
 
          (a)   Subject to the following provisions of this Section 2.4, the
full Exercise Price for shares of Stock purchased upon the exercise of any
Option shall be paid at the time of such exercise (except that, in the case of
an exercise arrangement approved by the Committee and described in paragraph
2.4(c), payment may be made as soon as practicable after the exercise).
 
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          (b)   The Exercise Price shall be payable in cash or by tendering, by
either actual delivery of shares or by attestation, already-owned shares of
Stock acceptable to the Committee, and valued at Fair Market Value as of the day
of exercise, or in any combination thereof, as determined by the Committee.
 
          (c)   The Committee may permit a Participant to elect to pay the
Exercise Price upon the exercise of an Option by irrevocably authorizing a third
party to sell shares of Stock (or a sufficient portion of the shares) acquired
upon exercise of the Option and remit to the Company a sufficient portion of the
sale proceeds to pay the entire Exercise Price and any tax withholding resulting
from such exercise.
 
     Section 2.5. SETTLEMENT OF AWARD. Settlement of Options and SARs is subject
to Section 4.7.
 
                                    ARTICLE 3
                               OTHER STOCK AWARDS
 
     Section 3.1. DEFINITIONS.
 
          (a)   A "Stock Unit" Award is the grant of a right to receive shares
of Stock in the future.
 
          (b)   A "Performance Share" Award is a grant of a right to receive
shares of Stock or Stock Units which is contingent on the achievement of
performance or other objectives during a specified period.
 
          (c)   A "Performance Unit" Award is a grant of a right to receive a
designated dollar value amount of Stock which is contingent on the achievement
of performance or other objectives during a specified period.
 
          (d)   A "Restricted Stock" Award is a grant of shares of Stock, and a
"Restricted Stock Unit" Award is the grant of a right to receive shares of Stock
in the future, with such shares of Stock or right to future delivery of such
shares of Stock subject to a risk of forfeiture or other restrictions that will
lapse upon the achievement of one or more goals relating to completion of
service by the Participant, or achievement of performance or other objectives,
as determined by the Committee.
 
     Section 3.2. RESTRICTIONS ON AWARDS. Each Stock Unit Award, Restricted
Stock Award, Restricted Stock Unit Award, Performance Share Award, and
Performance Unit Award shall be subject to the following:
 
          (a)   Any such Award shall be subject to such conditions, restrictions
and contingencies as the Committee shall determine.
 
          (b)   The Committee may designate whether any such Award being granted
to any Participant is intended to be "performance-based compensation" as that
term is used in section 162(m) of the Code. Any such Awards designated as
intended to be "performance-based compensation" shall be conditioned on the
achievement of one or more performance measures, to the extent required by Code
section 162(m). The performance measures that may be used by the Committee for
such Awards shall be based on the attainment of any performance goals, as
selected by the Committee, that are related to profits, profit growth,
profit-related return ratios, cash flow or shareholder returns, where such goals
may be stated in absolute terms or relative to comparison companies or indices
to be achieved during a period of time. For Awards under this Article 3 intended
to be "performance-based compensation," the grant of the Awards and the
establishment of the Performance Measures shall be made during the period
required under Code section 162(m).
 
                                    ARTICLE 4
                          OPERATION AND ADMINISTRATION
 
     Section 4.1. EFFECTIVE DATE. Subject to the approval of the shareholders of
the Company at the Company's 2003 annual meeting of its shareholders, the Plan
shall be effective as of July 1, 2003 (the "Effective Date"). The Plan shall be
unlimited in duration and, in the event of Plan termination, shall remain in
effect as long as any Awards under it are outstanding; provided, however, that
no Awards may be granted under the Plan after the ten year anniversary of the
Effective Date (except for Awards granted pursuant to commitments entered into
prior to such ten-year anniversary).
 
     Section 4.2. SHARES SUBJECT TO PLAN. The shares of Stock for which Awards
may be granted under the Plan shall be subject to the following:
 
          (a)   The shares of Stock with respect to which Awards may be made
under the Plan shall be shares currently authorized but unissued or currently
held or subsequently acquired by the Company as treasury shares, including
shares purchased in the open market or in private transactions.
 
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          (b)   Subject to the following provisions of this Section 4.2, the
maximum number of shares of Stock that may be delivered to Participants and
their beneficiaries under the Plan shall be equal to the sum of: (i) six million
(6,000,000) shares of Stock; and (ii) any shares of Stock available for future
awards under any prior stock option or incentive plan of the Company (the "Prior
Plans") as of the Effective Date; and (iii) any shares of Stock that are
represented by awards granted under any Prior Plans which are forfeited, expire
or are canceled without delivery of shares of Stock or which result in the
forfeiture of the shares of Stock back to the Company.
 
          (c)   To the extent provided by the Committee, any Award may be
settled in cash rather than Stock. To the extent any shares of Stock covered by
an Award are not delivered to a Participant or beneficiary because the Award is
forfeited or canceled, or the shares of Stock are not delivered because the
Award is settled in cash or used to satisfy the applicable tax withholding
obligation, such shares shall not be deemed to have been delivered for purposes
of determining the maximum number of shares of Stock available for delivery
under the Plan.
 
          (d)   If the exercise price of any stock option granted under the Plan
or any Prior Plan is satisfied by tendering shares of Stock to the Company (by
either actual delivery or by attestation), only the number of shares of Stock
issued net of the shares of Stock tendered shall be deemed delivered for
purposes of determining the maximum number of shares of Stock available for
delivery under the Plan.
 
          (e)   Subject to paragraph 4.2(f), the following additional maximums
are imposed under the Plan.
 
                (i)    The maximum number of shares of Stock that may be issued
by Options intended to be ISOs shall be three hundred thousand (300,000) shares.
 
                (ii)   The maximum number of shares that may be covered by
Awards granted to any one individual pursuant to Article 2 (relating to Options
and SARs) shall be sixty thousand (60,000) shares during any one calendar year
period. If an Option is in tandem with an SAR, such that the exercise of the
Option or SAR with respect to a share of Stock cancels the tandem SAR or Option
right, respectively, with respect to such share, the tandem Option and SAR
rights with respect to each share of Stock shall be counted as covering but one
share of Stock for purposes of applying the limitations of this paragraph (ii).
 
                (iii)  The maximum number of shares of Stock that may be issued
in conjunction with Awards granted pursuant to Article 3 (relating to Other
Stock Awards) shall be one million (1,000,000) shares.
 
                (iv)   For Stock Unit Awards, Restricted Stock Awards,
Restricted Stock Unit Awards and Performance Share Awards that are intended to
be "performance-based compensation" (as that term is used for purposes of Code
section 162(m)), no more than thirty thousand (30,000) shares of Stock may be
subject to such Awards granted to any one individual during any one calendar
year period. If, after shares have been earned, the delivery is deferred, any
additional shares attributable to dividends during the deferral period shall be
disregarded.
 
                (v)    For Performance Unit Awards that are intended to be
"performance-based compensation" (as that term is used for purposes of Code
section 162(m)), no more than $150,000 may be subject to such Awards granted to
any one individual during any one calendar year period. If, after amounts have
been earned with respect to Performance Unit Awards, the delivery of such
amounts is deferred, any additional amounts attributable to earnings during the
deferral period shall be disregarded.
 
          (f)   In the event of a corporate transaction involving the Company
(including, without limitation, any stock dividend, stock split, extraordinary
cash dividend, recapitalization, reorganization, merger, consolidation, split
up, spin off, combination or exchange of shares), the Committee may adjust
Awards to preserve the benefits or potential benefits of the Awards. Action by
the Committee may include: (i) adjustment of the number and kind of shares which
may be delivered under the Plan; (ii) adjustment of the number and kind of
shares subject to outstanding Awards; (iii) adjustment of the Exercise Price of
outstanding Options and SARs; and (iv) any other adjustments that the Committee
determines to be equitable.
 
     Section 4.3. GENERAL RESTRICTIONS. Delivery of shares of Stock or other
amounts under the Plan shall be subject to the following:
 
          (a)   Notwithstanding any other provision of the Plan, the Company
shall have no liability to deliver any shares of Stock under the Plan or make
any other distribution of benefits under the Plan unless such delivery or
distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act of 1933), and the applicable
requirements of any securities exchange or similar entity.
 
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          (b)   To the extent that the Plan provides for issuance of stock
certificates to reflect the issuance of shares of Stock, the issuance may be
effected on a non-certificated basis, to the extent not prohibited by applicable
law or the applicable rules of any stock exchange.
 
     Section 4.4. TAX WITHHOLDING. All distributions under the Plan are subject
to withholding of all applicable taxes, and the Committee may condition the
delivery of any shares or other benefits under the Plan on satisfaction of the
applicable withholding obligations. The Committee, in its discretion, and
subject to such requirements as the Committee may impose prior to the occurrence
of such withholding, may permit such withholding obligations to be satisfied
through cash payment by the Participant, through the surrender of shares of
Stock which the Participant already owns, or through the surrender of shares of
Stock to which the Participant is otherwise entitled under the Plan.
 
     Section 4.5. GRANT AND USE OF AWARDS. In the discretion of the Committee, a
Participant may be granted any Award permitted under the provisions of the Plan,
and more than one Award may be granted to a Participant. Awards may be granted
as alternatives to or replacement of awards granted or outstanding under the
Plan, or any other plan or arrangement of the Company or a Subsidiary (including
a plan or arrangement of a business or entity, all or a portion of which is
acquired by the Company or a Subsidiary). Subject to the overall limitation on
the number of shares of Stock that may be delivered under the Plan, the
Committee may use available shares of Stock as the form of payment for
compensation, grants or rights earned or due under any other compensation plans
or arrangements of the Company or a Subsidiary, including the plans and
arrangements of the Company or a Subsidiary assumed in business combinations.
 
     Section 4.6. DIVIDENDS AND DIVIDEND EQUIVALENTS. An Award (including
without limitation an Option or SAR Award) may provide the Participant with the
right to receive dividend payments or dividend equivalent payments with respect
to Stock subject to the Award (both before and after the Stock subject to the
Award is earned, vested, or acquired), which payments may be either made
currently or credited to an account for the Participant, and may be settled in
cash or Stock, as determined by the Committee. Any such settlements, and any
such crediting of dividends or dividend equivalents or reinvestment in shares of
Stock, may be subject to such conditions, restrictions and contingencies as the
Committee shall establish, including the reinvestment of such credited amounts
in Stock equivalents.
 
     Section 4.7. SETTLEMENT OF AWARDS. The obligation to make payments and
distributions with respect to Awards may be satisfied through cash payments, the
delivery of shares of Stock, the granting of replacement Awards, or combination
thereof as the Committee shall determine. In lieu of issuing a fraction of a
share upon any exercise of an Award, resulting from an adjustment of the Award
pursuant to paragraph 4.2(f) of the Plan or otherwise, the Company will be
entitled to pay to the Participant an amount equal to the fair market value of
such fractional share. Satisfaction of any obligations under an Award, which is
sometimes referred to as "settlement" of the Award, may be subject to such
conditions, restrictions and contingencies as the Committee shall determine. The
Committee may permit or require the deferral of any Award payment, subject to
such rules and procedures as it may establish, which may include provisions for
the payment or crediting of interest or dividend equivalents, and may include
converting such credits into deferred Stock equivalents. Each Subsidiary shall
be liable for payment of cash due under the Plan with respect to any Participant
to the extent that such benefits are attributable to the services rendered for
that Subsidiary by the Participant. Any disputes relating to liability of a
Subsidiary for cash payments shall be resolved by the Committee.
 
     Section 4.8. TRANSFERABILITY. Except as otherwise permitted by the
Committee,
 
          (a)   Awards under the Plan are not transferable except as designated
by the Participant by will, by the laws of descent and distribution or by a
beneficiary form filed with the Company.
 
          (b)   Awards may be exercised or claimed on behalf of a deceased
Participant or other person entitled to benefits under the Plan by the
beneficiary of such Participant or other person if the Company has a valid
designation of such beneficiary on file, or otherwise by the personal legal
representative of such Participant or other person.
 
     Section 4.9. FORM AND TIME OF ELECTIONS. Unless otherwise specified herein,
each election required or permitted to be made by any Participant or other
person entitled to benefits under the Plan, and any permitted modification, or
revocation thereof, shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Plan, as the Committee shall require.
 
     Section 4.10. AGREEMENT WITH COMPANY. An Award under the Plan shall be
subject to such terms and conditions, not inconsistent with the Plan, as the
Committee shall, in its sole discretion, prescribe. The terms and conditions of
any Award to any Participant shall be reflected in such form of written document
as is determined by the Committee. A copy of such document shall be provided to
the Participant, and the Committee may, but need not require that the
Participant
 
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sign a copy of such document. Such document is referred to in the Plan as an
"Award Agreement" regardless of whether any Participant signature is required.
 
     Section 4.11. ACTION BY COMPANY OR SUBSIDIARY. Any action required or
permitted to be taken by the Company or any Subsidiary shall be by resolution of
its board of directors, or by action of one or more members of the board
(including a committee of the board) who are duly authorized to act for the
board, or (except to the extent prohibited by applicable law or applicable rules
of any stock exchange) by a duly authorized officer of such company.
 
     Section 4.12. GENDER AND NUMBER. Where the context admits, words in any
gender shall include any other gender, words in the singular shall include the
plural and the plural shall include the singular.
 
     Section 4.13. LIMITATION OF IMPLIED RIGHTS.
 
          (a)   Neither a Participant nor any other person shall, by reason of
participation in the Plan, acquire any right in or title to any assets, funds or
property of the Company or any Subsidiary whatsoever, including, without
limitation, any specific funds, assets, or other property which the Company or
any Subsidiary, in its sole discretion, may set aside in anticipation of a
liability under the Plan. A Participant shall have only a contractual right to
the Stock or amounts, if any, payable under the Plan, unsecured by any assets of
the Company or any Subsidiary, and nothing contained in the Plan shall
constitute a guarantee that the assets of the Company or any Subsidiary shall be
sufficient to pay any benefits to any person.
 
          (b)   The Plan does not constitute a contract of employment, and
selection as a Participant will not give any participating employee the right to
be retained in the employ of the Company or any Subsidiary, nor any right or
claim to any benefit under the Plan, unless such right or claim has specifically
accrued under the terms of the Plan. Except as otherwise provided in the Plan,
no Award under the Plan shall confer upon the holder thereof any rights as a
shareholder of the Company prior to the date on which the individual fulfills
all conditions for receipt of such rights.
 
     Section 4.14. EVIDENCE. Evidence required of anyone under the Plan may be
by certificate, affidavit, document or other information which the person acting
on it considers pertinent and reliable, and signed, made or presented by the
proper party or parties.
                                    ARTICLE 5
                                CHANGE OF CONTROL
 
     Subject to the provisions of paragraph 4.2(f) (relating to the adjustment
of shares), and except as otherwise provided in the Plan or the Award Agreement
reflecting the applicable Award, upon the occurrence of a Change of Control the
following provisions shall apply:
 
     Section 5.1. ACCELERATION OF VESTING. If a Change of Control of the Company
shall occur, then with respect to outstanding Awards not already vested and/or
exercisable, the Committee, in its sole discretion, may determine that:
 
          (a)   All outstanding Options (regardless of whether in tandem with
SARs) shall become fully exercisable.
 
          (b)   All outstanding SARs (regardless of whether in tandem with
Options) shall become fully exercisable.
 
          (c)   All Stock Units, Restricted Stock, Restricted Stock Units, and
Performance Shares shall become fully vested.
 
     If the Committee determines to accelerate any such outstanding Awards, then
such Awards shall remain vested and/or exercisable during the remaining term
thereof, regardless of whether the employment or other status of the
Participants with respect to which Awards have been granted shall continue with
the Company or any Subsidiary.
 
     Section 5.2. CASH PAYMENT. Without limiting the generality of Section 4.7,
if a Change of Control of the Company shall occur, then the Committee, in its
sole discretion, and without the consent of any Participant affected thereby,
may determine that some or all Participants holding outstanding Awards shall
receive cash settlements in exchange for redemption of all or a part of such
Awards.
 
     Section 5.3. LIMITATION ON CHANGE OF CONTROL PAYMENTS. Notwithstanding
anything in Section 5.1 or 5.2 above to the contrary, if, with respect to a
Participant, the acceleration of the exercisability and/or vesting of an Award
as
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provided in Section 5.1 or the payment of cash in exchange for all or part of an
Award as provided in Section 5.2 above (which acceleration or payment could be
deemed a "payment" within the meaning of Section 280G(b)(2) of the Code),
together with any other payments which such Participant has the right to receive
from the Company or any corporation which is a member of an "affiliated group"
(as defined in Section 1504(a) of the Code without regard to Section 1504(b) of
the Code) of which the Company is a member, would constitute a "parachute
payment" (as defined in Section 280G(b)(2) of the Code), then the acceleration
of exercisability and/or vesting and the payments to such Participant pursuant
to Sections 5.1 and 5.2 above shall be reduced to the extent or amount as, in
the sole judgment of the Committee, will result in no portion of such payments
being subject to the excise tax imposed by Section 4999 of the Code.
 
                                    ARTICLE 6
                                    COMMITTEE
 
     Section 6.1. ADMINISTRATION. The authority to control and manage the
operation and administration of the Plan shall be vested in a committee (the
"Committee") in accordance with this Article 6. The Committee shall be selected
by the Board, and shall consist solely of two or more members of the Board who
are not employees of the Company or any Subsidiary. Unless otherwise determined
by the Board, the Compensation Committee of the Board shall serve as the
Committee for purposes of the Plan. If at any time the Committee does not exist,
or for any other reason determined by the Board, the Board may take any action
under the Plan that would otherwise be the responsibility of the Committee.
 
     Section 6.2. POWERS OF COMMITTEE. The Committee's administration of the
Plan shall be subject to the following:
 
          (a)   Subject to the provisions of the Plan, the Committee will have
the authority and discretion to select from among the Eligible Recipients those
persons who shall receive Awards, to determine the time or times of receipt, to
determine the types of Awards and the number of shares covered by the Awards, to
establish the terms, conditions, performance criteria, restrictions, and other
provisions of such Awards, and (subject to the restrictions imposed by Article
7) to cancel or suspend Awards.
 
          (b)   To the extent that the Committee determines that the
restrictions imposed by the Plan preclude the achievement of the material
purposes of the Awards in jurisdictions outside the United States, the Committee
will have the authority and discretion to modify those restrictions as the
Committee determines to be necessary or appropriate to conform to applicable
requirements or practices of jurisdictions outside of the United States.
 
          (c)   The Committee will have the authority and discretion to
interpret the Plan, to establish, amend, and rescind any rules and regulations
relating to the Plan, to determine the terms and provisions of any Award
Agreement made pursuant to the Plan, and to make all other determinations that
may be necessary or advisable for the administration of the Plan.
 
          (d)   Any interpretation of the Plan by the Committee and any decision
made by it under the Plan is final and binding on all persons.
 
          (e)   In controlling and managing the operation and administration of
the Plan, the Committee shall take action in a manner that conforms to the
articles and by-laws of the Company, and applicable state corporate law.
 
     Section 6.3. DELEGATION BY COMMITTEE. Except to the extent prohibited by
applicable law or the applicable rules of a stock exchange, the Committee may
allocate all or any portion of its responsibilities and powers to any one or
more of its members and may delegate all or any part of its responsibilities and
powers to any person or persons selected by it. Any such allocation or
delegation may be revoked by the Committee at any time.
 
     Section 6.4. INFORMATION TO BE FURNISHED TO COMMITTEE. The Company and
Subsidiaries shall furnish the Committee with such data and information as it
determines may be required for it to discharge its duties. The records of the
Company and Subsidiaries as to an employee's or Participant's employment,
termination of employment, leave of absence, reemployment and compensation shall
be conclusive on all persons unless determined to be incorrect. Participants and
other persons entitled to benefits under the Plan must furnish the Committee
such evidence, data or information as the Committee considers desirable to carry
out the terms of the Plan.
 
                                    ARTICLE 7
                            AMENDMENT AND TERMINATION
 
     The Board may, at any time, amend or terminate the Plan, provided that no
amendment or termination may, in the absence of written consent to the change by
the affected Participant (or, if the Participant is not then living, the
affected beneficiary), adversely affect the rights of any Participant or
beneficiary under any Award granted under the Plan prior to
 
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the date such amendment is adopted by the Board; and further provided that
adjustments pursuant to paragraph 4.2(f) shall not be subject to the foregoing
limitations of this Article 7. Amendments to this Plan shall be subject to
shareholder approval to the extent such approval is required by applicable law
or applicable requirements of any securities exchange or similar entity.
 
                                    ARTICLE 8
                                  DEFINED TERMS
 
In addition to the other definitions contained herein, the following definitions
shall apply:
 
          (a)   Award. The term "Award" shall mean any award or benefit granted
under the Plan, including, without limitation, the grant of Options, SARs, Stock
Unit Awards, Restricted Stock Awards, Restricted Stock Unit Awards, Performance
Unit Awards, and Performance Share Awards.
 
          (b)   Award Agreement. The term "Award Agreement" has the meaning
assigned in Section 4.10.
 
          (c)   Board. The term "Board" shall mean the Board of Directors of the
Company.
 
          (d)   Change of Control. The term "Change of Control" shall mean (a)
the sale, lease, exchange or other transfer of all or substantially all of the
assets of the Company (in one transaction or in a series of related
transactions) to a corporation that is not controlled by the Company, (b) the
approval by the shareholders of the Company of any plan or proposal for the
liquidation or dissolution of the Company, (c) a successful tender offer for the
Common Stock of the Company, after which the tendering party holds more than 30%
of the issued and outstanding Common Stock of the Company, or (d) a merger,
consolidation, share exchange, or other transaction to which the Company is a
party pursuant to which the holders of all of the shares of the Company
outstanding prior to such transaction do not hold, directly or indirectly, at
least 70% of the outstanding shares of the surviving company after the
transaction.
 
          (e)   Code. The term "Code" means the Internal Revenue Code of 1986,
as amended. A reference to any provision of the Code shall include reference to
any successor provision of the Code.
 
          (f)   Committee. The term "Committee" has the meaning assigned in
Section 6.1.
 
          (g)   Company. The term "Company" has the meaning assigned in Section
1.1.
 
          (h)   Effective Date. The term "Effective Date" has the meaning
assigned in Section 4.1.
 
          (i)   Eligible Recipient. The term "Eligible Recipient" shall mean any
employee of the Company or a Subsidiary and any of those consultants and
independent contractors of the Company or a Subsidiary who are natural persons.
An Award may be granted to an employee, consultant or independent contractor in
connection with hiring, retention or otherwise, prior to the date he or she
first performs services for the Company or the Subsidiaries, provided that such
Awards shall not become vested prior to the date he or she first performs such
services. An Award may also be granted to an employee, consultant or independent
contractor in connection with the conclusion of such employee, consultant or
independent contractor's performance of services and separation from the Company
or its Subsidiaries. The effect of discontinuity in an Eligible Recipient's
service with the Company or its Subsidiaries on any outstanding Award shall be
at the discretion of the Committee.
 
          (j)   Exercise Price. The term "Exercise Price" has the meaning
assigned in Section 2.2.
 
          (k)   Fair Market Value. For purposes of determining the "Fair Market
Value" of a share of Stock as of any date, the following rules shall apply:
 
                (i) If the principal market for the Stock is a national
securities exchange or the Nasdaq Stock Market, then the "Fair Market Value" as
of that date shall be the closing sale price of the Stock on the principal
exchange or market on which the Stock is then listed or admitted to trading on
the trading day immediately preceding such date.
 
                (ii) If sale prices are not available or if the principal market
for the Stock is not a national securities exchange and the Stock is not quoted
on the Nasdaq Stock Market, the average between the highest bid and lowest asked
prices for the Stock on such day as reported on the Nasdaq OTC Bulletin Board
Service or by the National Quotation Bureau, Incorporated or a comparable
service.
 
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                (iii) If the day is not a business day, and as a result,
paragraphs (i) and (ii) next above are inapplicable, the Fair Market Value of
the Stock shall be determined as of the next earlier business day. If paragraphs
(i) and (ii) next above are otherwise inapplicable, then the Fair Market Value
of the Stock shall be determined in good faith by the Committee.
 
          (l)   ISO. The term "ISO" has the meaning assigned in Section 2.1(a).
 
          (m)   NQO. The term "NQO" has the meaning assigned in Section 2.1(a).
 
          (n)   Option. The term "Option" has the meaning assigned in Section
2.1(a).
 
          (o)   Participant. The term "Participant" has the meaning assigned in
Section 1.2.
 
          (p)   Performance Unit. The term "Performance Unit" has the meaning
assigned in Section 3.1(c).
 
          (q)   Performance Share. The term "Performance Share" has the meaning
assigned in Section 3.1(b).
 
          (r)   Plan. The term "Plan" has the meaning assigned in Section 1.1.
 
          (s)   Prior Plan. The term "Prior Plan" has the meaning assigned in
Section 4.2(b).
 
          (t)   Restricted Stock. The term "Restricted Stock" has the meaning
assigned in Section 3.1(d).
 
          (u)   Restricted Stock Unit. The term "Restricted Stock Unit" has the
meaning assigned in Section 3.1(d).
 
          (v)   SAR. The term "SAR" has the meaning assigned in Section 2.1(b).
 
          (w)   Subsidiaries. The term "Subsidiary" means any company during any
period in which it is a "subsidiary corporation" (as that term is defined in
Code section 424(f)) with respect to the Company.
 
          (x)   Stock. The term "Stock" shall mean shares of common stock of the
Company.
 
          (y)   Stock Unit. The term "Stock Unit" has the meaning assigned in
Section 3.1(a).
 
                                       B-8