WESCO INTERNATIONAL, INC.
 
                          1999 LONG-TERM INCENTIVE PLAN
 
 
                                    ARTICLE I
 
                        PURPOSE AND ADOPTION OF THE PLAN
 
         1.01 PURPOSE. The purpose of the WESCO International, Inc. 1999
Long-Term Incentive Plan (as the same may be amended from time to time, the
"Plan") is to assist WESCO International, Inc., a Delaware corporation (the
"Company") and its Subsidiaries (as defined below) in attracting and retaining
highly competent key employees and to act as an incentive in motivating selected
key employees of the Company and its Subsidiaries (as defined below) to achieve
long-term corporate objectives.
 
         1.02 ADOPTION AND TERM. The Plan has been approved by the Board of
Directors of the Company (the "Board") and the stockholders of the Company to be
effective as of the effective date of Company's Registration Statement on Form
S-1, as filed with the Securities Exchange Commission in connection with the
initial public offering of the Company's Common Stock (the "Effective Date").
The Plan shall remain in effect until terminated by action of the Board;
provided, however, that no Incentive Stock Option (as defined below) may be
granted hereunder after the tenth anniversary of the Effective Date and the
provisions of Articles VII and VIII with respect to performance-based awards to
"covered employees" under Section 162(m) of the Code (as defined below) shall
expire as of the fifth anniversary of the Effective Date.
 
 
                                   ARTICLE II
                                        
                                  DEFINITIONS
                                        
         For the purposes of this Plan, capitalized terms shall have the
following meanings:
 
         2.01 ACCELERATED OWNERSHIP OPTIONS shall have the meaning given to such
term in Section 6.03.
 
         2.02 ACQUIRING CORPORATION shall have the meaning given to such term in
Section 9.08(b).
 
         2.03 AWARD means any grant to a Participant of one or a combination of
Non-Qualified Stock Options or Incentive Stock Options described in Article VI,
Restricted Shares described in Article VII and Performance Awards described in
Article VIII.
 
         2.04 AWARD AGREEMENT means a written agreement between the Company and
a Participant or a written notice from the Company to a Participant specifically
setting forth the terms and conditions of an Award granted under the Plan.
 
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         2.05 AWARD PERIOD means, with respect to an Award, the period of time
set forth in the Award Agreement during which specified target performance goals
must be achieved or other conditions set forth in the Award Agreement must be
satisfied.
 
         2.06 BENEFICIARY means an individual, trust or estate who or which, by
a written designation of the Participant filed with the Company or by operation
of law, succeeds to the rights and obligations of the Participant under the Plan
and an Award Agreement upon the Participant's death.
 
         2.07 BOARD shall have the meaning given to such term in Section 1.02.
 
         2.08 CHANGE IN CONTROL means the first to occur of the following events
after the Effective Date: (a) the acquisition by any person, entity or "group"
(as defined in Section 13(d) of the Securities Exchange Act of 1934, as
amended), other than the Company, its Subsidiaries, any employee benefit plan of
the Company or its Subsidiaries, or Cypress Merchant Banking Partners L.P. or
any successor investment vehicle, of 30% or more of the combined voting power of
the Company's then outstanding voting securities; (b) the merger or
consolidation of the Company, as a result of which persons who were stockholders
of the Company immediately prior to such merger or consolidation, do not,
immediately thereafter, own, directly or indirectly, more than 70% of the
combined voting power entitled to vote generally in the election of directors of
the merged or consolidated company; (c) the liquidation or dissolution of the
Company; (d) the sale, transfer or other disposition of all or substantially all
of the assets of the Company to one or more persons or entities that are not,
immediately prior to such sale, transfer or other disposition, affiliates of the
Company; and (e) during any period of not more than two years, individuals who
constitute the Board as of the beginning of the period and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in clause (a) or (b) of this
sentence) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who were directors at such time or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board.
 
         2.09 CODE means the Internal Revenue Code of 1986, as amended.
References to a section of the Code include that section and any comparable
section or sections of any future legislation that amends, supplements or
supersedes said section.
 
         2.10 COMMITTEE means the Compensation Committee of the Board.
 
         2.11 COMPANY shall have the meaning given to such term in Section 1.01.
 
         2.12 COMMON STOCK means Common Stock of the Company.
 
         2.13 COMPANY VOTING SECURITIES means the combined voting power of all
outstanding securities of the Company entitled to vote generally in the election
of directors of the Company.
 
         2.14 DATE OF GRANT means the date as of which the Committee grants an
Award. If the Committee contemplates an immediate grant to a Participant, the
Date of Grant shall be the date of the Committee's action. If the Committee
contemplates a date on which the grant is to be made other than the date of the
Committee's action, the Date of Grant shall be the date so
 
 
 
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contemplated and set forth in or determinable from the records of action of the
Committee; provided, however, that the Date of Grant shall not precede the date
of the Committee's action.
 
         2.15 EFFECTIVE DATE shall have the meaning given to such term in
Section 1.02.
 
         2.16 EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
 
         2.17 EXERCISE PRICE shall have the meaning given to such term in
Section 6.01(b).
 
         2.18 EXTRAORDINARY TERMINATION shall have the meaning given to such
term in Section 6.02(e).
 
         2.19 FAIR MARKET VALUE means, as of any applicable date, the closing
price 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
Committee, 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 the closing price per share of the Common Stock
as so quoted on the nearest date before the date as of which Fair Market Value
is to be determined on which there are sales. 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 Committee 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. Notwithstanding the foregoing, in the case of Options granted in
connection with the assumption by the Company of stock options of acquired
companies, as described in Section 9.08(c), the Committee may determine that the
term "Fair Market Value" shall have the same meaning as is given to such term
under the provisions of such assumed stock option.
 
         2.20 INCENTIVE STOCK OPTION means a stock option within the meaning of
Section 422 of the Code.
 
         2.21 MERGER means any merger, reorganization, consolidation, share
exchange, transfer of assets or other transaction having similar effect
involving the Company.
 
         2.22 NON-QUALIFIED STOCK OPTION means a stock option which is not an
Incentive Stock Option.
 
         2.23 OPTIONS means all Non-Qualified Stock Options and Incentive Stock
Options granted at any time under the Plan.
 
         2.24 ORIGINAL OPTION shall have the meaning given to such term in
Section 6.03.
 
         2.25 PARTICIPANT means a person designated to receive an Award under
the Plan in accordance with Section 5.01.
 
         2.26 PERFORMANCE AWARDS means Awards granted in accordance with Article
VIII.
 
         2.27 PERMANENT DISABILITY means a physical or mental disability or
infirmity that prevents the performance of a Participant's employment-related
duties lasting (or likely to last, based on competent medical evidence presented
to the Board) for a period of six months or longer. The Board's reasoned and
good faith judgment of Permanent Disability shall be final and shall be based
 
 
 
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on such competent medical evidence as shall be presented to it by such
Participant or by any physician or group of physicians or other competent
medical expert employed by the Participant or the Company to advise the Board.
 
         2.28 PLAN shall have the meaning given to such term in Section 1.01.
 
         2.29 PRIOR PLANS shall have the meaning given to such term in Section
4.01.
 
         2.30 RESTRICTED SHARES means Common Stock subject to restrictions
imposed in connection with Awards granted under Article VII.
 
         2.31 RETIREMENT means a Participant's retirement at or after age 65.
 
         2.32 SUBSIDIARY means a subsidiary of the Company within the meaning of
Section 424(f) of the Code.
 
 
                                   ARTICLE III
 
                                 ADMINISTRATION
 
         3.01 COMMITTEE. The Plan shall be administered by the Committee. The
Committee shall have exclusive and final authority in each determination,
interpretation or other action affecting the Plan and its Participants. The
Committee shall have the sole discretionary authority to interpret the Plan, to
establish and modify administrative rules for the Plan, to impose such
conditions and restrictions on Awards as it determines appropriate, and to take
such steps in connection with the Plan and Awards granted hereunder as it may
deem necessary or advisable. The Committee may, subject to compliance with
applicable legal requirements, with respect to Participants who are not subject
to Section 16(b) of the Exchange Act or Section 162(m) of the Code, delegate
such of its powers and authority under the Plan as it deems appropriate to
designated officers or employees of the Company. In addition, the Board may
exercise any of the authority conferred upon the Committee hereunder. In the
event of any such delegation of authority or exercise of authority by the Board,
references in the Plan to the Committee shall be deemed to refer to the delegate
of the Committee or the Board, as the case may be.
 
 
                                   ARTICLE IV
 
                                     SHARES
 
         4.01 NUMBER OF SHARES ISSUABLE. The total number of shares of Common
Stock authorized to be issued under the Plan shall be the sum of (a) 6,936,000
shares, (b) the number of shares of Common Stock covered by any unexercised
portions of stock options granted under the Company's 1994 Stock Option Plan,
1998 Stock Option Plan or Stock Option Plan for Branch Employees (the "Prior
Plans") that are canceled or terminated after the Effective Date and (c) the
number of shares of Common Stock surrendered by Participants after the Effective
Date to pay all or a portion of the exercise price and/or withholding taxes with
respect to the exercise of stock options granted under any of the Prior Plans.
The number of shares available for issuance under the Plan shall be subject to
adjustment in accordance with Section 9.08. The shares to be offered
 
 
 
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under the Plan shall be authorized and unissued shares of Common Stock, or
issued shares of Common Stock which will have been reacquired by the Company.
 
         4.02 SHARES SUBJECT TO TERMINATED AWARDS. Shares of Common Stock
covered by any unexercised portions of terminated Options (including canceled
Options) granted under Article VI, shares of Common Stock forfeited as provided
in Section 7.02(a) and shares of Common Stock subject to any Award that are
otherwise surrendered by a Participant or terminated may be subject to new
Awards under the Plan. If any shares of Common Stock are withheld from those
otherwise issuable or are tendered to the Company, by attestation or otherwise,
in connection with the exercise of an Option, only the net number of shares of
Common Stock issued as a result of such exercise shall be deemed delivered for
purposes of determining the maximum number of shares available for delivery
under the Plan.
 
 
                                    ARTICLE V
 
                                  PARTICIPATION
 
         5.01 ELIGIBLE PARTICIPANTS. Participants in the Plan shall be such key
employees of the Company and its Subsidiaries as the Committee, in its sole
discretion, may designate from time to time. The Committee's designation of a
Participant in any year shall not require the Committee to designate such person
to receive Awards in any other year. The designation of a Participant to receive
an Award under one portion of the Plan does not require the Committee to include
such Participant under other portions of the Plan. The Committee shall consider
such factors as it deems pertinent in selecting Participants and in determining
the types and amounts of their respective Awards. Subject to adjustment in
accordance with Section 9.08, during any calendar year no Participant shall be
granted Awards in respect of more than 1,000,000 shares of Common Stock (whether
through grants of Options or other Awards of Common Stock or rights with respect
thereto); provided, however, that if it is the Committee's intention as of the
Date of Grant of an Award, as evidenced by the applicable Award Agreement, that
such Award shall be earned by the Participant over a period of more than one
calendar year, then for purposes of applying the foregoing per calendar year
share limitation, the shares of Common Stock subject to such Award shall be
allocated to the first calendar year in which such shares may be earned
(determined without regard to possible vesting as a result of a Change in
Control or pursuant to any provision of this Plan authorizing the Committee to
accelerate the vesting of an Award).
 
 
                                   ARTICLE VI
 
                                  STOCK OPTIONS
 
6.01 OPTION AWARDS.
 
         (a) GRANT OF OPTIONS. The Committee may grant, to such Participants as
the Committee may select, Options entitling the Participants to purchase shares
of Common Stock from the Company in such numbers, at such prices, and on such
terms and subject to such conditions, not inconsistent with the terms of the
Plan, as may be established by the Committee. The terms of any Option granted
under the Plan shall be set forth in an Award Agreement.
 
 
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         (b) EXERCISE PRICE OF OPTIONS. The exercise price of each share of
Common Stock which may be purchased upon exercise of any Option granted under
the Plan (the "Exercise Price") shall be determined by the Committee; provided,
however, that, except in the case of any substituted Options described in
Section 9.08(c), the Exercise Price shall in all cases be equal to or greater
than the Fair Market Value on the Date of Grant.
 
         (c) DESIGNATION OF OPTIONS. Except as otherwise expressly provided in
the Plan, the Committee may designate, at the time of the grant of an Option,
such Option as an Incentive Stock Option or a Non-Qualified Stock Option;
provided, however, that an Option may be designated as an Incentive Stock Option
only if the applicable Participant is an employee of the Company or a Subsidiary
on the Date of Grant.
 
         (d) SPECIAL INCENTIVE STOCK OPTION RULES. No Participant may be granted
Incentive Stock Options under the Plan (or any other plans of the Company and
its Subsidiaries) that would result in Incentive Stock Options to purchase
shares of Common Stock with an aggregate Fair Market Value (measured on the Date
of Grant) of more than $100,000 first becoming exercisable by such Participant
in any one calendar year. Notwithstanding any other provision of the Plan to the
contrary, no Incentive Stock Option shall be granted to any person who, at the
time the Option is granted, owns stock (including stock owned by application of
the constructive ownership rules in Section 424(d) of the Code) possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary, unless at the time the Incentive Stock Option is
granted the Exercise Price is at least 110% of the Fair Market Value on the Date
of Grant of the Common Stock subject to the Incentive Stock Option and the
Incentive Stock Option by its terms is not exercisable for more than five (5)
years from the Date of Grant.
 
         (e) RIGHTS AS A STOCKHOLDER. A Participant or a transferee of an Option
pursuant to Section 9.04 shall have no rights as a stockholder with respect to
the shares of Common Stock covered by an Option until that Participant or
transferee shall have become the holder of record of any such shares, and no
adjustment shall be made with respect to any such shares of Common Stock for
dividends in cash or other property or distributions of other rights on the
Common Stock for which the record date is prior to the date on which that
Participant or transferee shall have become the holder of record of any shares
covered by such Option; provided, however, that Participants are entitled to the
adjustments set forth in Section 9.08.
 
         6.02 TERMS OF STOCK OPTIONS
 
         (a) CONDITIONS ON EXERCISE. An Award Agreement with respect to Options
may contain such waiting periods, exercise dates and restrictions on exercise
(including, but not limited to, periodic installments) as may be determined by
the Committee at the time of grant.
 
         (b) DURATION OF OPTIONS. Options shall terminate after the first to
occur of the following events:
 
                  (i) Expiration of the Option as provided in the related Award
         Agreement; or
 
                  (ii) Termination of the Award as provided in Section 6.02(e)
         following the Participant's Termination of Employment; or
 
                  (iii) Ten years from the Date of Grant.
 
 
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         (c) ACCELERATION OF EXERCISE TIME. The Committee, in its sole
discretion, shall have the right (but shall not in any case be obligated),
exercisable at any time after the Date of Grant, to permit the exercise of any
Option prior to the time such Option would otherwise become exercisable under
the terms of the related Award Agreement.
 
         (d) EXTENSION OF EXERCISE TIME. In addition to the extensions permitted
under Section 6.02(e) in the event of Termination of Employment, the Committee,
in its sole discretion, shall have the right (but shall not in any case be
obligated), exercisable on or at any time after the Date of Grant, to permit the
exercise of any Option after its expiration date described in Section 6.02(e),
subject, however, to the limitations described in Sections 6.02(b)(i) and (iii).
 
         (e) EXERCISE OF OPTIONS UPON TERMINATION OF EMPLOYMENT.
 
                  (i) EXTRAORDINARY TERMINATION. Unless otherwise provided in
         the Award Agreement or otherwise determined by the committee at the
         Date of Grant, in the event that a Participant's employment with the
         Company and the Subsidiaries terminates by reason of the Participant's
         death, permanent Disability or Retirement (each an "Extraordinary
         Termination"), then any Options held by the Participant and then
         exercisable shall remain exercisable solely until the first to occur of
         (i) the first anniversary of the Participant's termination of
         employment or (ii) the expiration of the term of the Option unless the
         exercise period is extended by the Committee in accordance with Section
         6.02(d). Any Options held by the Participant that are not exercisable
         at the date of the Extraordinary Termination shall terminate and be
         cancelled immediately upon such Extraordinary Termination, and any
         Options described in the preceding sentence that are not exercised
         within the period described in such sentence shall terminate and be
         cancelled upon the expiration of such period.
 
                  (ii) OTHER TERMINATION OF EMPLOYMENT. Unless otherwise
         provided in the Award Agreement or otherwise determined by the
         Committee at or after the Date of Grant, in the event that a
         Participant's employment with the Company and the Subsidiaries
         terminates for any reason other than an Extraordinary Termination, any
         Options held by such Participant that are exercisable as of the date of
         such termination shall remain exercisable for a period of 60 days (or,
         if shorter, during the remaining term of the Options), unless the
         exercise period is extended by the Committee in accordance with Section
         6.02(d). Any Options held by the Participant that are not exercisable
         at the date of the Participant's termination of employment shall
         terminate and be cancelled immediately upon such termination, and any
         Options described in the preceding sentence that are not exercised
         within the period described in such sentence shall terminate and be
         cancelled upon the expiration of such period.
 
         6.03 ACCELERATED OWNERSHIP OPTIONS. With respect to any Option or any
stock option granted under the terms of one of the Prior Plans or otherwise (an
"Original Option"), the Committee shall have the authority to specify, at or
after the time of grant of such Original Option, that, subject to the
availability of shares of Common Stock under the Plan, a Participant shall be
granted a new option (referred to as an "Accelerated Ownership Option") in the
event (i) such Participant exercises all or a part of such Original Option by
surrendering previously acquired shares of Common Stock in full or partial
payment of the exercise 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 whole or in part by the delivery of previously
acquired shares of Common Stock by the Participant to the Company or the
withholding of shares of Common 
 
 
 
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Stock from the shares otherwise issuable to the Participant upon the exercise of
the Original Option. Each such Accelerated Ownership Option shall cover a number
of shares of Common Stock equal to the number of shares of Common Stock
surrendered in payment of the exercise price under such Original Option and/or
surrendered or withheld to pay withholding taxes with respect to such Original
Option. Each such Accelerated Ownership Option shall have an Exercise Price per
share of Common Stock equal to the Fair Market Value of the Common Stock on the
date of exercise of the Original Option in respect of which the Accelerated
Ownership Option was granted and shall expire on the stated expiration date of
the Original Option. An Accelerated Ownership Option shall be exercisable at any
time and from time to time from and after the Date of Grant of such Accelerated
Ownership Option, subject to such restrictions on exercisability as may be
imposed in the discretion of the Committee. Any Accelerated Ownership Option may
provide for the grant, when exercised, of subsequent Accelerated Ownership
Options to the extent and upon such terms and conditions, consistent with this
Section 6.03, as the Committee in its sole discretion shall specify at or after
the time of grant of such Accelerated Ownership Option. An Accelerated Ownership
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 Accelerated Ownership Option, as the Committee in its sole
discretion shall deem desirable and which may be set forth in rules or
guidelines adopted by the Committee or in the Award Agreements evidencing the
Accelerated Ownership Options.
 
         6.04 OPTION EXERCISE PROCEDURES. Each Option granted under the Plan
shall be exercised by written notice to the Company which must be received by
the officer or employee of the Company designated in the Award Agreement at or
before the close of business on the expiration date of the Award. The Exercise
Price of shares purchased upon exercise of an Option granted under the Plan
shall be paid in full in cash by the Participant pursuant to the Award
Agreement; provided, however, that in lieu of such cash a Participant may (if
authorized by the Committee) pay the Exercise Price in whole or in part by
delivering (actually or by attestation) to the Company shares of the Common
Stock having a Fair Market Value on the date of exercise of the Option equal to
the Exercise Price for the shares being purchased; except that (i) any portion
of the Exercise Price representing a fraction of a share shall in any event be
paid in cash and (ii) no shares of the Common Stock which have been held for
less than six months may be delivered in payment of the Exercise Price of an
Option. Payment may also be made, in the discretion of the 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 Exercise Price. The date of exercise of an Option
shall be determined under procedures established by the Committee, and as of the
date of exercise the person exercising the Option shall, as between the Company
and such person, be considered for all purposes to be the owner of the shares of
Common Stock with respect to which the Option has been exercised. Any part of
the Exercise Price paid in cash upon the exercise of any Option shall be added
to the general funds of the Company and may be used for any proper corporate
purpose. Unless the Committee shall otherwise determine, any shares of Common
Stock transferred to the Company as payment of all or part of the Exercise Price
upon the exercise of any Option shall be held as treasury shares.
 
         6.05 CHANGE IN CONTROL. Unless otherwise provided by the Committee in
the applicable Award Agreement, in the event of a Change in Control, all Options
outstanding on the date of such Change in Control shall become immediately and
fully exercisable. The provisions of this Section 6.05 shall not be applicable
to any Options granted to a Participant if any Change in
 
 
 
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Control results from such Participant's beneficial ownership (within the meaning
of Rule 13d-3 under the Exchange Act) of Common Stock or Company Voting
Securities.
 
 
                                   ARTICLE VII
 
                                RESTRICTED SHARES
 
         7.01 RESTRICTED SHARE AWARDS. The Committee may grant to any
Participant an Award of such number of shares of Common Stock on such terms,
conditions and restrictions, whether based on performance standards, periods of
service, retention by the Participant of ownership of specified shares of Common
Stock or other criteria, as the Committee shall establish. With respect to
performance-based Awards of Restricted Shares intended to qualify for
deductibility under the "performance-based" compensation exception contained in
Section 162(m) of the Code, performance targets will include specified levels of
one or more of the following (in absolute terms or relative to one or more other
companies or indices): operating income, return on investment, return on
stockholders' equity, stock price appreciation, earnings before interest, taxes,
depreciation and amortization, earnings per share and/or growth in earnings per
share. The terms of any Restricted Share Award granted under this Plan shall be
set forth in an Award Agreement which shall contain provisions determined by the
Committee and not inconsistent with this Plan.
 
                  (a) ISSUANCE OF RESTRICTED SHARES. As soon as practicable
         after the Date of Grant of a Restricted Share Award by the Committee,
         the Company shall cause to be transferred on the books of the Company
         or its agent, shares of Common Stock, registered on behalf of the
         Participant, evidencing the Restricted Shares covered by the Award,
         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. All shares of Common Stock covered by Awards under this
         Article VII 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 Shares the share
         certificates representing such Restricted Shares may be held in custody
         by the Company, its designee, or, if the certificates bear a
         restrictive legend, by the Participant. Upon the lapse or release of
         all restrictions with respect to an Award as described in Section
         7.01(d), one or more share certificates, registered in the name of the
         Participant, for an appropriate number of shares as provided in Section
         7.01(d), free of any restrictions set forth in the Plan and the related
         Award Agreement shall be delivered to the Participant.
 
                  (b) STOCKHOLDER RIGHTS. Beginning on the Date of Grant of a
         Restricted Share Award and subject to execution of the related Award
         Agreement as provided in Section 7.01(a), and except as otherwise
         provided in such Award Agreement, the Participant shall become a
         stockholder of the Company with respect to all shares subject to the
         Award Agreement and shall have all of the rights of a stockholder,
         including, but not limited to, the right to vote such shares and the
         right to receive dividends; provided, however, that any shares of
         Common Stock distributed as a dividend or otherwise with respect to any
         Restricted Shares as to which the restrictions have not yet lapsed,
         shall be subject to the same restrictions as such Restricted Shares and
         held or restricted as provided in Section 7.01(a).
 
 
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                  (c) RESTRICTION ON TRANSFERABILITY. None of the Restricted
         Shares may be assigned or transferred (other than by will or the laws
         of descent and distribution or to an inter vivos trust with respect to
         which the Participant is treated as the owner under Sections 671
         through 677 of the Code), pledged or sold prior to the lapse of the
         restrictions applicable thereto.
 
                  (d) DELIVERY OF SHARES UPON VESTING. Upon expiration or
         earlier termination of the forfeiture period without a forfeiture and
         the satisfaction of or release from any other conditions prescribed by
         the Committee, or at such earlier time as provided under the provisions
         of Section 7.03, the restrictions applicable to the Restricted Shares
         shall lapse. As promptly as administratively feasible thereafter,
         subject to the requirements of Section 9.05, the Company shall deliver
         to the Participant or, in case of the Participant's death, to the
         Participant's Beneficiary, one or more share certificates for the
         appropriate number of shares of Common Stock, free of all such
         restrictions, except for any restrictions that may be imposed by law.
 
         7.02 TERMS OF RESTRICTED SHARES.
 
                  (a) FORFEITURE OF RESTRICTED SHARES. Subject to Sections
         7.02(b) and 7.03, Restricted Shares shall be forfeited and returned to
         the Company and all rights of the Participant with respect to such
         Restricted Shares shall terminate unless the Participant continues in
         the service of the Company or a Subsidiary until the expiration of the
         forfeiture period for such Restricted Shares and satisfies any and all
         other conditions set forth in the Award Agreement. The Committee shall
         determine the forfeiture period (which may, but need not, lapse in
         installments) and any other terms and conditions applicable with
         respect to any Restricted Share Award.
 
                  (b) WAIVER OF FORFEITURE PERIOD. Notwithstanding anything
         contained in this Article VII to the contrary, the Committee may, in
         its sole discretion, waive the forfeiture period and any other
         conditions set forth in any Award Agreement under appropriate
         circumstances (including the death, disability or Retirement of the
         Participant or a material change in circumstances arising after the
         date of an Award) and subject to such terms and conditions (including
         forfeiture of a proportionate number of the Restricted Shares) as the
         Committee shall deem appropriate.
 
         7.03 CHANGE IN CONTROL. Unless otherwise provided by the Committee in
the applicable Award Agreement, in the event of a Change in Control, all
restrictions applicable to the Restricted Share Award shall terminate fully and
the Participant shall immediately have the right to the delivery of share
certificates for such shares in accordance with Section 7.01(d).
 
 
                                  ARTICLE VIII
 
                               PERFORMANCE AWARDS
 
         8.01     PERFORMANCE AWARDS.
 
                  (a) AWARD PERIODS AND DETERMINATIONS OF AWARDS. The Committee
         may grant Performance Awards to Participants. A Performance Award shall
         consist of the right to receive a payment (measured by the Fair Market
         Value of a specified number of shares of
 
 
 
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         Common Stock, increases in such Fair Market Value during the Award
         Period and/or a fixed cash amount) contingent upon the extent to which
         certain predetermined performance targets have been met during an Award
         Period. Performance Awards may be made in conjunction with, or in
         addition to, Restricted Share Awards made under Article VII. The Award
         Period shall be two or more fiscal or calendar years or other annual
         periods as determined by the Committee. The Committee, in its
         discretion and under such terms as it deems appropriate, may permit
         newly eligible Participants, such as those who are promoted or newly
         hired, to receive Performance Awards after an Award Period has
         commenced.
 
                  (b) PERFORMANCE TARGETS. The performance targets may include
         such goals related to the performance of the Company and/or the
         performance of a Participant as may be established by the Committee in
         its discretion. In the case of Performance Awards intended to qualify
         for deductibility under the "performance-based" compensation exception
         contained in Section 162(m) of the Code, the targets will include
         specified levels of one or more of the following (in absolute terms or
         relative to one or more other companies or indices): operating income,
         return on investment, return on stockholders' equity, stock price
         appreciation, earnings before interest, taxes, depreciation and
         amortization, earnings per share and/or growth in earnings per share.
         The performance targets established by the Committee may vary for
         different Award Periods and need not be the same for each Participant
         receiving a Performance Award in an Award Period. Except to the extent
         inconsistent with the performance-based compensation exception under
         Section 162(m) of the Code, in the case of Performance Awards granted
         to Participants to whom such section is applicable, the Committee, in
         its discretion, but only under extraordinary circumstances as
         determined by the Committee, may change any prior determination of
         performance targets for any Award Period at any time prior to the final
         determination of the value of a related Performance Award when events
         or transactions occur to cause such performance targets to be an
         inappropriate measure of achievement.
 
                  (c) EARNING PERFORMANCE AWARDS. The Committee, on or as soon
         as practicable after the Date of Grant, shall prescribe a formula to
         determine the percentage of the applicable Performance Award to be
         earned based upon the degree of attainment of performance targets.
 
                  (d) PAYMENT OF EARNED PERFORMANCE AWARDS. Payments of earned
         Performance Awards shall be made in cash or shares of Common Stock or a
         combination of cash and shares of Common Stock, in the discretion of
         the Committee. The Committee, in its sole discretion, may provide such
         terms and conditions with respect to the payment of earned Performance
         Awards as it may deem desirable.
 
         8.02 TERMS OF PERFORMANCE AWARDS.
 
                  (a) TERMINATION OF EMPLOYMENT. Unless otherwise provided below
         or in Section 8.03, in the case of a Participant's Termination of
         Employment prior to the end of an Award Period, the Participant will
         not have earned any Performance Awards for that Award Period.
 
                  (b) RETIREMENT. If a Participant's Termination of Employment
         is because of Retirement prior to the end of an Award Period, the
         Participant will not be paid any Performance Award, unless the
         Committee, in its sole and exclusive discretion, determines
 
 
 
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         that an Award should be paid. In such a case, the Participant shall be
         entitled to receive a pro-rata portion of his or her Award as
         determined under subsection (d).
 
                  (c) DEATH OR DISABILITY. If a Participant's Termination of
         Employment is due to death or to disability (as determined in the sole
         and exclusive discretion of the Committee) prior to the end of an Award
         Period, the Participant or the Participant's personal representative
         shall be entitled to receive a pro-rata share of his or her Award as
         determined under subsection (d).
 
                  (d) PRO-RATA PAYMENT. The amount of any payment to be made to
         a Participant whose employment is terminated by Retirement, death or
         disability (under the circumstances described in subsections (b) and
         (c)) will be the amount determined by multiplying (i) the amount of the
         Performance Award that would have been earned through the end of the
         Award Period had such employment not been terminated by (ii) a
         fraction, the numerator of which is the number of whole months such
         Participant was employed during the Award Period, and the denominator
         of which is the total number of months of the Award Period. Any such
         payment made to a Participant whose employment is terminated prior to
         the end of an Award Period shall be made at the end of such Award
         Period, unless otherwise determined by the Committee in its sole
         discretion. Any partial payment previously made or credited to a
         deferred account for the benefit of a Participant in accordance with
         Section 8.01(d) of the Plan shall be subtracted from the amount
         otherwise determined as payable as provided in this Section 8.02(d).
 
                  (e) OTHER EVENTS. Notwithstanding anything to the contrary in
         this Article VIII, the Committee may, in its sole and exclusive
         discretion, determine to pay all or any portion of a Performance Award
         to a Participant who has terminated employment prior to the end of an
         Award Period under certain circumstances (including the death,
         disability or Retirement of the Participant or a material change in
         circumstances arising after the Date of Grant), subject to such terms
         and conditions as the Committee shall deem appropriate.
 
         8.03 CHANGE IN CONTROL. Unless otherwise provided by the Committee in
the applicable Award Agreement, in the event of a Change in Control, all
Performance Awards for all Award Periods shall immediately become fully payable
to all Participants and shall be paid to Participants within thirty (30) days
after such Change in Control.
 
 
                                   ARTICLE IX
 
              TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN
 
         9.01 PLAN PROVISIONS CONTROL AWARD TERMS. The terms of the Plan shall
govern all Awards granted under the Plan, and in no event shall the Committee
have the power to grant any Award under the Plan the terms of which are contrary
to any of the provisions of the Plan. In the event any provision of any Award
granted under the Plan shall conflict with any term in the Plan as constituted
on the Date of Grant of such Award, the term in the Plan as constituted on the
Date of Grant of such Award shall control.
 
         9.02 AWARD AGREEMENT. No person shall have any rights under any Award
granted under the Plan unless and until the Company and the Participant to whom
such Award shall have been granted shall have executed and delivered an Award
Agreement or the Participant shall have 
 
 
 
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<PAGE>   13
 
 
received and acknowledged notice of the Award authorized by the Committee
expressly granting the Award to such person and containing provisions setting
forth the terms of the Award.
 
         9.03 MODIFICATION OF AWARD AFTER GRANT. No Award granted under the Plan
to a Participant may be modified (unless such modification does not materially
decrease the value of that Award) after its Date of Grant except by express
written agreement between the Company and such Participant, provided that any
such change (a) may not be inconsistent with the terms of the Plan, and (b)
shall be approved by the Committee.
 
         9.04 LIMITATION ON TRANSFER. Except as provided in Section 7.01(c) in
the case of Restricted Shares, a Participant's rights and interest under the
Plan may not be assigned or transferred other than by will or the laws of
descent and distribution and, during the lifetime of a Participant, only the
Participant personally (or the Participant's personal representative) may
exercise rights under the Plan. The Participant's Beneficiary may exercise the
Participant's rights to the extent they are exercisable under the Plan following
the death of the Participant. Notwithstanding the foregoing, the Committee may
grant Non-Qualified Stock Options that are transferable, without payment of
consideration, to immediate family members of the Participant, to trusts or
partnerships for such family members, or to such other parties as the Committee
may approve (as evidenced by the applicable Award Agreement or an amendment
thereto), and the Committee may also amend outstanding Non-Qualified Stock
Options to provide for such transferability.
 
         9.05 WITHHOLDING TAXES. The Company shall be entitled, if the Committee
deems it necessary or desirable, to withhold (or secure payment from the
Participant in lieu of withholding) the amount of any withholding or other tax
required by law to be withheld or paid by the Company with respect to any amount
payable and/or shares issuable under such Participant's Award or with respect to
any income recognized upon a disqualifying disposition of shares received
pursuant to the exercise of an Incentive Stock Option, and the Company may defer
payment of cash or issuance of shares upon exercise or vesting of an Award
unless indemnified to its satisfaction against any liability for any such tax.
The amount of such withholding or tax payment shall be determined by the
Committee and shall be payable by the Participant at such time as the Committee
determines. With the approval of the Committee, the Participant may elect to
meet his or her withholding requirement (i) by having withheld from such Award
at the appropriate time that number of shares of Common Stock, rounded up to the
next whole share, the Fair Market Value of which is equal to the amount of
withholding taxes due, (ii) by direct payment to the Company in cash of the
minimum amount of any taxes required to be withheld with respect to such Award
or (iii) by a combination of withholding such shares and paying cash.
 
         9.06 SURRENDER OF AWARDS. Any Award granted under the Plan may be
surrendered to the Company for cancellation on such terms as the Committee and
the Participant approve.
 
         9.07 CANCELLATION AND RESCISSION OF AWARDS.
 
         (a) DETRIMENTAL ACTIVITIES. Unless the Award Agreement specifies
otherwise, the Committee may cancel, rescind, suspend, withhold or otherwise
limit or restrict any unexpired, unpaid, or deferred Awards at any time if the
Participant is not in compliance with all applicable provisions of the Award
Agreement and the Plan, or if the Participant engages in any "Detrimental
Activity." For purposes of this Section 9.07, "Detrimental Activity" shall
include: (i) the rendering of services for any organization or engaging directly
or indirectly in any business which is or becomes competitive with the Company,
or which organization or business, or the rendering
 
 
 
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<PAGE>   14
 
 
of services to such organization or business, is or becomes otherwise
prejudicial to or in conflict with the interests of the Company; (ii) the
disclosure to anyone outside the Company, or the use in other than the Company's
business, without prior written authorization from the Company, of any
confidential information or material relating to the business of the Company,
acquired by the Participant either during or after employment with the Company;
(iii) any attempt directly or indirectly to induce any employee of the Company
to be employed or perform services elsewhere or any attempt directly or
indirectly to solicit the trade or business of any current or prospective
customer, supplier or partner of the Company; or (iv) any other conduct or act
determined to be injurious, detrimental or prejudicial to any interest of the
Company.
 
         (b) Upon exercise, payment or delivery pursuant to an Award, the
Participant shall certify in a manner acceptable to the Company that he or she
is in compliance with the terms and conditions of the Plan. In the event a
Participant fails to comply with the provisions of paragraphs (a)(i)-(iv) of
this Section 9.07, if applicable, prior to, or during the six months after, any
exercise, payment or delivery pursuant to an Award, such exercise, payment or
delivery may be rescinded within two years thereafter. In the event of any such
rescission, the Participant shall pay to the Company the amount of any gain
realized or payment received as a result of the rescinded exercise, payment or
delivery, in such manner and on such terms and conditions as may be required,
and the Company shall be entitled to set-off against the amount of any such gain
any amount owed to the Participant by the Company.
 
         9.08 ADJUSTMENTS TO REFLECT CAPITAL CHANGES.
 
                  (a) RECAPITALIZATION. The number and kind of shares subject to
         outstanding Awards, the Exercise Price for such shares, the number and
         kind of shares available for Awards subsequently granted under the Plan
         and the maximum number of shares in respect of which Awards can be made
         to any Participant in any calendar year shall be appropriately adjusted
         to reflect any stock dividend, stock split, or share combination or any
         recapitalization, merger, consolidation, exchange of shares,
         liquidation or dissolution of the Company or other change in
         capitalization with a similar substantive effect upon the Plan or the
         Awards granted under the Plan. The Committee shall have the power and
         sole discretion to determine the amount of the adjustment to be made in
         each case.
 
                  (b) CERTAIN MERGERS. After any Merger in which the Company is
         not the surviving corporation or pursuant to which a majority of the
         shares which are of the same class as the shares that are subject to
         outstanding Options are exchanged for, or converted into, or otherwise
         become shares of another corporation, the surviving, continuing,
         successor or purchasing corporation, as the case may be (the "Acquiring
         Corporation"), will either assume the Company's rights and obligations
         under outstanding Award Agreements or substitute awards in respect of
         the Acquiring Corporation's stock for outstanding Awards, provided,
         however, that if the Acquiring Corporation does not assume or
         substitute for such outstanding Awards, the Board shall provide prior
         to the Merger that any unexercisable and/or unvested portion of the
         outstanding Awards shall be immediately exercisable and vested as of a
         date prior to such Merger, as the Board so determines. The exercise
         and/or vesting of any Award that was permissible solely by reason of
         this Section 9.08 shall be conditioned upon the consummation of the
         Merger. Any Awards which are neither assumed by the Acquiring
         Corporation nor exercised as of the date of the Merger shall terminate
         effective as of the effective date of the Merger. Comparable rights
         shall accrue to each Participant in the event of successive Mergers of
         the character described above.
 
 
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<PAGE>   15
 
 
                  (c) OPTIONS TO PURCHASE SHARES OR STOCK OF ACQUIRED COMPANIES.
         After any Merger in which the Company or a Subsidiary shall be a
         surviving corporation, the Committee may grant Options or other Awards
         under the provisions of the Plan, pursuant to Section 424 of the Code
         or as is otherwise permitted under the Code, in full or partial
         replacement of or substitution for old stock options granted under a
         plan of another party to the merger whose shares of stock subject to
         the old options may no longer be issued following the Merger. The
         manner of application of the foregoing provisions to such options and
         any appropriate adjustments in the terms of such stock options shall be
         determined by the Committee in its sole discretion. Any such
         adjustments may provide for the elimination of any fractional shares
         which might otherwise become subject to any Options. The foregoing
         shall not be deemed to preclude the Company from assuming or
         substituting for stock options of acquired companies other than
         pursuant to this Plan.
 
         9.09 LEGAL COMPLIANCE. Shares of Common Stock shall not be issued
hereunder unless the issuance and delivery of such shares shall comply with
applicable laws and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
 
         9.10 NO RIGHT TO EMPLOYMENT. No Participant or other person shall have
any claim of right to be granted an Award under the Plan. Neither the Plan nor
any action taken hereunder shall be construed as giving any Participant any
right to be retained in the service of the Company or any of its Subsidiaries.
 
         9.11 AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES. Payments received by a
Participant pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any pension, group insurance or other benefit
plan applicable to the Participant which is maintained by the Company or any of
its Subsidiaries, except as may be provided under the terms of such plans or
determined by the Board.
 
         9.12 GOVERNING LAW. All determinations made and actions taken pursuant
to the Plan shall be governed by the laws of the State of Delaware, other than
the conflict of laws provisions thereof, and construed in accordance therewith.
 
         9.13 NO STRICT CONSTRUCTION. No rule of strict construction shall be
implied against the Company, the Committee or any other person in the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Committee.
 
         9.14 CAPTIONS. The captions (i.e., all Section headings) used in the
Plan are for convenience only, do not constitute a part of the Plan, and shall
not be deemed to limit, characterize or affect in any way any provisions of the
Plan, and all provisions of the Plan shall be construed as if no captions had
been used in the Plan.
 
         9.15 SEVERABILITY. Whenever possible, each provision in the Plan and
every Award at any time granted under the Plan shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of the Plan or any Award at any time granted under the Plan shall be held to be
prohibited by or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
the Plan, such Award and every other Award at any time granted under the Plan
shall remain in full force and effect.
 
 
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         9.16 AMENDMENT AND TERMINATION.
 
                  (a) AMENDMENT. The Board shall have complete power and
         authority to amend the Plan at any time; provided, that no termination
         or amendment of the Plan may, without the consent of the Participant to
         whom any Award shall theretofore have been granted under the Plan,
         materially adversely affect the right of such individual under such
         Award; and provided further, that no such alteration or amendment of
         the Plan shall, without approval by the stockholders of the Company (a)
         increase the total number of shares of Common Stock which may be issued
         or delivered under the Plan or (b) increase the total number of shares
         which may be covered by Awards to any one Participant.
 
                  (b) TERMINATION. The Board shall have the right and the power
         to terminate the Plan at any time. No Award shall be granted under the
         Plan after the termination of the Plan, but the termination of the Plan
         shall not have any other effect and any Award outstanding at the time
         of the termination of the Plan may be exercised after termination of
         the Plan at any time prior to the expiration date of such Award to the
         same extent such Award would have been exercisable had the Plan not
         been terminated.