<PAGE>   1
                                                                    EXHIBIT 10.6



                                 ALLERGAN, INC.

                           SAVINGS AND INVESTMENT PLAN




RESTATED
1998
<PAGE>   2

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
                                -----------------
                                                                                     PAGE
                                                                                     ----
<S>                                                                                  <C>
ARTICLE I
NAME AND EFFECTIVE DATE                                                                1
     1.1        Plan Name                                                              1
     1.2        Effective Date of 1998 Restated Plan                                   1
     1.3        Plan Purpose                                                           1
     1.4        Merger of Allergan, Inc. Puerto Rico Savings and Investment Plan       1
     1.5        Plan Intended to Qualify                                               1

ARTICLE II
DEFINITIONS                                                                            2
     2.1        Accounts                                                               2
     2.2        Affiliated Company                                                     2
     2.3        After Tax Deposits                                                     2
     2.4        After Tax Deposits Account                                             2
     2.5        Anniversary Date                                                       2
     2.6        Reserved for Future Modifications                                      2
     2.7        Reserved for Future Modifications                                      2
     2.8        Before Tax Deposits                                                    2
     2.9        Before Tax Deposits Account                                            2
     2.10       Beneficiary                                                            2
     2.11       Board of Directors                                                     2
     2.12       Break in Service                                                       2
     2.13       Reserved for Future Modifications                                      2
     2.14       Code                                                                   2
     2.15       Committee                                                              3
     2.16       Company                                                                3
     2.17       Company Contributions                                                  3
     2.18       Company Contributions Account                                          3
     2.19       Company Stock                                                          3
     2.20       Compensation                                                           3
     2.21       Computation Period                                                     4
     2.22       Credited Service                                                       4
     2.23       Disability                                                             5
     2.24       Reserved for Future Modifications                                      5
     2.25       Effective Date                                                         5
     2.26       Eligible Employee                                                      5
     2.27       Eligible Retirement Plan                                               6
     2.28       Eligible Rollover Distribution                                         6
     2.29       Employee                                                               6
     2.30       Employment Commencement Date                                           6
     2.31       ERISA                                                                  7
     2.32       Reserved for Future Modifications                                      7
     2.33       Forfeitures                                                            7
     2.34       Highly Compensated Employee                                            7
     2.35       Hour of Service                                                        8
     2.36       Investment Manager                                                     8
     2.37       Leased Employee                                                        8
     2.38       Leave of Absence                                                       9
     2.39       Normal Retirement Age                                                 10
     2.40       Participant                                                           10
     2.41       Participant Deposits                                                  10
     2.42       Period of Severance                                                   10
     2.43       Plan                                                                  10
     2.44       Plan Administrator                                                    10
</TABLE>


<PAGE>   3

<TABLE>
<S>                                                                                  <C>
     2.45       Plan Year                                                             10
     2.46       Reemployment Commencement Date                                        10
     2.47       Rollover Account                                                      10
     2.48       Severance                                                             10
     2.49       Severance Date                                                        11
     2.50       Sharing Deposits                                                      11
     2.51       Sponsor                                                               11
     2.52       Trust and Trust Fund                                                  11
     2.53       Trustee                                                               11
     2.54       Reserved for Future Modifications                                     11
     2.55       Reserved for Future Modifications                                     11
     2.56       Valuation Date                                                        11
     2.57       415 Suspense Account                                                  11

ARTICLE III
ELIGIBILITY AND PARTICIPATION                                                         12
     3.1        Participation                                                         12
     3.2        Participants in Prior Plans                                           12
     3.3        Participation in Plan Prior to March 1, 1995                          12

ARTICLE IV
PARTICIPANT DEPOSITS                                                                  13
     4.1        Election                                                              13
     4.2        Amount Subject to Election                                            13
     4.3        Limitation on Compensation Deferrals                                  14
     4.4        Provisions for Return of Excess Before Tax
                Deposits Over $7,000                                                  16
     4.5        Provision for Recharacterization or Return
                of Excess Deferrals by Highly Compensated
                Participants                                                          17
     4.6        Termination of, Change in Rate of, or
                Resumption of Deferrals                                               19
     4.7        Character of Deposits                                                 19
     4.8        Rollover Contributions                                                19

ARTICLE V
TRUST FUND AND COMPANY CONTRIBUTIONS                                                  21
     5.1        General                                                               21
     5.2        Single Trust                                                          21
     5.3        Company Contributions                                                 21
     5.4        Form of Company Contributions                                         21
     5.5        Investment of Trust Assets                                            22
     5.6        Reserved for Future Modifications                                     23
     5.7        Irrevocability                                                        23
     5.8        Company, Committee and Trustee Not
                Responsible for Adequacy of Trust Fund                                24
     5.9        Certain Offers for Company Stock                                      24
     5.10       Voting of Company Stock                                               26
     5.11       Securities Law Limitation                                             27
     5.12       Distributions                                                         27
     5.13       Taxes                                                                 28
     5.14       Trustee Records to be Maintained                                      28
     5.15       Annual Report of Trustee                                              28
     5.16       Appointment of Investment Manager                                     28
</TABLE>


                                        2
<PAGE>   4

<TABLE>
<S>                                                                                  <C>
ARTICLE VI
ACCOUNTS AND ALLOCATIONS                                                              29
     6.1        Participants' Accounts                                                29
     6.2        Reserved for Plan Modifications                                       29
     6.3        Allocation of Amounts Contributed by Participants                     29
     6.4        Allocation of Company Contributions and Forfeitures                   29
     6.5        Valuation of Participants' Accounts                                   29
     6.6        Valuation of Company Stock                                            29
     6.7        Dividends, Splits, Recapitalizations, Etc.                            30
     6.8        Stock Rights, Warrants or Options                                     30
     6.9        Reserved for Plan Modifications                                       30
     6.10       Treatment of Accounts Upon Severance                                  30
     6.11       Cash Dividends                                                        30
     6.12       Miscellaneous Allocation Rules                                        31
     6.13       Limitations on After Tax Deposits and
                Company Contributions                                                 31
     6.14       Provision for Disposition of Excess After
                Tax Deposits or Matching Contributions on
                Behalf of Highly Compensated Participants                             34

ARTICLE VII
VESTING IN PLAN ACCOUNTS                                                              37
     7.1        No Vested Rights Except as Herein Provided                            37
     7.2        Vesting Schedule                                                      37
     7.3        Vesting of Participant Deposits                                       37

ARTICLE VIII
PAYMENT OF PLAN BENEFITS                                                              38
     8.1        Withdrawals During Employment                                         38
     8.2        Distributions Upon Termination of
                Employment or Disability                                              40
     8.3        Distribution Upon Death of Participant                                41
     8.4        Designation of Beneficiary                                            41
     8.5        Distribution Rules                                                    42
     8.6        Forfeitures                                                           43
     8.7        Valuation of Plan Benefits Upon Distribution                          43
     8.8        Lapsed Benefits                                                       43
     8.9        Persons Under Legal Disability                                        44
     8.10       Additional Documents                                                  44
     8.11       Trustee-to-Trustee Transfers                                          45
     8.12       Loans to Participants                                                 45

ARTICLE IX
OPERATION AND ADMINISTRATION                                                          47
     9.1        Appointment of Committee                                              47
     9.2        Transaction of Business                                               47
     9.3        Voting                                                                47
     9.4        Responsibility of Committee                                           47
     9.5        Committee Powers                                                      47
     9.6        Additional Powers of Committee                                        48
     9.7        Periodic Review of Funding Policy                                     49
     9.8        Application for Determination of Benefits                             49
     9.9        Limitation on Liability                                               49
</TABLE>


                                        3
<PAGE>   5

<TABLE>
<S>                                                                                  <C>
     9.10       Indemnification and Insurance                                         49
     9.11       Compensation of Committee and Plan Expenses                           50
     9.12       Resignation                                                           50
     9.13       Reliance Upon Documents and Opinions                                  50

ARTICLE X
AMENDMENT AND ADOPTION OF PLAN                                                        51
    10.1        Right to Amend Plan                                                   51
    10.2        Adoption of Plan by Affiliated Companies                              51

ARTICLE XI
DISCONTINUANCE OF CONTRIBUTIONS                                                       52

ARTICLE XII
TERMINATION AND MERGER                                                                53
    12.1        Right to Terminate Plan                                               53
    12.2        Effect on Trustee and Committee                                       53
    12.3        Merger Restriction                                                    53
    12.4        Effect of Reorganization, Transfer of
                Assets or Change in Control                                           53

ARTICLE XIII
LIMITATION ON ALLOCATIONS                                                             55
    13.1        General Rule                                                          55
    13.2        Annual Additions                                                      55
    13.3        Other Defined Contribution Plans                                      55
    13.4        Defined Benefit Plans                                                 56
    13.5        Adjustments for Excess Combined Plan
                Fraction and Excess Annual Additions                                  56
    13.6        Compensation                                                          57
    13.7        Treatment of 415 Suspense Account Upon
                Termination                                                           57

ARTICLE XIV
TOP-HEAVY RULES 59
    14.1        Applicability                                                         59
    14.2        Definitions                                                           59
    14.3        Top-Heavy Status                                                      60
    14.4        Minimum Contributions                                                 61
    14.5        Reserved for Future Modifications                                     61
    14.6        Maximum Annual Addition                                               61
    14.7        Minimum Vesting Rules                                                 62
    14.8        Noneligible Employees                                                 62

ARTICLE XV
RESTRICTION ON ASSIGNMENT OR OTHER
ALIENATION OF PLAN BENEFITS                                                           63
    15.1        General Restrictions Against Alienation                               63
    15.2        Qualified Domestic Relations Orders                                   63

ARTICLE XVI
MISCELLANEOUS PROVISIONS                                                              66
    16.1        No Right of Employment Hereunder                                      66
    16.2        Limitation on Company Liability                                       66
</TABLE>


                                        4
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<TABLE>
<S>                                                                                  <C>
    16.3        Effect of Article Headings                                            66
    16.4        Gender                                                                66
    16.5        Interpretation                                                        66
    16.6        Withholding For Taxes                                                 66
    16.7        California Law Controlling                                            66
    16.8        Plan and Trust as One Instrument                                      66
    16.9        Invalid Provisions                                                    66
    16.10       Counterparts                                                          66
</TABLE>

APPENDIX A


                                        5
<PAGE>   7

                                 ALLERGAN, INC.
                           SAVINGS AND INVESTMENT PLAN

                                    ARTICLE I
                             NAME AND EFFECTIVE DATE

        1.1 Plan Name. This document, made and entered into by Allergan, Inc., a
Delaware corporation ("Allergan"), evidences the terms of a defined contribution
plan with a cash or deferred arrangement for Eligible Employees of Allergan and
any Affiliated Companies that are authorized by the Board of Directors to
participate in the Plan, to be known hereafter as the "Allergan, Inc. Savings
and Investment Plan (Restated 1998)" (the "Plan").

        1.2 Effective Date of 1998 Restated Plan. The "Allergan, Inc. Savings
and Investment Plan (Restated 1996)" and the First, Second and Third Amendments
made thereto are hereby incorporated into the Plan. The Effective Date of the
1998 Restated Plan shall be January 1, 1999 unless otherwise stated in the Plan.


        1.3 Plan Purpose. The purpose of this Plan is to enable Eligible
Employees of Allergan, and any Affiliated Companies that are authorized by the
Board of Directors to participate in the Plan, to share in the growth and
prosperity of the Company and to provide Participants with an opportunity to
accumulate capital for their future economic security. All assets acquired under
this Plan as a result of Company Contributions, income, and other additions to
the Fund under the Plan will be administered, distributed, forfeited and
otherwise governed by the provisions of this Plan, which is to be administered
by the Committee for the exclusive benefit of Participants in the Plan and their
Beneficiaries.

        1.4 Merger of Allergan, Inc. Puerto Rico Savings and Investment Plan.
The Allergan, Inc. Puerto Rico Savings and Investment Plan shall merge with and
into the Plan effective as of the later of January 1, 1999 or, the date the
merger of the Allergan, Inc. Puerto Rico Savings and Investment Plan into the
Plan is approved by the United States and Puerto Rico tax authorities. This Plan
shall be the plan surviving the merger. All account balances shall be
transferred to the Plan and all assets acquired under the Plan as a result of
the merger shall be administered, distributed, forfeited and otherwise governed
by the provisions of the Plan and Appendix A, which is attached hereto and made
a part hereof.

        1.5 Plan Intended to Qualify. This Plan is an employee benefit plan that
is intended to qualify under Code Section 401(a) as a qualified profit sharing
plan and under Code Section 401(k) as a qualified cash or deferred arrangement.
The provisions of this Plan are intended to comply with the requirements of the
General Agreement on Tariffs and Trade, the Uniformed Services Employment and
Reemployment Rights Act of 1994, the Small Business Job Protection Act of 1996,
and the Taxpayer Relief Act of 1997.
<PAGE>   8

                                   ARTICLE II

                                   DEFINITIONS

        2.1. Accounts. "Accounts" or "Participant's Accounts" shall mean the
After Tax Deposits Accounts, Before Tax Deposits Accounts, Company Contribution
Accounts, and Rollover Accounts maintained for the various Participants.

        2.2. Affiliated Company. "Affiliated Company" shall mean (i) any
corporation, other than the Sponsor, which is included in a controlled group of
corporations (within the meaning of Code Section 414(b)) of which the Sponsor is
a member, (ii) any trade or business, other than the Sponsor, which is under
common control (within the meaning of Code Section 414(c)) with the Sponsor,
(iii) any entity or organization, other than the Sponsor, which is a member of
an affiliated service group (within the meaning of Code Section 414(m)) of which
the Sponsor is a member, and (iv) any entity or organization, other than the
Sponsor, which is affiliated with the Sponsor under Code Section 414(o). Any
entity shall be an Affiliated Company pursuant to this paragraph only during the
period of time in which such entity has the required relationship with the
Sponsor under clauses (i), (ii), (iii) or (iv) of this Section after the
original Effective Date of this Plan.

        2.3. After Tax Deposits. "After Tax Deposits" shall mean those
contributions made by a Participant which represent after-tax contributions.

        2.4. After Tax Deposits Account. "After Tax Deposits Account" of a
Participant shall mean his/her individual account in the Trust Fund in which are
held his/her After Tax Deposits and the earnings thereon.

        2.5. Anniversary Date. "Anniversary Date" shall mean the last day of
each Plan Year.

        2.6. Reserved for Future Modifications.

        2.7. Reserved for Future Modifications.

        2.8. Before Tax Deposits. "Before Tax Deposits" shall mean those
contributions made by a Participant which represent pre-tax contributions.

        2.9. Before Tax Deposits Account. "Before Tax Deposits Account" of a
Participant shall mean his/her individual account in the Trust Fund in which are
held his/her Before Tax Deposits and the earnings thereon.

        2.10. Beneficiary. "Beneficiary" or "Beneficiaries" shall mean the
person or persons last designated by a Participant as set forth in Section 8.4
or, if there is no designated Beneficiary or surviving Beneficiary, the person
or persons designated pursuant to Section 8.4 to receive the interest of a
deceased Participant in such event.

        2.11. Board of Directors. "Board of Directors" shall mean the Board of
Directors (or its delegate) of the Sponsor as it may from time to time be
constituted.

        2.12. Break in Service. "Break in Service" shall mean, with respect to
an Employee, each period of 12 consecutive months during a Period of Severance
that commences on the Employee's Severance Date or on any anniversary of such
Severance Date.

        2.13. Reserved for Future Modifications.

        2.14. Code. "Code" shall mean the Internal Revenue Code of 1986, as
amended. Where the context so requires a reference to a particular Code Section
shall also refer to any successor provision of the Code to such Code Section.


                                        2
<PAGE>   9

        2.15. Committee. "Committee" or "Plan Committee" shall mean the
committee to be appointed under the provisions of Section 9.1.

        2.16. Company. "Company" shall mean collectively the Sponsor and each
Affiliated Company that adopts this Plan in accordance with Section 10.2.

        2.17. Company Contributions. "Company Contributions" shall mean all
amounts (whether in cash or other property, including Company Stock) paid by the
Company pursuant to Section 5.3 into the Trust Fund established and maintained
under the provisions of this Plan for the purpose of providing benefits for
Participants and their Beneficiaries. Unless expressly stated otherwise in this
Plan, Company Contributions shall not include Participant Before Tax or After
Tax Deposits.

        2.18. Company Contributions Account. "Company Contributions Account"
shall mean a Participant's individual account in the Trust Fund in which are
held Company Contributions and the earnings thereon and amounts transferred from
a Participant's PAYSOP account in the SmithKline Beckman Savings and Investment
Plan to the Plan, if any. Any amounts so transferred shall be fully vested.

        2.19. Company Stock. "Company Stock" shall mean any class of stock of
the Sponsor which both constitutes "qualifying employer securities" as defined
in Section 407(d)(5) of ERISA and "employer securities" as defined in Code
Section 409(l).

        2.20. Compensation. "Compensation" shall mean the amounts paid during a
Plan Year to an Employee by the Company for services rendered, including base
earnings, commissions and similar incentive compensation, cost of living
allowances earned within the United States of America, holiday pay, overtime
earnings, pay received for election board duty, pay received for jury and
witness duty, pay received for military service (annual training), pay received
for being available for work, if required (call-in premium), amounts of salary
reduction elected by the Participant under a Code Section 401(k) cash or
deferred arrangement, shift differential and premium, sickness/accident related
pay, vacation pay, vacation shift premium, and bonus amounts paid under the
following programs:

                (1)     Sales bonus,

                (2)     "Management Bonus Payments" (MBP), either in cash or in
                        restricted stock,

                (3)     Group performance sharing payments, such as the
                        "Partners for Success";

but excluding business expense reimbursements; Company gifts or the value of
Company gifts; Company stock related options and payments; employee referral
awards; flexible compensation credits paid in cash; special overseas payments,
allowances and adjustments including, but not limited to, pay for cost of living
adjustments and differentials paid for service outside of the United States,
expatriate reimbursement payments, and tax equalization payments; forms of
imputed income; long-term disability pay; payment for loss of Company car;
Company car allowance; payments for patents or for writing articles; relocation
and moving expenses; retention and employment incentive payments; severance pay;
Share Value Plan or other long-term incentive awards, bonuses or payments;
"Impact Award" payments; "Employee of the Year" payments; "Awards for
Excellence" payments; special group incentive payments and individual
recognition payments which are nonrecurring in nature; tuition reimbursement;
and contributions by the Company under this Plan or distributions hereunder, any
contributions or distributions pursuant to any other plan sponsored by the
Company and qualified under Code Section 401(a) (other than contributions
constituting salary reduction amounts elected by the Participant under a Code
Section 401(k) cash or deferred arrangement), any payments under a health or
welfare plan sponsored by the Company, or premiums paid by the Company under any
insurance plan for the benefit of Employees. Compensation taken into account for
determining all benefits provided under the Plan for any Plan Year shall not
exceed $150,000 as adjusted at the time and in such manner as permitted under
Code Section 401(a)(17)(B). If the period for determining Compensation used in
calculating an Employee's allocation for a Plan Year is a short Plan Year (i.e.
shorter than 12 months), the Compensation limit is an amount equal to the
otherwise applicable Compensation limit multiplied by a fraction, the


                                        3
<PAGE>   10

numerator of which is the number of months in the short Plan Year, and the
denominator of which is 12. Notwithstanding the foregoing, for purposes of
applying the provisions of Articles XI and XII, an Employee's Compensation shall
be determined pursuant to the definition of "Compensation" as set forth in
Sections 13.6 or 14.2(i), as the case may be.(1)

        2.21. Computation Period.

                (a) "Computation Period" shall mean the consecutive twelve (12)
        month period used for determining whether an Employee is eligible to
        participate in the Plan pursuant to Section 3.1.

                (b) An Employee's initial Computation Period shall be the
        twelve-month period commencing on his Employment Commencement Date or
        Reemployment Commencement Date (whichever is applicable).

                (c) An Employee's second Computation Period (and all subsequent
        Computation Periods) shall be the Plan Year that includes or begins on
        the first anniversary of such Employee's Employment Commencement Date or
        Reemployment Commencement Date (whichever is applicable) and each
        subsequent Plan Year.

        2.22. Credited Service. "Credited Service" shall mean, with respect to
each Employee, his years and months of Credited Service determined in accordance
with the following rules:

                (a) In the case of any Employee who was employed by the Company
        at any time prior to the original Effective Date, for the period prior
        to January 1, 1989 such Employee shall be credited with Credited Service
        under this Plan equal to the period (if any) of service credited to such
        Employee under the SmithKline Beckman Savings and Investment Plan.

                (b) In the case of any Employee who is employed by the Company
        on or after the original Effective Date, an Employee shall receive
        Credited Service credit for the elapsed period of time between each
        Employment Commencement Date (or Reemployment Commencement Date) of the
        Employee and the Severance Date which immediately follows that
        Employment Commencement Date (or Reemployment Commencement Date). Solely
        for the purpose of determining an Employee's Credited Service under this
        paragraph (b), in the case of an Employee who is employed on January 1,
        1989, that date shall be deemed to be an Employment Commencement Date of
        the Employee (with service credit for periods prior to January 1, 1989
        to be determined under paragraph (a) above). An Employee who is absent
        from work on an authorized Leave of Absence shall be deemed to have
        incurred a Severance (if any) in accordance with the rules of Section
        2.48.

                (c) An Employee shall receive Credited Service credit for
        periods between a Severance and his subsequent Reemployment Commencement
        Date in accordance with the following rules:

                        (i) If an Employee incurs a Severance by reason of a
                quit, discharge, Disability, or retirement whether or not such a
                Severance occurs during an approved Leave of Absence and the
                Employee is later reemployed by the Company prior to his
                incurring a Break in Service, he shall receive Credited Service
                for the period commencing with his Severance Date and ending
                with his subsequent Reemployment Commencement Date.

                        (ii) Other than as expressly set forth above in this
                paragraph (c), an Employee shall receive no Credited Service
                with respect to periods between a Severance and a subsequent
                Reemployment Commencement Date.

----------
        (1) The amendment of Section 2.20 as set forth above was approved by the
Board on November 17, 1998 and is effective January 1, 1998 (effective January
1, 1997, with respect to the deletion of the family aggregation rules).


                                        4
<PAGE>   11

                (d) For all purposes of this Plan, an Employee's total Credited
        Service shall be determined by aggregating any separate periods of
        Credited Service separated by any Breaks in Service.

                (e) An Employee shall be credited with Credited Service with
        respect to a period of employment with an Affiliated Company, but only
        to the extent that such period of employment would be so credited under
        the foregoing rules set forth in this Section had such Employee been
        employed during such period by the Company.

                (f) Notwithstanding the foregoing, unless the Sponsor shall so
        provide by resolution of its Board of Directors, or unless otherwise
        expressly stated in this Plan, an Employee shall not receive such
        Credited Service credit for any period of employment with an Affiliated
        Company prior to such entity becoming an Affiliated Company.

                (g) In accordance with paragraph (f) above, an Eligible Employee
        shall receive Credited Service for any period of employment with
        Allergan Medical Optics - Lenoir facility prior to its becoming an
        Affiliated Company but only to the extent provided in paragraph (e)
        above. Notwithstanding anything therein to the contrary, the Employment
        Commencement Date for such Eligible Employee under paragraph (b) shall
        mean the date the Employee was first credited with an Hour of Service
        with Allergan Medical Optics - Lenoir facility, including any date prior
        to Allergan Medical Optics - Lenoir facility becoming an Affiliated
        Company.

                (h) Notwithstanding any provision of the Plan to the contrary,
        contributions, benefits and service credit with respect to qualified
        military service will be provided in accordance with Code Section
        414(u).(2)

        2.23. Disability. "Disability" shall mean any mental or physical
condition which, in the judgment of the Committee, based on such competent
medical evidence as the Committee may require, renders an individual unable to
engage in any substantial gainful activity for the Company for which he is
reasonably fitted by education, training, or experience and which condition can
be expected to result in death or which has lasted or can be expected to last
for a continuous period of at least 12 months. The determination by the
Committee, upon opinion of a physician selected by the Committee, as to whether
a Participant has incurred a Disability shall be final and binding on all
persons.

        2.24. Reserved for Future Modifications.

        2.25. Effective Date. "Effective Date" of this restated Plan shall mean
January 1, 1999 unless otherwise specified in the Plan. The original Effective
Date of the Plan is the date that is the day after the Spin-off Date as
hereinafter defined. Prior to the original Effective Date of this Plan, Eligible
Employees of Allergan were eligible to participate in the SmithKline Beckman
Corporation Savings and Investment Plan (the "SKB Plan"). On or about July 26,
1989, SmithKline Beckman Corporation distributed the stock of Allergan to its
shareholders, rendering Eligible Employees of the Company ineligible to
participate in the SKB Plan. The date upon which such distribution occurred
shall hereinafter be referred to as the "Spin-off Date."

        2.26. Eligible Employee. "Eligible Employee" shall mean any United
States-based payroll Employee and any Puerto Rico-based payroll Employee of the
Company and any expatriate Employee of the Company who is a United States
citizen or permanent resident, but excluding any non-resident alien of the
United States and Puerto Rico, any non-regular manufacturing site transition
Employee, any Leased Employee, and any Employee covered by a collective
bargaining agreement.(3)

----------
        (2) Paragraph (h) of Section 2.22 as set forth above was approved by the
Board on November 17, 1998 and is effective December 12, 1994.

        (3) The amendment of Section 2.26 as set forth above was approved by the
Board on November 17, 1998 and is effective the later of January 1, 1999 or, the
date the merger of the

                                        5
<PAGE>   12

        2.27. Eligible Retirement Plan. "Eligible Retirement Plan" shall mean an
individual retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan described
in Code Section 403(a), or a qualified trust described in Code Section 401(a)
that accepts an Eligible Rollover Distribution. However, in the case of an
Eligible Rollover Distribution. However, in the case of an Eligible Rollover
Distribution to a surviving spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.

        2.28. Eligible Rollover Distribution. "Eligible Rollover Distribution"
shall mean any distribution, on or after January 1, 1993, of all or any portion
of the balance to the credit of the Distributee, except that an Eligible
Rollover Distribution shall not include:

                (a) any distribution that is one of a series of substantially
        equal periodic payments (not less frequently than annually) made for the
        life (or life expectancy) of the Distributee of the joint lives (or
        joint life expectancies) of the Distributee and the Distributee's
        designated beneficiary, or for a specified period of ten years or more;

                (b) any distribution to the extent such distribution is required
        under Code Section 401(a)(9); and

                (c) the portion of any distribution that is not includable in
        gross income (determined without regard to the exclusion for net
        unrealized appreciation with respect to employer securities).

        For purposes of this Section, "Distributee" shall mean any Employee or
former Employee receiving a distribution from the Plan. A Distributee also
includes the Employee or former Employee's surviving spouse and the Employee's
or former Employee's spouse or former spouse who is the Alternate Payee under a
Qualified Domestic Relations Order (as defined in Article XV) are Distributees
with regard to the interest of the spouse or former spouse.

        2.29. Employee. "Employee" shall mean any person who is employed by the
Sponsor or an Affiliated Company in any capacity, any portion of whose income is
subject to withholding or income tax and/or for whom Social Security
contribution are made by the Sponsor or an Affiliated Company, as well as any
other person qualifying as a common-law employee or Puerto Rico-based employee
of the Sponsor or an Affiliated Company except that such term shall not include
(i) any individual who performs services for the Sponsor or an Affiliated
Company and who is classified or paid as an independent contractor (regardless
of his or her classification for federal tax or other legal purposes) by the
Sponsor or an Affiliated Company and (ii) any individual who performs services
for the Sponsor or an Affiliated Company pursuant to an agreement between the
Sponsor or an Affiliated Company and any other person including a leasing
organization except to the extent such individual is a Leased Employee.(4)

        2.30. Employment Commencement Date.

                (a) "Employment Commencement Date" shall mean the date on which
        an Employee is first credited with an Hour of Service for the Sponsor or
        an Affiliated Company.

                (b) Unless the Sponsor shall expressly determine otherwise, and
        except as is expressly provided otherwise in this Plan or in resolutions
        of the Board of Directors, an Employee shall not, for the

----------
Allergan, Inc. Puerto Rico Savings and Investment Plan into the Plan is approved
by the United States and Puerto Rico tax authorities.

       (4) The amendment of Section 2.29 as set forth above was approved by the
Board on November 17, 1998 and is effective the later of January 1, 1999 or, the
date the merger of the Allergan, Inc. Puerto Rico Savings and Investment Plan
into the Plan is approved by the United States and Puerto Rico tax authorities.


                                        6
<PAGE>   13

        purposes of determining his/her Employment Commencement Date, be deemed
        to have commenced employment with an Affiliated Company prior to the
        effective date on which the entity became an Affiliated Company.

        2.31. ERISA. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time, where the context so requires, a
reference to a particular ERISA section shall also refer to any successor
provision of ERISA to such ERISA section.

        2.32. Reserved for Future Modifications.

        2.33. Forfeitures. "Forfeitures" shall mean the nonvested portion of a
Participant's benefit that is forfeited in accordance with the provisions of
Article VIII.

        2.34. Highly Compensated Employee.(5) "Highly Compensated Employee"
shall mean:

               (a) An Employee who performed services for the Employer during
        the Plan Year or preceding Plan Year and is a member of one or more of
        the following groups:

                        (i) Employees who at any time during the Plan Year or
                preceding Plan Year were Five Percent Owners (as defined in
                Section 14.2).

                        (ii) Employees who received Compensation during the
                preceding Plan Year from the Employer in excess of $80,000 (as
                adjusted in such manner as permitted under Code Section
                414(q)(1)).

                (b) For the purpose of this Section, the term "Compensation"
        means compensation as defined in Code Section 415(c)(3), as set forth in
        Section 13.6.

                (c) The term "Highly Compensated Employee" includes a Former
        Highly Compensated Employee. A Former Highly Compensated Former Employee
        is any Employee who was (i) a Highly Compensated Employee when he or she
        terminated employment with the Employer or (ii) a Highly Compensated
        Employee at any time after attaining age 55. Notwithstanding the
        foregoing, an Employee who separated from service prior to 1987 shall be
        treated as a Former Highly Compensated Former Employee only if during
        the separation year (or year preceding the separation year) or any year
        after the Employee attains age 55 (or the last year ending before the
        Employee's 55th birthday), the Employee either received Compensation in
        excess of $50,000 or was a Five Percent Owner.

                (d) For the purpose of this Section, the term "Employer" shall
        mean the Sponsor and any Affiliated Company.

                (e) The determination of who is a Highly Compensated Employee,
        including the determination of the Compensation that is considered,
        shall be made in accordance with Code Section 414(q) and the Regulations
        and to the extent permitted thereunder, the Committee, for
        administrative convenience, may establish rules and procedures for
        purposes of identifying Highly Compensated Employees, which rules and
        procedures may result in an Eligible Employee being deemed to be a
        Highly Compensated Employee for purposes of the limitations of Article
        IV and Article VI, whether or not such Eligible Employee is a Highly
        Compensated Employee described in Code Section 414(q).


----------
        (5) The amendment of Section 2.34 as set forth above was approved by the
Board on November 17, 1998 and is effective January 1, 1997.


                                        7
<PAGE>   14

        2.35. Hour of Service.

                (a) "Hour of Service" of an Employee shall mean the following:

                        (i) Each hour for which the Employee is paid by the
                Company or an Affiliated Company or entitled to payment for the
                performance of services as an Employee.

                        (ii) Each hour in or attributable to a period of time
                during which the Employee performs no duties (irrespective of
                whether he/she has terminated his/her Employment) due to a
                vacation, holiday, illness, incapacity (including pregnancy or
                disability), layoff, jury duty, military duty or a Leave of
                Absence (if the Leave of Absence is an unpaid medical Leave of
                Absence, the Employee will accrue hours for the duration of such
                leave for the first six months of such leave), for which he/she
                is so paid or so entitled to payment, whether direct or
                indirect. However, no such hours shall be credited to an
                Employee if (A) such Employee is directly or indirectly paid or
                entitled to payment for such hours and (B) such payment or
                entitlement is made or due under a plan maintained solely for
                the purpose of complying with applicable worker's compensation,
                unemployment compensation, or disability insurance laws, or is a
                payment which solely reimburses the Employee for medical or
                medically-related expenses incurred by him/her.

                        (iii) Each hour for which he/she is entitled to back
                pay, irrespective of mitigation of damages, whether awarded or
                agreed to by the Company or an Affiliated Company, provided that
                such Employee has not previously been credited with an Hour of
                Service with respect to such hour under subparagraphs (i) or
                (ii) above.

                Hours of Service under paragraphs (a)(ii) and (a)(iii) shall be
        calculated in accordance with Department of Labor Regulation 29 C.F.R.
        Section 2530.200b-2(b). All Hours of Service determined under the rules
        of paragraph (a) shall be credited to the Computation Period to which
        the payment relates, rather than the period in which it is made.

                (b) In the event that an Employee is compensated for duties
        performed on a basis other than actual hours worked and no records of
        the Employee's actual working hours are maintained, the Employee shall
        be deemed to have completed ten (10) Hours of Service for each day, or
        portion thereof during which he/she is credited with an Hour of Service
        for the Company or an Affiliated Company.

                (c) Unless the Company shall expressly determine otherwise, and
        except as may be expressly provided otherwise in this Plan, an Employee
        shall not receive credit for his/her Hours of Service completed with an
        Affiliated Company prior to the effective date on which the entity
        became an Affiliated Company.

        2.36. Investment Manager. "Investment Manager" shall mean the one or
more Investment Managers, if any, that are appointed pursuant to Section 5.16
and who constitute investment managers under Section 3(38) of ERISA.

        2.37. Leased Employee. "Leased Employee" shall mean any person (other
than an Employee of the recipient) who pursuant to an agreement between the
recipient and any other person ("leasing organization") has performed services
for the recipient (or for the recipient and related persons determined in
accordance with Code Section 414(n)(6)) on a substantially full time basis for a
period of at least one (1) year, and such services are performed under the
primary direction or control by recipient employer. Contributions or benefits
provided a Leased Employee by the leasing organization which are attributable to
services performed for the recipient employer shall be treated as provided by
the recipient employer. A Leased Employee shall not be considered an Employee of
the recipient if Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce and such Leased Employee is covered
by a money purchase pension plan providing (i) a nonintegrated



                                        8
<PAGE>   15

employer contribution rate of at least ten (10) percent of compensation as
defined under Code Section 415(c)(3); (ii) immediate participation; and (iii)
full and immediate vesting.(6)

        2.38. Leave of Absence.

                (a) "Leave of Absence" shall mean any personal leave from active
        employment (whether with or without pay) duly authorized by the Company
        under the Company's standard personnel practices. All persons under
        similar circumstances shall be treated alike in the granting of such
        Leaves of Absence. Leaves of Absence may be granted by the Company for
        reasons of health (including temporary sickness or short term
        disability) or public service or for any other reason determined by the
        Company to be in its best interests.

                (b) In addition to Leaves of Absence as defined in paragraph (a)
        above, the term Leave of Absence shall also mean a Maternity or
        Paternity Leave, as defined herein, but only to the extent and for the
        purposes required under paragraph (c) below. As used herein, "Maternity
        or Paternity Leave" shall mean an absence from work for any period (i)
        by reason of the pregnancy of the Employee, (ii) by reason of the birth
        of a child of the Employee, (iii) by reason of the placement of a child
        with the Employee in connection with the adoption of the child by the
        Employee, or (iv) for purposes of caring for the child for a period
        beginning immediately following the birth or placement referred to in
        clauses (ii) or (iii) above.

                (c) Subject to the provisions of paragraph (d) below, a
        Maternity or Paternity Leave described in paragraph (b) above shall be
        deemed to constitute an authorized Leave of Absence for purposes of this
        Plan only to the extent consistent with the following rules:

                        (i) For purposes of determining whether a Break in
                Service has occurred, the Severance Date of a Participant who is
                absent by reason of a Maternity or Paternity Leave shall not be
                deemed to occur any earlier than the second anniversary of the
                date upon which such Maternity or Paternity Leave commences.

                        (ii) The Maternity or Paternity Leave shall be treated
                as a Leave of Absence solely for purposes of determining whether
                or not an Employee has incurred a Break in Service. Accordingly,
                such a Maternity or Paternity Leave shall not result in an
                accrual of Credited Service for purposes of the vesting
                provisions of this Plan or for purposes of determining
                eligibility to participate in the Plan pursuant to the
                provisions of Article III (except only in determining whether a
                Break in Service has occurred).

                        (iii) A Maternity or Paternity Leave shall not be
                treated as a Leave of Absence unless the Employee provides such
                timely information as the Committee may reasonably require to
                establish that the absence is for the reasons listed in
                paragraph (b) above and to determine the number of days for
                which there was such an absence.

                (d) Notwithstanding the limitations provided in paragraph (c)
        above, a Maternity or Paternity Leave described in paragraph (b) above
        shall be treated as an authorized Leave of Absence, as described in
        paragraph (a), for all purposes of this Plan to the extent the period of
        absence is one authorized as a Leave of Absence under the Company's
        standard personnel practices and thus is covered by the provisions of
        paragraph (a) above without reference to the provisions of paragraph (b)
        above, provided, however, that the special rule provided under this
        paragraph (d) shall not apply if it would result in a Participant who is
        absent on a Maternity or Paternity Leave being deemed to have incurred a
        Break in Service sooner than under the rules set forth in paragraph (c).


----------
       (6) The amendment of Section 2.37 as set forth above was approved by the
Board on November 17, 1998 and is effective January 1, 1997.


                                        9
<PAGE>   16


        2.39. Normal Retirement Age. "Normal Retirement Age" shall mean the
Participant's sixty-fifth (65th) birthday.

        2.40. Participant. "Participant" shall mean any Eligible Employee who
has commenced participation in the Plan pursuant to Article III and who retains
rights under the Plan.

        2.41. Participant Deposits. "Participant Deposits" shall mean all of a
Participant's deposits to the Plan, including After Tax Deposits and Before Tax
Deposits.

        2.42. Period of Severance. "Period of Severance" shall mean the period
of time commencing on an Employee's Severance Date and ending on the Employee's
subsequent Reemployment Commencement Date, if any.

        2.43. Plan. "Plan" shall mean the Allergan, Inc. Savings and Investment
Plan described herein and as amended from time to time.

        2.44. Plan Administrator. "Plan Administrator" shall mean the
administrator of the Plan, within the meaning of Section 3(16)(A) of ERISA. The
Plan Administrator shall be Allergan, Inc.

        2.45. Plan Year. "Plan Year" shall mean the period commencing on the
original Effective Date and ending on December 31, 1989 and each subsequent
calendar year.

        2.46. Reemployment Commencement Date. "Reemployment Commencement Date"
shall mean, in the case of an Employee who incurs a Severance and who is
subsequently reemployed by the Sponsor or an Affiliated Company, the first day
following the Severance on which the Employee is credited with an Hour of
Service for the Sponsor or Affiliated Company with respect to which he is
compensated or entitled to compensation by the Sponsor or Affiliated Company.
Unless the Sponsor shall expressly determine otherwise and except as is
expressly provided otherwise in this Plan, an Employee shall not, for the
purpose of determining his Reemployment Commencement Date, be deemed to have
commenced employment with an Affiliated Company prior to the effective date on
which such entity becomes an Affiliated Company.

        2.47. Rollover Account. "Rollover Account" of a Participant shall be his
individual account in the Trust Fund in which are held rollover contributions
made pursuant to Section 4.8.

        2.48. Severance. "Severance" shall mean the termination of an Employee's
employment with the Sponsor or Affiliated Company by reason of such Employee's
quit, discharge, Disability, death, retirement, or otherwise. For purposes of
determining whether an Employee has incurred a Severance, the following rules
shall apply:

                (a) An Employee shall not be deemed to have incurred a Severance
        (i) because of his absence from employment with the Sponsor or
        Affiliated Company by reason of any paid vacation or holiday period, or
        (ii) by reason of any Leave of Absence, subject to the provisions of
        paragraph (b) below.

                (b) For purposes of this Plan, an Employee shall be deemed to
        have incurred a Severance on the earlier of (i) the date on which he
        dies, resigns, is discharged, or otherwise terminates his employment
        with the Sponsor or Affiliated Company; or (ii) the date on which he is
        scheduled to return to work after the expiration of an approved Leave of
        Absence, if he does not in fact return to work on the scheduled
        expiration date of such Leave. In no event shall an Employee's Severance
        be deemed to have occurred before the last day on which such Employee
        performs any services for the Sponsor or Affiliated Company in the
        capacity of an Employee with respect to which he is compensated or
        entitled to compensation by the Sponsor or Affiliated Company.

                (c) Notwithstanding the foregoing, in the case of a Participant
        who is absent by reason of a Maternity or Paternity Leave, the
        provisions of Section 2.38(c)-(d) shall apply for purposes of
        determining whether such a Participant has incurred a Break in Service
        by reason of such Leave.


                                       10
<PAGE>   17


        2.49. Severance Date. "Severance Date" shall mean, in the case of any
Employee who incurs a Severance, the day on which such Employee is deemed to
have incurred said Severance as determined in accordance with the provisions of
Section 2.48, provided, however, that the special rules set forth under Section
2.38(c)-(d) shall apply with respect to determining whether a Participant on a
Maternity or Paternity Leave has incurred a Break in Service. In the case of any
Employee who incurs a Severance as provided under Section 2.48 and who is
entitled to a subsequent payment of compensation for reasons other than future
services (e.g., as back pay for past services rendered or as payments in the
nature of severance pay), the Severance Date of such Employee shall be as of the
effective date of the Severance event (e.g., the date of his death, effective
date of a resignation or discharge, etc.), and the subsequent payment of the
aforementioned type of post-Severance compensation shall not operate to postpone
the timing of the Severance Date for purposes of this Plan.

        2.50. Sharing Deposits. "Sharing Deposits" of a Participant shall mean
his/her Deposits (whether Before Tax or After Tax) not in excess of five percent
(5%) of Compensation. Sharing Deposits shall participate in allocations of
Company Contributions and Forfeitures. For the Plan Year beginning on the
Effective Date and ending December 31, 1989, deposits made to the SmithKline
Beckman Savings and Incentive Plan and compensation earned while participating
in such plan by any Participant for the period beginning January 1, 1989 and
ending on the Effective Date shall be included in Deposits and Compensation
under this Plan solely for the purpose of determining Sharing Deposits in such
Plan Year.

        2.51. Sponsor. "Sponsor" shall mean Allergan, Inc., a Delaware
Corporation, and any successor corporation or entity.

        2.52. Trust and Trust Fund. "Trust" or "Trust Fund" shall mean the one
or more trusts created for funding purposes under the Plan.

        2.53. Trustee. "Trustee" shall mean the individual or entity acting as a
trustee of the Trust Fund.

        2.54. Reserved for Future Modifications.

        2.55. Reserved for Future Modifications.

        2.56. Valuation Date. "Valuation Date" shall mean the date as of which
the Trustee shall determine the value of the assets in the Trust Fund for
purposes of determining the value of each Account, which shall be each business
day in accordance with rules applied in a consistent and uniform basis. For
periods prior to March 1, 1995, the date shall be the latest day of each
calendar month.

        2.57. 415 Suspense Account. "415 Suspense Account" shall mean the
account (if any) established and maintained in accordance with the provisions of
Article XIII for the purpose of holding and accounting for allocations of excess
Annual Additions (as defined in Article XIII).


                                       11
<PAGE>   18

                                   ARTICLE III
                          ELIGIBILITY AND PARTICIPATION

        3.1. Participation.(7)

                (a) Each Eligible Employee shall be eligible to participate in
        the Plan on his or her Employment Commencement Date.

                (b) If an Eligible Employee's employment with the Company
        terminates after the Employee has become a Participant in the Plan, the
        Employee shall become eligible to participate in the Plan immediately
        upon his or her Reemployment Commencement Date.

        3.2. Participants in Prior Plans. Any Employee who was eligible to
participate in the SmithKline Beckman Savings and Investment Plan on the day
preceding the Spin-Off Date (as that term is defined in Section 2.25), shall
automatically be eligible to participate in the Plan on the Effective Date,
provided he/she is an Eligible Employee on that date.

        3.3. Participation in Plan Prior to March 1, 1995. Notwithstanding
Section 3.1(a) above, prior to March 1, 1995, each Eligible Employee shall be
eligible to participate in the Plan upon the first day of the calendar month
("Eligibility Date") coincident with or immediately following the completion of
six (6) months of Credited Service.


----------
        (7) The amendment of Section 3.1 as set forth above was approved by the
Board on November 17, 1998 and is effective January 1, 1997.


                                       12
<PAGE>   19


                                   ARTICLE IV
                              PARTICIPANT DEPOSITS

        4.1. Election.

                (a) Each Eligible Employee may elect to defer the receipt of a
        portion of his/her Compensation and to have the deferred amount
        contributed directly by the Company to the Plan as Before Tax Deposits.
        Before Tax Deposits may be made only by means of payroll deduction.

                (b) Each Eligible Employee may elect to contribute to the Plan a
        portion of his/her Compensation as After Tax Deposits. After Tax
        Deposits may be made only by means of payroll deduction.

                (c) The Committee shall prescribe such procedures, either in
        writing or in practice, and provide such forms as are necessary or
        appropriate for each Participant and each Eligible Employee who will
        become a Participant to make deposits pursuant to this Article IV.
        However, an election by a Participant shall not be adopted
        retroactively.

                (d) Notwithstanding the above paragraphs, an Eligible Employee
        shall be deemed to have elected to defer the receipt of a three percent
        (3%) of his or her Compensation and to have such deferred amount
        contributed directly by the Company to the Plan as Before Tax Deposits
        if such Eligible Employee fails to file an election for any Plan Year
        within the time period prescribed by the Committee (or, in the case of
        newly hired Eligible Employee, the Eligible Employee fails to file an
        election when hired or prior to the date compensation for the first pay
        period is currently available). A deemed election under this paragraph
        (d) shall be effective as of the first pay period of the Plan Year (or,
        in the case of newly hired Eligible Employee, the first pay period
        following his or her date of hire) and shall remain in effect until
        superseded by a subsequent affirmative election by the Eligible
        Employee. Deferred amounts contributed directly by the Company to the
        Plan under this paragraph (d) shall be invested in the Balanced Fund
        described in Section 5.5(b) until superseded by a subsequent election by
        the Eligible Employee. (8)

        4.2. Amount Subject to Election.

                (a) Participants may elect to contribute a whole percentage of
        his/her Compensation to the Plan as Before Tax Deposits not to exceed
        twenty percent (20%) when aggregated with the After Tax Deposits
        contributed by such Participant pursuant to paragraph (b) below.
        Notwithstanding the foregoing, no Participant shall be permitted to make
        Before Tax Deposits to the Plan during any calendar year in excess of
        $7,000, or such larger amount as may be determined by the Secretary of
        the Treasury pursuant to Code Section 402(g)(2), or which exceed the
        limitations set forth in Section 4.3. For purposes of the dollar
        limitation, the Before Tax Deposits of a Participant for any taxable
        year is the sum of all Before Tax Deposits under the Plan and all salary
        reduction amounts under any other qualified cash or deferred arrangement
        (as defined in Code Section 401(k)), a simplified employee pension (as
        defined in Code Section 408(k) and Code Section 402(h)(1)(B)), a
        deferred compensation plan under Code Section 457, a trust described in
        Code Section 501(c)(18) and any salary reduction amount used to purchase
        an annuity contract under Code Section 403(b) whether or not sponsored
        by the Company but shall not include any amounts properly distributed as
        excess annual additions.(9)

                (b) Each Participant may elect to contribute a whole percentage
        of his/her Compensation to the Plan as After Tax Deposits not to exceed
        twenty percent (20%) when aggregated with the amount of his/her


----------
       (8) Paragraph (d) of Section 4.1 as set forth above was approved by the
Board on November 17, 1998 and is effective January 1, 1999.

       (9) The amendment of Section 4.2(a) as set forth above was approved by
the  Board on November 17, 1998 and is effective January 1, 1999.


                                       13
<PAGE>   20

        Before Tax Deposits. Notwithstanding the foregoing, no Participant shall
        be permitted to make After Tax Deposits to the Plan during any Plan Year
        which exceed the limitations set forth in Section 6.13.(10)

                (c) The Committee shall prescribe such procedures, either in
        writing or in practice, as it deems necessary or appropriate regarding
        the maximum amount that a Participant may elect to defer and the timing
        of such an election. These procedures shall apply to all individuals
        eligible to make an election described in Section 4.1. The Committee
        may, at any time during a Plan Year, require the suspension, reduction,
        or recharacterization of Before Tax Deposits or the suspension or
        reduction of After Tax Deposits of any Highly Compensated Employee such
        that the limitations of Section 4.2(a) and (b) are satisfied.

        4.3. Limitation on Compensation Deferrals. With respect to each Plan
Year, Compensation Deferral Contributions by a Participant for the Plan Year
shall not exceed the limitation on contributions by or on behalf of Highly
Compensated Participants under Code Section 401(k), as provided in this Section.
In the event that Compensation Deferral Contributions under this Plan by or on
behalf of Highly Compensated Participants exceed the limitations of this Section
for any reason, either such excess contributions shall be recharacterized as
After Tax Deposits or such excess contributions, adjusted for any income or loss
allocable thereto, shall be returned to the Participant, as provided in Section
4.5.(11)

                (a) The Compensation Deferral Contributions by Participants for
        a Plan Year shall satisfy the Actual Deferral Percentage Test set forth
        in (i) below, or, to the extent not precluded by applicable regulations,
        the alternative Actual Deferral Percentage test set forth in (ii) below:

                        (i) The average Actual Deferral Percentage for the
                Highly Compensated Participants shall not be more than the
                average Actual Deferral Percentage of all other Participants
                multiplied by 1.25, or

                        (ii) The excess of the average Actual Deferral
                Percentage for the Highly Compensated Participants over the
                average Actual Deferral Percentage for all other Participants
                shall not be more than two (2) percentage points (or such lesser
                percentage as the Secretary of the Treasury shall prescribe to
                prevent the multiple use of the alternative limitation set forth
                in this Section 4.3(a)(ii) with respect to any Highly
                Compensated Participants), and the average Actual Deferral
                Percentage for the Highly Compensated Participants shall not be
                more than the average Actual Deferral Percentage of all other
                Participants multiplied by 2.0.

                        (iii) In the event the test under (i) above cannot be
                satisfied, the Committee shall determine if the use of the
                alternative test under (ii) above is available under regulations
                relating to the multiple use of the alternative limitation, as
                prescribed by the Secretary of the Treasury under Code Section
                401(m)(2)(A). If the Committee determines that the alternative
                test is not available, either the Actual Deferral Percentage or
                the Average Contribution Percentage (as defined in Section 6.13)
                for Highly Compensated Participants eligible to participate in
                this Plan and a plan of the Company or an Affiliated Company
                that is subject to the limitations of Code Sections 401 (k) and
                (m) including, if applicable, this Plan, shall be reduced in
                accordance with, and to the extent necessary to satisfy, the
                requirements of regulations issued under Code Section 401(m).

                (b) Notwithstanding any other provisions of this Plan, for the
        purposes of the limitations of this Section 4.3 and Section 4.6 only,
        the following definitions shall apply:


----------
        (10) The amendment of Section 4.2(b) as set forth above was approved by
the Board on November 17, 1998 and is effective January 1, 1999.

        (11) The amendment of Section 4.3 to delete prior paragraph (e)
regarding family aggregation and to redesignate paragraphs (f), (g), and (h) as
paragraphs (e), (f), and (g), respectively, as set forth above was approved by
the Board on November 17, 1998 and is effective January 1, 1997.


                                       14
<PAGE>   21

                        (i) "Actual Deferral Percentage" shall mean, with
                respect to the group of Highly Compensated Participants and the
                group of all other Participants for a Plan Year, the ratio,
                calculated separately and to the nearest one-hundredth of one
                percent for each Participant in such group, as follows:

                                (1) For a Highly Compensated Participant, the
                        ratio of such Participant's Compensation Deferral
                        Contributions for the current Plan Year to such
                        Participant's Compensation for the current Plan Year;
                        provided, however, that the Actual Deferral Percentage
                        of a Highly Compensated Participant with no Compensation
                        Deferral Contributions made on his or her behalf shall
                        be zero.

                                (2) For any other Participant, the ratio of such
                        Participant's Compensation Deferral Contributions for
                        the preceding Plan Year to such Participant's
                        Compensation for the preceding Plan Year; provided,
                        however, that the Actual Deferral Percentage of a
                        Participant with no Compensation Deferral Contributions
                        made on his or her behalf shall be zero.

                To the extent determined by the Committee and in accordance with
        regulations issued by the Secretary of the Treasury, qualified
        nonelective contributions on behalf of a Participant that satisfy the
        requirements of Code Section 401(k)(3)(c)(ii) may also be taken into
        account for the purpose of determining the Actual Deferral Percentage of
        a Participant.(12)

                        (ii) "Highly Compensated Participant" shall mean for any
                Plan Year any Participant who is a Highly Compensated Employee.

                        (iii) "Participant" shall mean any Eligible Employee who
                satisfied the requirements under Section 3.1 during the Plan
                Year, whether or not such Eligible Employee has elected to
                contribute to the Plan for such Plan Year.

                        (iv) "Compensation Deferral Contributions" shall mean
                amounts contributed to the Plan by a Participant as Before Tax
                Deposits pursuant to Section 4.2(a), including excess Before Tax
                Deposits (as defined in Section 4.4(a)) of Highly Compensated
                Participants but excluding (1) excess Before Tax Deposits of all
                other Participants that arise solely from Before Tax Deposits
                made under this Plan or plans of the Company, (2) Before Tax
                Deposits that are taken into account in the Average Contribution
                Percentage test (as defined in Section 6.13) provided that the
                Actual Deferral Percentage test is satisfied both with and
                without exclusions of these Before Tax Deposits, and (3) any
                deferrals properly distributed as excess Annual Additions.
                Compensation Deferral Contributions may include, at the election
                of the Company, any Company Contributions which meet the
                requirements for such inclusion under Code Section 401(k)(3)(C).

                        (v) "Compensation" shall mean compensation as described
                below:

                                (1) Compensation means compensation determined
                        by the Company in accordance with the requirements of
                        Code Section 414(s) and the Regulations thereunder.

                                (2) For purposes of this Section 4.3, for Plan
                        Years beginning on or after January 1, 1998,
                        Compensation may, at the Company's election, exclude
                        amounts which are excludable from a Participant's gross
                        income under Code Section 125 (pertaining to cafeteria
                        plans) and Code Section 402(e)(3) (pertaining to 401(k)
                        salary reductions). The
----------
      (12) The amendment of Section 4.3(b)(i) as set forth above was approved by
the Board on November 17, 1998 and is effective January 1, 1997.


                                       15
<PAGE>   22

                        Company may change its election provided such change
                        does not discriminate in favor of Highly Compensated
                        Employees.

                                (3) Compensation taken into account for any Plan
                        Year shall not exceed $150,000 as adjusted at the time
                        and in such manner as permitted under Code Section
                        401(a)(17)(B).(13)

                (c) In the event that as of the last day of a Plan Year this
        Plan satisfies the requirements of Code Sections 401(k), 401(a)(4) or
        410(b) only if aggregated with one or more other plans which include
        arrangements under Code Section 401(k), then this Section 4.3 shall be
        applied by determining the Actual Deferral Percentages of Participants
        as if all such plans were a single plan, in accordance with regulations
        prescribed by the Secretary of the Treasury under Code Section 401(k).
        Plans may be considered one plan for purposes of satisfying Code Section
        401(k) only if they have the same Plan Year.

                (d) For the purposes of this Section 4.3, the "Actual Deferral
        Percentage" for any Highly Compensated Participant who is a Participant
        under two or more Code Section 401(k) arrangements of the Company shall
        be determined by taking into account the Highly Compensated
        Participant's compensation under each such arrangement and contributions
        under each such arrangement which qualify for treatment under Code
        Section 401(k), in accordance with regulations prescribed by the
        Secretary of the Treasury under Code Section 401(k). If the arrangements
        have different Plan Years, this paragraph shall be applied by treating
        all such arrangements ending with or within the same calendar year as a
        single arrangement. Notwithstanding the foregoing, certain plans shall
        be treated as separate plans if mandatorily disaggregated pursuant to
        Regulations under Code Section 401(k).

                (e) For purposes of the Actual Deferral Percentage test,
        Compensation Deferral Contributions must be made before the last day of
        the twelve-month period immediately following the Plan Year to which
        such contributions relate.

                (f) The determination and treatment of Compensation Deferral
        Contributions and the Actual Deferral Percentage of any Participant
        shall satisfy such other requirements as may be prescribed by the
        Secretary of the Treasury.

                (g) The Committee shall keep or cause to have kept such records
        as are necessary to demonstrate that the Plan satisfies the requirements
        of Code Section 401(k) and (m) and the regulations thereunder, in
        accordance with regulations prescribed by the Secretary of the Treasury.

        4.4. Provisions for Return of Excess Before Tax Deposits Over $7,000.

                (a) In the event that due to error or otherwise, an amount of a
        Participant's Compensation in excess of the $7,000 limitation (after
        application of any necessary adjustment) described in Section 4.2(a) is
        deferred under this Plan in any calendar year pursuant to such
        Participant's Compensation deferral agreement (but without regard to
        amounts deferred under any other plan) the excess Before Tax Deposits,
        if any, together with income allocable to such amount shall be returned
        to the Participant (after withholding applicable federal, state and
        local taxes due on such amounts) on or before the first April 15
        following the close of the calendar year in which such excess
        contribution is made; provided, however, if there is a loss allocable to
        the excess Before Tax Deposits, the amount distributed shall be the
        amount of the excess as adjusted to reflect such loss. Any Company
        Contributions allocated to the Participant's Sharing Deposits pursuant
        to Section 6.4(b) which are attributable to any excess Before Tax
        Deposits by a Participant, and any income or loss allocable to such
        Company Contributions, shall either be returned to the Company or
        applied to reduce future Company Contributions by the Company.

----------
       (13) The amendment of Section 4.3(b)(v) as set forth above was approved
by the Board on November 17, 1998 and is effective January 1, 1998.


                                       16
<PAGE>   23

                (b) The amount of income or loss attributable to any excess
        Before Tax Deposits described in paragraph (a) above shall be equal to
        the sum of the following:

                        (i) The income or loss allocable to the Participant's
                Before Tax Deposits Account for the Plan Year multiplied by a
                fraction, the numerator of which is the excess Before Tax
                Deposits as determined under paragraph (a) above, and the
                denominator of which is the balance of the Participant's Before
                Tax Deposits Account as of the last day of the Plan Year,
                without regard to any income or loss allocable to such Account
                during the Plan Year; and

                        (ii) The amount of allocable income or loss for the Gap
                Period using the "safe harbor" method set forth in regulations
                prescribed by the Secretary of the Treasury under Code Section
                402(g). Under the "safe harbor" method, such allocable income or
                loss is equal to 10% of the amount calculated under Section
                4.4(b)(i) above, multiplied by the number of calendar months
                from the last day of the Plan Year until the date of
                distribution of the Participant's excess Before Tax Deposits. A
                distribution on or before the 15th of the month is treated as
                made on the last day of the preceding month, a distribution
                after the 15th of the month is treated as made on the first day
                of the next month.

                (c) For the purpose of this Section 4.4, "Gap Period" shall mean
        the period between the last day of the Plan Year and the date of
        distribution of any excess Before Tax Deposits.

                (d) In accordance with procedures as may be established, either
        in writing or in practice, by the Committee, not later than March 1 of a
        calendar year a Participant may submit a claim to the Committee in which
        he certifies in writing the specific amount of his Before Tax Deposits
        for the preceding calendar year which, when added to amounts deferred
        for such calendar year under other plans or arrangements described in
        Code Sections 401(k), 408(k) or 403(b), will cause the Participant to
        exceed the $7,000 limitation as described in Section 4.2(a) for such
        preceding calendar year. Notwithstanding the amount of the Participant's
        Before Tax Deposits under the Plan for such preceding calendar year, the
        Committee shall treat the amount specified by the Participant in his
        claim as a Before Tax Deposit in excess of the $7,000 limitation (after
        application of any necessary adjustment) for such calendar year and
        return it to the Participant in accordance with Section 4.4(a) above. A
        Participant is deemed to notify the Committee of any excess Before Tax
        Deposits that arise by taking into account only those Before Tax
        Deposits made to this Plan and other plans of the Company.

                (e) Any Before Tax Deposits in excess of the $7,000 limitation
        (after application of any necessary adjustment) described in Section
        4.2(a) which are distributed to a Participant in accordance with this
        Section, shall to the extent required by regulations issued by the
        Secretary of the Treasury be treated as Annual Additions under Article
        XIII for the Plan Year for which the excess Before Tax Deposits were
        made, unless such amounts are distributed no later than the first April
        15th following the close of the Participant's taxable year.

                (f) The Committee shall not be liable to any Participant (or
        his/her Beneficiary, if applicable) for any losses caused by a mistake
        in calculating the amount of any Participant's excess Before Tax
        Deposits or the income or losses attributable thereto.

        4.5. Provision for Recharacterization or Return of Excess Deferrals by
Highly Compensated Participants. The provisions of this Section 4.5 shall be
applied after implementation of the provisions of Section 4.4. (14)

----------
        (14) The amendment of Section 4.5 to delete prior paragraph (c)
regarding family aggregation and to redesignate paragraphs (d), (e), (f), (g),
(h), and (i) as paragraphs (c), (d), (e), (f), (g), and (h), respectively, as
set forth above was approved by the Board on November 17, 1998 and is effective
January 1, 1997.


                                       17
<PAGE>   24

                (a) The Committee shall determine in accordance with the
        procedures set forth in Section 4.3, as soon as is reasonably possible
        following the close of each Plan Year, the extent (if any) to which
        deferral treatment under Code Section 401(k) may not be available for
        Compensation Deferral Contributions on behalf of any Highly Compensated
        Participants. If, pursuant to these determinations by the Committee, a
        Highly Compensated Participant's Compensation Deferral Contributions are
        not eligible for tax-deferral treatment then, as determined by the
        Committee, either (i) any excess Compensation Deferral Contributions
        shall be recharacterized as After Tax Deposits in accordance with
        regulations issued under Code Section 401(k), or (ii) any excess
        Compensation Deferral Contributions together with any income or loss
        allocable thereto shall be returned to the Highly Compensated
        Participant (after withholding applicable federal, state, and local
        taxes due on such amounts). Such return or recharacterization shall be
        made within the first two and one-half (2-1/2) months following the
        close of the Plan Year for which such excess deferrals were made,
        provided however, that if any excess deferrals and income or loss
        allocable thereto are, due to error or otherwise, not returned by such
        date, such amounts as are required to be returned shall be returned not
        later than the end of the first Plan Year following the Plan Year for
        which such excess deferrals were made.

                (b) For purposes of satisfying the Actual Deferral Percentage
        test of Section 4.3(a), the amount of any excess Compensation Deferral
        Contributions by a Highly Compensated Participant shall be determined by
        the Committee by application of a leveling method under which the
        Compensation Deferral Contributions of the Highly Compensated
        Participant who has the highest dollar amount of Compensation Deferral
        Contributions for such Plan Year is reduced to the extent required to
        cause such Highly Compensated Participant's Compensation Deferral
        Contributions to equal the Compensation Deferral Contributions of the
        Highly Compensated Participant with the next highest Compensation
        Deferral Contributions; provided, however, if a lesser amount, when
        added to the total dollar amount already returned under this paragraph
        (b), equals the total excess Compensation Deferral Contributions that
        are required to be returned to enable the Plan to satisfy the Actual
        Deferral Percentage test, the lesser amount shall be returned. This
        process shall be repeated until the Plan satisfies the Actual Deferral
        Percentage test. (15)

                (c) The amount of income or loss attributable to any excess
        Compensation Deferral Contributions by a Highly Compensated Participant
        for a Plan Year shall be equal to the sum of the following:

                        (i) The income or loss allocable to the Highly
                Compensated Participant's Compensation Deferral Contribution
                Accounts for the Plan Year multiplied by a fraction, the
                numerator of which is the excess Compensation Deferral
                Contribution as determined under Section 4.3, and the
                denominator of which is the balance of the Highly Compensated
                Participant's Compensation Deferral Contribution Accounts as of
                the last day of the Plan Year without regard to any income or
                loss allocable to such Accounts during the Plan Year; and

                        (ii) The amount of allocable income or loss for the Gap
                Period using the "safe harbor" method set forth in the
                regulations prescribed by the Secretary of the Treasury under
                Code Section 401(k). Under the "safe harbor" method, such
                allocable income or loss is equal to 10% of the amount
                calculated under Section 4.5(d)(i) above, multiplied by the
                number of calendar months from the last day of the Plan Year
                until the date of distribution of the Participant's excess
                Compensation Deferral Contribution. A distribution on or before
                the 15th of the month is treated as made on the last day of the
                preceding month, a distribution after the 15th of the month is
                treated as made on the first day of the next month.

                (d) For the purpose of this Section 4.5 the following shall
        apply:

                        (i) "Compensation Deferral Contribution Accounts" shall
                mean the Participant's Before Tax Deposits Account and shall
                mean any other accounts of the Participant to which

----------
        (15) The amendment of Section 4.5(b) as set forth above was approved by
the Board on November 17, 1998 and is effective January 1, 1997.


                                       18
<PAGE>   25

                Company Contributions have been allocated where such Company
                Contributions have been included as Compensation Deferral
                Contributions pursuant to Section 4.3(b)(iv).

                        (ii) "Gap Period" shall mean the period beginning with
                the last day of the Plan Year and the date of distribution of
                any excess Compensation Deferral Contributions.

                (e) For purposes of this Section, the amount of Compensation
        Deferral Contributions by a Participant who is not a Highly Compensated
        Participant for a Plan Year shall be reduced by any Before Tax Deposits
        which have been distributed to the Participant under Section 4.4, in
        accordance with regulations prescribed by the Secretary of the Treasury
        under Code Section 401(k).

                (f) In the event that the Committee determines that an amount to
        be deferred pursuant to the Compensation deferral agreement provided in
        Section 4.1 would cause the Company contributions under this and any
        other tax-qualified retirement plan maintained by the Company to exceed
        the applicable deduction limitations contained in Code Section 404, or
        to exceed the maximum Annual Addition determined in accordance with
        Article XIII, the Committee may treat such amount in accordance with the
        rules set forth above in Section 4.5(a).

                (g) The Committee shall not be liable to any Participant (or
        his/her Beneficiary, if applicable) for any losses caused by a mistake
        in calculating the amount of any Participant's excess Compensation
        Deferral Contribution or the income or losses attributable thereto.

                (h) To the extent required by regulations under Code Sections
        401(k) or 415, any excess Compensation Deferral Contributions with
        respect to a Highly Compensated Participant shall be treated as Annual
        Additions under Article XIII for the Plan Year for which the excess
        Compensation Deferral Contributions were made, notwithstanding the
        distribution of such excess in accordance with the provisions of this
        Section.

        4.6. Termination of, Change in Rate of, or Resumption of Deferrals.

                (a) A Participant shall be limited to changing the rate or form
        of investment of Before Tax Deposits or After Tax Deposits to once a
        month, in 1% increments, (once in any three (3) month period prior to
        March 1, 1995). Notwithstanding the foregoing, a Participant shall
        change the rate of such Deposits as may be required pursuant to Section
        4.2.

                (b) The right of a Participant to make Deposits shall cease
        during any Period of Severance.

                (c) Any change in rate or form of investment of Before Tax
        Deposits or After Tax Deposits made by a Participant pursuant to
        paragraph (a) above shall be effective in accordance with the following
        rules: (i) If the Participant properly notifies the Plan Administrator
        of such change on or before the fifteenth day of any month (or such
        later date authorized by the Committee), such change shall be effective
        on the first day of the following month or (ii) if the Participant
        properly notifies the Plan Administrator after the fifteenth day of any
        month (or such later date authorized by the Committee) but on or before
        the last day of such month, such change shall be effective on the first
        day of the second month following such month.

        4.7. Character of Deposits. Before Tax Deposits shall be treated as
Company Contributions for purposes of Code Sections 401(k) and 414(h). After Tax
Deposits shall not constitute "qualified voluntary employee contributions" under
Code Section 219 (relating to the deductibility of those amounts).

        4.8. Rollover Contributions.

                (a) Pursuant to procedures as the Committee may prescribe
        (either in writing or practice), a Participant may make a Rollover
        Contribution to the Plan. "Rollover Contribution" shall mean a


                                       19
<PAGE>   26

        contribution by a Participant as the result of a distribution from
        another "qualified trust" (as defined in Code Section 401) which is
        exempt from tax under Code Section 501, but only if such contribution:

                        (i) Is received by the Committee not later than 60 days
                after the distribution was received by the Participant; or

                        (ii) Is the result of a trustee-to-trustee transfer of
                assets between two (2) or more qualified plans, and the
                transaction satisfies the requirements of Section 12.3; or

                        (iii) Is the result of a transfer of assets from an
                individual retirement arrangement or annuity (as defined in Code
                Section 408) and such individual retirement arrangement or
                annuity was created solely from a distribution or distributions
                from a qualified plan; or

                        (iv) Is an "Eligible Rollover Distribution".

                (b) A Rollover Contribution shall not be considered a
        Participant Deposit.

                (c) A Participant's Rollover Contribution made pursuant the
        rules of this Section 4.8 shall be held in a separate Rollover Account
        for the Employee. This Rollover Account will not share in allocations of
        Company Contributions or Forfeitures under Section 6.4.



                                       20
<PAGE>   27

                                    ARTICLE V
                      TRUST FUND AND COMPANY CONTRIBUTIONS

        5.1. General. All contributions made under the Plan and investments made
and property of any kind or character acquired with any such funds or otherwise
contributed, and all income, profits, and proceeds derived therefrom, shall be
held in Trust and shall be held and administered by the Trustee in accordance
with the provisions of the Plan and Trust Agreement.

        5.2. Single Trust. Assets of the Trust shall be held in a separate fund
which shall consist of the Trust Fund. Individual Participant interests in the
Trust Fund shall be reflected in the Accounts maintained for the Participants.
Notwithstanding the foregoing, the Trust Fund shall be treated as a single trust
for purposes of investment and administration, and nothing contained herein
shall require a physical segregation of assets for any fund or for any Account
maintained under the Plan.

        5.3. Company Contributions. The Company shall contribute to the Plan in
accordance with the following rules:

                (a) Effective March 1, 1995 and subject to the limitations of
        Article XIII and to the extent that the Company has current or
        accumulated profits, the Company shall contribute monthly out of current
        or accumulated profits an amount which, when added to available
        forfeitures provided under Section 8.2 resulting from the terminations
        during the month, is equal to:

                        (i) 75% of each Participant's Sharing Deposits for the
                previous month which are not in excess of two percent (2%) of
                such Participant's Compensation.

                        (ii) 50% of each Participant's Sharing Deposits for the
                previous month which are in excess of two percent (2%) of such
                Participant's Compensation but not in excess of three percent
                (3%) of such Participant's Compensation.

                        (iii) 25% of each Participant's Sharing Deposits for the
                previous month which are in excess of three percent (3%) of such
                Participant's Compensation.

                In addition to the foregoing, the Company shall contribute an
        amount sufficient to satisfy the reinstatement and plan expense
        requirements of Section 6.4(a)(i) and (ii). When a Participant's
        contributions are suspended pursuant to Section 8.1, no Company
        Contributions shall be made for such Participant.

                (b) Prior to March 1, 1995 and subject to the limitations of
        Article XIII and to the extent that the Company has current or
        accumulated profits, the Company shall contribute monthly out of current
        or accumulated profits an amount which, when added to available
        forfeitures provided under Section 8.2 resulting from terminations
        during the month, is equal to 50% of each Participant's Sharing Deposits
        for the previous month plus an amount sufficient to satisfy the
        reinstatement and plan expense requirements of Section 6.4(a)(i) and
        (ii). When a Participant's contributions are suspended pursuant to
        Section 8.1, no Company Contributions shall be made for such
        Participant.

                (c) The Board of Directors, acting upon the advice and direction
        of the Committee, may authorize and direct that the Company Contribution
        (expressed as a percentage of Participants' Sharing Deposits in
        paragraph (a) above) be changed from time to time from a minimum of 0%
        to a maximum of 100%.

        5.4. Form of Company Contributions. The Company's contributions to the
Trust Fund shall be paid in cash, property, or Company Stock as the Company may
from time to time determine.



                                       21
<PAGE>   28

        5.5. Investment of Trust Assets.

                (a) The manner in which assets of the Trust will be invested
        shall be chosen by the Committee at its discretion, although the
        Committee may delegate the management to one or more Investment Managers
        appointed pursuant to Section 5.16. Notwithstanding the foregoing, all
        Company Contributions contributed on or after the original Effective
        Date shall be invested in Company Stock except to the extent invested
        pursuant to Section 5.5(e). Company Contributions made under the
        SmithKline Beckman Corporation Savings and Investment Plan and
        transferred to this Plan shall be invested at the discretion of the
        Committee.

                (b) The Committee may establish separate investment funds under
        the Plan, with each fund representing an investment alternative
        available to Participants for the investment of their Accounts as
        provided in Section 5.5(c) and (d) below. Each Participant shall have a
        subaccount under the Plan corresponding to the Participant's interest
        which is allocated to each investment fund. Each such subaccount may be
        valued separately. The Committee may, at its discretion, establish
        alternative investment funds or eliminate any previously established
        funds, including but not limited to the following types of investment
        funds:

                        (i) The Interest Income Fund investing in group annuity
                contracts with major insurance companies.

                        (ii) The Balanced Fund investing in common stocks,
                bonds, government securities and similar types of investments.

                        (iii) The Equity Fund investing in a mutual fund which
                may invest in equity securities, bonds, preferred stocks, and
                interest-bearing cash investments.

                        (iv) The Company Stock Fund consisting exclusively of
                Company Stock.

                Notwithstanding the establishment of separate investment funds,
        up to one hundred percent (100%) of the assets of the Plan may be
        invested in Company Stock.

                (c) A Participant may elect the investment fund to which his or
        her Before Tax Deposits or After Tax Deposits are invested under the
        Plan or may change such elections pursuant to Section 4.6(a). Such
        elections shall be limited to the investment funds currently offered by
        the Committee and currently available to Participants pursuant to
        paragraph (b) above. A Participant shall effect such an election by
        properly completing and submitting the form authorized by the Committee
        for this purpose.

                (d) A Participant may elect at any time to transfer amounts
        accrued in such Participant's Before Tax Deposits Account, After Tax
        Deposits Account, or Rollover Account among any of the investment funds
        currently offered by the Committee and currently available to the
        Participant, provided, however, the total amount transferred shall be in
        increments of 1% of the amount accrued in such accounts. A Participant
        shall effect such transfer in the manner authorized by the
        Committee.(16)


                (e) Notwithstanding the requirement of paragraph (a) above that
        all Company Contributions be invested in the Company Stock Fund, any
        Participant who is an Employee of the Company on or after the date he or
        she attains age 55 may elect that (i) all amounts allocated to his or
        her Company Contribution Account which are held in the Company Stock
        Fund and (ii) all future Company Contributions that may be allocated to
        his or her Company Contribution Account, be invested in any of the
        investment funds currently offered by the Committee and currently
        available to the Participant. A Participant shall make any election,


----------
        (16) The amendment of Section 5.5(d) as set forth above was approved by
the Board on November 17, 1998 and is effective January 1, 1999.



                                       22
<PAGE>   29

        and may change any election, at such times and in accordance with the
        requirements imposed by Section 5.5(c) and (d) above.

                (f) Amounts invested in any one of the investment funds shall
        not share in gains and losses experienced by any other fund.

                (g) Notwithstanding the establishment of separate investment
        funds within the Trust, the Trust shall at all times constitute a single
        trust.

                (h) Notwithstanding anything to the contrary in this Section 5.5
        or Section 4.1 or Section 8.1, the following additional transfer and
        withdrawal restrictions shall apply to all Participants who are
        Insiders. For the purpose of this Section 5.5, the term "Insider" shall
        mean any Participant who is directly or indirectly the beneficial owner
        of more than 10% of any class of any equity security (other than an
        exempted security) of the Sponsor (or the Company) which is registered
        pursuant to Section 12 of the Securities Exchange Act of 1934 (the "`34
        Act") or who is a "director" or an "officer" of the Sponsor or the
        Company as those terms are interpreted for the purpose of determining
        persons subject to Section 16 of the `34 Act.

                        (i) Any Insider who transfers amounts invested in the
                Company Stock Fund out of such fund and into another fund or
                withdraws cash in a transaction that results in the liquidation
                of amounts in the Company Stock Fund (pursuant to Sections 8.1
                or 8.12 below), may not for a period of six months following the
                Participant's election to so transfer funds, withdraw cash or
                take a loan, as the case may be, make an election to transfer
                amounts from another fund into the Company Stock Fund.

                        (ii) Any Insider who transfers amounts invested in a
                fund other than the Company Stock Fund into the Company Stock
                Fund, may not for a period of six months following the
                Participant's election to so transfer funds make an election to
                (1) transfer amounts from the Company Stock Fund into another
                fund, (2) withdraw cash or take a loan in a transaction that
                results in the liquidation of amounts in the Company Stock Fund
                or (3) utilize the diversification rule of Section 5.11 of the
                Allergan Inc. Employee Stock Ownership Plan or the provision of
                any Company plan covered by Rule 16b-3 (promulgated pursuant to
                the `34 Act) then in existence that would result in the transfer
                out of a Company equity securities fund.(17)

        5.6. Reserved for Future Modifications.

        5.7. Irrevocability. The Company shall have no right or title to, nor
interest in, the contributions made to the Trust Fund, and no part of the Trust
Fund shall revert to the Company except that on or after the original Effective
Date funds may be returned to the Company as follows:

                (a) In the case of a Company Contribution which is made by a
        mistake of fact, at the Company's written request that contribution may
        be returned to the Company within one (1) year after it is made.

                (b) All Company Contributions to the Trust are hereby
        conditioned upon the Plan satisfying all of the requirements of Code
        Section 401(a). If the Plan does not qualify, at the Company's written
        election the Plan may be revoked and all such contributions may be
        returned to the Company within one year after the date of Internal
        Revenue Service denial of the qualification of the Plan. Upon such a
        revocation the affairs of the Plan and Trust shall be terminated and
        wound up as the Company shall direct.


----------
        (17) Paragraph (h) of Section 5.5 as set forth above was adopted by the
Sponsor effective July 23, 1996.



                                       23
<PAGE>   30

                (c) All Company Contributions to the Plan are conditioned upon
        the deductibility of those contributions under Code Section 404. To the
        extent a deduction is disallowed, at the Company's written request the
        contribution may be returned to the Company within one year after the
        disallowance.

                (d) In the event that the Plan is terminated when there are
        amounts remaining in the Suspense Account, the excess funds may revert
        to the Company to the extent provided in Section 13.7.

        5.8. Company, Committee and Trustee Not Responsible for Adequacy of
Trust Fund.

                (a) The Company, Committee, and the Trustee shall not be liable
        or responsible for the adequacy of the Trust Fund to meet and discharge
        any or all payments and liabilities hereunder. All Plan benefits will be
        paid only from the Trust assets, and neither the Company, the Committee
        nor the Trustee shall have any duty or liability to furnish the Trust
        with any funds, securities or other assets except as expressly provided
        in the Plan.

                (b) Except as required under the Plan or Trust or under Part 4
        of Subtitle B of Title I of ERISA, the Company shall not be responsible
        for any decision, act or omission of the Trustee, the Committee, or the
        Investment Manager (if applicable), and shall not be responsible for the
        application of any moneys, securities, investments or other property
        paid or delivered to the Trustee.

        5.9. Certain Offers for Company Stock. Notwithstanding any other
provision of this Plan to the contrary, in the event an offer shall be received
by the Trustee (including but not limited to a tender offer or exchange offer
within the meaning of the Securities Exchange Act of 1934, as from time to time
amended and in effect) to acquire any or all shares of Company Stock held by the
Trust (an "Offer"), the discretion or authority to sell, exchange or transfer
any of such shares shall be determined in accordance with the following rules:

                (a) The Trustee shall have no discretion or authority to sell,
        exchange or transfer any of such stock pursuant to such Offer except to
        the extent, and only to the extent, that the Trustee is timely directed
        to do so in writing by each Participant with respect to any of such
        shares that are allocated to such Participant's Accounts.

                (b) Upon timely receipt of such instructions, the Trustee shall,
        subject to the provisions of paragraphs (c) and (m) of this Section,
        sell, exchange or transfer pursuant to such Offer, only such shares as
        to which such instructions were given. The Trustee shall use its best
        efforts to communicate or cause to be communicated to each Participant
        the consequences of any failure to provide timely instructions to the
        Trustee.

                (c) In the event, under the terms of an Offer or otherwise, any
        shares of Company Stock tendered for sale, exchange or transfer pursuant
        to such Offer may be withdrawn from such Offer, the Trustee shall follow
        such instructions respecting the withdrawal of such securities from such
        Offer in the same manner and the same proportion as shall be timely
        received by the Trustee from the Participants entitled under this
        paragraph to give instructions as to the sale, exchange or transfer of
        securities pursuant to such Offer.

                (d) In the event that an Offer for fewer than all of the shares
        of Company Stock held by the Trustee in the Trust shall be received by
        the Trustee, each Participant shall be entitled to direct the Trustee as
        to the acceptance or rejection of such Offer (as provided by paragraph
        (a) of this Section) with respect to the largest portion of such Company
        Stock as may be possible given the total number or amount of shares of
        Company Stock the Plan may sell, exchange or transfer pursuant to the
        Offer based upon the instructions received by the Trustee from all other
        Participants who shall timely instruct the Trustee pursuant to this
        paragraph to sell, exchange or transfer such shares pursuant to such
        Offer, each on a pro rata basis in accordance with the maximum number of
        shares each such Participant would have been permitted to direct under
        paragraph (a) had the Offer been for all shares of Company Stock held in
        the trust.



                                       24
<PAGE>   31

                (e) In the event an Offer shall be received by the Trustee and
        instructions shall be solicited from Participants in the Plan pursuant
        to paragraph (a) of this Section regarding such Offer, and prior to
        termination of such Offer, another Offer is received by the Trustee for
        the securities subject to the first Offer, the Trustee shall use its
        best efforts under the circumstances to solicit instructions from the
        Participants to the Trustee (i) with respect to securities tendered for
        sale, exchange or transfer pursuant to the first Offer, whether to
        withdraw such tender, if possible, and, if withdrawn, whether to tender
        any securities so withdrawn for sale, exchange or transfer pursuant to
        the second Offer and (ii) with respect to securities not tendered for
        sale, exchange or transfer pursuant to the first Offer, whether to
        tender or not to tender such securities for sale, exchange or transfer
        pursuant to the second Offer. The Trustee shall follow all such
        instructions received in a timely manner from Participants in the same
        manner and in the same proportion as provided in paragraph (a) of this
        Section. With respect to any further Offer for any Company Stock
        received by the Trustee and subject to any earlier Offer (including
        successive Offers from one or more existing offerors), the Trustee shall
        act in the same manner as described above.

                (f) With respect to any Offer received by the Trustee, the
        Trustee shall distribute, at the Company's expense, copies of all
        relevant material including but not limited to material filed with the
        Securities and Exchange Commission with such Offer or regarding such
        Offer, and shall seek confidential written instructions from each
        Participant who is entitled to respond to such Offer pursuant to
        paragraphs (a) or (b). The identities of Participants, the amount of
        Company Stock allocated to their Accounts, and the Compensation of each
        Participant shall be determined from the list of Participants delivered
        to the Trustee by the Committee which shall take all reasonable steps
        necessary to provide the Trustee with the latest possible information.

                (g) The Trustee shall distribute and/or make available to each
        Participant who is entitled to respond to an Offer pursuant to
        paragraphs (a), (b), or (c) an instruction form to be used by each such
        Participant who wishes to instruct the Trustee. The instruction form
        shall state that (i) if the Participant fails to return an instruction
        form to the Trustee by the indicated deadline, the Company Stock with
        respect to which he or she is entitled to give instructions will not be
        sold, exchanged or transferred pursuant to such Offer, (ii) the
        Participant will be a named fiduciary (as described in paragraph (j)
        below) with respect to all shares for which he or she is entitled to
        give instructions, and (iii) the Company acknowledges and agrees to
        honor the confidentiality of the Participant's instructions to the
        Trustee.

                (h) Each Participant may choose to instruct the Trustee in one
        of the following two ways: (i) not to sell, exchange or transfer any
        shares of Company Stock for which he is entitled to give instructions,
        or (ii) to sell, exchange or transfer all Company Stock for which he or
        she is entitled to give instructions. The Trustee shall follow up with
        additional mailings and postings of bulletins, as reasonable under the
        time constraints then prevailing, to obtain instructions from
        Participants not otherwise responding to such requests for instructions.
        Subject to paragraph (c), the Trustee shall then sell, exchange or
        transfer shares according to instructions from Participants, except that
        shares for which no instructions are received shall not be sold,
        exchanged or transferred.

                (i) The Company shall furnish former Participants who have
        received distributions of Company Stock so recently as to not be
        shareholders of record with the information given to Participants
        pursuant to paragraphs (d), (e), and (f) of this Section. The Trustee is
        hereby authorized to sell, exchange or transfer pursuant to an Offer any
        such Company Stock in accordance with appropriate instructions from such
        former Participants.

                (j) Neither the Committee nor the Trustee shall express any
        opinion or give any advice or recommendation to any Participant
        concerning the Offer, nor shall they have any authority or
        responsibility to do so. The Trustee has no duty to monitor or police
        the party making the Offer; provided, however, that if the Trustee
        becomes aware of activity which on its face reasonably appears to the
        Trustee to be materially false, misleading, or coercive, the Trustee
        shall demand promptly that the offending party take appropriate
        corrective action. If the offending party fails or refuses to take
        appropriate corrective action, the Trustee shall communicate with
        affected Participants in such manner as it deems advisable.



                                       25
<PAGE>   32

                (k) The Trustee shall not reveal or release a Participant's
        instructions to the Company, its officers, directors, employees, or
        representatives. If some but not all Company Stock held by the Trust is
        sold, exchanged, or transferred pursuant to an Offer, the Company, with
        the Trustee's cooperation, shall take such action as is necessary to
        maintain the confidentiality of Participant's records including, without
        limitation, establishment of a security system and procedures which
        restrict access to Participant records and retention of an independent
        agent to maintain such records. If an independent record keeping agent
        is retained, such agent must agree, as a condition of its retention by
        the Company, not to disclose the composition of any Participant Accounts
        to the Company, its officers, directors, employees, or representatives.
        The Company acknowledges and agrees to honor the confidentiality of
        Participants' instructions to the Trustee.

                (l) Each Participant shall be a named fiduciary (as that term is
        defined in ERISA Section 402(a)(2)) with respect to Company Stock
        allocated to his or her Accounts under the Plan solely for purposes of
        exercising the rights of a shareholder with respect to an Offer pursuant
        to this Section 5.9 and voting rights pursuant to Section 5.10.

                (m) Reserved for future plan modifications.

                (n) To the extent that an Offer results in the sale of Company
        Stock in the Trust, the Committee shall instruct the Trustee as to the
        investment of the proceeds of such sale.

                (o) In the event a court of competent jurisdiction shall issue
        to the Plan, the Company or the Trustee an opinion or order, which
        shall, in the opinion of counsel to the Company or the Trustee,
        invalidate, in all circumstances or in any particular circumstances, any
        provision or provisions of this Section regarding the determination to
        be made as to whether or not Company Stock held by the Trustee shall be
        sold, exchanged or transferred pursuant to an Offer or cause any such
        provision or provisions to conflict with securities laws, then, upon
        notice thereof to the Company or the Trustee, as the case may be, such
        invalid or conflicting provisions of this Section shall be given no
        further force or effect. In such circumstances the Trustee shall have no
        discretion as to whether or not Company Stock held in the Trust shall be
        sold, exchanged, or transferred unless required under such order or
        opinion, but shall follow instructions received from Participants, to
        the extent such instructions have not been invalidated by such order or
        opinion. To the extent required to exercise any residual fiduciary
        responsibility with respect to such sale, exchange or transfer, the
        Trustee shall take into account in exercising its fiduciary judgment,
        unless it is clearly imprudent to do so, directions timely received from
        Participants, as such directions are most indicative of what action is
        in the best interests of Participants. Further, the Trustee, in addition
        to taking into consideration any relevant financial factors bearing on
        any such decision, shall take into consideration any relevant
        nonfinancial factors, including, but not limited to, the continuing job
        security of Participants as employees of the Sponsor or any Affiliated
        Company, conditions of employment, employment opportunities and other
        similar matters, and the prospect of the Participants and prospective
        Participants for future benefits under the Plan.

        5.10. Voting of Company Stock. Notwithstanding any other provision of
the Plan to the contrary, the Trustee shall have no discretion or authority to
vote Company Stock held in the Trust on any matter presented for a vote by the
stockholders of the Company except in accordance with timely directions received
by the Trustee from either the Committee or Participants, depending on who has
the right to direct the voting of such stock as provided in the following
provisions of this Section 5.10.

                (a) All Company Stock held in the Trust Fund shall be voted by
        the Trustee as the Committee directs in its absolute discretion, except
        as provided in this Section 5.10(a).

                        (i) If the Sponsor has a registration-type class of
                securities (as defined in Code Section 409(e)(4)), then with
                respect to all corporate matters, each Participant shall be
                entitled to direct the Trustee as to the voting of all Company
                Stock allocated and credited to his Accounts.



                                       26
<PAGE>   33

                        (ii) If the Sponsor does not have a registration-type
                class of securities (as defined in Code Section 409(e)(4)), then
                only with respect to such matters as the approval or disapproval
                of any corporate merger or consolidation, recapitalization,
                reclassification, liquidation, dissolution, sale of
                substantially all assets of trade or business, or such similar
                transactions as may be prescribed in Treasury Regulations, each
                Participant shall be entitled to direct the Trustee as to the
                voting of all Company Stock allocated and credited to the his
                Accounts.

                (a) All Participants entitled to direct such voting shall be
        notified by the Sponsor, pursuant to its normal communications with
        shareholders, of each occasion for the exercise of such voting rights
        within a reasonable time before such rights are to be exercised. Such
        notification shall include all information distributed to shareholders
        either by the Sponsor or any other party regarding the exercise of such
        rights. Such Participants shall be so entitled to direct the voting of
        fractional shares (or fractional interests in shares), provided,
        however, that the Trustee may, to the extent possible, vote the combined
        fractional shares (or fractional interests in shares) so as to reflect
        the aggregate direction of all Participants giving directions with
        respect to fractional shares (or fractional interests in shares). To the
        extent that a Participant shall fail to direct the Trustee as to the
        exercise of voting rights arising under any Company Stock credited to
        his Accounts, such Company Stock shall not be voted. The Trustee shall
        maintain confidentiality with respect to the voting directions of all
        Participants.

                (b) Each Participant shall be a named fiduciary (as that term is
        defined in ERISA Section 402(a)(2)) with respect to Company Stock for
        which he has the right to direct the voting under the Plan but solely
        for the purpose of exercising voting rights pursuant to this Section
        5.10 or certain Offers pursuant to Section 5.9.

                (c) In the event a court of competent jurisdiction shall issue
        an opinion or order to the Plan, the Company or the Trustee, which
        shall, in the opinion of counsel to the Company or the Trustee,
        invalidate under ERISA, in all circumstances or in any particular
        circumstances, any provision or provisions of this Section regarding the
        manner in which Company stock held in the Trust shall be voted or cause
        any such provision or provisions to conflict with ERISA, then, upon
        notice thereof to the Company or the Trustee, as the case may be, such
        invalid or conflicting provisions of this Section shall be given no
        further force or effect. In such circumstances the Trustee shall
        nevertheless have no discretion to vote Company Stock held in the Trust
        unless required under such order or opinion but shall follow
        instructions received from Participants, to the extent such instructions
        have not been invalidated. To the extent required to exercise any
        residual fiduciary responsibility with respect to voting, the Trustee
        shall take into account in exercising its fiduciary judgment, unless it
        is clearly imprudent to do so, directions timely received from
        Participants, as such directions are most indicative of what is in the
        best interests of Participants. Further, the Trustee, in addition to
        taking into consideration any relevant financial factors bearing on any
        such decision, shall take into consideration any relevant nonfinancial
        factors, including, but not limited to, the continuing job security of
        Participants as employees of the Company or any of its subsidiaries,
        conditions of employment, employment opportunities and other similar
        matters, and the prospect of the Participants and prospective
        Participants for future benefits under the Plan.

        5.11. Securities Law Limitation. Neither the Committee nor the Trustee
shall be required to engage in any transaction, including without limitation,
directing the purchase or sale of Company Stock, which either determines in its
sole discretion might tend to subject itself, its members, the Plan, the
Company, or any Participant or Beneficiary to a liability under federal or state
securities laws.

        5.12. Distributions. Money and property of the Trust shall be paid out,
disbursed, or applied by the Trustee for the benefit of Participants and
Beneficiaries under the Plan in accordance with directions received by the
Trustee from the Committee. Upon direction of the Committee, the Trustee may pay
money or deliver property from the Trust for any purpose authorized under the
Plan. The Trustee shall be fully protected in paying out money or delivering
property from the Trust from time to time upon written order of the Committee
and shall not be liable for the application of such money or property by the
Committee.



                                       27
<PAGE>   34

        The Trustee shall not be required to determine or to make any
investigation to determine the identity or mailing address of any person
entitled to benefits hereunder and shall have discharged its obligation in that
respect when it shall have sent checks or other property by first-class mail to
such persons at their respective addresses as may be certified to it by the
Committee.

        5.13. Taxes. If the whole or any part of the Trust, or the proceeds
thereof, shall become liable for the payment of any estate, inheritance, income
or other tax, charge, or assessment which the Trustee shall be required to pay,
the Trustee shall have full power and authority to pay such tax, charge, or
assessment out of any moneys or other property in its hands for the account of
the person whose interests hereunder are so liable, but at least ten (10) days
prior to making any such payment, the Trustee shall mail notice to the Committee
of its intention to make such payment. Prior to making any transfers or
distributions of any of the Trust, the Trustee may require such releases or
other documents from any lawful taxing authority as it shall deem necessary.

        5.14. Trustee Records to be Maintained. The Trustee shall keep accurate
and detailed accounts of all investments, receipts, disbursements, and other
transactions hereunder, and all accounts, books, and records relating thereto
shall be open to inspection and audit at all reasonable times by any person
designated by the Company (subject to the provisions of Section 5.9(i)).

        5.15. Annual Report of Trustee. Promptly following the close of each
Plan Year (or such other period as may be agreed upon between the Trustee and
Committee), or promptly after receipt of a written request from the Company, the
Trustee shall prepare for the Company a written account which will enable the
Company to satisfy the annual financial reporting requirements of ERISA, and
which will set forth among other things all investments, receipts,
disbursements, and other transactions effected by the Trustee during such Plan
Year or during the period from the close of the last Plan Year to the date of
such request. Such account shall also describe all securities and other
investments purchased and sold during the period to which it refers, the cost of
acquisition or net proceeds of sale, the securities and investments held as of
the date of such account, and the cost of each item thereof as carried on the
books of the Trustee. All accounts so filed shall be open to inspection during
business hours by the Company, the Committee, and by Participants and
Beneficiaries of the Plan (subject to the provisions of Section 5.9(i)).

        5.16. Appointment of Investment Manager. From time to time the
Committee, in accordance with Section 9.6 hereof, may appoint one or more
Investment Managers who shall have investment management and control over assets
of the Trust not invested or to be invested in Company Stock. The Committee
shall notify the Trustee of such assets of the appointment of the Investment
Manager. In the event more than one Investment Manager is appointed, the
Committee shall determine which assets shall be subject to management and
control by each Investment Manager and shall also determine the proportion in
which funds withdrawn or disbursed shall be charged against the assets subject
to each Investment Manager's management and control. As shall be provided in any
contract between an Investment Manager and the Committee, such Investment
Manager shall hold a revocable proxy with respect to all securities which are
held under the management of such Investment Manager pursuant to such contract
(except for Company Stock), and such Investment Manager shall report the voting
of all securities subject to such proxy on an annual basis to the Committee.



                                       28
<PAGE>   35

                                   ARTICLE VI
                            ACCOUNTS AND ALLOCATIONS

        6.1. Participants' Accounts. In order to account for the allocated
interest of each Participant in the Trust Fund, there shall be established and
maintained for each Participant (making such form of contribution) a Before Tax
Deposits Account, an After Tax Deposits Account, a Company Contribution Account,
and a Rollover Account.

        6.2. Reserved for Plan Modifications.

        6.3. Allocation of Amounts Contributed by Participants. All After Tax
Deposits and Before Tax Deposits contributed by a Participant shall be allocated
to the separate Account established and maintained for that Participant for such
form of contributions. Such contributions shall be paid by the Company to the
Trustee as soon as practicable, but in no event later than thirty (30) days
after such amounts are withheld from the Participants' paychecks.

        6.4. Allocation of Company Contributions and Forfeitures. Within 30 days
of the last day of each month, Company Contributions made pursuant to Section
5.3 for such month and Forfeitures which occurred during such month shall be
allocated as follows:

                (a) All Company Contributions for such month shall first be used
        to restore the Accounts of Participants rehired during such month
        pursuant to the rules of Section 8.6 but only after all Forfeitures
        occurring during such month are so applied.

                (b) If any Forfeitures remain after application of paragraph
        (a), such funds shall be allocated to the Company Contribution Accounts
        of Participants to the extent necessary to correct insufficient
        allocations made to such Accounts in prior months discovered during the
        Plan Year to which such Forfeitures are attributable. Any Company
        Contributions which remain after the application of paragraph (a) may be
        used to pay Plan expenses. The determination of the extent to which such
        contributions shall be used to pay Plan expenses shall be made at the
        sole discretion of the Committee.

                (c) Any Company Contributions and Forfeitures which remain after
        the application of paragraphs (a) and (c) above shall be allocated to
        the Company Contribution Accounts of all Participants who made Sharing
        Deposits during such month, in an amount equal to the percentages
        provided in Section 5.3(a) (or such percentage established by the Board
        of Directors pursuant to Section 5.3(c)) of the Sharing Deposits for
        such month of each such Participant.

        The allocations of Company Contributions under this Section 6.4 shall be
made only after any allocations required by Sections 6.5 and 13.5 have been
made.

        6.5. Valuation of Participants' Accounts. Within sixty (60) days after
each Valuation Date the Trustee shall value the assets of the Trust on the basis
of fair market values. Company Stock held by the Trust shall be valued in
accordance with Section 6.6. If separate investment funds are maintained under
the Trust pursuant to Section 5.4(b) then each such fund shall be valued
separately so that gains or losses of the various funds shall not be commingled.
Upon receipt of these valuations from the Trustee, the Committee shall revalue
the Accounts and subaccounts (as established pursuant to Section 5.4(b)), if
any, of each Participant as of the applicable Valuation Date so as to reflect,
among other things, a proportionate share in any increase or decrease in the
fair market value of the assets in the Trust Fund, determined by the Trustee as
of that date as compared with the value of the assets in the Trust Fund as of
the immediately preceding Valuation Date.

        6.6. Valuation of Company Stock. Company Stock held by the Trust shall
be valued according to the following rules:



                                       29
<PAGE>   36

                (a) In the case of Company Stock that is publicly traded on a
        national securities exchange, such stock shall be valued by reference to
        the closing price of such stock on such exchange on the last trading day
        of the month for which such stock is being valued.

                (b) In the case of Company Stock that is not publicly traded on
        a national securities exchange, such stock shall be valued as of the
        first day of each Plan Year, or such other time as established by the
        Committee, by determining the fair market value of such stock through
        the use of an independent appraiser. Such fair market valuation shall be
        used to determine the valuation of each Participant's Company Stock
        Account on each Valuation Date in such Plan Year pursuant to Section
        6.5.

        6.7. Dividends, Splits, Recapitalizations, Etc. Any Company Stock
received by the Trustee as a stock split, dividend, or as a result of a
reorganization or other recapitalization of the Company shall be allocated in
the same manner as the Company Stock to which it is attributable is then
allocated.

        6.8. Stock Rights, Warrants or Options.

                (a) In the event any rights, warrants, or options are issued on
        Company Stock held in the Trust Fund, the Trustee shall exercise them
        for the acquisition of additional Company Stock as directed by the
        Committee to the extent that cash is then available in the Trust Fund.

                (b) Any Company Stock acquired in this fashion shall be treated
        as Company Stock purchased by the Trustee for the net price paid and
        shall be allocated in the same manner as the funds used to purchase the
        Company Stock were or would be allocated under the provisions of this
        Plan. Thus, if the funds used to purchase the stock consisted of
        unallocated Company Contributions, the stock would be allocated under
        the terms of Section 6.4; if the funds used consisted of the unallocated
        net income of the Trust, the stock would be allocated as provided in
        Section 6.5; and if the funds used consisted of funds previously
        allocated to the Accounts, the stock would be allocated in the manner in
        which the Accounts or subaccounts are debited and credited.

                (c) Any rights, warrants, or options on Company Stock which
        cannot be exercised for lack of cash may, as directed by the Committee,
        be sold by the Trustee and the proceeds allocated in accordance with the
        source of the Company Stock with respect to which the rights, warrants,
        or options were issued in accordance with rules of paragraph (b) above.

        6.9. Reserved for Plan Modifications.

        6.10. Treatment of Accounts Upon Severance. Upon a Participant's
Severance, pending distribution of the Participant's benefit pursuant to the
provisions of Article VIII below, the Participant's Accounts shall continue to
be maintained and accounted for in accordance with all applicable provisions of
this Plan, including but not limited to the allocation of Company Contributions
and net income or loss to which the Accounts are entitled under the applicable
provisions of Sections 6.4 and 6.5 as of any Valuation Date or other date
preceding the distribution of the Participant's entire benefit under the Plan.

        6.11. Cash Dividends.

                (a) All cash dividends paid to the Trustee with respect to
        Company Stock that has been allocated to a Participant's Account as of
        the quarterly date on which the dividend is received by the Trustee
        shall be allocated to the Participant's Account.

                (b) If a Participant (or Beneficiary) has a current right to a
        distribution in Company Stock pursuant to Article VIII and such stock
        has not yet been re-registered in the name of the Participants (or
        Beneficiary) as of the record date of any dividend on such stock, such
        dividend shall be distributed to the Participant (or Beneficiary).



                                       30
<PAGE>   37

                (c) Notwithstanding the provisions of paragraph (a) and (b)
        above, the Committee may determine, in its discretion, that cash
        dividends on such shares may be used to purchase additional shares of
        Company Stock, or in whatever other manner it deems appropriate.

        6.12. Miscellaneous Allocation Rules.

                (a) In the event that there is more than one class of Company
        Stock to be allocated to Participants' Accounts, there shall be
        allocated to the Account of each Participant (entitled to share in
        allocations of Company Stock as of any applicable date) the portion of
        each class of Company Stock (to be allocated as of that date) which the
        amount to be allocated to the Account of the Participant bears to the
        total amount to be allocated to the Accounts of all Participants
        entitled to share in such allocation.

                (b) Allocations of all assets other than Company Stock shall be
        made on the basis of, and expressed in terms of dollar value.
        Allocations of Company Stock shall be on the basis of the number of
        shares of Company Stock (including fractional shares) and valuations, as
        of each Valuation Date, shall be expressed in terms of number of shares
        and dollar value.

                (c) The Committee and the Trustee shall establish such
        additional accounting procedures as may be necessary for the purpose of
        making the allocations, valuations and adjustments to Participants'
        Accounts provided for in this Article VI. From time to time the
        Committee and Trustee may modify such additional accounting procedures
        for the purpose of achieving equitable, nondiscriminatory, and
        administratively feasible allocations among the Accounts of Participants
        in accordance with the general concepts of the Plan and the provisions
        of this Article VI.

                (d) The Company, the Committee and Trustee do not in any manner
        or to any extent whatsoever warrant, guarantee or represent that the
        value of a Participant's Account shall at any time equal or exceed the
        amount previously contributed thereto.

        6.13. Limitations on After Tax Deposits and Company Contributions. With
respect to each Plan Year, After Tax Deposits and Matching Contributions under
the Plan for the Plan Year shall not exceed the limitations by or on behalf of
Highly Compensated Participants under Code Section 401(m), as provided in this
Section. In the event that After Tax Deposits and Matching Contributions under
this Plan by or on behalf of Highly Compensated Participants for any Plan Year
exceed the limitations of this Section for any reason, such excess After Tax
Deposits and Matching Contributions and any income or loss allocable thereto
shall be disposed of in accordance with Section 6.13.(18)

                (a) The After Tax Deposits by Participants and Matching
        Contributions on behalf of Participants for a Plan Year shall satisfy
        the Average Contribution Percentage test set forth in (i) below, or, to
        the extent not precluded by applicable regulations, the alternative
        Average Contribution Percentage test set forth in (ii) below:

                        (i) The "Average Contribution Percentage" for the Highly
                Compensated Participants shall not be more than the Average
                Contribution Percentage of all other Participants multiplied by
                1.25, or

                        (ii) The excess of the Average Contribution Percentage
                for the Highly Compensated Participant over the Average
                Contribution Percentage for all other Participants shall not be
                more than two (2) percentage points (or such lesser percentage
                as the Secretary of the Treasury shall prescribe to prevent the
                multiple use of the alternative limitation set forth in this

----------
        (18) The amendment of Section 6.13 to delete prior paragraph (e)
regarding family aggregation and to redesignate paragraphs (f), (g), and (h) as
paragraphs (e), (f), and (g), respectively, as set forth above was approved by
the Board on November 17, 1998 and is effective January 1, 1997.



                                       31
<PAGE>   38

                Section 6.13(a)(ii) with respect to any Highly Compensated
                Participant), and the Average Contribution Percentage for the
                Highly Compensated Participant shall not be more than the
                Average Contribution Percentage of all other Participants
                multiplied by 2.0.

                        (iii) If one or more Highly Compensated Employees
                participate in both a cash or deferred arrangement and a plan
                subject to the Average Contribution Percentage test maintained
                by the Sponsor or an Affiliated Company and the sum of the
                Actual Deferral Percentage and Average Contribution Percentage
                of those Highly Compensated Employees subject to either or both
                test exceeds the Aggregate Limit, then the Average Contribution
                Percentage of those Highly Compensated Employees who also
                participate in the cash or deferred arrangement will be reduced
                (beginning with such Highly Compensated Employee whose Average
                Contribution Percentage is the highest) so that the limit is not
                exceeded. The amount by which each Highly Compensated Employee's
                Average Contribution Percentage is reduced shall be treated as
                an Excess Aggregate Contribution. The Actual Deferral Percentage
                and Average Contribution Percentage of the Highly Compensated
                Employee are determined after any corrections required to meet
                the Actual Deferral Percentage and Average Contribution
                Percentage tests. Multiple use does not occur if both the Actual
                Deferral Percentage and Average Contribution Percentage of those
                Highly Compensated Employees does not exceed 125 percent of the
                Actual Deferral Percentage and Average Contribution Percentage
                of all other Participants.

                (b) For purposes of Sections 6.13 and 6.14 the following
        definitions shall apply:

                        (i) "Average Contribution Percentage" shall mean, with
                respect to the group of Highly Compensated Participants and the
                group of all other Participants for a Plan Year, the ratio,
                calculated separately and to the nearest one-hundredth of one
                percent for each Participant in such group: The "Contribution
                Percentage" for any Participant shall be determined as follows:

                                (1) For a Highly Compensated Participant, the
                        ratio of such Participant's After Tax Deposits and
                        Matching Contributions for the current Plan Year to such
                        Participant's Compensation for the current Plan Year;
                        provided, however, that the Contribution Percentage of a
                        Highly Compensated Participant with no After Tax
                        Deposits and Matching Contributions made on his or her
                        behalf shall be zero.

                                (2) For any other Participant, the ratio of such
                        Participant's After Tax Deposits and Matching
                        Contributions for the preceding Plan Year to such
                        Participant's Compensation for the preceding Plan Year;
                        provided, however, that the Contribution Percentage of a
                        Participant with no After Tax Deposits and Matching
                        Contributions made on his or her behalf shall be zero.

                        The Contribution Percentage, in each case, however,
                shall not include Matching Contributions that are forfeited
                either to correct Excess Aggregate Contributions or because the
                contribution to which they relate are excess Before Tax
                Deposits, excess After Tax Deposits, or Excess Aggregate
                Contributions. To the extent determined by the Committee and in
                accordance with regulations issued by the Secretary of the
                Treasury under Code Section 401(m)(3), Before Tax Deposits and
                any qualified nonelective contributions, within the meaning of
                Code Section 401(m)(4)(C) on behalf of a Participant may also be
                taken into account for purposes of calculating the Contribution
                Percentage of a Participant. However, if any Before Tax Deposits
                are taken into account for purposes of determining Actual
                Deferral Percentages under Section 4.3 then such Before Tax
                Deposits shall not be taken into account under this Section
                6.13.(19)

----------
        (19) The amendment of Section 6.13(b)(i) as set forth above was approved
by the Board on November 17, 1998 and is effective January 1, 1997.



                                       32
<PAGE>   39

                        (ii) "Highly Compensated Participant" shall mean for any
                Plan Year any Participant who is a Highly Compensated Employee.

                        (iii) "Participant" shall mean any Eligible Employee who
                satisfied the requirements under Section 3.1 during the Plan
                Year whether or not such Eligible Employee has elected to
                contribute to the Plan for such Plan Year.

                        (iv) "Matching Contributions" shall mean the Company
                Contributions allocated to a Participant's Company Contribution
                Account pursuant to Section 6.4(a) of the Plan.

                        (v) "Compensation" shall mean compensation as described
                below:

                                (1) Compensation means compensation determined
                        by the Company in accordance with the requirements of
                        Code Section 414(s) and the Regulations thereunder.

                                (2) For purposes of this Section 6.13,
                        Compensation may, at the Company's election, exclude
                        amounts which are excludable from a Participant's gross
                        income under Code Section 125 (pertaining to cafeteria
                        plans) and Code Section 402(e)(3) (pertaining to 401(k)
                        salary reductions). The Company may change its election
                        provided such change does not discriminate in favor of
                        Highly Compensated Employees.

                                (3) Compensation taken into account for any Plan
                        Year shall not exceed $150,000 as adjusted at the time
                        and in such manner as permitted under Code Section
                        401(a)(17)(B).(20)

                        (vi) "Aggregate Limit" shall mean the sum of (1) 125
                percent of the greater of the Actual Deferral Percentage of all
                Non-Highly Compensated Participants for the Plan Year or the
                Average Contribution Percentage of Non-Highly Compensated
                Participants under the Plan subject to Code Section 401(m) for
                the Plan Year beginning with or within the Plan Year of the cash
                or deferred arrangement and (2) the lesser of 200% or two plus
                the lesser of such Actual Deferral Percentage or Average
                Contribution Percentage. "Lesser" is substituted for "greater"
                in (1) above, and "greater" is substituted for "lesser" after
                "two plus the" in (2) above if it would result in a larger
                Aggregate Limit.

                        (vii) "Excess Aggregate Contributions" shall mean, with
                respect to any Plan Year, the excess of:

                                (1) The aggregate After Tax Deposits and
                        Matching Contributions taken into account in computing
                        the numerator of the Contribution Percentage actually
                        made on behalf of Highly Compensated Employees for such
                        Plan year, over

                                (2) The maximum After Tax Deposits and Matching
                        Contributions permitted under the Average Contribution
                        Percentage test as determined by reducing such Matching
                        Contributions made on behalf of Highly Compensated
                        Employees in order of their Contribution Percentages,
                        beginning with the highest of such percentages.

                        Such determination shall be made after first determining
                excess Before Tax Deposits pursuant to Sections 4.2(a) and 4.3.

                        (viii) "Non-Highly Compensated Participant" shall mean
                any Participant who is not a Highly Compensated Employee.


----------
        (20) The amendment of Section 6.13(b)(v) as set forth above was approved
by the Board on November 17, 1998 and is effective January 1, 1998.



                                       33


<PAGE>   40

                (c) For the purposes of this Section 6.13, if two or more plans
        described in Code Section 401(a) are considered one plan for the
        purposes of Code Sections 401(m), 401(a)(4) or 410(b), the Contribution
        Percentages of Participants shall be treated as made under one plan.
        Plans may be considered one plan for purposes of satisfying Code Section
        401(m) only if they have the same Plan Year.

                (d) For purposes of this Section 6.13, the Contribution
        Percentage for any Highly Compensated Participants who is eligible to
        have After Tax Deposits or Matching Contributions allocated to his or
        her account under two or more plans maintained by the Sponsor or an
        Affiliated Company shall be determined as if the total of such After Tax
        Deposits or Matching Contributions was made under each plan. If a Highly
        Compensated Employee participates in two or more cash or deferred
        arrangements that have different plan years, all cash or deferred
        arrangements that have different plan years, all cash or deferred
        arrangements ending with or within the same calendar year shall be
        treated as a single arrangement. Notwithstanding the foregoing, certain
        plans shall be treated as separate plans if mandatorily disaggregated
        pursuant to Regulations under Code Section 401(m).

                (e) For purposes of the Average Contribution Percentage test,
        After Tax Deposits shall be considered to have been made in the Plan
        Year in which contributed to the Trust. Matching Contributions shall be
        considered made for a Plan Year if made no later than the end of the
        twelve-month period beginning on the day after the close of the Plan
        Year.

                (f) The determination and treatment of the Contribution
        Percentage of any Participant shall satisfy such other requirements as
        may be prescribed by the Secretary of the Treasury.

                (g) The Committee shall keep or cause to have kept such records
        as are necessary to demonstrate that the Plan satisfies the requirements
        of Code Section 401(m) and the regulations thereunder, in accordance
        with regulations prescribed by the Secretary of the Treasury.

        6.14. Provision for Disposition of Excess After Tax Deposits or Matching
Contributions on Behalf of Highly Compensated Participants. After application of
the provisions of Section 4.4 and 4.5, the following provisions shall be
implemented:(21)

                (a) The Committee shall determine, as soon as is reasonably
        possible following the close of each Plan Year, the extent (if any) to
        which contributions by or on behalf of Highly Compensated Participants
        may cause the Plan to exceed the limitations of Section 6.13 for such
        Plan Year. If, pursuant to the determination by the Committee and as
        required by the leveling method described in paragraph (b) below,
        contributions by or on behalf of a Highly Compensated Participant may
        cause the Plan to exceed such limitations, then the Committee shall take
        the following steps:

                        (i) First, any excess After Tax Deposits that were not
                matched by Matching Contributions, together with income or loss
                allocable to such amount (determined in accordance with (d)
                below) shall be returned to the Highly Compensated Participant.

                        (ii) Second, if any excess remains after the provisions
                of (i) above are applied, to the extent necessary to eliminate
                the excess, Matching Contributions with respect to the Highly
                Compensated Participant, any corresponding matched After Tax
                Deposits, and any income or loss allocable thereto, shall either
                be distributed (if non-forfeitable) to the Highly Compensated
                Participant or forfeited (to the extent forfeitable under the
                Plan) on a pro-rata basis. Amounts of excess Matching
                Contributions forfeited by Highly Compensated Participants under
                this Section

----------
        (21) The amendment of Section 6.14 to delete prior paragraph (c)
regarding family aggregation and to redesignate paragraphs (d), (e), (f), and
(g), as paragraphs (c), (d), (e), and (f), respectively, as set forth above was
approved by the Board on November 17, 1998 and is effective January 1, 1997.



                                       34
<PAGE>   41

                6.14, including any income or loss allocable thereto, shall be
                applied to reduce Matching Contributions by the Company or the
                Affiliated Company that made the Matching Contribution on behalf
                of the Highly Compensated Participant for the Plan Year for
                which the excess contribution was made.

                        (iii) If administratively feasible, any amounts
                distributed pursuant to subparagraphs (i) or (ii) above shall be
                returned within two and one-half (2-1/2) months following the
                close of the Plan Year for which such excess After Tax Deposits
                or Matching Contributions were made, but in any event no later
                than the end of the first Plan Year following the Plan Year for
                which the excess After Tax Deposits or Matching Contributions
                were made. After Tax Deposits and Matching Contributions for any
                Plan Year shall be made on the basis of the respective portions
                of such excess After Tax Deposits and Matching Contributions
                attributable to each Highly Compensated Participant.

                (b) For purposes of satisfying the Average Contribution
        Percentage test, the amount of any excess After Tax Deposits or Matching
        Contributions by or on behalf of Highly Compensated Participants for a
        Plan Year under Section 6.13 shall be determined by application of a
        leveling method under which the After Tax Deposits or Matching
        Contributions of the Highly Compensated Participant who has the highest
        dollar amount of After Tax Deposits or Matching Contributions for such
        Plan Year is reduced to the extent required to cause such Highly
        Compensated Participant's After Tax Deposits and Matching Contributions
        to equal the After Tax Deposits and Matching Contributions of the Highly
        Compensated Participant with the next highest After Tax Deposits and
        Matching Contributions; provided, however, if a lesser amount, when
        added to the total dollar amount already distributed under this
        paragraph (b), equals the total excess After Tax Deposits and Matching
        Contributions that are required to be distributed to enable the Plan to
        satisfy the Average Contribution Percentage test, the lesser amount
        shall be distributed. This process shall be repeated until the Plan
        satisfies the Average Contribution Percentage test.(22)

                (c) The amount of income or loss attributable to any excess
        After Tax Deposits or Matching Contributions, as determined under this
        Section 6.14 (the "Excess Aggregate Contribution") by a Highly
        Compensated Participant for a Plan Year shall be equal to the sum of the
        following:

                        (i) The income or loss allocable to the Highly
                Compensated Participant's Excess Aggregate Contribution Accounts
                for the Plan Year multiplied by a fraction, the numerator of
                which is the Excess Aggregate Contribution and the denominator
                of which is the sum of the balance of the Highly Compensated
                Participant's Excess Aggregate Contribution Accounts without
                regard to any income or loss allocable to such Accounts during
                the Plan Year; and

                        (ii) The amount of allocable income or loss for the Gap
                Period using the "safe harbor" method set forth in regulations
                prescribed by the Secretary of the Treasury under Code Section
                401(m). Under the "safe harbor" method, such allocable income or
                loss is equal to 10% of the amount calculated under Section
                6.14(d)(i) above, multiplied by the number of calendar months
                from the last day of the Plan Year until the date of
                distribution of the Participant's excess After Tax Deposits or
                Matching Contributions. A distribution on or before the 15th of
                the month is treated as made on the last day of the preceding
                month, a distribution after the 15th of the month is treated as
                made on the first day of the next month.

                (d) For the purpose of this Section 6.14, the following shall
        apply:

                        (i) "Excess Aggregate Contribution Accounts" shall mean
                the Participant's After Tax Deposits Account and Company
                Contribution Account.

----------
        (22) The amendment of Section 6.14(b) as set forth above was approved by
the Board on November 17, 1998 and is effective January 1, 1997.



                                       35
<PAGE>   42

                        (ii) "Gap Period" shall mean the period between last day
                 of the Plan Year and the date of distribution of any Excess
                 Aggregate Contributions.

                (e) Any excess After Tax Deposits and/or Matching Contributions
        distributed to a Highly Compensated Participant or forfeited by a Highly
        Compensated Participant in accordance with this Section 6.14, shall be
        treated as Annual Additions under Article XIII for the Plan Year for
        which the excess contribution was made.

                (f) Neither the Committee nor the Plan Administrator shall be
        liable to any Participant (or his/her Beneficiary, if applicable) for
        any losses caused by a mistake in calculating the amount of any Excess
        Aggregate Contributions by or on behalf of a Highly Compensated
        Participant and the income or loss allocable thereto.


                                       36
<PAGE>   43

                                   ARTICLE VII
                            VESTING IN PLAN ACCOUNTS

        7.1. No Vested Rights Except as Herein Provided. No Participant shall
have any vested right or interest to, or any right of payment of, any assets of
the Trust Fund, except as expressly provided in this Plan. Neither the making of
any allocations nor the credit to any Account of a Participant shall vest in any
Participant any right, title, or interest in or to any assets of the Trust Fund.

        7.2. Vesting Schedule.

                (a) A Participant's interest in his/her Company Contribution
        Account shall vest in accordance with the following schedule:

<TABLE>
<CAPTION>
               Years of Credited Service                   Vested Percentage
               -------------------------                   -----------------
<S>                                                        <C>
               Less than 3                                         0%
               3 or more                                         100%
</TABLE>

                (b) Notwithstanding the above, a Participant shall become fully
        vested in his or her Company Contribution Account upon the occurrence of
        any of the following events, if such Participant is then still an
        Employee:

                        (i) Attainment of age sixty-two (62);

                        (ii) Death;

                        (iii) Severance due to a Disability; or

                        (iv) Occurrence of a Change of Control pursuant to
                Section 12.4.

                (c) Notwithstanding the above, a Participant shall at all times
        be 100% vested in all amounts transferred from the SmithKline Beckman
        Corporation Savings and Investment Plan to this Plan.

        7.3. Vesting of Participant Deposits. A Participant shall be fully
vested at all times in the amounts allocated to his or her Before Tax Deposits
Account, After Tax Deposits Account, and Rollover Account.



                                       37
<PAGE>   44

                                  ARTICLE VIII
                            PAYMENT OF PLAN BENEFITS

        8.1. Withdrawals During Employment. A Participant may withdraw, once in
any month period, amounts of at least $500 from his or her Accounts while an
Employee in accordance with the following rules:

                (a) A Participant may, for any reason, withdraw any portion of
        the amount allocated to his After Tax Deposits Account (excluding any
        After Tax Deposits recharacterized as such under Section 4.5 and any
        earnings attributable to After Tax Deposits after December 31, 1988). A
        Participant who makes a withdrawal of After Tax Deposits which are also
        Sharing Deposits shall not receive an allocation of Company
        Contributions pursuant to Section 6.4(a)(iii) with respect to any
        Sharing Deposits made by such Participant during the 6 month period
        beginning on the date of any such withdrawal.(23)

                (b) After withdrawing all After Tax Deposits pursuant to
        paragraph (a) above, a Participant with 3 or more years of Credited
        Service may, for any reason, withdraw any portion of the amount
        allocated to his or her Company Contribution Account that was so
        allocated 2 or more years prior to the date of such a withdrawal.

                (c) On or after the attainment of age 59-1/2, a Participant may
        withdraw any portion of the amounts allocated to any of his or her
        Accounts.

                (d) After withdrawing all amounts permitted pursuant to
        paragraphs (a), (b) and (c) above, a Participant may withdraw amounts
        from his or her Before Tax Deposits Account (excluding any earnings
        attributable to such Account after December 31, 1988) and Rollover
        Account, and the vested portion of his or her Company Contribution
        Account, and any remaining amount in his or her After Tax Deposits after
        December 31, 1988) earnings attributable to such After Tax Deposits
        after December 31, 1988) which were recharacterized as such under
        Section 4.5 upon incurring a hardship as determined by the Plan
        Administrator in accordance with the following procedures:

                        (i) A hardship distribution shall be made to a
                Participant only if the Plan Administrator (or its
                representative) determines that the Participant has an immediate
                and heavy financial need and that a withdrawal from the Plan is
                necessary in order to satisfy such need.

                        (ii) The following situations shall be "deemed" to be
                immediate and heavy financial needs:

                                (1) Medical expenses described in Code Section
                        213(d) incurred by the Participant, the Participant's
                        spouse, or any dependents of the Participant (as defined
                        in Code Section 152);

                                (2) The purchase (excluding mortgage payments)
                        of a principal residence for the Participant only;

                                (3) The payment of tuition and related
                        educational fees for the next twelve (12) months of
                        post-secondary education for the Participant, his or her
                        spouse, children, or dependents;

                                (4) The need to prevent the eviction of the
                        Participant from his or her principal residence or
                        foreclosure on the mortgage of the Participant's
                        principal residence; and


----------
        (23) The amendment of Section 8.1(a) as set forth above was approved by
the Board on November 17, 1998 and is effective January 1, 1997.



                                       38
<PAGE>   45

                                (5) Any other situation deemed as immediate and
                        heavy financial needs by the Internal Revenue Service
                        through the publication of revenue rulings, notices, and
                        other documents of general applicability.

                        (iii) In the case of the hardship withdrawal of the
                vested portion of a Participant's Company Contribution Account,
                the following situations shall also be "deemed" to be immediate
                and heavy financial needs:

                                (1) The purchase of a primary residence for the
                        Participant or a dependent, including related expenses
                        incurred up to 3 months following the purchase;

                                (2) Any education expense for the Participant or
                        a dependent for the current or immediately prior school
                        semester;

                                (3) The funeral expense of a dependent; and

                                (4) Any medical or dental expenses for the
                        Participant or his or her dependents incurred during the
                        current or immediately prior calendar year.

                        (iv) The determination as to whether a withdrawal from
                the Plan is necessary to satisfy an immediate and heavy
                financial need is to be made on the basis of all relevant facts
                and circumstances. However, a withdrawal from the Plan shall be
                necessary in order to satisfy an immediate and heavy financial
                need only if:

                                (1) The amount of the withdrawal is not in
                        excess of the amount required to relieve the financial
                        need (including amounts necessary to pay any federal,
                        state, or local income taxes or penalties reasonably
                        anticipated to result from the withdrawal) or in excess
                        of the amount that such need could not be satisfied from
                        other sources that are reasonably available to the
                        Participant.

                                (2) The Participant submits a signed statement
                        to the Committee, on which the Committee can reasonably
                        rely, to the extent that the need cannot be relieved:

                                        (A) Through reimbursement or
                                compensation by insurance or otherwise;

                                        (B) By reasonable liquidation of the
                                Participant's assets, to the extent such
                                liquidation would not itself cause an immediate
                                and heavy financial need;

                                        (C) By cessation of Before Tax Deposits
                                or After Tax Deposits under the Plan; or

                                        (D) By other withdrawals or
                                distributions or nontaxable (at the time of the
                                loan) loans from any plan maintained by the
                                Company (including this Plan) or any other
                                employer, or by borrowing from commercial
                                sources on reasonable commercial terms.

                        (v) A Participant's resources shall be deemed to include
                those assets of his or her spouse and minor children that are
                reasonably available to the Participant.

                        (vi) A Participant who makes a hardship withdrawal
                pursuant to this Section 8.1(d) shall not be permitted to make
                Before Tax Deposits or After Tax Deposits for a period of 12
                months from the date of such withdrawal unless such withdrawal
                only included amounts from such Participant's Company
                Contribution Account.



                                       39
<PAGE>   46

                        (vii) A Participant who makes a hardship withdrawal
                pursuant to this Section 8.1 may not make Before Tax
                Contributions for such Participant's taxable year immediately
                following the taxable year of such hardship withdrawal that is
                in excess of the applicable limit under Code Section 402(g) for
                such immediately following taxable year less the amount of such
                Participant's Before Tax Contributions for the taxable year in
                which such Participant made the hardship withdrawal.

                        (viii) Notwithstanding the provisions of paragraph (e)
                below, all hardship withdrawals shall be made in cash regardless
                of the fund from which such withdrawal is made. The Committee
                may, at its discretion, establish written procedures whereby
                Participants may receive an estimated prepayment of a hardship
                withdrawal based on the last available valuation of such
                Participant's Accounts with a reconciling adjustment made to
                such Participant's Accounts after current valuation data is
                available.

                (e) Except as provided in subparagraph (d)(viii) above, all
        withdrawals shall be made in cash, except to the extent any of the
        vested portion of a Participant's Account to be withdrawn is invested in
        the Company Stock Fund, then such withdrawal may be made in Company
        Stock at the election of the Participant to the extent so invested.

                (f) Except as provided in paragraphs (a) through (d) above,
        Participants may not receive a distribution of their benefits under the
        plan prior to termination of employment.

                (g) Except as provided in paragraph (d)(viii) above, all
        withdrawals shall be made to Participants as soon as reasonably
        practicable following the Valuation Date in the month for which a
        properly completed withdrawal request is deemed perfected. All
        withdrawals shall be based on the Account balances of a Participant as
        of such Valuation Date. If a properly completed withdrawal request is
        received by the Plan Administrator during any month and on or before the
        fifteenth day of such month, the withdrawal request shall be deemed
        perfected in such month, otherwise such withdrawal request shall be
        deemed perfected in the immediately following month.

                (h) Notwithstanding anything to the contrary in this Section 8.1
        or Section 4.1, the additional withdrawal restrictions stated in Section
        5.5(h) shall apply to all Participants who are Insiders, as that term is
        defined Section 5.5(h).(24)

        8.2. Distributions Upon Termination of Employment or Disability.

                (a) Subject to the provisions of Section 8.5, if a Participant
        incurs a Severance for any reason (including Disability) other than
        death, all or a portion of such Participant's entire vested portion of
        his or her Accounts under the Plan shall be (i) distributed directly to
        such Participant or (ii) at the election of the Participant, distributed
        as an Eligible Rollover Distribution and paid directly by the Trustee to
        the trustee of an Eligible Retirement Plan.(25)

                (b) Any distribution made pursuant to paragraph (a) shall be
        paid no more than once in any three (3) month period in amounts of at
        least $500 (or the Participant's entire vested portion of his or her
        Accounts under the Plan if lesser) and shall be made in cash except to
        the extent any of the vested portion


----------
        (24) The amendment of Section 8.1(h) as set forth above was adopted by
the Sponsor and is effective July 23, 1996.

        (25) The amendment of Section 8.2(a) as set forth above was approved by
the Board on November 17, 1998 and is effective January 1, 1999.



                                       40
<PAGE>   47

        of such Participant's Accounts is invested in the Company Stock Fund,
        then, to the extent so invested, such distribution may be made in
        Company Stock at the election of the Participant.(26)

                (c) Notwithstanding the provisions contained in the foregoing
        paragraphs of this Section 8.2 or Section 8.1, any provision which
        restricts or would deny a Participant through the withholding of consent
        or the exercise of discretion by some person or persons other than the
        Participant (and where relevant, other than the Participant's spouse) of
        an alternative form of benefit, in violation of Code Section 411(d)(6)
        and the regulation promulgated thereunder, is hereby amended by the
        deletion of the consent and/or discretion requirement.

        8.3. Distribution Upon Death of Participant. In the event of the death
of a Participant, the Participant's benefit under the Plan shall be distributed
to the surviving spouse as Beneficiary (if still alive) unless the Participant
designated another Beneficiary pursuant to Section 8.4. If the Beneficiary is
the surviving spouse of the Participant, he or she may elect to have an Eligible
Rollover Distribution paid directly by the Trustee to the trustee of an Eligible
Retirement Plan. Distributions to the Beneficiary pursuant to this Section 8.3
shall be in the same form as specified in Section 8.2(b) above, as elected by
the Beneficiary. All such distributions shall be made as soon as practicable
after the death of the Participant. A Beneficiary may not elect to defer such a
distribution.

        8.4. Designation of Beneficiary.

                (a) At any time, and from time to time, each Participant shall
        have the unrestricted right to designate the Beneficiary to receive the
        portion of his death benefit and to revoke any such designation. Each
        such designation shall be evidenced by a written instrument signed by
        the Participant and filed with the Committee.

                (b) If the Participant is married and designates a Beneficiary
        other than his spouse, said designation shall not be honored by the
        Committee unless accompanied by the written consent of said spouse to
        said designation. Such consent (i) must designate a Beneficiary which
        may not be changed without the consent of the spouse (or the consent of
        the spouse expressly permits designation by the Participant without any
        further consent by the spouse), (ii) must acknowledge the effect of the
        designation, and (iii) must be witnessed by a Plan representative or a
        notary public. No consent of such spouse shall be necessary if it is
        established to the satisfaction of a Plan representative that the
        consent required under this paragraph (b) cannot or need not be obtained
        because (i) there is no spouse, (ii) the spouse cannot be located, or
        (iii) there exist such other circumstances which, pursuant to
        Regulations under Code Section 417, permit a distribution to another
        Beneficiary. Any consent of a spouse obtained pursuant to this paragraph
        (b) or any determination that the consent of the spouse cannot (or need
        not) be obtained, shall be effective only with respect to that spouse.
        If a Participant becomes married following his designation of a
        Beneficiary other than his spouse, such designation shall be ineffective
        unless the spousal consent requirements of this paragraph are satisfied
        with respect to such spouse (subject, however, to the provisions of
        Article XV regarding Qualified Domestic Relations Orders).

                (c) If the Participant is married and does not designate a
        Beneficiary, the Participant's spouse shall be his Beneficiary for
        purposes of this Section. If the deceased Participant is not married and
        shall have failed to designate a Beneficiary, or if the Committee shall
        be unable to locate the designated Beneficiary after reasonable efforts
        have been made, or if such Beneficiary shall be deceased, distribution
        of the Participant's death benefit shall be made by payment of the
        deceased Participant's entire interest in the Trust to his personal
        representative in a single lump-sum payment. In the event the deceased
        Participant is not a resident of California at the date of his death,
        the Committee, in its discretion, may require the establishment of
        ancillary administration in California. If the Committee cannot locate a
        qualified personal representative of the deceased Participant, or if
        administration of the deceased Participant's estate is not otherwise
        required, the Committee, in its discretion, may pay the deceased


----------
        (26) The amendment of Section 8.2(b) as set forth above was approved by
the Board on November 17, 1998 and is effective January 1, 1999.



                                       41
<PAGE>   48

        Participant's interest in the Trust to his heirs at law (determined in
        accordance with the laws of the State of California as they existed at
        the date of the Participant's death).

        8.5. Distribution Rules. Notwithstanding any other provisions of this
Article VIII of the Plan regarding distributions of Participant's Accounts, the
following additional rules shall apply to all such distributions.

                (a) In no event shall any benefits under this Plan, including
        benefits upon retirement, Severance, or Disability, be paid (or commence
        to be paid) to a Participant prior to the "Consent Date" (as defined
        herein) unless the Participant consents in writing to the payment (or
        commencement of payment) of such benefits prior to said Consent Date. As
        used herein, the term "Consent Date" shall mean the later of (i) the
        Participant's 62nd birthday, or (ii) the Participant's Normal Retirement
        Age. Notwithstanding the foregoing, the provisions of this paragraph
        shall not apply (i) following the Participant's death, or (ii) with
        respect to a lump sum distribution of the vested portion of a
        Participant's Account if the total amount of such vested portion does
        not exceed or has never exceeded $5,000.(27)

                (b) Unless a Participant elects otherwise pursuant to paragraph
        (a) above, distributions of the vested portion of a Participant's
        Accounts shall commence no later than the 60th day after the close of
        the Plan Year in which the latest of the following events occurs: (i)
        the Participant's Normal Retirement Age; (ii) the tenth anniversary of
        the year in which the Participant commenced participation in the Plan;
        or (iii) the termination of the Participant's employment with the
        Company.

                (c) Notwithstanding paragraphs (a) or (b) above, distributions
        of the entire vested portion of a Participant's Accounts shall be made
        no later than the Participant's Required Beginning Date, or, if such
        distribution is to be made over the life of such Participant or over the
        lives of such Participant and a Beneficiary (or over a period not
        extending beyond the life expectancy of such Participant and
        Beneficiary) then such distribution shall commence no later than the
        Participant's Required Beginning Date. Required Beginning Date shall
        mean:

                        (i) Participants attaining age 70-1/2 prior to 1999: The
                Required Beginning Date of a Participant who attains age 70-1/2
                prior to 1999 shall be April 1 of the calendar year immediately
                following the year in which the Participant attains age 70-1/2;
                provided, however, that a Participant, other than a Five Percent
                Owner (as defined in Code Section 416(i) and applicable
                regulations), who attains age 70-1/2 in 1996, 1997, or 1998 may
                elect to defer the Required Beginning Date until April 1 of the
                calendar year following the later of the calendar year in which
                the Participant attains age 70-1/2 or retires.

                        (ii) Participants attaining age 70-1/2 after 1998: The
                Required Beginning Date of a Participant who attains age 70-1/2
                after 1998 shall be April 1 of the calendar year immediately
                following the later of the calendar year in which the
                Participant attains age 70-1/2 or retires; provided, however, if
                such Participant is a Five Percent Owner (as defined in Code
                Section 416(i) and applicable regulations) with respect to the
                Plan Year ending in the calendar year in which such Participant
                attains age 70-1/2, the Required Beginning Date shall be April 1
                of the calendar year immediately following the year in which
                such Participant attains age 70-1/2.(28)

                (d) Notwithstanding anything to the contrary in this Plan, if a
        Participant dies before distribution of his or her vested benefit has
        begun in accordance with paragraph (c) above, the Participant's vested
        benefit shall be distributed to his Beneficiary within five years from
        the date of the Participant's death except that any portion of the
        Account balance meeting the following requirements shall not be subject
        to this rule:


----------
        (27) The amendment of Section 8.5(a) as set forth above was adopted by
the Sponsor and is effective January 1, 1998.

        (28) The amendment of Section 8.5(c) as set forth above was adopted by
the Sponsor and is effective January 1, 1997.



                                       42
<PAGE>   49

                        (i) A Beneficiary has been designated to receive the
                Participant's Account balance and such designation is effective
                at the Participant's death;

                        (ii) The Account balance is paid to the Beneficiary over
                the Beneficiary's life or over a period not to exceed the
                Beneficiary's life; and

                        (iii) The payments to the Beneficiary commence within
                one year of the Participant's death, or, if the Beneficiary is
                the spouse, before the time the deceased Participant would have
                attained age 70-1/2.

                (e) All distributions under this Plan shall be made in
        accordance with the minimum distribution incidental benefit requirements
        of Code Section 401(a)(9)(G) and in accordance with all regulations
        issued under Code Section 401(a)(9).

                (f) If it is not administratively practical to calculate and
        commence payments by the latest date specified in the rules of
        paragraphs (b), (c) and (d) above because the amount of the
        Participant's benefit cannot be calculated, or because the Committee is
        unable to locate the Participant (or eligible Beneficiary) after making
        reasonable efforts to do so, the payment shall be made as soon as is
        administratively possible (but not more than 60 days) after the
        Participant (or Beneficiary) can be located and the amount of the
        distributable benefit can be ascertained.

        8.6. Forfeitures.

                (a) In the event that a distribution of the entire vested
        portion of a Participant's Accounts is made to a Participant due to a
        Severance when he is not fully vested in such Accounts, the nonvested
        portion of the Participant's Account(s) shall be forfeited as of the
        Participant's Severance Date. A Participant who incurs such a Severance
        when no portion of his or her Accounts are vested shall be deemed to
        have received a distribution pursuant to this paragraph (a).

                (b) In the event a Participant who receives a distribution
        pursuant to paragraph (a) above is rehired by the Company prior to the
        date such Participant incurs five consecutive Breaks in Service, the
        amount so forfeited shall be reinstated to the Participant's Accounts as
        of the Participant's Reemployment Commencement Date (without regard to
        any interest or investment earnings on such amount).

                (c) If a Participant incurs a Severance when partially vested in
        his Accounts and does not receive a distribution described in paragraph
        (a), the Participant's Account shall continue to be held by the Trustee
        as provided in Section 6.10. Thereafter, when the Participant incurs
        five consecutive Breaks in Service, the non-vested portion of the
        Participant's Accounts shall be forfeited.

                (d) Forfeitures shall be used as provided in Section 6.4.

        8.7. Valuation of Plan Benefits Upon Distribution. For the purpose of
any distribution of benefits under this Article VIII, the amount of such
distribution shall be based on the value of a Participant's Accounts as of the
Valuation Date in the month in which the application for such distribution is
deemed perfected. If a properly completed distribution application is received
by the Plan Administrator during any month and on or before the fifteenth day of
such month, the distribution application shall be deemed perfected in such
month, otherwise such distribution application shall be deemed perfected in the
immediately following month.

        8.8. Lapsed Benefits.

                (a) In the event that a benefit is payable under this Plan to a
        Participant and after reasonable efforts the Participant cannot be
        located for the purpose of paying the benefit during a period of three



                                       43
<PAGE>   50

        consecutive years, the Participant shall be presumed dead and the
        benefit shall, upon the termination of that three year period, be paid
        to the Participant's Beneficiary.

                (b) If any eligible Beneficiary cannot be located for the
        purpose of paying the benefit for the following two years, then the
        benefit shall be forfeited and allocated to the Accounts of the other
        Participants for such Plan Year in accordance with Section 6.4.

                (c) If a Participant shall die prior to receiving a distribution
        of his entire benefit under this Plan (other than a Participant presumed
        to have died as provided above), if after reasonable efforts an eligible
        Beneficiary of the Participant cannot be located for the purpose of
        paying the benefit during a period of five consecutive years, the
        benefit shall, upon expiration of such five-year period, be forfeited
        and reallocated to the Accounts of the other Participants in accordance
        with Section 6.4.

                (d) For purposes of this Section, the term "Beneficiary" shall
        include any person entitled under Section 8.4 to receive the interest of
        a deceased Participant or deceased designated Beneficiary. It is the
        intention of this provision that during the relevant waiting period (two
        years or five years) the benefit will be distributed to an eligible
        Beneficiary in a lower priority category under Section 8.4 if no
        eligible Beneficiary in a higher priority category can be located by the
        Committee after reasonable efforts have been made.

                (e) Notwithstanding the foregoing rules, if after such a
        forfeiture the Participant or an eligible Beneficiary shall claim the
        forfeited benefit, the amount forfeited shall be reinstated (without
        regard to any interest or investment earnings on such amount) and paid
        to the claimant as soon as practical following the claimant's production
        of reasonable proof of his or her identity and entitlement to the
        benefit (determined pursuant to the Plan's normal claim review
        procedures under Section 9.8).

                (f) The Committee shall direct the Trustee with respect to the
        procedures to be followed concerning a missing Participant (or
        Beneficiary), and the Company shall be obligated to contribute to the
        Trust Fund any amounts necessary after the application of Section 6.4 to
        pay any reinstated benefit after it has been forfeited pursuant to the
        provisions of this Section.

        8.9. Persons Under Legal Disability.

                (a) If any payee under the Plan is a minor or if the Committee
        reasonably believes that any payee is legally incapable of giving a
        valid receipt and discharge for any payment due him/her, the Committee
        may have the payment, or any part thereof, made to the person (or
        persons or institution) whom it reasonably believes is caring for or
        supporting the payee, unless it has received due notice of claim
        therefor from a duly appointed guardian or committee of the payee.

                (b) Any such payment shall be a payment from the Accounts of the
        payee and shall, to the extent thereof, be a complete discharge of any
        liability under the Plan to the payee.

        8.10. Additional Documents.

                (a) The Committee or the Company may require satisfactory proof
        of any matter under this Plan from or with respect to any Employee,
        Participant, or Beneficiary, and no person shall be entitled to receive
        any benefits under this Plan until the required proof shall be
        furnished.

                (b) The Committee or Trustee, or both, may require the execution
        and delivery of such documents, papers and receipts as the Committee or
        Trustee may determine necessary or appropriate in order to establish the
        fact of death of the deceased Participant and of the right and identity
        of any Beneficiary or other person or persons claiming any benefits
        under this Article VIII.



                                       44
<PAGE>   51

                (c) The Committee or the Trustee, or both, may, as a condition
        precedent to the payment of death benefits hereunder, require an
        inheritance tax release and/or such security as the Committee or
        Trustee, or both, may deem appropriate as protection against possible
        liability for State or Federal death taxes attributable to any death
        benefits.

        8.11. Trustee-to-Trustee Transfers. In the case of any Participant or
Participants who have terminated employment with the Company and all Affiliated
Companies and subsequently become employed by an unrelated successor employer,
the Committee, shall at the request of such Participant or Participants, direct
the Trustee to transfer the assets in the Accounts of such Participant or
Participants directly to the trustee of any retirement plan maintained by such
successor employer or employers in lieu of any distribution described in the
preceding provisions of this Article VIII but only if (i) the retirement plan
maintained by such successor employer is determined to the satisfaction of the
Committee to be qualified under Code Section 401, (ii) the sponsor and trustee
of such plan consent to the transfer, and (iii) such transfer satisfies the
conditions of Section 12.3 hereof.

        8.12. Loans to Participants. A Participant may borrow from his or her
Accounts while an Employee in accordance with the following rules:

                (a) Subject to minimum and maximum loan requirements, a
        Participant may borrow up to 50% of his or her After Tax Deposits
        Account, Rollover Account, the vested portion of his or her Company
        Contribution Account and Before Tax Deposits Account. Only one loan may
        be outstanding to a Participant any time. The minimum loan amount shall
        be $1,000 and the maximum loan amount shall be $50,000. The $50,000
        maximum loan amount shall be reduced by the excess, if any, of the
        highest outstanding balance of loans from the Plan to the Participant
        during the one-year period ending on the day before the loan is made
        over the outstanding balance of loans on the date the loan is made.

                (b) A loan to a Participant shall be made solely from his or her
        Account(s) and shall be considered an investment directed by the
        Participant. Loan amounts shall be funded from the Participant's
        Accounts in the following order: (i) After Tax Deposits Account; (ii)
        Rollover Account; (iii) Company Contribution Account; and (iv) Before
        Tax Deposits Account. Principal repayments shall be credited to the
        Participant's Accounts in the inverse of the order used to fund the loan
        and interest payments shall be credited to the Participant's Accounts in
        direct proportion to the principal repayments.

                (c) A loan to a Participant shall bear an interest rate equal to
        the prime rate reported in the Wall Street Journal on the last business
        day of the previous month plus one percent (1%) and shall remain fixed
        throughout the term of the loan. Notwithstanding the preceding sentence,
        if the Committee determines that such rate is not reasonable or
        otherwise not in accordance with applicable requirements under the Code
        or ERISA, the Committee shall set an alternate interest rate at the time
        that the loan is taken.

                (d) A loan to a Participant shall have a definite maturity date
        and repayment schedule and shall be amortized on a substantially level
        basis with repayments occurring not less frequently than quarterly.
        Loans, other than loans made for the purpose of acquiring the principal
        residence of the Participant, shall be made for a period not to exceed
        five (5) years. Loans made for the purpose of acquiring the principal
        residence of the Participant shall be made for a period not to exceed
        fifteen (15) years.

                (e) A loan to a Participant shall be secured by the vested
        portion of the Participant's Account(s). No more than 50% of the
        Participant's vested Account(s) as determined on the date the loan is
        issued shall be considered by the Plan as security for a loan. A
        Participant who borrows from the Plan hereby agrees that, unless
        expressly provided otherwise in loan documents, any such loan is
        automatically secured by 50% of his or her vested Account(s).

                (f) A loan to a Participant shall be evidenced by a promissory
        note and/or such other documentation as required by the Committee.



                                       45
<PAGE>   52

                (g) A loan to a Participant shall be treated as a distribution
        unless the entire principal amount and any interest accrued thereon is
        repaid within ninety (90) days after the occurrence of a Participant's
        Severance. Absent repayment by the Participant, the Committee shall
        instruct the Trustee to distribute the note to the Participant as part
        of his or her distribution and the Participant's vested Account(s) shall
        be reduced to the extent of such distribution.

                (h) The Committee shall establish the participant loan program
        and have the duty to manage and administer the participant loan program
        in accordance with the terms and provisions of this Section. The
        Committee shall have, but not by way of limitation, the following
        discretionary powers and authority:

                        (i) To determine the manner in which loan repayments
                shall occur whether it be through automatic payroll deductions
                or otherwise.

                        (ii) To establish any fees, including but not limited to
                application fees and maintenance fees, and the manner in which
                such fees are collected from the Participant.

                        (iii) To consider only those factors which would be
                considered in a normal commercial setting by persons in the
                business of making similar types of loans in establishing the
                participant loan program. Such factors may include the
                applicant's credit worthiness and financial need, but may not
                include any factor which would discriminate against Participants
                who are not Highly Compensated Employees. Loans shall be made
                available to all Participants without regard to a Participant's
                race, color, religion, sex, age or national origin and shall not
                be made available to Participants who are Highly Compensated
                Employees in an amount greater than the amount made available to
                Participants who are not Highly Compensated Employees.



                                       46
<PAGE>   53

                                   ARTICLE IX
                          OPERATION AND ADMINISTRATION

        9.1. Appointment of Committee. There is hereby created a committee (the
"Committee") which shall exercise such powers and have such duties in
administering the Plan as are hereinafter set forth. The Board of Directors
shall determine the number of members of such Committee. The members of the
Committee shall be appointed by the Board of Directors and such Board shall from
time to time fill all vacancies occurring in said Committee. The members of the
Committee shall constitute the Named Fiduciaries of the Plan within the meaning
of Section 402(a)(2) of ERISA; provided that solely for purposes of Section 5.9
hereof, Participants shall be Named Fiduciaries with respect to shares of
Company Stock allocated to their respective Accounts and solely for purposes of
Section 5.10, Participants shall be Named Fiduciaries with respect to shares of
Company Stock allocated to their respective Accounts on matters as to which they
are entitled to provide voting directions.

        9.2. Transaction of Business. A majority of the Committee shall
constitute a quorum for the transaction of business. Actions of the Committee
may be taken either by vote at a meeting or in writing without a meeting. All
action taken by the Committee at any meeting shall be by a vote of the majority
of those present at such meeting. All action taken in writing without a meeting
shall be by a vote of the majority of those responding in writing. All notices,
advices, directions and instructions to be transmitted by the Committee shall be
in writing and signed by or in the name of the Committee. In all its
communications with the Trustee, the Committee may, by either of the majority
actions specified above, authorize any one or more of its members to execute any
document or documents on behalf of the Committee, in which event it shall notify
the Trustee in writing of such action and the name or names of its members so
designated and the Trustee shall thereafter accept and rely upon any documents
executed by such member or members as representing action by the Committee until
the Committee shall file with the Trustee a written revocation of such
designation.

        9.3. Voting. Any member of the Committee who is also a Participant
hereunder shall not be qualified to act or vote on any matter relating solely to
himself, and upon such matter his presence at a meeting shall not be counted for
the purpose of determining a quorum. If, at any time a member of the Committee
is not so qualified to act or vote, the qualified members of the Committee shall
be reduced below two (2), the Board of Directors shall promptly appoint one or
more special members to the Committee so that there shall be at least one
qualified member to act upon the matter in question. Such special Committee
members shall have power to act only upon the matter for which they were
especially appointed and their tenure shall cease as soon as they have acted
upon the matter for which they were especially appointed.

        9.4. Responsibility of Committee. The authority to control and manage
the operation and administration of the Plan, the general administration of this
Plan, the responsibility for carrying out this Plan and the authority and
responsibility to control and manage the assets of the Trust are hereby
delegated by the Board of Directors to and vested in the Committee, except to
the extent reserved to the Board of Directors, the Sponsor, or the Company.
Subject to the limitations of this Plan, the Committee shall, from time to time,
establish rules for the performance of its functions and the administration of
this Plan. In the performance of its functions, the Committee shall not
discriminate in favor of Highly Compensated Employees.

        9.5. Committee Powers. The Committee shall have all discretionary powers
necessary to supervise the administration of the Plan and control its
operations. In addition to any discretionary powers and authority conferred on
the Committee elsewhere in the Plan or by law, the Committee shall have, but not
by way of limitation, the following discretionary powers and authority:

                (a) To designate agents to carry out responsibilities relating
        to the Plan, other than fiduciary responsibilities as provided in
        Section 9.6.

                (b) To employ such legal, actuarial, medical, accounting,
        clerical, and other assistance as it may deem appropriate in carrying
        out the provisions of this Plan, including one or more persons to render
        advice with regard to any responsibility any Named Fiduciary or any
        other fiduciary may have under the Plan.



                                       47
<PAGE>   54

                (c) To establish rules and regulations from time to time for the
        conduct of the Committee's business and the administration and
        effectuation of this Plan.

                (d) To administer, interpret, construe, and apply this Plan and
        to decide all questions which may arise or which may be raised under
        this Plan by any Employee, Participant, former Participant, Beneficiary
        or other person whatsoever, including but not limited to all questions
        relating to eligibility to participate in the Plan, the amount of
        Credited Service of any Participant, and the amount of benefits to which
        any Participant or his Beneficiary may be entitled.

                (e) To determine the manner in which the assets of this Plan, or
        any part thereof, shall be disbursed.

                (f) To direct the Trustee, in writing, from time to time, to
        invest and reinvest the Trust Fund, or any part thereof, or to purchase,
        exchange, or lease any property, real or personal, which the Committee
        may designate. This shall include the right to direct the investment of
        all or any part of the Trust in any one security or any one type of
        securities permitted hereunder. Among the securities which the Committee
        may direct the Trustee to purchase are "qualifying employer securities"
        as defined in Code Section 4975(e).

                (g) Subject to provisions (a) through (d) of Section 10.1, to
        make administrative amendments to the Plan that do not cause a
        substantial increase or decrease in benefit accruals to Participants and
        that do not cause a substantial increase in the cost of administering
        the Plan.

                (h) To perform or cause to be performed such further acts as it
        may deem to be necessary, appropriate or convenient in the efficient
        administration of the Plan.

        Any action taken in good faith by the Committee in the exercise of
discretionary powers conferred upon it by this Plan shall be conclusive and
binding upon the Participants and their Beneficiaries. All discretionary powers
conferred upon the Committee shall be absolute; provided, however, that all such
discretionary power shall be exercised in a uniform and nondiscriminatory
manner.

        9.6. Additional Powers of Committee. In addition to any discretionary
powers or authority conferred on the Committee elsewhere in this Plan or by law,
such Committee shall have the following discretionary powers and authority:

                (a) To appoint one or more Investment Managers pursuant to
        Section 5.16 to manage and control any or all of the assets of the Trust
        not invested or to be invested in Company Stock;

                (b) To designate persons (other than the members of the
        Committee) to carry out fiduciary responsibilities, other than any
        responsibility to manage or control the assets of the Trust;

                (c) To allocate fiduciary responsibilities among the members of
        the Committee, other than any responsibility to manage or control the
        assets of the Trust;

                (d) To cancel any such designation or allocation at any time for
        any reason;

                (e) To direct the voting of any Company Stock or any other
        security held by the Trust subject to Section 9.13 hereof; and

                (f) To exercise management and control over Plan assets and to
        direct the purchase and sale of Company Stock for the Trust.

        Any action under this Section 9.6 shall be taken in writing, and no
designation or allocation under paragraphs (a), (b) or (c) shall be effective
until accepted in writing by the indicated responsible person.



                                       48
<PAGE>   55

        9.7. Periodic Review of Funding Policy. At periodic intervals the
Committee shall review the long-run and short-run financial needs of the Plan
and shall determine a funding policy for the Plan consistent with the objectives
of the Plan and the minimum funding standards of ERISA, if applicable. In
determining such funding policy the Committee shall take into account, at a
minimum, not only the long-term investment objectives of the Trust Fund
consistent with the prudent management of the assets thereof, but also the
short-run needs of the Plan to pay benefits. All actions taken by the Committee
with respect to the funding policy of the Plan, including the reasons therefor,
shall be fully reflected in the minutes of the Committee.

        9.8. Application for Determination of Benefits.

                (a) The Committee may require any person claiming benefits under
        the Plan to submit an application therefor on such forms and in such
        manner as the Committee may prescribe, together with such documents and
        information as the Committee may require. In the case of any person
        suffering from a disability which prevents him from making personal
        application for benefits, the Committee may, in its discretion, permit
        another person acting on his behalf to submit the application.

                (b) Within ninety (90) days following receipt of an application
        and all necessary documents and information, the Committee shall furnish
        the claimant with written notice of the decision rendered with respect
        to the application. In the case of a denial of the claimant's
        application, the written notice shall set forth:

                        (i) The specific reasons for the denial, with reference
                to the Plan provisions upon which the denial is based;

                        (ii) A description of any additional information or
                material necessary for perfection of the application (together
                with an explanation why the material or information is
                necessary); and

                        (iii) An explanation of the Plan's claim review
                procedure.

                (c) A claimant who does not agree with the decision rendered
        under Section 9.8(b) hereof with respect to his application may appeal
        the decision to the Committee. The appeal shall be made in writing
        within sixty-five (65) days after the date of notice of the decision
        with respect to the application. If the application has neither been
        approved nor denied within the ninety (90) day period provided in
        Section 9.8(b) hereof, then the appeal shall be made within sixty-five
        (65) days after the expiration of the ninety (90) day period. In making
        his or her appeal, the claimant may request that his application be
        given full and fair review by the Committee. The claimant may review all
        pertinent documents and submit issues and comments in writing. The
        decision of the Committee shall be made promptly, and not later than
        sixty (60) days after the Committee's receipt of a request for review,
        unless special circumstances require an extension of time for
        processing, in which case a decision shall be rendered as soon as
        possible, but not later than one hundred twenty (120) days after receipt
        of a request for review. The decision on review shall be in writing and
        shall include specific reasons for the decision, written in a manner
        calculated to be understood by the claimant with specific references to
        the pertinent Plan provisions upon which the decision is based.

        9.9. Limitation on Liability. Each of the fiduciaries under the Plan
shall be solely responsible for its own acts and omissions and no fiduciary
shall be liable for any breach of fiduciary responsibility resulting from the
act or omission of any other fiduciary or person to whom fiduciary
responsibilities have been allocated or delegated pursuant to Section 9.6,
except as provided in Sections 405(a) and 405(c)(2)(A) or (B) of ERISA. The
Committee shall have no responsibility over assets as to which management and
control has been delegated to an Investment Manager appointed pursuant to
Section 5.16 hereof or as to which management and control has been retained by
the Trustee.

        9.10. Indemnification and Insurance. To the extent permitted by law, the
Company shall indemnify and hold harmless the Committee and each member thereof,
each Trustee, the Board of Directors and each member



                                       49
<PAGE>   56

thereof, and such other persons as the Board of Directors may specify, from the
effects and consequences of his or her acts, omissions, and conduct in his or
her official capacity in connection with the Plan and Trust. To the extent
permitted by law, the Company may also purchase liability insurance for such
persons.

        9.11. Compensation of Committee and Plan Expenses. Members of the
Committee shall serve as such without compensation unless the Board of Directors
shall otherwise determine, but in no event shall any member of the Committee who
is an Employee receive compensation from the Plan for his or her services as a
member of the Committee. All members shall be reimbursed for any necessary
expenditures incurred in the discharge of duties as members of the Committee.
The compensation or fees, as the case may be, of all officers, agents, counsel,
the Trustee or other persons retained or employed by the Committee shall be
fixed by the Committee, subject to approval by the Board of Directors. The
expenses incurred in the administration and operation of the Plan, including but
not limited to the expenses incurred by the members of the Committee in
exercising their duties, shall be paid by the Plan from the Trust Fund, unless
paid by the Company, provided, however, that the Plan and not the Company shall
bear the cost of interest and normal brokerage charges which are included in the
cost of securities purchased by the Trust Fund (or charged to proceeds in the
case of sales). If such expenses are to be paid by the Plan from the Trust Fund,
the Committee may direct the Trustee to use forfeitures and dividends (and to
sell the shares of Company Stock that represent such forfeitures or dividends)
to pay such expenses.

        9.12. Resignation. Any member of the Committee may resign by giving
fifteen (15) days notice to the Board of Directors, and any member shall resign
forthwith upon receipt of the written request of the Board of Directors, whether
or not said member is at that time the only member of the Committee.

        9.13. Reliance Upon Documents and Opinions. The members of the
Committee, the Board of Directors, the Company and any person delegated to carry
out any fiduciary responsibilities under the Plan (hereinafter a "delegated
fiduciary"), shall be entitled to rely upon any tables, valuations,
computations, estimates, certificates and reports furnished by any consultant,
or firm or corporation which employs one or more consultants, upon any opinions
furnished by legal counsel, and upon any reports furnished by the Trustee or any
Investment Manager. The members of the Committee, the Board of Directors, the
Company and any delegated fiduciary shall be fully protected and shall not be
liable in any manner whatsoever for anything done or action taken or suffered in
reliance upon any such consultant, or firm or corporation which employs one or
more consultants, Trustee, Investment Manager, or counsel. Any and all such
things done or such action taken or suffered by the Committee, the Board of
Directors, the Company and any delegated fiduciary shall be conclusive and
binding on all Employees, Participants, Beneficiaries, and any other persons
whomsoever, except as otherwise provided by law. The Committee and any delegated
fiduciary may, but are not required to, rely upon all records of the Company
with respect to any matter or thing whatsoever, and may likewise treat such
records as conclusive with respect to all Employees, Participants,
Beneficiaries, and any other persons whomsoever, except as otherwise provided by
law.



                                       50
<PAGE>   57

                                    ARTICLE X
                         AMENDMENT AND ADOPTION OF PLAN

        10.1. Right to Amend Plan. The Sponsor, by resolution of the Board of
Directors, shall have the right to amend this Plan and Trust Agreement at any
time and from time to time and in such manner and to such extent as it may deem
advisable, including retroactively, subject to the following provisions:

                (a) No amendment shall have the effect of reducing any
        Participant's vested interest in the Plan or eliminating an optional
        form of distribution.

                (b) No amendment shall have the effect of diverting any part of
        the assets of the Plan to persons or purposes other than the exclusive
        benefit of the Participants or their Beneficiaries.

                (c) No amendment shall have the effect of increasing the duties
        or responsibilities of a Trustee without its written consent.

                (d) No amendment shall result in discrimination in favor of
        officers, shareholders, or other highly compensated or key employees.

        The Committee shall have the right to amend the Plan, subject to the
above provisions (a) through (d), in accordance with the provisions of Section
9.5(g).

        10.2. Adoption of Plan by Affiliated Companies. Subject to approval by
the Board of Directors, and consistent with the provisions of ERISA, an
Affiliated Company may adopt the Plan for all or any specified group of its
Eligible Employees by entering into an adoption agreement in the form and
substance prescribed by the Committee. The adoption agreement may include such
modification of the Plan provisions with respect to such Eligible Employees as
the Committee approves after having determined that no prohibited discrimination
or other threat to the qualification of the Plan is likely to result. The Board
of Directors may prospectively revoke or modify an Affiliated Company's
participation in the Plan at any time and for any or no reason, without regard
to the terms of the adoption agreement, or terminate the Plan with respect to
such Affiliated Company's Eligible Employees and Participants. By execution of
an adoption agreement (each of which by this reference shall become part of the
Plan), the Affiliated Company agrees to be bound by all the terms and conditions
of the Plan.



                                       51
<PAGE>   58

                                   ARTICLE XI
                         DISCONTINUANCE OF CONTRIBUTIONS

        In the event the Company decides it is impossible or inadvisable for
business reasons to continue to make contributions under the Plan, it may, by
resolution of the Board of Directors, discontinue contributions to the Plan.
Upon the permanent discontinuance of contributions to the Plan and
notwithstanding any other provisions of the Plan, the rights of Participants
shall become fully vested and nonforfeitable unless replaced by a comparable
plan. The permanent discontinuance of contributions on the part of the Company
shall not terminate the Plan as to the funds and assets then held in the Trust,
or operate to accelerate any payments of distributions to or for the benefit of
Participants or Beneficiaries, and the Trust shall continue to be administered
in accordance with the provisions hereof until the obligations hereunder shall
have been discharged and satisfied.



                                       52
<PAGE>   59

                                   ARTICLE XII
                             TERMINATION AND MERGER

        12.1. Right to Terminate Plan. In the event the Board of Directors
decides it is impossible or inadvisable for business reasons to continue the
Plan, then it may, by resolution, terminate the Plan. Upon and after the
effective date of such termination, the Company shall not make any further
contributions under the Plan. Upon the termination or partial termination of the
Plan for any reason, the interest in the Trust of each affected Participant
shall automatically become fully vested unless the Plan is continued after its
termination by conversion of this Plan into a comparable Plan through Plan
amendment or through merger. After the satisfaction of all outstanding
liabilities of the Plan to persons other than Participants and Beneficiaries,
all unallocated assets shall be allocated to the Accounts of Participants to the
maximum extent permitted by law. The Trust Fund may not be fully or finally
liquidated until all assets are allocated to Accounts; alternatively any
unallocated assets may be transferred to another defined contribution plan
maintained by the Sponsor or an Affiliated Company qualified under Code Section
401 where such assets shall be allocated among the accounts of Participants
herein who are participants in such transferee plan. In no event, however, shall
any part of the Plan revert to or be recoverable by the Company, or be used for
or diverted to purposes other than for the exclusive benefit of the Participants
or their Beneficiaries. Notwithstanding the foregoing, amounts held in the 415
Suspense Account may revert to the Company in accordance with Section 13.7.

        12.2. Effect on Trustee and Committee. The Trustee and the Committee
shall continue to function as such for such period of time as may be necessary
for the winding up of this Plan and for the making of distributions in the
manner prescribed by the Board of Directors at the time of termination of the
Plan.

        12.3. Merger Restriction. Notwithstanding any other provision in this
Plan, this Plan shall not in whole or in part merge or consolidate with, or
transfer its assets or liabilities to, any other plan unless each affected
Participant in this Plan would (if such other plan then terminated) receive a
benefit immediately after the merger, consolidation, or transfer which is equal
to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had then
terminated).

        12.4. Effect of Reorganization, Transfer of Assets or Change in Control.

                (a) In the event of a consolidation or merger of the Company, or
        in the event of a sale and/or any other transfer of the operating assets
        of the Company, any ultimate successor or successors to the business of
        the Company may continue this Plan in full force and effect by adopting
        the same by resolution of its board of directors and by executing a
        proper supplemental or transfer agreement with the Trustee.

                (b) In the event of a Change in Control (as herein defined), all
        Participants who were Participants on the date of such Change in Control
        shall become 100% vested in any amounts allocated to their Company
        Contribution Accounts on the date of such Change in Control and in any
        amounts allocated to their Company Contribution Accounts subsequent to
        the date of the Change in Control. Notwithstanding the foregoing, the
        Board of Directors may, at its discretion, amend or delete this
        paragraph (b) in its entirety prior to the occurrence of any such Change
        in Control. For the purpose of this paragraph (b), "Change in Control"
        shall mean the following and shall be deemed to occur if any of the
        following events occur:

                        (i) Any "person," as such term is used in Sections 13(d)
                and 14(d) of the Securities Exchange Act of 1934 (the "Exchange
                Act"), is or becomes the "beneficial owner" (as defined in Rule
                13d-3 under the Exchange Act), directly or indirectly, of
                securities of the Sponsor representing 50% or more of the
                combined voting power of the Sponsor's then outstanding voting
                securities;

                        (ii) Individuals who, as of the date hereof, constitute
                the Board (the "Incumbent Board"), cease for any reason to
                constitute at least a majority of the Board, provided that any
                person becoming a director subsequent to the date hereof whose
                election, or nomination for election by the Sponsor's
                stockholders, is approved by a vote of at least a majority of
                the directors



                                       53
<PAGE>   60

                then comprising the Incumbent Board (other than an election or
                nomination of an individual whose initial assumption of office
                is in connection with an actual or threatened election contest
                relating to the election of the directors of the Sponsor, as
                such terms are used Rule 14a-11 of Regulation 14A promulgated
                under the Exchange Act) shall, for the purposes of this Plan, be
                considered as though such person were a member of the Incumbent
                Board;

                        (iii) The stockholders of the Sponsor approve a merger
                or consolidation with any other corporation, other than

                                (1) a merger or consolidation which would result
                        in the voting securities of the Sponsor outstanding
                        immediately prior thereto continuing to represent
                        (either by remaining outstanding or by being converted
                        into voting securities of another entity) more than 50%
                        of the combined voting power of the voting securities of
                        the Sponsor or such other entity outstanding immediately
                        after such merger or consolidation, and

                                (2) a merger or consolidation effected to
                        implement a recapitalization of the Company (or similar
                        transaction) in which no person acquires 50% or more of
                        the combined voting power of the Sponsor's then
                        outstanding voting securities; or

                        (iv) The stockholders of the Sponsor approve a plan of
                complete liquidation of the Company or an agreement for the sale
                or other disposition by the Company of all or substantially all
                of the Company's assets.

                        Notwithstanding the preceding provisions of this
        paragraph (b), a Change in Control shall not be deemed to have occurred
        (i) if the "person" described in the preceding provisions of this
        paragraph is an underwriter or underwriting syndicate that has acquired
        the ownership of 50% or more of the combined voting power of the
        Sponsor's then outstanding voting securities solely in connection with a
        public offering of the Sponsor's securities or (ii) if the "person"
        described in the preceding provisions of this paragraph is an employee
        stock ownership plan or other employee benefit plan maintained by the
        Company that is qualified under the provisions of the Employee
        Retirement Income Security Act of 1974, as amended.



                                       54
<PAGE>   61

                                  ARTICLE XIII
                            LIMITATION ON ALLOCATIONS

        13.1. General Rule.

                (a) Subject to Sections 13.3 through 13.6 hereof, the total
        Annual Additions under this Plan to a Participant's Accounts for any
        Limitation Year shall not exceed the lesser of:

                        (i) Thirty Thousand Dollars ($30,000);(29) or

                        (ii) Twenty-five percent (25%) of the Participant's
                Compensation, from the Company for the Limitation Year. For
                purposes of this Article XIII, the "Limitation Year" shall mean
                the Plan Year.

                (b) For the purpose of this Article XIII and XIV only, the term
        "Company" shall mean the Sponsor and any Affiliated Company whether or
        not such Affiliated Company has adopted the Plan pursuant to Section
        8.2. Solely for purposes of this Article XI, an entity shall be
        considered an Affiliated Company by reference to Code Section 415(h).

        13.2. Annual Additions. For purposes of Section 13.1, the term "Annual
Additions" shall mean with respect to a Participant, for any Limitation Year
with respect to this Plan and each other defined contribution plan, within the
meaning of Code Section 415(k), maintained by the Company ("Defined Contribution
Plan"), the sum of the amounts determined under Sections 13.2(a), (b), (c), (d),
(e) and (f) hereof:

                (a) All amounts contributed or deemed contributed by the
        Company.

                (b) All amounts contributed by the Participant.

                (c) Forfeitures allocated to such Participant.

                (d) Any amounts allocated to an account established under a
        pension or annuity plan to provide medical benefits with respect to a
        Participant after retirement under Code Section 401(h).

                (e) Any amounts allocated for such Plan Year which amounts are
        derived from contributions paid or accrued after December 31, 1985, in
        taxable years ending after such date, which are attributable to post
        retirement medical or life insurance benefits allocated to the separate
        account of a key employee (as defined in Code Section 416(i) under Code
        Section 419A(d)(1).

                (f) Excess deferral amounts determined pursuant to Sections 4.5
        and 6.14.

                (g) Excess deferral amounts determined pursuant to Section 4.4
        to the extent such amounts are distributed after the first April 15th
        following the close of the Participant's taxable year.

Notwithstanding the foregoing, Sections 13.2(d) and 13.2(e) above shall not be
included in any amount treated as an Annual Addition for purposes of applying
the limitations contained in Section 13.1(a)(ii) above. A Participant's Rollover
Contributions shall not be considered Annual Additions.

        13.3. Other Defined Contribution Plans. If the Company maintains any
other Defined Contribution Plan, then each Participant's Annual Additions under
such Defined Contribution Plan shall be aggregated with the Participant's Annual
Additions under this Plan for the purposes of applying the limitations of
Section 13.1.


----------
        (29) The amendment of Section 13.1(a)(1) as set forth above was approved
by the Board on November 17, 1998 and is effective January 1, 1995.




                                       55
<PAGE>   62

        13.4. Defined Benefit Plans. If a Participant in this Plan has also been
a participant in a defined benefit plan (as defined in Code Section 415(k))
maintained by the Company ("Defined Benefit Plan"), then in addition to the
limitation contained in Section 13.1 hereof, the sum of the "Defined Benefit
Fraction," as defined in Section 13.4(a) hereof, and the "Defined Contribution
Fraction," as defined in Section 13.4(b) hereof, for any Limitation Year shall
not exceed 1.0.

                (a) "Defined Benefit Fraction" shall mean a fraction, the
        numerator of which is the total projected benefit of a Participant under
        all Defined Benefit Plans expressed as either an annual straight life
        annuity or a qualified joint and survivor annuity providing the maximum
        permissible survivor benefit (determined as of the close of the
        Limitation Year), and the denominator of which is the lesser of (i) the
        maximum dollar amount otherwise allowable for such Limitation Year under
        Code Section 415(b)(1)(A) times 1.25 or (ii) the percentage of
        compensation limit under Code Section 415(b)(1)(B) for such Limitation
        Year times 1.4.

                (b) "Defined Contribution Fraction" shall mean a fraction, the
        numerator of which is the sum of the Participant's Annual Additions to
        this Plan and all other Defined Contribution Plans as of the end of a
        Limitation Year, and the denominator of which is the sum, determined for
        such Limitation Year and each prior Limitation Year of the Participant's
        service with the Company of the lesser of (i) the maximum dollar Annual
        Addition under Code Section 415(c)(1)(A) (determined without regard to
        Code Section 415(c)(6)) which could have been made for the Limitation
        Year times 1.25 or (ii) the amount determined under the percentage of
        compensation limit for such Limitation Year under Code Section
        415(c)(1)(B) times 1.4. In computing the Defined Contribution Fraction
        under this Section 11.4(b) with respect to any Limitation Year ending
        after December 31, 1982, the special transition rule provided in Code
        Section 415(e)(6) shall be applicable.

        This Section shall not apply to Plan Years beginning on or after January
1, 2000.(30)

        13.5. Adjustments for Excess Combined Plan Fraction and Excess Annual
Additions. To the extent that the Annual Additions on behalf of any Participant
in a Limitation Year to this Plan and all other Defined Contribution Plans
exceed the limitations set forth in Sections 13.1 through 13.3 hereof, then
excess Annual Additions shall be eliminated in accordance with the following
rules and in the following order:

                (a) If the Annual Additions on behalf of a Participant in a
        Limitation Year to the Plan and all other Defined Contribution Plans
        would cause the sum of the Defined Contribution Fraction and Defined
        Benefit Fraction to exceed 1.0 as determined under Section 13.4 hereof,
        the excess shall be eliminated by first applying the provisions such
        other Defined Benefit Plans that are applicable to reduce the Annual
        Addition or annual benefit under such other plans (except to the extent
        that this may be prohibited by law or by the terms of such plans). This
        subsection shall not apply to Plan Years beginning on or after January
        1, 2000.(31)

                (b) If, after the application of paragraph (a) above, excess
        Annual Additions on behalf of any Participant remain, such excess shall
        be eliminated by reducing the allocation to the Participant's Account by
        the amount of the excess and treating such amount as a forfeiture under
        Section 5.3 hereof and reallocating such amount proportionately to the
        Accounts of other Participants receiving allocations for the Limitation
        Year up to the limits set forth in Sections 13.1 through 13.3 hereof.
        The allocation to the Participant's Account shall be reduced in the
        following order until such excess is Tax Deposits that are not Sharing
        Deposits, After Tax Deposits and Before Tax Deposits that are Sharing
        Deposits and Company Contributions on a pro-rata basis.


----------
        (30) The amendment of Section 13.4 to add the last sentence as set forth
above was approved by the Board on November 17, 1998.

        (31) The amendment of Section 13.5(a) to add the last sentence as set
forth above was approved by the Board on November 17, 1998.



                                       56
<PAGE>   63

                (c) After each Participant's Account has been credited under
        paragraph (b) with an amount bringing his Account up to his maximum
        Annual Addition (determined under the provisions of this Article XIII),
        any remaining excess Annual Addition shall be transferred and credited
        to a 415 Suspense Account established for the purpose of this Section
        13.5.

                (d) Any amounts held in the 415 Suspense Account shall be
        treated as Company contributions and allocated to the Accounts of
        Participants as of the last day of the next succeeding Plan Year in
        accordance with the allocation formula applicable to Company
        contributions provided in Section 6.4. The 415 Suspense Account shall be
        exhausted before any Company contributions shall be allocated to the
        Accounts of Participants subsequent to the date upon which any residue
        excess Annual Addition as described in paragraph (c) is credited to the
        415 Suspense Account.

        13.6. Compensation. For the purpose of this Article XIII, Compensation
shall mean a Participant's earned income, wages, salaries, fees for professional
services, and other amounts received (without regard to whether or not an amount
is paid in cash) for personal services actually rendered in the course of
employment with the Company maintaining the Plan and shall be determined as
described below:

                (a) Compensation shall include to the extent that the amounts
        are includible in gross income (including, but not limited to,
        commissions paid salespeople, compensation for services on the basis of
        a percentage of profits, commissions on insurance premiums, tips,
        bonuses, fringe benefits, and reimbursements or other expense allowances
        under a nonaccountable plan as described in Regulation 1.62-2(c)).

                (b) Compensation shall include any elective deferral as defined
        in Code Section 402(g)(3) and any amount which is contributed or
        deferred by the Company at the election of the Employee and which is not
        includible in the gross income of the Employee by reason of Code
        Sections 125 or 457.

                (c) Compensation shall not include (i) any employer
        contributions to a plan of deferred compensation which are not included
        in the Employee's gross income for the taxable year in which
        contributed, (ii) any distributions from a plan of deferred
        compensation, (iii) any amounts realized from the exercise of a
        non-qualified stock option or when restricted stock or property held by
        the Employee becomes either freely transferable or is no longer subject
        to a substantial risk of forfeiture under Code Section 83 if such
        option, stock, or property was granted to the Employee by the Company,
        (iv) any amounts realized from the sale, exchange, or other disposition
        of stock acquired under a qualified stock option, (v) any contribution
        for medical benefits (within the meaning of Code Section 419(f)(2) after
        termination of employment which is otherwise treated as an Annual
        Addition, and (vi) any amount otherwise treated as an Annual Addition
        under Code Section 415(l)(1).

                (d) Notwithstanding anything in the Plan to the contrary,
        Compensation shall be determined in accordance with Code Section
        415(c)(3) as in effect for Plan Years beginning prior to January 1, 1998
        where required by applicable law.(32)

        13.7. Treatment of 415 Suspense Account Upon Termination. In the event
the Plan shall terminate at a time when all amounts in the 415 Suspense Account
have not been allocated to the Accounts of the Participants, the 415 Suspense
Account amounts shall be applied as follows:

                (a) The amount in the 415 Suspense Account shall first be
        allocated, as of the Plan termination date, to Participants in
        accordance with the allocation formula applicable to Company
        contributions provided under Section 6.4.


----------
        (32) The amendment of Section 13.6 as set forth above was approved by
the Board on November 17, 1998 and is effective January 1, 1998.



                                       57
<PAGE>   64

                (b) If, after those allocations have been made, any further
        residue funds remain in the 415 Suspense Account, the residue may revert
        to the Company in accordance with applicable provisions of the Code,
        ERISA, and the regulations thereunder.



                                       58
<PAGE>   65

                                   ARTICLE XIV
                                 TOP-HEAVY RULES

        14.1. Applicability. Notwithstanding any provision in this Plan to the
contrary, and subject to the limitations set forth in Section 14.8, the
requirements of Sections 14.4, 14.5, 14.6 and 14.7 shall apply under this Plan
in the case of any Plan Year in which the Plan is determined to be a Top-Heavy
Plan under the rules of Section 14.3. For the purpose of this Article XIV and
XIII only, the term "Company" shall mean the Sponsor and any Affiliated Company
whether or not such company has adopted the Plan pursuant to Section 10.2.

        14.2. Definitions. For purposes of this Article XIV, the following
special definitions and definitional rules shall apply:

                (a) The term "Key Employee" means any Employee or former
        Employee who, at any time during the Plan Year or any of the four
        preceding Plan Years, is or was:

                        (i) An officer of the Company having an annual
                Compensation greater than 50% of the amount in effect under Code
                Section 415(b)(1)(A) for the Plan Year; provided, however, for
                such purposes no more than 50 Employees (or, if lesser, the
                greater of three Employees or 10% of the Employees) shall be
                treated as officers;

                        (ii) One of the ten Employees having annual Compensation
                from the Company of more than the limitation in effect under
                Code Section 415(c)(1)(A) and owning (or considered as owning
                within the meaning of Code Section 318) the largest interests in
                the Company. For this purpose, if two Employees have the same
                interest in the Company, the Employee having greater annual
                Compensation from the Company shall be treated as having a
                larger interest;

                        (iii) A Five Percent Owner of the Company; or

                        (iv) A One Percent Owner of the Company having an annual
                Compensation from the Company of more than $150,000.

                (b) The term "Five Percent Owner" means any person who owns (or
        is considered as owning within the meaning of Code Section 318) more
        than 5% of the outstanding stock of the Company or stock possessing more
        than 5% of the total combined voting power of all stock of the Company.

                (c) The term "One Percent Owner" means any person who would be
        described in paragraph (b) if "1%" were substituted for "5%" each place
        where it appears therein.

                (d) The term "Non-Key Employee" means any Employee who is not a
        Key Employee.

                (e) The term "Determination Date" means, with respect to any
        plan year, the last day of the preceding plan year. In the case of the
        first plan year of any plan, the term "Determination Date" shall mean
        the last day of that plan year.

                (f) The term "Aggregation Group" means (i) each plan of the
        Company in which a Key Employee is a Participant, and (ii) each other
        plan of the Company which enables any plan described in clause (i) to
        meet the requirements of Code Sections 401(a)(4) or 410. Any plan not
        required to be included in an Aggregation Group under the preceding
        rules may be treated as being part of such group if the group would
        continue to meet the requirements of Code Sections 401(a)(4) and 410
        with the plan being taken into account.

                (g) For purposes of determining ownership under paragraphs (a),
        (b) and (c) above, the following special rules shall apply: (i) Code
        Section 318(a)(2)(C) shall be applied by substituting "5%" for "50%",



                                       59
<PAGE>   66

        and (ii) the aggregation rules of Code Sections 414(b), (c) and (m)
        shall not apply, with the result that the ownership tests of this
        Section 14.2 shall apply separately with respect to each Affiliated
        Company.

                (h) The terms "Key Employee" and "Non-Key Employee" shall
        include their Beneficiaries, and the definitions provided under this
        Section 14.2 shall be interpreted and applied in a manner consistent
        with the provisions of Code Section 416(i) and the regulations
        thereunder.

                (i) For purposes of this Article XIV, an Employee's Compensation
        shall be determined in accordance with the rules of Section 13.6.

        14.3. Top-Heavy Status.

                (a) The term "Top-Heavy Plan" means, with respect to any Plan
        Year:

                        (i) Any defined benefit plan if, as of the Determination
                Date, the present value of the cumulative accrued benefits under
                the plan for Key Employees exceeds 60% of the present value of
                the cumulative accrued benefits under the plan for all
                Employees; and

                        (ii) Any defined contribution plan if, as of the
                Determination Date, the aggregate of the account balances of Key
                Employees under the plan exceeds 60% of the aggregate of the
                account balances of all Employees under the plan.

                        In applying the foregoing provisions of this paragraph
        (a), the valuation date to be used in valuing Plan assets shall be (i)
        in the case of a defined benefit plan, the same date which is used for
        computing costs for minimum funding purposes, and (ii) in the case of a
        defined contribution plan, the most recent valuation date within a
        12-month period ending on the applicable Determination Date.

                (b) Each plan maintained by the Company required to be included
        in an Aggregation Group shall be treated as a Top-Heavy Plan if the
        Aggregation Group is a Top-Heavy Group.

                (c) The term "Top-Heavy Group" means any Aggregation Group if
        the sum (as of the Determination Date) of (i) the present value of the
        cumulative accrued benefits for Key Employees under all defined benefit
        plans included in the group, and (ii) the aggregate of the account
        balances of Key Employees under all defined contribution plans included
        in the group exceeds 60% of a similar sum determined for all Employees.
        For purposes of determining the present value of the cumulative accrued
        benefit of any Employee, or the amount of the account balance of any
        Employee, such present value or amount shall be increased by the
        aggregate distributions made with respect to the Employee under the plan
        during the five year period ending on the Determination Date. The
        preceding prior distribution rule shall also apply to distributions
        under a terminated plan that, if it had not been terminated, would have
        been required to be included in an Aggregation Group; provided, however,
        any rollover contribution or similar transfer initiated by the Employee
        and made after December 31, 1983, to a plan shall not be taken into
        account with respect to the transferee plan for purposes of determining
        whether such plan is a Top-Heavy Plan (or whether any Aggregation Group
        which includes such plan is a Top-Heavy Group).

                (d) If any individual is a Non-Key Employee with respect to any
        plan for any plan year, but the individual was a Key Employee with
        respect to the plan for any prior plan year, any accrued benefit for the
        individual (and the account balance of the individual) shall not be
        taken into account for purposes of this Section 14.3.

                (e) If any individual has not performed services for the Company
        at any time during the five year period ending on the Determination
        Date, any accrued benefit for such individual (and the account balance
        of the individual) shall not be taken into account for purposes of this
        Section 14.3



                                       60
<PAGE>   67

                (f) In applying the foregoing provisions of this Section, the
        accrued benefit of a Non-Key Employee shall be determined (i) under the
        method, if any, which is used for accrual purposes under all plans of
        the Company and any Affiliated Companies, or (ii) if there is no such
        uniform method, as if such benefit accrued not more rapidly than the
        slowest accrual rate permitted under Code Section 411(b)(1)(C).

                (g) For all purposes of this Article XIV, the definitions
        provided under this Section 14.3 shall be applied and interpreted in a
        manner consistent with the provisions of Code Section 416(g) and the
        Regulations thereunder.

        14.4. Minimum Contributions. For any Plan Year in which the Plan is
determined to be a Top-Heavy Plan, the minimum Company Contributions for that
year shall be determined in accordance with the rules of this Section 14.4.

                (a) Except as provided below, the minimum contribution
        (including for Plan Years beginning after December 31, 1984, amounts
        deferred under a cash or deferred arrangement under Code Section 401(k))
        for each Non-Key Employee shall be not less than 3% of his compensation.
        For purposes of satisfying the minimum contribution requirement, Before
        Tax Deposits and Matching Contributions as defined in Section
        6.13(b)(iv) shall not be taken into account.

                (b) Subject to the following rules of this paragraph (b), the
        percentage set forth in paragraph (a) above shall not be required to
        exceed the percentage at which contributions (including for Plan Years
        beginning after December 31, 1984, amounts deferred under a cash or
        deferred arrangement under Code Section 401(k)) are made (or are
        required to be made) under the Plan for the year for the Key Employee
        for whom the percentage is the highest for the year. This determination
        shall be made by dividing the contributions for each Key Employee by so
        much of his total compensation for the Plan Year as does not exceed the
        applicable Compensation limit. For purposes of this paragraph (b), all
        defined contribution plans required to be included in an Aggregation
        Group shall be treated as one plan. Notwithstanding the foregoing, the
        exceptions to paragraph (a) as provided under this paragraph (b) shall
        not apply to any plan required to be included in an Aggregation Group if
        the plan enables a defined benefit plan to meet the requirements of Code
        Sections 401(a)(4) or 410.

                (c) The Participant's minimum contribution determined under this
        Section 14.4 shall be calculated without regard to any Social Security
        benefits payable to the Participant.

                (d) In the event a Participant is covered by both a defined
        contribution and a defined benefit plan maintained by the Company, both
        of which are determined to be Top-Heavy Plans, the Company shall satisfy
        the minimum benefit requirements of Code Section 416 by providing (in
        lieu of the minimum contribution described in paragraph (a) above) a
        minimum benefit under the defined benefit plan so as to prevent the
        duplication of required minimum benefits hereunder.

        14.5. Reserved for Future Modifications.

        14.6. Maximum Annual Addition.

                (a) Except as set forth below, for any Plan Year in which the
        Plan is determined to be a Top-Heavy Plan, the rules of Section 13.4(b)
        and (c) shall be applied by substituting "1.0" for "1.25".

                (b) The rule set forth in paragraph (a) above shall not apply if
        (i) the minimum contribution requirement of Section 14.4(a) above would
        be satisfied after substituting "4%" for "3%" where it appears therein,
        and (ii) the Plan would not be a Top-Heavy Plan if "90%" were
        substituted for "60%" each place it appears in Section 14.3(a)(ii).

                (c) The rules of paragraph (a) shall not apply with respect to
        any Employee as long as there are no (i) Company Contributions
        (including amounts deferred under a cash or deferred arrangement under



                                       61
<PAGE>   68

        Code Section 401(k)), forfeitures, or voluntary nondeductible
        contributions allocated to the Employee under a defined contribution
        plan maintained by the Company, or (ii) accruals by the Employee under a
        defined benefit plan maintained by the Company.

        14.7. Minimum Vesting Rules.

                (a) For any Plan Year in which it is determined that the Plan is
        a Top-Heavy Plan, the vesting schedule of the Plan shall be changed to
        that set forth below (unless the Plan's vesting schedule otherwise
        provides for vesting at a rate at least as rapid as that set forth
        below):

<TABLE>
<CAPTION>
             Number of Full Years of                            Nonforfeitable
             Credited Service                                   Percentage
             ----------------                                   ----------
<S>                                                             <C>
             Less than 3 years                                        0%
             3 or more                                              100%
</TABLE>

                (b) If the Plan ceases to be a Top-Heavy Plan, the vesting
        schedule of the Plan shall (for such Plan Years as the Plan is not a
        Top-Heavy Plan) revert to that provided in Section 7.2 (the "Regular
        Vesting Schedule"). If such reversion to the Regular Vesting Schedule is
        deemed to constitute a vesting schedule change that is attributable to a
        Plan amendment (within the meaning of Code Section 411(a)(10)), then
        such reversion to said Regular Vesting Schedule shall be subject to the
        requirements of Code Section 411(a)(10) of this Plan. For such purposes,
        the date of the adoption of such deemed amendment shall be the
        Determination Date as of which it is determined that the Plan has ceased
        to be a Top-Heavy Plan.

        14.8. Noneligible Employees. The rules of this Article XIV shall not
apply to any Employee included in a unit of employees covered by a collective
bargaining agreement between employee representatives and one or more employers
if retirement benefits were the subject of good faith bargaining between such
employee representatives and the employer or employers.



                                       62
<PAGE>   69

                                   ARTICLE XV
                       RESTRICTION ON ASSIGNMENT OR OTHER
                           ALIENATION OF PLAN BENEFITS

        15.1.  General Restrictions Against Alienation.

                (a)The interest of any Participant or his Beneficiary in the
        income, benefits, payments, claims or rights hereunder, or in the Trust
        Fund, shall not in any event be subject to sale, assignment,
        hypothecation, or transfer. Each Participant and Beneficiary is
        prohibited from anticipating, encumbering, assigning, or in any manner
        alienating his or her interest under the Trust Fund, and is without
        power to do so, except as may be permitted in connection with providing
        security for a loan from the Plan to the Participant pursuant to the
        provisions of this Plan as it may be amended from time to time. The
        interest of any Participant or Beneficiary shall not be liable or
        subject to his debts, liabilities, or obligations, now contracted, or
        which may hereafter be contracted, and such interest shall be free from
        all claims, liabilities, or other legal process now or hereafter
        incurred or arising. Neither the interest of a Participant or
        Beneficiary, nor any part thereof, shall be subject to any judgment
        rendered against any such Participant or Beneficiary. Notwithstanding
        the foregoing, a Participant's or Beneficiary's interest in the Plan may
        be subject to the enforcement of a Federal tax levy made pursuant to
        Code Section 6331 or the collection by the United States on a judgment
        resulting from an unpaid tax assessment.

                (b) In the event any person attempts to take any action contrary
        to this Article XV, such action shall be null and void and of no effect,
        and the Company, the Committee, the Trustee and all Participants and
        their Beneficiaries, may disregard such action and are not in any manner
        bound thereby, and they, and each of them, shall suffer no liability for
        any such disregard thereof, and shall be reimbursed on demand out of the
        Trust Fund for the amount of any loss, cost or expense incurred as a
        result of disregarding or of acting in disregard of such action.

                (c) The foregoing provisions of this Section shall be
        interpreted and applied by the Committee in accordance with the
        requirements of Code Section 401(a)(13) and ERISA Section 206(d) as
        construed and interpreted by authoritative judicial and administrative
        rulings and regulations.

        15.2. Qualified Domestic Relations Orders. The rules set forth in
Section 15.1 above shall not apply with respect to a "Qualified Domestic
Relations Order" as described below.

                (a) A "Qualified Domestic Relations Order" is a judgment,
        decree, or order (including approval of a property settlement agreement)
        that:

                        (i) Creates or recognizes the existence of an Alternate
                Payee's right to, or assigns to an Alternate Payee the right to,
                receive all or a portion of the benefits payable under this Plan
                with respect to a Participant,

                        (ii) Relates to the provision of child support, alimony
                payments, or marital property rights to a spouse, former spouse,
                child or other dependent of a Participant,

                        (iii) Is made pursuant to a State domestic relations law
                (including a community property law), and

                        (iv) Clearly specifies: (A) the name and last known
                mailing address (if any) of the Participant and the name and
                mailing address of each Alternate Payee covered by the order (if
                the Plan Administrator does not have reason to know that address
                independently of the order); (B) the amount or percentage of the
                Participant's benefits to be paid to each Alternate Payee, or
                the manner in which the amount or percentage is to be
                determined; (C) the number of payments or period to which the
                order applies; and (D) each plan to which the order applies.



                                       63
<PAGE>   70

                For purposes of this Section 15.2, "Alternate Payee" means any
        spouse, former spouse, child or other dependent of a Participant who is
        recognized by a domestic relations order as having a right to receive
        all, or a portion of, the benefits payable with respect to the
        Participant.

                (b) A domestic relations order is not a Qualified Domestic
        Relations Order if it requires:

                        (i) The Plan to provide any type or form of benefit, or
                any option, not otherwise provided under the Plan;

                        (ii) The Plan to provide increased benefits; or

                        (iii) The payment of benefits to an Alternate Payee that
                are required to be paid to another Alternate Payee under a
                previous Qualified Domestic Relations Order.

                (c) A domestic relations order shall not be considered to fail
        to satisfy the requirements of paragraph (b)(i) above with respect to
        any payment made before a Participant has separated from service solely
        because the order requires that payment of benefits be made to an
        Alternate Payee:

                        (i) On or after the date on which the Participant
                attains (or would have first attained) his earliest retirement
                age (as defined in Code Section 414(p)(4)(B));

                        (ii) As if the Participant had retired on the date on
                which such payment is to begin under such order (but taking into
                account only the present value of accrued benefits and not
                taking into account the present value of any subsidy for early
                retirement benefits); and

                        (iii) In any form in which such benefits may be paid
                under the Plan to the Participant (other than in the form of a
                joint and survivor annuity with respect to the Alternate Payee
                and his or her subsequent spouse).

                Notwithstanding the foregoing, if the Participant dies before
        his earliest retirement age (as defined in Code Section 414(p)(4)(B)),
        the Alternate Payee is entitled to benefits only if the Qualified
        Domestic Relations Order requires survivor benefits to be paid to the
        Alternate Payee.

                (d) To the extent provided in any Qualified Domestic Relations
        Order, the former spouse of a Participant shall be treated as a
        surviving Spouse of the Participant for purposes of applying the rules
        (relating to minimum survivor annuity requirements) of Code Sections
        401(a)(11) and 417, and any current spouse of the Participant shall not
        be treated as a spouse of the Participant for such purposes.

                (e) In the case of any domestic relations order received by the
        Plan, the Plan Administrator shall promptly notify the Participant and
        any Alternate Payee of the receipt of the order and the Plan's
        procedures for determining the qualified status of domestic relations
        orders. Within a reasonable period after the receipt of the order, the
        Plan Administrator shall determine whether the order is a Qualified
        Domestic Relations Order and shall notify the Participant and each
        Alternate Payee of such determination.

                (f) The Plan Administrator shall establish reasonable procedures
        to determine the qualified status of domestic relations orders and to
        administer distributions under Qualified Domestic Relations Orders.
        During any period in which the issue of whether a domestic relations
        order is a Qualified Domestic Relations Order is being determined (by
        the Plan Administrator, by a court of competent jurisdiction, or
        otherwise), the Plan Administrator shall segregate in a separate account
        in the Plan (or in an escrow account) the amounts which would have been
        payable to the Alternate Payee during the period if the order had been
        determined to be a Qualified Domestic Relations Order. If within the 18
        Month Period (as defined below), the order (or modification thereof) is
        determined to be a Qualified Domestic Relations Order, the Plan
        Administrator shall pay the segregated amounts (plus any interest
        thereon) to the person or persons entitled thereto. However, if within
        the 18 Month Period (i) it is determined that the order is not a



                                       64
<PAGE>   71

        Qualified Domestic Relations Order, or (ii) the issue as to whether the
        order is a Qualified Domestic Relations Order is not resolved, then the
        Plan Administrator shall pay the segregated amounts (plus any interest
        thereon) to the person or persons who would have been entitled to the
        amounts if there had been no order (assuming such benefits were
        otherwise payable). Any determination that an order is a Qualified
        Domestic Relations Order that is made after the close of the 18 Month
        Period shall be applied prospectively only. For purposes of this Section
        15.2, the "18 Month Period" shall mean the 18 month period beginning
        with the date on which the first payment would be required to be made
        under the domestic relations order.



                                       65
<PAGE>   72

                                   ARTICLE XVI
                            MISCELLANEOUS PROVISIONS

        16.1. No Right of Employment Hereunder. The adoption and maintenance of
this Plan and Trust shall not be deemed to constitute a contract of employment
or otherwise between the Company and any Employee or Participant, or to be a
consideration for, or an inducement or condition of, any employment. Nothing
contained herein shall be deemed to give any Employee the right to be retained
in the service of the Company or to interfere with the right of the Company to
discharge, with or without cause, any Employee or Participant at any time, which
right is hereby expressly reserved.

        16.2. Limitation on Company Liability. Any benefits payable under this
Plan shall be paid or provided for solely from the Plan and the Company assumes
no liability or responsibility therefor.

        16.3. Effect of Article Headings. Article headings are for convenient
reference only and shall not be deemed to be a part of the substance of this
instrument or in any way to enlarge or limit the contents of any Article.

        16.4. Gender. Masculine gender shall include the feminine and the
singular shall include the plural unless the context clearly indicates
otherwise.

        16.5. Interpretation. The provisions of this Plan shall in all cases be
interpreted in a manner that is consistent with this Plan satisfying (a) the
requirements of Code Section 401(a) and related statutes for qualification as a
defined contribution plan and (b) the requirements of Code Section 401(k) and
related statutes for qualification as a cash or deferred arrangement.

        16.6. Withholding For Taxes. Any payments from the Trust Fund may be
subject to withholding for taxes as may be required by any applicable federal or
state law.

        16.7. California Law Controlling. All legal questions pertaining to the
Plan which are not controlled by ERISA shall be determined in accordance with
the laws of the State of California and all contributions made hereunder shall
be deemed to have been made in that State.

        16.8. Plan and Trust as One Instrument. This Plan and the Trust
Agreement shall be construed together as one instrument. In the event that any
conflict arises between the terms and/or conditions of the Trust Agreement and
this Plan, the provisions of this Plan shall control, except that with respect
to the duties and responsibilities of the Trustee, the Trust Agreement shall
control.

        16.9. Invalid Provisions. If any paragraph, section, sentence, clause or
phrase contained in this Plan shall become illegal, null or void or against
public policy, for any reason, or shall be held by any court of competent
jurisdiction to be incapable of being construed or limited in a manner to make
it enforceable, or is otherwise held by such court to be illegal, null or void
or against public policy, the remaining paragraphs, sections, sentences, clauses
or phrases contained in this Plan shall not be affected thereby.

        16.10. Counterparts. This instrument may be executed in one or more
counterparts each of which shall be legally binding and enforceable.

        Allergan, Inc. hereby executes this instrument, evidencing the terms of
the Allergan, Inc. Savings and Investment Plan as restated this 7th day of April
1999.

ALLERGAN, INC.


By: /s/ AIMEE S. WEISNER
   ------------------------
   Assistant Secretary


                                       66
<PAGE>   73

                                   APPENDIX A
           SPECIAL PROVISIONS FOR PUERTO RICO-BASED PAYROLL EMPLOYEES


                                     PART I
                                  INTRODUCTION


        1.1 Effective Date. Subject to the approval of the United States and
Puerto Rico tax authorities, the Effective Date of this Appendix A is the later
of January 1, 1999 or, the date the merger of the Allergan, Inc. Puerto Rico
Savings and Investment Plan into the Plan is approved by the United States and
Puerto Rico tax authorities. Prior to the Effective Date of Appendix A, Puerto
Rico-based Employees were eligible to participate in the Allergan, Inc. Puerto
Rico Savings and Investment Plan. As of the Effective Date of Appendix A,
Eligible Puerto Rico-based Employees shall cease participating in the Allergan,
Inc. Puerto Rico Savings and Investment Plan and shall participate in the Plan.

        1.2 Merger of Allergan, Inc. Puerto Rico Savings and Investment Plan.
Subject to the approval of the United States and Puerto Rico tax authorities,
the Allergan, Inc. Puerto Rico Savings and Investment Plan shall merge with and
into the Plan. The Plan shall be the plan surviving the merger. All account
balances shall be transferred to the Plan and all assets acquired under the Plan
as a result of the merger shall be administered, distributed, forfeited and
otherwise governed by the provisions of the Plan and this Appendix A.

        1.3 Purpose of Appendix A. The provisions of the Plan shall apply to all
Puerto Rico-based payroll Employees, except as specifically provided in this
Appendix A.



                                     PART II
                                   DEFINITIONS


        The Definitions of Article II of the Plan shall apply to all Puerto
Rico-based Employees and shall have the same meaning for the purpose of this
Appendix A except as set forth below:

        2.1 Plan Section 2.20. "Compensation" shall have the same meaning as set
forth in Plan Section 2.20 except that in the case of a Puerto Rico-based
Employee, Compensation shall also include cost of living allowances earned
within Puerto Rico and amounts paid under the Christmas bonus program.

        2.2 Plan Section 2.24. "Credited Service" shall have the same meaning as
set forth in Plan Section 2.24 except that in the case of a Puerto Rico-based
Employee who was employed by the Company at any time prior to the original
Effective Date, for the period prior to January 1, 1989, Credited Service shall
include service, if any, credited to such Employee under the Savings and
Investment Plan for Employees of Subsidiaries of SmithKline Beckman Corporation
Whose Principal Office is Located in Puerto Rico.

        2.3 Plan Section 2.26. For the purpose of this Appendix A only, the
definition of "Eligible Employee" as defined in Plan Section 2.26 shall not
apply and "Eligible Employee" or "Eligible Puerto Rico-based Employee" shall
mean any Puerto Rico-based Employee but shall exclude any non-resident alien of
Puerto Rico and the United States, any Leased Employee, and, and any Employee
covered by a collective bargaining agreement.

        2.4 Plan Section 2.29. For the purpose of this Appendix A only, the
definition of "Employee" as defined in Plan Section 2.29 shall not apply and
"Employee" or "Puerto Rico-based Employee" shall mean any person who is employed
in any capacity by the Sponsor or any Affiliated Company at its Puerto Rico
locations, any portion of whose income is subject to withholding or income tax
and/or for whom Social Security contribution are made by the Sponsor or any
Affiliated Company except that such term shall not include (i) any individual
who performs services for the Sponsor or any Affiliated Company and who is
classified or paid as an independent contractor (regardless of his or her
classification for federal tax or other legal purposes) by the Sponsor or any



<PAGE>   74
Affiliated Company and (ii) any individual who performs services for the Sponsor
or any Affiliated Company pursuant to an agreement between the Sponsor or any
Affiliated Company and any other person including a leasing organization except
to the extent such individual is a Leased Employee.

        2.5 Plan Section 2.40. For the purpose of this Appendix A only,
"Participant" as defined in Plan Section 2.40 shall not apply and "Participant"
or "Puerto Rico-based Participant" shall mean a Puerto Rico-based Employee who
is eligible to participate in the Plan and elects to participate in the Plan in
accordance with Plan Section 3.1.

        2.6 Plan Section 2.50. Notwithstanding the provisions of Plan Section
2.50, "Sharing Deposits" of a Puerto Rico-based Participant shall mean his
Deposits (whether Before Tax or After Tax) not in excess of six percent (6%) of
Compensation. Sharing Deposits shall participate in allocations of Company
Contributions and Forfeitures.

        2.7 Additional Terms. Additional terms shall have the following meaning:

                (a) "PR-Code" shall mean the Puerto Rico Internal Revenue Code
        of 1994, as amended. Where the context so requires a reference to a
        particular PR-Code Section shall also refer to any successor provision
        of the PR-Code to such PR-Code Section.

                (b) "Top One-Third Highly Compensated Employee" shall mean any
        Participant who has Compensation for a Plan Year that is greater than
        the Compensation for such Plan Year of two-thirds (2/3) of all other
        Participants of the same Company.



                                    PART III
                          ELIGIBILITY AND PARTICIPATION


        The provisions of Article III of the Plan shall apply to all Puerto
Rico-based Employees.



                                     PART IV
                              PARTICIPANT DEPOSITS


        The provisions of Article IV of the Plan shall apply to all Puerto
Rico-based Employees except as set forth below:

        4.1 Reserved for Future Modification.

        4.2 Plan Section 4.2(a). Notwithstanding the provisions of Plan Section
4.2(a), a Puerto Rico-based Participant may elect to contribute a whole
percentage of his Compensation to the Plan as Before Tax Deposits not to exceed
ten percent (10%) and, when aggregated with the After Tax Deposits contributed
by such Participant pursuant to paragraph (b) below, not to exceed fifteen
percent (15%). Notwithstanding the foregoing, no Participant shall be permitted
to make Before Tax Deposits to the Plan during any calendar year in excess of
$8,000, or such larger amount as may be determined by the Puerto Rico Secretary
of the Treasury pursuant to the PR-Code, or which exceed the limitations set
forth in Section 4.3 of this Appendix. For purposes of the dollar limitation,
the Before Tax Deposits of a Participant for any taxable year is the sum of all
Before Tax Deposits under the Plan and all salary reduction amounts under any
other qualified cash or deferred arrangement (as defined in Code Section 401(k),
a simplified employee pension (as defined in Code Sections 408(k) and
402(h)(1)(B), a deferral compensation plan under Code Section 457, a trust
described in Code Section 501(c)(18) and any salary reduction amount used to
purchase an annuity contract under Section 403(b) whether or not sponsored by
the Company but shall not include any amounts properly distributed as excess
annual additions.



                                      A-2
<PAGE>   75

        4.3 Additional Contribution Deferral Limitation. In addition to the
limitations on Compensation Deferral Contributions set forth in Plan Section
4.3, Compensation Deferral Contributions by a Puerto Rico-based Participant
shall not exceed the limitation on contributions by or on behalf of the Top
One-Third Highly Compensation Employees under PR-Code Section 1165(e), as
provided in this Section 4.3 with respect to each Plan Year. In the event that
Compensation Deferrals Contributions under the Plan by or on behalf of the Top
One-Third Highly Compensated Employees exceed the limitations of this section
for any reason, such excess contributions shall be recharacterized as After Tax
Deposits or such excess contributions, adjusted for any income or loss allocable
thereto, shall be returned to such Participant, as provided in Plan Section 4.5.

                (a) The Compensation Deferral Contributions by Participants for
        a Plan Year shall satisfy the Actual Deferral Percentage test under the
        PR-Code as set forth in (i) below, or to the extent not precluded by
        applicable regulations, the alternate Actual Deferral Percentage test as
        set forth in (ii) below:

                        (i) The average "Actual Deferral Percentage" for the Top
                One-Third Highly Compensated Employees shall not be more than
                the average Actual Deferral Percentage of all non-Top One-Third
                Highly Compensated Employees multiplied by 1.25, or

                        (ii) The excess of the average Actual Deferral
                Percentage for the Top One-Third Highly Compensated Employees
                over the average Actual Deferral Percentage for all non-Top
                One-Third Highly Compensated Employees shall not be more than
                two (2) percentage points and the average Actual Deferral
                Percentage for the Top One-Third Highly Compensated Employee
                shall not be more than the average Actual Deferral Percentage of
                all non-Top One-Third Highly Compensated Employees multiplied by
                2.0.

                (b) For the purpose of this Section 4.3 only, the following
        definitions shall apply:

                        (i) "Actual Deferral Percentage" shall mean, with
                respect to the group of all Top One-Third Highly Compensated
                Employees and the group of all non-Top One-Third Highly
                Compensated Employees for a Plan Year, the ratio, calculated
                separately for each Participant in such group, of the amount of
                the Participant's Compensation Deferral Contribution for such
                Plan Year, to such Participant's Compensation for such Plan
                Year, in accordance with regulations prescribed by the Puerto
                Rico Secretary of the Treasury under PR-Code Section 1165(e).
                For purposes of computing the Actual Deferral Percentage, an
                Eligible Employee who would be a Participant but for the failure
                to make Before Tax Deposits shall be treated as a Participant on
                whose behalf no Before Tax Deposits are made.

                        (ii) "Participant" shall mean any Eligible Puerto
                Rico-based Employee who satisfied the requirements under Plan
                Section 3.1 during the Plan Year, whether or not such Eligible
                Employee elected to contribute to the Plan for such Plan Year.

                        (iii) "Compensation Deferral Contributions" shall mean
                amounts contributed to the Plan by a Participant as Before Tax
                Deposits pursuant to Section 4.1 of this Appendix, including
                excess Before Tax Deposits (as defined in Plan Section 4.4(a))
                of the Top One-Third Highly Compensated Employees but excluding
                (1) excess Before Tax Deposits of all non-Top One-Third Highly
                Compensated Employees that arise solely from Before Tax Deposits
                made under the Plan or plans of the Company, (2) Before Tax
                Deposits that are taken into account in the Average Contribution
                Percentage test (as defined in Plan Section 6.11) provided that
                the Actual Deferral Percentage test is satisfied both with and
                without exclusions of these Before Tax Deposits, and (3) any
                deferrals properly distributed as excess Annual Additions. To
                the extent determined by the Committee and in accordance with
                regulations issued by the Puerto Rico Secretary of the Treasury,
                matching contributions and qualified nonelective contributions
                on behalf of a Participant that satisfy the requirements of
                PR-Code Section 1165(e)(3)(D)(ii) may also be taken into account
                for the purpose of determining the Actual Deferral Percentage of
                such Participant.

                        (iv) "Compensation" shall mean compensation as described
                below:



                                      A-3
<PAGE>   76

                                (1) Compensation means compensation determined
                        by the Company in accordance with the requirements of
                        Code Section 414(s) and the regulations thereunder.

                                (2) For the purpose of this Section 4.3,
                        Compensation may, at the Company's election, include
                        amounts which are excludable from a Participant's gross
                        income under Code Section 125 (pertaining to cafeteria
                        plans) and Code Section 402(e)(3) (pertaining to 401(k)
                        salary reductions). The Company may change its election
                        provided such change does not discriminate in favor of
                        the Top One-Third Highly Compensated Employees.

                                (3) Compensation taken into account for any Plan
                        Year shall not exceed $150,000 as adjusted at the time
                        and in such manner as permitted under Code Section
                        401(a)(17)(B).

                (c) In the event that as of the first day of Plan Year, the Plan
        satisfies the requirements of PR-Code Section 1165(a) only if aggregated
        with one or more other plans which include arrangements under PR-Code
        Section 1165(e), then this Section 4.3 shall be applied by determining
        the Actual Deferral Percentages of Participants as if all such plans
        were a single plan, in accordance with regulations prescribed by the
        Secretary of the Treasury under PR-Code Section 1165(e). Plans may be
        considered one plan for purposes of satisfying PR-Code Section 1165(e)
        only if they have the same Plan Year.

                (d) For the purpose of this Section 4.3, the "Actual Deferral
        Percentage" for any Top One-Third Highly Compensated Employee who is a
        Participant under two or more PR-Code Section 1165(e) arrangements of
        the Company shall be determined by taking into account the Top One-Third
        Highly Compensated Employee's Compensation under each such arrangement
        and contributions under each such arrangement which qualify for
        treatment under PR-Code Section 1165(e) in accordance with regulations
        prescribed by the Puerto Rico Secretary of the Treasury under PR-Code
        Section 1165(e). If the arrangements have different Plan Years, this
        subsection shall be applied by treating all such arrangements ending
        with or within the same calendar year as a single arrangement.
        Notwithstanding the foregoing, certain plans shall be treated as
        separate plans if mandatorily disaggregated pursuant to regulations
        under Code Section 401(k).

                (e) For purposes of the Actual Deferral Percentage test,
        Compensation Deferral Contributions must be made before the last day of
        the twelve-month period immediately following the Plan Year to which
        such contributions relate.

                (f) The determination and treatment of Compensation Deferral
        Contributions and the Actual Deferral Percentage of any Participant
        under this Section 4.3 shall satisfy such other requirements as may be
        prescribed by the Puerto Rico Secretary of the Treasury.

                (g) The Committee shall keep or cause to have kept such records
        as are necessary to demonstrate that the Plan satisfies the requirements
        of PR-Code Section 1165(e) and the regulations thereunder, in accordance
        with regulations prescribed by the Puerto Rico Secretary of the
        Treasury.

        4.4 Plan Section 4.4. The provisions of Plan Section 4.4 entitled
"Provisions for Return of Excess Before Tax Deposits over $7,000" shall be
applied by substituting the dollar limitation contained in Section 4.1 of this
Appendix for the "$7,000 limitation" in each place it appears.

        4.5 Plan Section 4.5. The provisions of Plan Section 4.5 entitled
"Provision for Recharacterization or Return of Excess Deferrals by Highly
Compensated Participants" shall be applied as follows:

                (a) "Highly Compensated Employee and Top One-Third Highly
        Compensated Employee" shall be substituted for "Highly Compensated
        Employee" in each place it appears.



                                      A-4
<PAGE>   77

                (b) Any reference to Code Sections shall include reference to
        the corresponding PR-Code Section unless the context clearly indicates
        otherwise. For example, references to "Code Section 401(k)" and "Code
        Section 404" shall include references to PR-Code Section 1165(e) and
        PR-Code Section 1023(n), respectively.

        4.6 Reserved for Future Modification.

        4.7 Plan Section 4.7. In addition to the provisions of Plan Section 4.7
entitled "Character of Deposits," Before Tax Deposits shall be treated as
Company Contributions for purposes of PR-Code Section 1165(e).

        4.8 Plan Section 4.8. The provisions of Plan Section 4.8 entitled
"Rollover Contributions" shall be applied by including a corresponding reference
to "PR-Code Section 1165(a)" in each place "Code Section 401(a)" and "Code
Section 501(a)" appears.



                                     PART V
                      TRUST FUND AND COMPANY CONTRIBUTIONS


        The provisions of Article V shall apply to all Puerto Rico-based
Employees except as set forth below:

        5.1 Plan Section 5.2. Notwithstanding the provisions of Plan Section 5.2
entitled "Company Contributions" and subject to the limitations of Plan Article
XIII and to the extent that the Company has current or accumulated profits, in
the case of a Puerto Rico-based Participant the Company shall contribute monthly
out of current or accumulated profits and an amount which, when added to
available forfeitures provided under Plan Section 8.2 resulting from the
terminations during the month, is equal to 75% of each Participant's Sharing
Deposits for the previous month which are not in excess of two percent (2%) of
such Participant's Compensation.

        5.2 Plan Section 5.7. The provisions of Plan Section 5.7 entitled
"Irrevocability" shall be applied by including a corresponding reference to
"PR-Code Section 1165(a)" and "PR-Code Section 1023(n)" in each place "Code
Section 401(a)" and "Code Section 404" appears, respectively



                                     PART VI
                            ACCOUNTS AND ALLOCATIONS


        The provisions of Article VI of the Plan shall apply to all Puerto
Rico-based Employees.



                                    PART VII
                            VESTING IN PLAN ACCOUNTS


        The provisions of Article VII of the Plan shall apply to all Puerto
Rico-based Employees.



                                      A-5
<PAGE>   78

                                    PART VIII
                            PAYMENT OF PLAN BENEFITS


        The provisions of Article VIII of the Plan shall apply to all Puerto
Rico-based Employees except as set forth below:

        8.1 Plan Section 8.1. The provisions of Plan Section 8.1 entitled
"Withdrawals During Employment" shall be applied by including a corresponding
reference to "PR-Code Section 1165(e)(7)(A)" in each place "Code Section 402(g)"
appears.

        8.2 Plan Section 8.4. In addition to the provisions of Plan Section 8.4
entitled "Designation of Beneficiary," the following rules shall apply to a
Participant, as defined in Section 2.4 of this Appendix:

                (a) In the event a deceased Participant is not a resident of
        Puerto Rico at the date of his death, the Plan Administrator, in its
        discretion, may require the establishment of ancillary administration in
        Puerto Rico.

                (b) If the Committee cannot locate a qualified personal
        representative of the deceased Participant, or if administration of the
        deceased Participant's estate is not otherwise required, the Plan
        Administrator, in its discretion, may pay the deceased Participant's
        interest in the Trust Fund to his heirs at law (determined in accordance
        with the laws of the Commonwealth of Puerto Rico) as they existed at the
        date of the Participant's death.

        8.3 Plan Section 8.5(a). Notwithstanding the provisions of Plan Section
8.5(a) entitled "Distribution Rules," in the case of a Puerto Rico-based
Participant in no event shall any benefits under the Plan, including benefits
upon retirement, Severance, or Disability, be paid (or commence to be paid) to a
participant prior to the "Consent Date" (as defined herein) unless the
Participant consents in writing to the payment (or commencement of payment) of
such benefits prior to said Consent Date. As used herein, the term "Consent
Date" shall mean the later of (i) the Participant's 62nd birthday, or (ii) the
Participant's Normal Retirement Age. Notwithstanding the foregoing, the
provisions of this Paragraph shall not apply (i) following the Participant's
death, or (ii) with respect to a lump sum distribution of the vested portion of
a Participant's Account if the total amount of such vested portion does not
exceed or has never exceeded $3,500.

        8.4 Plan Section 8.5(c). Notwithstanding the provisions of Plan Section
8.5(c) entitled "Distribution Rules," Section 8.3 of this Appendix or Plan
Section 8.5(b), in the case of a Puerto Rico-based Participant distributions of
the entire vested portion of a Participant's Accounts shall be made no later
than the Participant's Required Beginning Date, or, if such distribution is to
be made over the life of such Participant or over the lives of such Participant
and a Beneficiary (or over a period not extending beyond the life expectancy of
such participant and Beneficiary) then such distribution shall commence no later
than the Participant's Required Beginning Date. Required Beginning Date shall
mean:

                (a) For the period prior to January 1, 1989, April 1 of the
        calendar year following the later of the calendar year in which the
        Participant (i) attains age 70-1/2, or (ii) retires; provided, however,
        the foregoing clause (ii) shall not apply with respect to a Participant
        who is a Five Percent Owner (as defined in Code Section 416(i)) at any
        time during the five Plan Year period ending in the calendar year in
        which the Participant attains age 70-1/2. If the Participant becomes a
        Five Percent Owner during any Plan Year subsequent to the five Plan Year
        period referenced above, the Required Beginning Date under this
        Paragraph (a) shall be April 1 of the calendar year following the
        calendar year in which such subsequent Plan year ends.

                (b) For the period after December 31, 1988, April 1 of the
        calendar year following the calendar year in which the Participant
        attains age 70-1/2; provided, however, if the Participant attains age
        70-1/2 before January 1, 1988 and the Participant was not a Five Percent
        Owner at any time during the Plan Year ending with or within the
        calendar year in which such Participant attains age 66-1/2 or any
        subsequent



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<PAGE>   79

        Plan Year, then this Paragraph (b) shall not apply and the Required
        Beginning Date shall be determined under Paragraph (a) above.

        8.5 Plan Section 8.10(c). The provisions of Plan Section 8.10(c)
entitled "Additional Documents" shall be applied by including reference to
"Puerto Rico" in each place "State or Federal" appears.

        8.6 Plan Section 8.11. The provisions of Plan Section 8.11 entitled
"Trustee-Trustee Transfers" shall be applied by including a corresponding
reference to "PR-Code Section 1165" in each place "Section 401 of the Code"
appears.

        8.7 Plan Section 8.12. The provisions of Plan Section 8.10(c) entitled
"Additional Documents" shall be applied by including reference to the "P-R Code"
in each place "Code or ERISA" appears.



                                     PART IX
                           PLAN ARTICLES IX THROUGH XV


        The provisions of Articles IX through XV of the Plan shall apply to all
Puerto Rico-based Employees.



                                     PART X
                            MISCELLANEOUS PROVISIONS


        The provisions of Article XVI of the Plan shall apply to all Puerto
Rico-based Employees except as follows:

        10.1 Plan Section 16.5. In addition to the provisions of Plan Section
16.5 entitled "Interpretation," the provisions of the Plan shall be interpreted
in a manner consistent with the Plan satisfying (i) the requirements of PR-Code
Section 1165(a) and related statutes for qualification as a defined contribution
plan and (ii) the requirements of PR-Code Section 1165(e) and related statutes
for qualification as a cash or deferred arrangement to the extent such
interpretation would not violate (i) the requirements of Code Section 401(a) and
related statutes for qualification as a defined contribution plan and (ii) the
requirements of Code Section 401(k) and related statutes for qualification as a
cash or deferred arrangement.

        10.2 Plan Section 16.6. In addition to the provisions of Plan Section
16.6 entitled "Withholding for Taxes," any payments from the Trust Fund may be
subject to withholding for taxes as may be required by any applicable Puerto
Rico law.

        10.3 Plan Section 16.7. In addition to the provisions of Plan Section
16.7 entitled "California Law Controlling," the Plan Administrator shall
determine whether all legal questions pertaining to the Plan which are not
controlled by ERISA shall be determined in accordance with the laws of the
Commonwealth of Puerto Rico or the laws of the State of California in the case
of a Puerto Rico-based Employee or Participant.



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