DUQUESNE LIGHT HOLDINGS, INC.
                          2002 LONG-TERM INCENTIVE PLAN
                                  (AS AMENDED)
 
         This is the Duquesne Light Holdings, Inc. 2002 Long-Term Incentive Plan
(as it may be amended from time to time, the "Plan"), formerly known as the DQE,
Inc. 2002 Long-Term Incentive Plan. Section 16 of the Plan contains a key to the
locations of the definitions of certain capitalized terms that are used in this
Plan. The purposes of the Plan are to encourage eligible employees of Duquesne
Light Holdings, Inc. (the "Company") and any Affiliate of the Company, including
without limitation directors and officers of the Company and each Affiliate of
the Company who are employees, as well as non-employee directors of the Company,
to increase their efforts to make the Company and each Affiliate of the Company
more successful, to provide an additional inducement for such employees and
non-employee directors to remain with the Company or an Affiliate, to reward
such employees and non-employee directors by providing an opportunity to acquire
shares of the Common Stock, no par value (the "Common Stock"), of the Company on
favorable terms and to provide a means through which the Company may attract
able persons to enter the employ of the Company or an Affiliate of the Company
and to serve as non-employee directors of the Company. For the purposes of the
Plan, the term "Affiliate" shall have the meaning given to that term in Rule
12b-2 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended (the "1934 Act").
 
         The Plan replaces the Company's prior plan, the DQE, Inc. Long-Term
Incentive Plan, as amended (the "Prior Plan"). Stock options (with or without
alternative stock appreciation rights, limited stock appreciation rights and/or,
for stock options granted on or after January 1, 1990, Dividend Equivalent
Accounts) granted under the Prior Plan prior to the Effective Date (each, a
"Prior Option") shall not be affected by the adoption of the Plan, and the Prior
Plan shall remain in effect to the extent necessary to administer the Prior
Options, but no new stock options shall be granted under the Prior Plan after
the Effective Date.
 
SECTION 1. ADMINISTRATION
 
         Except as otherwise provided below with respect to Non-Insiders (as
hereinafter defined), the Plan shall be administered by a Committee (the
"Disinterested Committee") appointed by the Board of Directors of the Company
(the "Board") and consisting of not less than two members of the Board. Unless
otherwise determined by the Board, the Disinterested Committee shall be
constituted so as to qualify Awards under the Plan as performance-based
compensation for purposes of Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"), and for the exemption provided by Rule 16b-3 of
the Securities and Exchange Commission under the 1934 Act.
 
         The Disinterested Committee shall interpret the Plan and prescribe such
rules, regulations and procedures in connection with the operations of the Plan
as it shall deem to be necessary and advisable for the administration of the
Plan consistent with the purposes of the Plan.
 
         The Disinterested Committee shall keep records of action taken at its
meetings. A majority of the Disinterested Committee shall constitute a quorum at
any meeting, and the acts of a majority of the members present at any meeting at
which a quorum is present, or acts approved in writing by a majority of the
Disinterested Committee, shall be the acts of the Disinterested Committee.
 
         The Plan is intended to comply in all respects with Section 16(b) of
the 1934 Act, the regulations promulgated thereunder and any amendments to the
1934 Act or the regulations. Any provision contrary to such law or regulations
shall be deemed void to the extent prohibited by law.
 
         Notwithstanding any provision of the Plan to the contrary, from the
shares of Common Stock available under Section 3 hereof, the Disinterested
Committee may at any time and from time to time set aside a number of shares for
issuance pursuant to Awards ("Non-Insider Awards") to be granted in the sole
discretion of the Key Employee Stock Incentive Award Committee of the Board (the
"Key Employee Committee"). Such Non-Insider Awards may be granted by the Key
Employee Committee only to Non-Insiders (as hereinafter defined in Section 2)
and shall be subject to such terms and conditions, consistent with the Plan, as
may be established by the Key Employee Committee at the time of such grants. The
authority of the Key Employee Committee with respect to Non-Insider Awards shall
be limited to the selection of persons to receive such Awards and the
establishment, consistent with the Plan, of the terms and conditions of such
Awards, including the number of shares of Common Stock subject thereto; all
other aspects of Plan administration with respect to Non-Insider Awards shall be
the sole and exclusive responsibility of the Disinterested Committee in
accordance with the applicable provisions of the Plan.
 
SECTION 2.     ELIGIBILITY
 
         All eligible employees (as defined in the following sentence) of the
Company and any Affiliate of the Company shall be eligible to receive Awards
under the Plan. For purposes of the Plan, an eligible employee is an employee
who is classed as regularly and actively employed by the Company or any
Affiliate of the Company and whose wages and other conditions of employment are
not covered by a collective bargaining agreement, unless and until such
agreement provides for the application of the Plan to employees covered by such
agreement. For purposes of the Plan, the term "Award" means any one or a
combination of stock options (with or without alternative stock appreciation
rights and/or Dividend Equivalent Accounts, Restricted Shares (as hereinafter
defined in Section 6), Restricted Units (as hereinafter
 
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defined in Section 6), Non-Employee Director Stock Awards (as hereinafter
defined in Section 6), Performance Awards (as hereinafter defined in Section 7),
awards of cash or any other award made under the terms of the Plan. For purposes
of the Plan, the term "Participant" means an eligible employee designated to
receive an Award pursuant to the Plan.
 
         Subject to the provisions of the Plan, the Disinterested Committee
shall have full and final authority, in its discretion, to grant Awards as
described herein and to determine the employees to whom Awards shall be granted,
the number of shares to be covered by each Award, and the terms and conditions
of each Award. In determining the number of shares covered by each Award and the
terms and conditions of each Award and, with respect to each stock option grant,
whether alternative stock appreciation rights shall be granted or whether
Dividend Equivalent Accounts should be established in conjunction with a stock
option, the Disinterested Committee shall consider the position and the
responsibilities of the employee being considered, the nature and value to the
Company or an Affiliate of the Company of his or her service, his or her present
and/or potential contribution to the success of the Company or an Affiliate of
the Company and such other factors as the Disinterested Committee may deem
relevant.
 
         Notwithstanding the foregoing, subject to the provisions of the Plan,
the Key Employee Committee shall have full and final authority, in its
discretion, to grant Awards to Non-Insiders as described herein and to determine
the eligible employees to whom such Non-Insider Awards shall be granted, the
number of shares to be covered by each such Non-Insider Award, and the terms and
conditions of each such Non-Insider Award; provided, however, that Non-Insider
Awards shall be granted solely and exclusively to persons who at the time of
such Awards are not subject to the reporting and liability provisions of Section
16 of the 1934 Act with respect to DQE Common Stock ("Non-Insiders"). The
foregoing provisions shall not preclude the Disinterested Committee from also
making awards under the Plan to Non-Insiders.
 
         Non-employee directors of the Company shall be eligible to receive
Awards under the Plan as if they were eligible employees of the Company, and
shall further be eligible, as determined by the Disinterested Committee, to
receive Non-Employee Director Share Awards.
 
         No Participant shall receive Awards (including, without limitation, any
stock appreciation rights or other Awards denominated in Common Stock but
payable in cash) under the Plan in any calendar year in respect of (i) more than
500,000 shares of Common Stock, subject to adjustment as set forth in Section 8,
or (ii) solely in the case of Performance Awards denominated in cash, more than
more than $1,000,000.
 
SECTION 3.     SHARES AVAILABLE UNDER THE PLAN
 
         Subject to adjustment and substitution as set forth in Section 8, the
aggregate number of shares of the Common Stock authorized for issuance under the
Plan shall be 3,690,468 shares and, of this total, no more than 700,000 shares
shall be issued as Restricted Shares, Restricted Units or Non-Employee Director
Share Awards. If any stock option award granted under the Plan is canceled by
mutual consent or terminates or expires for any reason without having been
exercised in full, if any Restricted Shares are forfeited as provided in Section
6(B), or if any shares of the Common Stock subject to any Restricted Unit or
Performance Award are otherwise surrendered by the Participant, the number of
shares subject to such stock option, such Restricted Share Award, Restricted
Unit Award or such Performance Award shall again be available for purposes of
the Plan; however, for purposes of determining the number of shares of the
Common Stock as to which Awards may be granted under the Plan, to the extent
that alternative stock appreciation rights or limited stock appreciation rights
granted in conjunction with a stock option are exercised and the stock option
surrendered unexercised, such stock option shall be deemed to have been
exercised instead, and the shares of the Common Stock which otherwise would have
been issued or delivered upon the exercise of such stock option shall not again
be available for the grant of any other Award under the Plan. None of the shares
subject to any stock option award granted under the Prior Plan shall again be
available for purposes of the Plan if such stock option is canceled by mutual
consent or terminates or expires for any reason without having been exercised in
full. The shares that may be delivered under the Plan following the Effective
Date may be newly issued shares or shares acquired by the Company on the open
market or from such other source as may be determined from time to time by the
Company.
 
         The obligation of the Company to sell or deliver shares of the Common
Stock under the Plan shall be subject to (i) the effectiveness of a registration
statement under the Securities Act of 1933, as amended, with respect to such
shares, if deemed necessary or appropriate by counsel for the Company, (ii) the
condition that the shares shall have been listed (or authorized for listing upon
official notice of issuance) upon each stock exchange on which such shares may
then be listed and (iii) all other applicable laws, regulations, rules and
orders which may then be in effect.
 
SECTION  4.     GRANT OF STOCK OPTIONS, ALTERNATIVE STOCK APPRECIATION RIGHTS
                AND ESTABLISHMENT OF DIVIDEND EQUIVALENT ACCOUNTS
 
         The Disinterested Committee (and the Key Employee Committee, in the
case of Non-Insider Awards) shall have authority, in its discretion, to grant
"nonstatutory" stock options (i.e., stock options that do not qualify under
Section 422 of the Code). The Disinterested Committee (and the Key Employee
Committee, in the case of Non-Insider Awards) also shall have the authority, in
its discretion, to grant alternative stock appreciation rights in conjunction
with stock options with the effect provided in Section 5(D), to grant
stock-for-stock options in conjunction with stock options with the effect
provided in Section 5(F) and to establish Dividend Equivalent Accounts. If the
Disinterested Committee
 
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(or the Key Employee Committee, in the case of Non-Insider Awards) contemplates
an immediate grant to a Participant, the date of grant shall be the date of the
Disinterested Committee's (or the Key Employee Committee's) action. If the
Disinterested Committee (or the Key Employee Committee, in the case of
Non-Insider Awards) contemplates a date on which the grant is to be made other
than the date of the Disinterested Committee's (or the Key Employee Committee's)
action, the date of grant shall be the date so contemplated and set forth in or
determinable from the records of action of the Disinterested Committee (or the
Key Employee Committee), provided that the date of grant shall not precede the
date of the Disinterested Committee's (or the Key Employee Committee's) action.
Alternative stock appreciation rights granted in conjunction with a stock option
may be granted and Dividend Equivalent Accounts established in conjunction with
stock options may be established either at the time the stock option is granted
or at any time thereafter during the term of the stock option.
 
SECTION 5. TERMS AND CONDITIONS OF STOCK OPTIONS, ALTERNATIVE STOCK APPRECIATION
           RIGHTS AND DIVIDEND EQUIVALENT ACCOUNTS
 
         Stock options and alternative stock appreciation rights granted under
the Plan shall be subject to the following terms and conditions:
 
         (A) The purchase price at which each stock option may be exercised (the
"Option Price") shall be such price as the Disinterested Committee (or the Key
Employee Committee, in the case of Non-Insider Awards), in its discretion, shall
determine but shall not be less than 100% of the fair market value per share of
the Common Stock covered by the stock option on the date of grant. For purposes
of this Section 5(A), the fair market value of the Common Stock shall be
determined as provided in Section 5(J). Without the prior approval of the
Company's stockholders, stock options issued under the Plan will not be
repriced, replaced, or regranted through cancellation, or by lowering the option
exercise price of a previously granted stock option.
 
         (B) The Option Price for each stock option shall be paid in full upon
exercise and shall be payable in cash in United States dollars (including check,
bank draft or money order); provided, however, that in lieu of such cash a
Participant may (if authorized by the Disinterested Committee) pay the Option
Price in whole or in part by delivering to the Company shares of the Common
Stock having a fair market value on the date of exercise of the stock option,
determined as provided in Section 5(J), equal to the Option Price for the shares
being purchased; except that (i) any portion of the Option Price representing a
fraction of a share shall in any event be paid in cash and (ii) no shares of the
Common Stock acquired directly from the Company which have been held for less
than six months may be delivered in payment of the Option Price of a stock
option. In the discretion of the Disinterested Committee, the delivery of shares
of Common Stock in full or partial payment of the option exercise price may be
accomplished without the actual delivery by the Participant of stock
certificates representing the delivered shares under a procedure whereby the
Participant attests in writing, on a form acceptable to the Disinterested
Committee, to ownership of the subject shares and the Company delivers to the
Participant certificates representing the net shares issuable upon such option
exercise. Payment may also be made, in the discretion of the Disinterested
Committee, by the delivery (including, without limitation, by fax) to the
Company or its designated agent of an executed irrevocable option exercise form
together with irrevocable instructions to a broker-dealer to sell or margin a
sufficient portion of the shares and deliver the sale or margin loan proceeds
directly to the Company to pay for the Option Price. The date of exercise of a
stock option shall be determined under procedures established by the
Disinterested Committee, and as of the date of exercise the person exercising
the stock option shall, as between the Company and such person, be considered
for all purposes to be the owner of the shares with respect to which the stock
option has been exercised. Payment of the Option Price with shares shall not
increase the number of shares of the Common Stock which may be issued or
delivered under the Plan as provided in Section 3.
 
         (C) No stock option shall be exercisable after the expiration of ten
years from the date of grant. A stock option to the extent exercisable at any
time may be exercised in whole or in part.
 
         (D) Alternative stock appreciation rights granted in conjunction with a
stock option may be exercised only when and to the extent the stock option may
be exercised (determined without regard to the restrictions set forth in Section
5(K)) and only by the same person who is entitled to exercise the stock option.
Alternative stock appreciation rights entitle such person to surrender the stock
option, or any portion thereof, unexercised and to receive from the Company in
exchange therefor that number of shares of the Common Stock having an aggregate
fair market value on the date of exercise of the alternative stock appreciation
rights equal to the excess of the fair market value of one share of the Common
Stock on such date of exercise over the Option Price per share times the number
of shares covered by the stock option, or portion thereof, which is surrendered,
except that cash shall be paid by the Company in lieu of a fraction of a share.
Unless the Disinterested Committee otherwise determines, the Participant may
exercise alternative stock appreciation rights for cash, or partly in cash and
partly in shares. The date of exercise of alternative stock appreciation rights
shall be determined under procedures established by the Disinterested Committee,
and payment under this Section 5(D) shall be made by the Company as soon as
practicable after the date of exercise. As of the date of exercise, the person
exercising the alternative stock appreciation rights shall, as between the
Company and such person, be considered for all purposes to be the owner of the
shares which are to be delivered upon the exercise of the alternative stock
appreciation rights. To the extent that the stock option in conjunction with
which alternative stock appreciation rights have been granted is exercised,
canceled, terminates or expires, the alternative stock appreciation
 
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rights shall be canceled. For the purposes of this Section 5(D), the fair market
value of the Common Stock shall be determined as provided in Section 5(J).
 
         (E) For any stock option (with or without alternative stock
appreciation rights) granted under the Plan, the Disinterested Committee (or the
Key Employee Committee, in the case of Non-Insider Awards) shall have the
discretion, upon the grant of a stock option or thereafter, to establish a
Dividend Equivalent Account with respect to the stock option, and the stock
option agreement referred to in Section 5(I) or an amendment thereto shall
confirm such establishment. If a Dividend Equivalent Account is established, the
following terms apply.
 
         Subject to such conditions, limitations and restrictions as shall be
established by the Disinterested Committee (or the Key Employee Committee, in
the case of Non-Insider Awards), from the date of grant of the stock option or,
if later, the date of establishment of the Dividend Equivalent Account, to the
earlier of (i) the date of payment of such Dividend Equivalent Account or (ii)
the date of cancellation, termination or expiration of the stock option, the
Dividend Equivalent Account shall be credited as of the record date of each cash
dividend on the Common Stock with an amount equal to the cash dividends which
would be paid with respect to the Common Stock then covered by the stock option
if the stock option had been exercised and such Common Stock had been held of
record on such record date. The Participant or other holder of such stock option
shall be entitled to receive from the Company in cash the balance credited to
the Dividend Equivalent Account at such time, or from time to time, as shall be
determined by the Disinterested Committee (or the Key Employee Committee, in the
case of Non-Insider Awards) and set forth in the applicable stock option
agreement referred to in Section 5(I) or an amendment thereto; provided,
however, that if the applicable Award agreement shall so provide, the
Disinterested Committee (or the Key Employee Committee, in the case of
Non-Insider Awards) may determine that the balance credited to a Participant's
Dividend Equivalent Account be paid in the form of shares of Common Stock having
a fair market value equal to such balance, or a combination of cash and shares.
 
         To the extent that a stock option and any alternative stock
appreciation rights granted in conjunction with the stock option are canceled,
terminate or expire without the exercise of the stock option or the alternative
stock appreciation rights, if any, granted in conjunction with the stock option,
the Dividend Equivalent Account with respect to the stock option shall be
eliminated, and no payment with respect to the Dividend Equivalent Account shall
be made by the Company. Dividend Equivalent Accounts shall be established and
maintained only on the books and records of the Plan and/or the Company and no
assets or funds of the Company or of the Plan shall be set aside, placed in
trust, removed from the claims of the Company's general creditors, or otherwise
made available until such amounts are actually payable as provided hereunder.
 
         (F) The Disinterested Committee (or the Key Employee Committee, in the
case of Non-Insider Awards) shall have the authority to specify, at or after the
time of grant of a stock option, that, subject to the availability of shares of
Common Stock under the Plan at the time of such grant, a Participant shall be
granted a new stock option ("New Option") in the event (i) such Participant
exercises all or a part of a stock option (an "Original Option") by surrendering
in accordance with Section 5(B) of the Plan previously acquired shares of Common
Stock in full or partial payment of the Option Price under such Original Option,
and/or (ii) a Participant's withholding tax obligation with respect to the
exercise of an Original Option is satisfied, in accordance with Section 13 of
the Plan, by the delivery of previously acquired shares of Common Stock by the
Participant to the Company or the withholding of shares of Common Stock from the
shares otherwise issuable to the Participant upon the exercise of the Original
Option. Each New Option shall cover a number of shares of Common Stock equal to
the number of shares of Common Stock surrendered in payment of the Option Price
under such Original Option and/or surrendered or withheld to pay withholding
taxes with respect to such Original Option. Each New Option shall have an Option
Price per share of Common Stock equal to the fair market value of the Common
Stock on the date of exercise of the stock option in respect of which the New
Option was granted and shall expire on the stated expiration date of the
Original Option. A New Option shall be exercisable at any time and from time to
time from and after the date of grant of such New Option, subject to such
restrictions on exercisability as may be imposed in the discretion of the
Disinterested Committee (or the Key Employee Committee, in the case of
Non-Insider Awards); provided, however, that a New Option shall not be
exercisable during the first six months from the date of grant of such New
Option. Any New Option may provide for the grant, when exercised, of subsequent
New Options to the extent and upon such terms and conditions, consistent with
this Section 5(F), as the Disinterested Committee (or the Key Employee
Committee, in the case of Non-Insider Awards) in its sole discretion shall
specify at or after the time of grant of such New Option. A New Option shall
contain such other terms and conditions, which may include a restriction on the
transferability of the shares of Common Stock received upon exercise of the
Original Option, as the Disinterested Committee (or the Key Employee Committee,
in the case of Non-Insider Awards) in its sole discretion shall deem desirable
and which may be set forth in rules or guidelines adopted by the Disinterested
Committee (or the Key Employee Committee, in the case of Non-Insider Awards) or
in the stock option agreements evidencing the New Options.
 
         (G) No stock option or alternative stock appreciation rights (or
associated Dividend Equivalent Account) shall be transferable by a Participant
otherwise than by will, or if a Participant dies intestate, by the laws of
descent and distribution of the state of domicile of the Participant at the time
of death, and all stock options and alternative stock appreciation rights shall
be exercisable during the lifetime of a Participant only by the Participant or
by the guardian or
 
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legal representative of the Participant. Notwithstanding the foregoing, the
Disinterested Committee (or the Key Employee Committee, in the case of
Non-Insider Awards) may grant stock options (with or without alternative stock
appreciation rights or associated Dividend Equivalent Account) 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
Disinterested Committee (or the Key Employee Committee, in the case of
Non-Insider Awards) may also amend outstanding stock options to provide for such
transferability.
 
         (H) Subject to Section 5(K) and Section 9 or this Plan, each
Participant's stock option agreement shall contain provisions, consistent with
this Plan, setting forth the extent to which the Participant shall have the
right to exercise his or her stock option following termination of the
Participant's employment or directorship with the Company and its Affiliates.
Such provisions shall be determined in the sole discretion of the Disinterested
Committee (or the Key Employee Committee, in the case of Non-Insider Awards),
shall be included in the stock option agreement entered into with each
Participant, need not be uniform among all stock options issued under the Plan,
and may reflect distinctions based on the reasons for termination; provided,
however, that in no event shall any such stock option be exercisable after the
expiration date thereof under Section 5(C).
 
         If a Participant engages in the operation or management of a business
(whether as owner, partner, officer, director, employee or otherwise and whether
during or after termination of employment) which is in competition with the
Company or an Affiliate of the Company, the Disinterested Committee may
immediately terminate all outstanding stock options held by the Participant;
provided, however, that this sentence shall not apply if the exercise period of
a stock option following termination of employment has been extended as provided
in Section 9(C). Whether a Participant has engaged in the operation or
management of a business which is in competition with the Company or an
Affiliate of the Company shall also be determined, in its discretion, by the
Disinterested Committee, and any such determination by the Disinterested
Committee shall be final and binding.
 
         (I) All stock options and alternative stock appreciation rights and any
associated Dividend Equivalent Accounts shall be confirmed by a stock option
agreement, or an amendment thereto, which shall be executed on behalf of the
Company by the Chief Executive Officer (if other than the President), the
President or any Vice President and by the Participant.
 
         (J) Fair market value of the Common Stock, so long as the Common Stock
is listed on the New York Stock Exchange, shall be the mean between the highest
and lowest sales prices per share of the Common Stock as quoted in the
NYSE-Composite Transactions listing in The Wall Street Journal (or such other
reliable publication as the Disinterested Committee (or the Key Employee
Committee, in the case of Non-Insider Awards), in its discretion, may determine
to rely upon) for the date as of which fair market value is to be determined. If
there are no sales on such date, then fair market value shall be determined by
taking a weighted average of the mean between the highest and lowest selling
prices per share of the Common Stock as so quoted on the nearest date before and
the nearest date after the date as of which fair market value is to be
determined on which there are sales. The average should be weighted inversely by
the respective numbers of days between the selling dates and the date as of
which fair market value is to be determined. If the Common Stock is not listed
on the New York Stock Exchange on the date as of which fair market value is to
be determined, the Disinterested Committee (or the Key Employee Committee, in
the case of Non-Insider Awards) shall in good faith determine the fair market
value of the Common Stock on such date. Fair market value shall be determined
without regard to any restriction other than a restriction which, by its terms,
will never lapse.
 
         (K) Notwithstanding any other provision of this Section 5 or any other
provision of the Plan or any stock option agreement referred to in Section 5(I)
or an amendment thereto, any Participant who has made a hardship withdrawal from
the Company's 401(k) Retirement Savings Plan for Management Employees or the
Duquesne Light Company 401(k) Retirement Savings Plan for IBEW Represented
Employees shall be prohibited, for a period of six (6) months following such
hardship withdrawal, from exercising any stock option under the Plan in such a
manner and to the extent that the exercise of such stock option would result in
an employee elective contribution or an employee contribution to an employer
plan within the meaning of Treasury Regulation Section
1.401(k)-1(d)(2)(iii)(B)(3) or any successor regulation.
 
                  Subject to the foregoing provisions of this Section and the
other provisions of the Plan, any stock option or alternative stock appreciation
rights granted under the Plan may be exercised at such times and in such amounts
and be subject to such restrictions and other terms and conditions as shall be
determined by the Disinterested Committee (or the Key Employee Committee, in the
case of Non-Insider Awards), in its discretion, and set forth in the stock
option agreement referred to in Section 5(I), or an amendment thereto.
 
SECTION 6.  RESTRICTED SHARES, RESTRICTED UNITS AND NON-EMPLOYEE DIRECTOR STOCK
            GRANTS
 
         (A) Types of Awards. The Disinterested Committee (or the Key Employee
Committee, in the case of Non-Insider Awards) shall have the authority, in its
discretion, to 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 or other criteria, as the
Disinterested Committee (or the Key Employee Committee, in the case of
Non-Insider Awards) shall establish (each such share, a "Restricted Share"). The
Disinterested Committee (or the Key Employee Committee, in the case of
Non-Insider Awards) may also grant units representing
 
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the right to receive shares of Common Stock in the future subject to the
achievement of one or more goals relating to the completion of service by the
Participant and/or the achievement of performance or other objectives, and
containing such other terms, conditions and restrictions, as the Disinterested
Committee (or the Key Employee Committee, in the case of Non-Insider Awards)
shall establish (each such unit, a "Restricted Unit"). In addition, the
Disinterested Committee shall have the authority, in its discretion, to grant to
any Participant who is a non-employee member of the Board an Award of
unrestricted shares of Common Stock in such number of shares, and on such terms
and conditions as the Disinterested Committee shall establish (each such share,
a "Non-Employee Director Share Award"). With respect to performance-based Awards
of Restricted Shares or Restricted Units to "covered employees" (as defined in
Section 162(m) of the Code) that are intended to qualify as "performance-based
compensation" for purposes of Section 162(m) of the Code performance targets
will be limited to specified levels of one or more of the following (the
"Performance Goals"): total shareholder return, operating income, operating
profit (earnings from continuing operations before interest and taxes), net
income, earnings per share, earnings before interest, taxes, depreciation and
amortization, return on investment or working capital, return on shareholders'
equity, economic value added (the amount, if any, by which net operating profit
after tax exceeds a reference cost of capital), and balanced scorecard any one
of which may be measured with respect to the Company or any one or more of its
Affiliates or business units and either in absolute terms or as compared to
another company or companies or peer group. The terms of any Restricted Share
and Restricted Unit Awards granted under this Plan shall be set forth in an
agreement which shall contain provisions determined by the Disinterested
Committee (or the Key Employee Committee, in the case of Non-Insider Awards) and
not inconsistent with this Plan.
 
         (B)      Restricted Share Awards.
 
                  (i) Issuance of Restricted Shares. As soon as practicable
          after the date of grant of an Award of Restricted Shares by the
          Disinterested Committee (or the Key Employee Committee, in the case of
          Non-Insider Awards), the Company shall cause to be transferred on the
          books of the Company, or its agent, the Common Stock, registered on
          behalf of the Participant, evidencing the Restricted Shares covered by
          the Award, but subject to forfeiture to the Company 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. The terms of any Restricted Share
          award granted under the Plan shall be set forth in an Award agreement
          executed on behalf of the Company by the Chief Executive Officer (if
          other than the President), the President or any Vice President and by
          the Participant, which Award agreement shall contain provisions
          determined by the Disinterested Committee (or the Key Employee
          Committee, in the case of Non-Insider Awards) and not inconsistent
          with the Plan. Until the lapse or release of all restrictions
          applicable to an Award of Restricted Shares, the share certificates,
          if any, 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; provided, however, that if the Restricted
          Shares are uncertificated, other arrangements may be made, in the
          discretion of the Disinterested Committee (or the Key Employee
          Committee, in the case of Non-Insider Awards), to ensure the
          enforcement of the restrictions on such Restricted Shares. Upon the
          lapse or release of all restrictions with respect to an Award as
          described in Section 6(A)(iv), one or more share certificates,
          registered in the name of the Participant, for an appropriate number
          of shares as provided in Section 6(A)(iv), free of any restrictions
          set forth in the Plan and the Award agreement, shall be delivered to
          the Participant.
 
                  (ii) Shareholder Rights. Beginning on the date of grant of the
         Restricted Share award and subject to execution of the Award agreement
         as provided in Section 6(A)(i), the Participant shall become a
         shareholder 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 6(A)(i); provided further, however,
         that the Award agreement with respect to Restricted Shares may provide
         for (A) the assignment by the Participant to the Company of all cash
         and non-cash dividends that accrue with respect to such Restricted
         Shares during the applicable forfeiture period, (B) either the
         accumulation of such dividends without interest or the deemed
         investment of such dividends in hypothetical shares of Common Stock
         during the accumulation period and (C) the delivery of such accumulated
         dividends (as adjusted, if appropriate, for any income or loss on a
         deemed investment in shares of Common Stock) to the Participant, in the
         form of cash, shares of Common Stock having a fair market value equal
         to the amount of such accumulated dividends, or a combination of cash
         and shares, at such time as the forfeiture restrictions with respect to
         such Restricted Shares shall lapse.
 
                  (iii) Restriction on Transferability. None of the Restricted
         Shares shall be transferable by a Participant otherwise than by will,
         or if a Participant dies intestate, by the laws of descent and
         distribution of the state of domicile of the Participant at the time of
         death, prior to lapse of the restrictions applicable thereto.
 
                                       A-6
<PAGE>
 
                  (iv) Delivery of Shares Upon Vesting. Upon expiration or
         earlier termination of the forfeiture period without a forfeiture and
         the satisfaction of any other conditions prescribed by the
         Disinterested Committee (or the Key Employee Committee, in the case of
         Non-Insider Awards), or at such earlier time as provided under the
         provisions of Section 9(D), the restrictions applicable to the
         Restricted Shares shall lapse. As promptly as administratively feasible
         thereafter, subject to the requirements of Section 13, 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.
 
                  (v) Terms of Restricted Shares. Subject to Section 9(D) and
         the terms of the applicable Award agreement, 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 an
         Affiliate 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 Disinterested Committee (or the
         Key Employee Committee, in the case of Non-Insider Awards) 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. If a Participant engages in the
         operation or management of a business (whether as owner, partner,
         officer, director, employee or otherwise and whether during or after
         termination of employment) which is in competition with the Company or
         an Affiliate of the Company, the Disinterested Committee may
         immediately cause all Restricted Shares to be forfeited and returned to
         the Company and all rights of the Participant with respect to such
         Restricted Shares to terminate. Whether a Participant has engaged in
         the operation or management of a business which is in competition with
         the Company or an Affiliate of the Company shall also be determined, in
         its discretion, by the Disinterested Committee, and any such
         determination by the Disinterested Committee shall be final and
         binding.
 
         (C) Restricted Unit Awards. Restricted Unit Awards shall be subject to
the restrictions, terms and conditions contained in the Plan and the applicable
Award agreements entered into by the appropriate Participants. Until the lapse
or release of all restrictions applicable to an Award of Restricted Units, no
shares of Common Stock shall be issued in respect of such Awards and no
Participant shall have any rights as a shareholder of the Company with respect
to the shares of Common Stock covered by such Restricted Unit Award.
Notwithstanding the foregoing, if so provided in the applicable Award agreement,
and subject to such conditions, limitations and restrictions as shall be
established by the Disinterested Committee (or the Key Employee Committee, in
the case of Non-Insider Awards), from the date of grant of a Restricted Unit
Award to the date of distribution, cancellation, termination or expiration of
the Restricted Unit, the Participant shall be credited as of the record date of
each cash dividend on the Common Stock with an amount equal to the cash
dividends which would be paid with respect to the Common Stock then covered by
the Restricted Unit if the Restricted Unit had been an issued and outstanding
share of Common Stock held of record by the Participant on such record date. The
Participant shall be entitled to receive from the Company in cash and/or shares
of Common Stock, as determined by the Disinterested Committee (or the Key
Employee Committee, in the case of Non-Insider Awards), the balance of such
dividend equivalent amounts credited to the Participant at such time, and
subject to such terms, conditions and restrictions, as shall be determined by
the Disinterested Committee (or the Key Employee Committee, in the case of
Non-Insider Awards) and set forth in the applicable Award agreement with respect
to such Restricted Units. Subject to the requirements of Section 13, upon the
lapse or release of all restrictions with respect to a Restricted Unit Award or
at a later date if distribution has been deferred, one or more share
certificates, registered in the name of the Participant, for an appropriate
number of shares, free of any restrictions set forth in the Plan and the related
Award agreement shall be delivered to the Participant. A Participant's
Restricted Unit Award shall not be contingent on any payment by or consideration
from the Participant other than the rendering of services. With the consent of
the Disinterested Committee and the Participant, Restricted Unit Awards may be
exchanged for outstanding Restricted Stock Awards subject to such restrictions,
terms and conditions as the Disinterested Committee shall determine. If a
Participant engages in the operation or management of a business (whether as
owner, partner, officer, director, employee or otherwise and whether during or
after termination of employment) which is in competition with the Company or an
Affiliate of the Company, the Disinterested Committee may immediately cause all
Restricted Units to be forfeited and returned to the Company and all rights of
the Participant with respect to such Restricted Units to terminate. Whether a
Participant has engaged in the operation or management of a business which is in
competition with the Company or an Affiliate of the Company shall also be
determined, in its discretion, by the Disinterested Committee, and any such
determination by the Disinterested Committee shall be final and binding.
 
         (D) Non-Employee Director Share Awards. The Disinterested Committee may
grant Non-Employee Director Share Awards to non-employee directors as part of
the regular compensation package for all non-employee directors and/or as part
of the regular compensation package for the Chairman of the Board, the Vice
Chairman and Chairmen of Board Committees. Upon the grant of a Non-Employee
Director Stock Award, the Company shall cause to be transferred on the books of
the Company, or its agent, the Common Stock, registered on behalf of the
Participant, evidencing the shares of Common Stock covered by the Award. Such
shares shall not be subject to
 
                                       A-7
<PAGE>
 
forfeiture but shall be subject to such other terms and conditions as the
Disinterested Committee shall determine. Upon such grant, the Participant shall
become a shareholder of the Company with respect to all shares subject to the
Non-Employee Director Share Award 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.
 
SECTION 7.     PERFORMANCE AWARDS
 
         (A)      General
 
                  (i) Award Periods and Calculations of Potential Incentive
         Amounts. The Disinterested Committee (or the Key Employee Committee, in
         the case of Non-Insider Awards) may grant Performance Awards to
         Participants who are key management employees of the Company. 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
         the 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. An "Award Period" means, with respect to a Performance Award,
         the period of time set forth in the Award agreement during which
         specified performance goals must be achieved or other conditions set
         forth in the Award agreement must be satisfied. The Award Period shall
         be twenty-four (24) or more consecutive months as determined by the
         Disinterested Committee (or the Key Employee Committee, in the case of
         Non-Insider Awards).
 
                  No later than ninety (90) days after the commencement of each
         Award Period, the Disinterested Committee (or the Key Employee
         Committee, in the case of Non-Insider Awards) shall (x) designate the
         Participants who are eligible to receive Performance Awards during such
         Award Period based on such factors as it deems pertinent, (y) set the
         performance targets to be achieved during an Award Period in order to
         receive Performance Awards, and (z) promptly provide to each person
         selected as a Participant written notice of such selection and the
         applicable performance targets. The Disinterested Committee (or the Key
         Employee Committee, in the case of Non-Insider Awards), 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.
 
                  For purposes of this Section 7, the fair market value of the
         Common Stock shall be determined as provided in Section 5(J). The terms
         of any Performance Award granted under the Plan shall be set forth in
         an Award agreement executed on behalf of the Company by the Chief
         Executive Officer (if other than the President), the President or any
         Vice President and by the Participant, which Award agreement shall
         contain provisions determined by the Disinterested Committee (or the
         Key Employee Committee, in the case of Non-Insider Awards) and not
         inconsistent with the Plan, which may include provisions describing:
         (i) the Award Period for measuring the achievement of performance
         objectives, in whole or in part; (ii) the performance objectives for
         the Participant, including a target level of performance; (iii) the
         amount of cash and/or the number of shares of Common Stock available to
         the Participant upon achieving the target level of performance; (iv)
         the applicable percentage of the target award that will be paid
         depending on the extent to which the target level of performance is
         fully or partially achieved or surpassed; and (v) the effect of the
         Participant's termination of employment prior to the end of the Award
         Period.
 
                  (ii) Performance Targets. The performance targets for
         Performance Awards may include such goals related to the performance of
         the Company or, where relevant, any one or more of its Affiliates or
         divisions and/or the performance of a Participant as may be established
         by the Disinterested Committee (or the Key Employee Committee, in the
         case of Non-Insider Awards) 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 Disinterested Committee (or the Key Employee Committee, in the case
         of Non-Insider Awards) 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 Disinterested Committee (or the Key
         Employee Committee, in the case of Non-Insider Awards), in its
         discretion, but only under extraordinary circumstances as determined by
         the Disinterested Committee (or the Key Employee Committee, in the case
         of Non-Insider Awards), 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.
 
                  (iii) Earning Performance Awards. The Disinterested Committee
         (or the Key Employee Committee, in the case of Non-Insider Awards), 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.
         After the end of the applicable Award Period, the Disinterested
         Committee (or the Key Employee Committee, in the case of Non-Insider
         Awards) shall
 
                                       A-8
<PAGE>
 
         determine whether the participant has achieved or surpassed the target
         level of performance for the Award Period.
 
                  (iv) Payment of Earned Performance Awards. Subject to the
         requirements of Section 13, 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 Disinterested Committee (or the Key
         Employee Committee, in the case of Non-Insider Awards). The
         Disinterested Committee (or the Key Employee Committee, in the case of
         Non-Insider Awards), in its sole discretion, may define such terms and
         conditions with respect to the payment of earned Performance Awards as
         it may deem desirable. If all or part of a Performance Award is in the
         form of shares of Common Stock, a Participant does not have the right
         to vote the shares or receive dividends on the shares or have any other
         rights of a shareholder with respect to the shares, unless and until
         the shares are issued to the Participant.
 
         (B)      Terms of Performance Awards
 
                  (i) Termination of Employment. Unless the Disinterested
         Committee (or the Key Employee Committee, in the case of Non-Insider
         Awards), in its discretion, shall otherwise determine, if prior to the
         end of an Award Period a Participant's employment with the Company and
         its Affiliates terminates, or the Participant's employer ceases to be
         an Affiliate of the Company, the Participant will not be entitled to
         receive any Performance Awards except to the extent otherwise provided
         in the applicable Award agreement.
 
                  (ii) Other Events. If a Participant engages in the operation
         or management of a business (whether as owner, partner, officer,
         director, employee or otherwise and whether during or after termination
         of employment) which is in competition with the Company or an Affiliate
         of the Company, the Disinterested Committee may immediately cause all
         Performance Awards to be forfeited and returned to the Company and all
         rights of the Participant with respect to such Performance Awards to
         terminate. Whether a Participant has engaged in the operation or
         management of a business which is in competition with the Company or an
         Affiliate of the Company shall also be determined, in its discretion,
         by the Disinterested Committee, and any such determination by the
         Disinterested Committee shall be final and binding.
 
                  (iii) Dividend Equivalents. If so provided in the applicable
         Award agreement, and subject to such conditions, limitations and
         restrictions as shall be established by the Disinterested Committee (or
         the Key Employee Committee, in the case of Non-Insider Awards), if a
         Performance Award is denominated in shares of Common Stock, then from
         the date of grant of such Performance Award to the date of
         distribution, cancellation, termination or expiration of the
         Performance Award, the Participant shall be credited as of the record
         date of each cash dividend on the Common Stock with an amount equal to
         the cash dividends which would be paid with respect to the Common Stock
         then covered by the Performance Award if the Performance Award had been
         an issued and outstanding share of Common Stock held of record by the
         Participant on such record date. The Participant shall be entitled to
         receive from the Company in cash and/or shares of Common Stock, as
         determined by the Disinterested Committee (or the Key Employee
         Committee, in the case of Non-Insider Awards), the balance of such
         dividend equivalent amounts credited to the Participant at such time,
         and subject to such terms, conditions and restrictions, as shall be
         determined by the Disinterested Committee (or the Key Employee
         Committee, in the case of Non-Insider Awards) and set forth in the
         applicable Award agreement with respect to such Performance Award.
 
SECTION 8.     ADJUSTMENT AND SUBSTITUTION OF SHARES
 
         If a dividend or other distribution shall be declared upon the Common
Stock payable in shares of the Common Stock, (i) the number of shares of the
Common Stock then subject to any outstanding stock option, Restricted Share
Award, Restricted Unit Award or Performance Award, (ii) the number of shares of
the Common Stock which may be delivered under the Plan but are not then subject
to an outstanding stock option, Restricted Share Award, Restricted Unit Award or
Performance Award and (iii) the limitation under Section 2 on the number of
shares of Common Stock which may be subject to Awards granted to any Participant
in any calendar year shall be adjusted by adding thereto the number of shares of
the Common Stock which would have been distributable thereon if such shares had
been outstanding on the date fixed for determining the shareholders entitled to
receive such stock dividend or distribution.
 
         If the outstanding shares of the Common Stock shall be changed into or
exchangeable for a different number or kind of shares of stock or other
securities of the Company or another corporation, whether through
reorganization, reclassification, recapitalization, stock split-up, combination
of shares, merger or consolidation, then there shall be substituted for each
share of the Common Stock subject to any then outstanding stock option,
Restricted Share Award, Restricted Unit Award or Performance Award and for each
share of the Common Stock which may be delivered under the Plan but is not then
subject to an outstanding stock option, Restricted Share Award, Restricted Unit
Award or Performance Award, the number and kind of shares of stock or other
securities into which each outstanding share of the Common Stock shall be so
changed or for which each such share shall be exchangeable.
 
         In case of any adjustment or substitution as provided for in this
Section 8, the aggregate Option Price for all shares subject to each then
outstanding stock option prior to such adjustment or substitution shall be the
aggregate Option Price for all shares of stock or other securities (including
any fraction) to which such shares shall have been
 
                                       A-9
<PAGE>
 
adjusted or which shall have been substituted for such shares. Any new Option
Price per share shall be carried to at least three decimal places with the last
decimal place rounded upwards to the nearest whole number.
 
         The Disinterested Committee shall have the power and sole discretion to
determine the amount of any adjustment or substitution pursuant to this Section
8. No adjustment or substitution provided for in this Section 8 shall require
the Company to sell or deliver a fraction of a share or other security.
Accordingly, all fractional shares or other securities which result from any
such adjustment or substitution shall be eliminated and not carried forward to
any subsequent adjustment or substitution.
 
SECTION 9. ADDITIONAL RIGHTS IN CERTAIN EVENTS
 
         (A) Definition of Change in Control. For purposes of this Section 9,
"Change in Control" shall mean, and shall be deemed to have occurred upon, the
first to occur of any of the following events:
 
                  (i) The acquisition by any individual, entity, or group (a
         "Person"), including a "person" within the meaning of Section 13(d)(3)
         or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
         "Exchange Act"), of beneficial ownership within the meaning of Rule
         13d-3 promulgated under the Exchange Act, of twenty percent (20%) or
         more of either: (i) the then outstanding shares of common stock of the
         Company (the "Outstanding Common Stock"); or (ii) the combined voting
         power of the then outstanding securities of the Company entitled to
         vote generally in the election of directors (the "Outstanding Voting
         Securities"); excluding, however the following: (a) any acquisition
         directly from the Company (excluding an acquisition resulting from the
         exercise of an exercise, conversion, or exchange privilege unless the
         security being so exercised, converted or exchanged was acquired
         directly from the Company); (b) any acquisition by the Company, (c) any
         acquisition by an employee benefit plan (or related trust) sponsored or
         maintained by the Company or any corporation controlled by the Company;
         or (d) any acquisition by any corporation pursuant to a transaction
         which complies with subclauses (a), (b), and (c) of clause (iii) below;
 
                  (ii) During any twenty-four (24) consecutive month period, the
         individuals who, at the beginning of such period, constitute the Board
         (the "Incumbent Directors") cease for any reason other than death to
         constitute at least a majority thereof, provided, however, that a
         director who was not a director at the beginning of such twenty-four
         (24) month period shall be deemed to have satisfied such twenty-four
         (24) month requirement (and be an Incumbent Director) if such director
         was elected by, or on the recommendation of or with the approval of, at
         least two-thirds (2/3) of the directors who then qualified as Incumbent
         Directors either actually (because they were directors at the beginning
         of such period) or by prior operation of the provisions of this clause
         (ii);
 
                  (iii) The consummation of a reorganization, merger or
         consolidation of the Company or sale or other disposition of all or
         substantially all of the assets of the Company (a "Corporate
         Transaction"); excluding, however, a Corporate Transaction pursuant to
         which: (a) all or substantially all of the individuals or entities who
         are the beneficial owners, respectively, of the Outstanding Common
         Stock and the Outstanding Voting Securities immediately prior to such
         Corporate Transaction will beneficially own, directly or indirectly,
         more than sixty percent (60%) of, respectively, the outstanding shares
         of common stock, and the combined voting power of the outstanding
         securities of such corporation entitled to vote generally in the
         election of directors, as the case may be, of the corporation resulting
         from such Corporate Transaction (including, without limitation, a
         corporation, which as a result of such transaction owns the Company or
         all or substantially all of the Company's assets either directly or
         indirectly) in substantially the same proportions relative to each
         other as their ownership, immediately prior to such Corporate
         Transaction, of the Outstanding Common Stock and the Outstanding Voting
         Securities, as the case may be; (b) no Person (other than: the Company;
         any employee benefit plan (or related trust) sponsored or maintained by
         the Company or any corporation controlled by the Company; the
         corporation resulting from such Corporate Transaction; and any Person
         which beneficially owned, immediately prior to such Corporate
         Transaction, directly or indirectly, twenty-five percent (25%) or more
         of the Outstanding Common Stock or the Outstanding Voting Securities,
         as the case may be) will beneficially own, directly or indirectly,
         twenty-five percent (25%) or more of, respectively, the outstanding
         shares of common stock of the corporation resulting from such Corporate
         Transaction or the combined voting power of the outstanding securities
         of such corporation entitled to vote generally in the election of
         directors; and (c) individuals who were members of the Incumbent Board
         will constitute at least a majority of the members of the board of
         directors of the corporation resulting from such Corporate Transaction;
         or
 
                  (iv) The consummation of a plan of complete liquidation or
         dissolution of the Company.
 
         Notwithstanding the foregoing, a Change in Control will not be deemed
to have occurred by reason of a distribution of the voting securities of any of
the Company's subsidiaries to the stockholders of the Company, or by means of an
initial public offering of such securities.
 
         (B) Acceleration of the Exercise Date of Stock Options and Alternative
Stock Appreciation Rights. Unless the stock option agreement referred to in
Section 5(I), or an amendment thereto, shall otherwise provide, notwithstanding
any other provision contained in the Plan (other than Section 5(K)), upon the
occurrence of a Change in Control, all stock options and alternative stock
appreciation rights shall become immediately and fully exercisable.
 
                                       A-10
<PAGE>
 
         (C) Extension of the Expiration Date of Stock Option and Alternative
Stock Appreciation Rights. Unless the stock option agreement referred to in
Section 5(I), or an amendment thereto, shall otherwise provide, notwithstanding
any other provision contained in the Plan (other than Section 5(K)), all stock
options and alternative stock appreciation rights held by a Participant whose
employment with the Company or an Affiliate of the Company terminates within one
year of any Change in Control for any reason other than disability, retirement
under any retirement plan of the Company or an Affiliate of the Company, or
death shall be exercisable for a period of three months from the date of such
termination, but in no event after the expiration date of the stock option.
 
         (D) Termination of Restrictions on Restricted Shares and Restricted
Units. Unless the applicable Award agreement referred to in Section 6, or an
amendment thereto, shall otherwise provide, notwithstanding any other provision
in the Plan, upon the occurrence of a Change in Control, all restrictions
applicable to all Restricted Share Awards and Restricted Unit Awards 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 6.
 
         (E) Acceleration of Payment of Performance Awards. Unless the
applicable Award agreement referred to in Section 7, or an amendment thereto,
shall otherwise provide, notwithstanding any other provision in the Plan, upon
the occurrence of a Change in Control, all Performance Awards for all
uncompleted Award Periods shall be determined for all uncompleted Award Periods
as of the date of the Change in Control at the greater of (i) the performance
level attained and projected for the remainder of such uncompleted Award Periods
and (ii) the target performance level for each such uncompleted Award Period,
and shall immediately become fully payable to all Participants and shall be paid
to Participants as soon as reasonably practicable after such Change in Control.
 
SECTION 10. FOREIGN QUALIFIED AWARDS
 
         Awards under the Plan may be granted to such employees of the Company
and its Affiliates who are residing in foreign jurisdictions as the
Disinterested Committee (or the Key Employee Committee, in the case of
Non-Insider Awards) in its sole discretion may determine from time to time. The
Disinterested Committee (or the Key Employee Committee, in the case of
Non-Insider Awards) 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; 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.
 
SECTION 11. EFFECT OF THE PLAN ON THE RIGHTS OF EMPLOYEES AND EMPLOYER
 
         Neither the adoption of the Plan nor any action of the Board, the
Disinterested Committee (or the Key Employee Committee, in the case of
Non-Insider Awards) or the Key Employee Disinterested Committee (or the Key
Employee Committee, in the case of Non-Insider Awards) pursuant to the Plan
shall be deemed to give any employee any right to be granted an Award under the
Plan and nothing in the Plan, in any Award granted under the Plan, in any
Dividend Equivalent Account established under the Plan or in any stock option
agreement or other Award agreement shall confer any right to any employee to
continue in the employ of the Company or an Affiliate of the Company or
interfere in any way with the rights of the Company or an Affiliate of the
Company to terminate the employment of any employee at the time.
 
SECTION 12. AMENDMENT
 
         The right to alter and amend the Plan at any time and from time to time
and the right to revoke or terminate the Plan are hereby specifically reserved
to the Board; provided always that no such revocation or termination shall
terminate any outstanding stock option, alternative stock appreciation rights,
Restricted Share award or Performance Award theretofore granted under the Plan
or any Dividend Equivalent Account theretofore established under the Plan; and
provided further that no such alteration or amendment of the Plan shall, without
approval by the shareholders of the Company (a) increase the total number of
shares which may be issued or delivered under the Plan, (b) increase the total
number of shares which may be covered by Awards to any one Participant, (c)
change the minimum Option Price or (d) extend the period set forth in the Plan
during which Awards may be granted. No alteration, amendment, revocation or
termination of the Plan shall, without the written consent of the holder of a
stock option, alternative stock appreciation rights, Restricted Share Award,
Restricted Unit Award or Performance Award theretofore granted under the Plan or
a Dividend Equivalent Account theretofore established under the Plan, adversely
affect the rights of such holder with respect to such stock option, alternative
stock appreciation rights, Restricted Share Award, Restricted Unit Award,
Performance Award or Dividend Equivalent Account.
 
SECTION 13. TAXES
 
         The Company shall 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 of Common Stock issuable under the Plan, and the Company may defer
payment or issuance of the cash or shares of Common Stock unless indemnified to
its satisfaction against any liability for any such tax. The amount of such
withholding or tax payment shall be determined by the Disinterested Committee
(or the Key Employee Committee, in the case of Non-Insider Awards) or its
delegate and shall be payable by the Participant at such time as the
Disinterested Committee (or the Key Employee Committee, in the case of
Non-Insider Awards) or its delegate determines. The Disinterested Committee (or
the Key Employee Committee, in the case of Non-Insider Awards) shall prescribe
one or more methods by which the Participant will be permitted to satisfy his or
her tax withholding obligation,
 
                                      A-11
<PAGE>
 
which methods may include, without limitation, any one, or any combination, of
the following: (i) the payment of cash by the Participant to the Company, (ii)
the delivery of previously acquired shares of Common Stock by the Participant to
the Company, (iii) the withholding of cash from any cash amount otherwise
payable to the Participant upon the exercise of alternative stock appreciation
rights or the settlement of Dividend Equivalent Accounts and (iv) the
withholding of shares of Common Stock from any shares otherwise issuable to the
Participant. For purposes of clauses (ii) and (iv) above, shares of Common Stock
shall be valued based upon their fair market value on the date such shares are
delivered or withheld. The Disinterested Committee (or the Key Employee
Committee, in the case of Non-Insider Awards) shall be authorized, in its sole
discretion, to establish such rules and procedures relating to any such
withholding methods as it deems necessary or appropriate, including, without
limitation, rules and procedures relating to elections by Participants who are
subject to the provisions of Section 16 of the 1934 Act to deliver shares of
Common Stock or have shares of Common Stock withheld to meet such withholding
obligations.
 
SECTION 14.     EFFECTIVE DATE AND DURATION OF PLAN
 
         The Plan was approved by the Board, effective as of January 1, 2002
(the "Effective Date") and was ratified by the shareholders of the Company as of
June 26, 2002. Certain amendments to the Plan were approved by the Board on
February 26, 2004 and are subject to approval by the shareholders.
 
         No Award may be granted or Dividend Equivalent Account established
under the Plan after December 31, 2011.
 
 SECTION 15.     DEFINITION KEY
 
The following terms shall have the meanings defined for such terms in the
section of the Plan set forth below:
 
<TABLE>
<S>                                             <C>
"Affiliate"                                     first paragraph
 "Associate"                                    Section 9(A)(1)
"Award"                                         Section 2
"Award Period"                                  Section 7(A)
"Board"                                         Section 1
"Change in Control"                             Section 9(A)
"Code"                                          Section 1
"Company"                                       first paragraph
"Common Stock"                                  first paragraph
"Corporate Transaction"                         Section 9(A)(iii)
"Disinterested Committee"                       Section 1
"Effective Date"                                Section 14
"Exchange Act"                                  Section 9(A)(i)
"Incumbent Directors"                           Section 9(A)(ii)
"Key Employee Committee"                        Section 1
"New Option"                                    Section 5(F)
"1934 Act"                                      first paragraph
"Non-Employee Director Share Award"             Section 6(A)
"Non-Insider Awards"                            Section 2
"Non-Insiders"                                  Section 2
"Option Price"                                  Section 5(A)
"Original Option"                               Section 5(F)
"Outstanding Common Stock                       Section 9(A)(i)
"Outstanding Voting Securities                  Section 9(A)(i)
"Participant"                                   Section 2
"Performance Award"                             Section 7(A)
"Performance Goals"                             Section 6(A)
"Person"                                        Section 9(A)(2)
"Plan"                                          first paragraph
"Prior Option"                                  second paragraph
"Prior Plan"                                    second paragraph
"Restricted Share"                              Section 6(A)
"Restricted Unit"                               Section 6(A)
</TABLE>
 
                                      A-12