FINLAY RETIREMENT INCOME PLAN


                             As amended and restated
                                  October 1999






















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                          FINLAY RETIREMENT INCOME PLAN

                                    Preamble
                                    --------

     Effective January 1, 1987, S & L Acquisition Company,  L.P. ("S&L") adopted
the Seligman & Latz Retirement  Income Plan ("Original  Plan"), a profit-sharing
plan  providing  for  contributions  pursuant to section  401(k) of the Internal
Revenue Code ("Code").

     Effective as of December 6, 1988, S&L was  restructured  into and succeeded
by four separate corporations,  Adrien Arpel, Inc., Finlay Enterprises, Inc. and
its wholly  owned  subsidiary  Finlay  Fine  Jewelry  Corporation,  and  Tru-Run
Corporation.  In  connection  with that  restructuring,  the Original  Plan was,
effective  on such date,  assumed and  continued  by Finlay  Enterprises,  Inc.,
Finlay Fine Jewelry Corporation and Tru-Run Corporation, all of which were under
common  control within the meaning of section 414 (b) of the Code. In connection
with that  change and  effective  as of the same  date,  the  Original  Plan was
renamed  the Finlay and Tru-Run  Retirement  Income  Plan  ("Finlay  and Tru-Run
Plan") and amended to reflect the consequences of the restructuring.


     The Finlay and  Tru-Run  Plan was  amended and  restated,  effective  as of
January 1,  1989 except as otherwise provided,  to make changes deemed necessary
or  advisable  to comply with changes in  applicable  law,  effective as of such
dates as are required by law, to make other  changes  deemed  desirable,  and to
merge  the  Finlay   Enterprises   Retirement  Income  Plan  ("Field  Plan"),  a
profit-sharing plan qualified under section 401(a) of the Code and maintained by
Finlay Enterprises, Inc. for certain field employees of Finlay Enterprises, Inc.
and Finlay Fine Jewelry Corporation,  into the Finlay and Tru-Run Plan effective
as of the close of business on December 31,  1988,  with the terms of the Finlay
and  Tru-Run  Plan as so  amended  and  restated  superseding  in all  respects,
effective as of January 1, 1989, the provisions of the Field Plan.  Effective as
of  January  1,  1990,  the  Finlay  and  Tru-Run  Plan was  renamed  the Finlay

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Retirement  Income  Plan.  On April 27, 1999,  the Plan was further  amended and
restated to include  additional  amendments adopted since the prior restatement,
including  those  necessary to comply with the  provisions of the Small Business
Job  Protection  Act of 1996  (SBJPA),  the Uruguay Round  Agreements  Act (also
referred to as GATT), the Taxpayer Relief Act of 1997 and the IRS  Restructuring
and Reform Act of 1998, as well as other amendments determined by the Company to
be  appropriate  to further  the  purposes of the Plan,  effective  as the dates
required by such  provisions of law or as expressly set forth,  and otherwise as
of the date thereof,  provided that  clarifications  of existing  provisions are
effective as of the same dates as the provisions which they clarify.  On October
__, 1999, a further  restatement was adopted  reflecting an amendment  effective
July 1, 1999 authorizing  quarterly  enrollment dates after initial eligibility,
and making further changes to reflect  provisions of SBJPA that become effective
in 1999. The Plan as so amended and restated reads as follows:

                                    ARTICLE I

                                   Definitions
                                   -----------

     When used in this Plan,  the  following  terms  shall  have the  designated
meanings, unless a different meaning is clearly required by the context:

     1.1 Accounts.  A Participant's  Profit-Sharing  and Matching  Contributions
Account, Elective Contributions Account, and Closed Savings Account.

     1.2 Affiliate. Any of the following:

          1.2.1  Controlled  Group  Affiliate.  Any trade or business  (other
than an Employer),  whether or not incorporated,  which at the time of reference
controls,  is controlled by, or is under common control with an Employer  within
the meaning of section 414(b) or 414(c) of



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the Code  and,  for  purposes  of  Article  XIV,  section  415(h) of the Code (a
"Controlled Group Affiliate").

          1.2.2  Affiliated  Service  Groups,  etc. Any  (a) member  of an
affiliated service group, within the meaning of section 414(m) of the Code, that
includes an Employer,  or (b) organization  aggregated with an Employer pursuant
to section 414(o) of the Code, to the extent required by such sections.

     1.3 Appropriate Form. The form or other method of communication  prescribed
by the Committee for a particular  purpose  specified in the Plan, when filed or
otherwise effectuated at the time and in the manner prescribed by the Committee.

     1.4 Beneficiary.  The person or persons entitled to benefits under the Plan
following a Participant's death, pursuant to Article IX.

     1.5 Board of Directors.  The Board of Directors of the Company, or any duly
authorized committee thereof.

     1.6 Break in  Service.  A  Severance  Period of not less than  twelve  (12)
consecutive months; provided,  however, that in the case of an individual who is
absent from work for maternity or paternity reasons,  no portion of the first 12
consecutive  months  of such  absence  following  his  Severance  Date  shall be
considered for purposes of determining whether there has been a Break in Service
or the length of such Break in Service (this  provision shall not,  however,  be
construed  to grant an employee any right to a leave of absence for any reason).
For  purposes  of this  Section  1.6,  an  absence  from work for  maternity  or
paternity reasons means a cessation of active employment (and continuing absence
from such employment) on or after January 1, 1985 (a) by reason of the pregnancy
of the individual,  (b) by reason of the birth of a child of the individual, (c)
by reason of the placement of a child with the individual in connection

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with the  adoption  of such child by such  individual,  or (d) for  purposes  of
caring for such child for a period beginning immediately following such birth or
placement.

     1.7  Closed  Savings  Account.  A  separate  account  maintained  for  each
Participant who was a participant in the Finlay  Enterprises  Retirement  Income
Plan  on  December  31,  1988,  which  reflects  his  share  of the  Trust  Fund
attributable to amounts credited to such account pursuant to Section 4.11.

     1.8 Code.  The Internal  Revenue Code of 1986 as amended from time to time.
Reference to a specific provision of the Code shall include such provision,  any
valid regulation or ruling promulgated  thereunder and any comparable  provision
of future law that amends, supplements or supersedes such provision.

     1.9 Committee. The Administrative Committee provided for in Article XI.
     1.10  Company.  For periods  prior to December 6, 1988,  S & L  Acquisition
Company,  L.P. For the period from  December 6, 1988 through  December 31, 1989,
Finlay  Enterprises,  Inc.  and Tru-Run  Corporation,  which  entities  shall be
referred to herein,  separately or collectively  as the context may require,  as
"Company."  On and after  January  1, 1990,  Finlay  Enterprises,  Inc.,  or any
successor thereof by merger, consolidation or otherwise.

     1.11  Compensation.  Total compensation as that term is defined in Treasury
Regulation section 1.415-2(d)(11)(i), paid by an Employer to an individual after
he has become a Participant for service as an Eligible Employee,  but determined
before giving effect to any  Contribution  Agreement  under this Plan, or to any
similar reduction  agreement  pursuant to any cafeteria plan (within the meaning
of  section  125 of the Code) or to pay for a  qualified  transportation  fringe
(within the meaning of section 132(f) of the Code), excluding the following:

          (a) reimbursements or other expense allowances;


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          (b) fringe benefits (cash and noncash);

          (c) moving expenses paid by an Employer;

          (d) employer  contributions to a plan of deferred  compensation  which
are not includible in the employee's  gross income for the taxable year in which
contributed, employer contributions under a simplified employee pension plan and
any distributions from a plan of deferred compensation; and


          (e) welfare benefits.

Compensation  taken into account for any  Participant  for any of the Plan Years
1989 through 1993, shall not exceed two hundred thousand dollars  ($200,000) (as
adjusted from time to time in accordance  with section  401(a)(17) of the Code),
and shall not  exceed one  hundred  fifty  thousand  dollars  ($150,000),  as so
adjusted, for any Plan Year beginning on or after January 1, 1994.

     1.12  Contribution  Agreement.  An agreement by an Eligible  Employee  (set
forth on the Appropriate  Form) to reduce his Compensation  otherwise payable in
cash in order to share in Elective  Contributions under the Plan, as provided in
Section 3.2.

     1.13 Date of Hire. The date on which an employee first completes an Hour of
Service.

     1.14  Disability.  Permanent and total  disability by reason of a medically
determinable  physical or mental  impairment  which can be expected to result in
death or to be of continued duration for the Participant's  lifetime,  rendering
the Participant unable to engage in
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any gainful  occupation,  as determined by the Committee on the basis of medical
evidence  satisfactory  to it,  including  but  not  limited  to an  independent
examination by a competent  physician  (giving uniform treatment to Participants
similarly situated).

     1.15 Early Retirement Date. The Participant's 55th birthday.

     1.16 Elective Contributions. Contributions by an Employer for a Participant
under  Section  3.2,  based on the  amount by which the  Participant  elected to
reduce his Compensation otherwise payable in cash.

     1.17 Elective Contributions Account. A separate account maintained for each
participant  which reflects his share of the Trust Fund attributable to Elective
Contributions  (including,  if applicable  pursuant to Section 3.6.5,  Qualified
Nonelective  Contributions),  as adjusted  from time to time pursuant to Article
IV.

     1.18 Eligible Employee/Eligible Participant.

         1.18.1  Eligible  Employee.  Any  of  the  following  employees  of an
Employer:

          (a)  Employees  compensated  through  the  payroll  identified  by the
Employers as the "home office payroll";  regional vice presidents;  Finlay group
managers;  for periods  after  December 31,  1988,  any  employee  who  performs
services for an Employer  that are part of the field  operations  of Finlay Fine
Jewelry  Corporation  or, for  periods  prior to  December  6, 1988,  the Finlay
Division of S & L  Acquisition  Company,  L.P.;  for periods prior to January 1,
1989, Arpel account  executives;  for periods prior to the effective date of the
sale of the Beauty  Salon  Division of S & L  Acquisition  Company L.P. to Regis
Corporation,  beauty  salon  supervisors  and  account  executives;  and Tru-Run
supervisors during the period Tru-Run Corporation participated in the Plan;

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          (b) Any officer of an Employer who performs services for such Employer
on a substantially full-time basis; and

          (c) Any other employee of an Employer who participated in the Seligman
& Latz Pension Plan on December 31, 1986.  Notwithstanding  the  foregoing,  the
following  shall not be considered  Eligible  Employees:  (i) an employee  whose
compensation  or  conditions  of  employment  are  determined  by or  subject to
collective  bargaining with a union, unless the applicable collective bargaining
agreement  expressly  provides that he shall be eligible to  participate in this
Plan, (ii) a non-resident  alien,  or (iii) an individual who performs  services
for an Employer under an agreement or arrangement  (which may be written,  oral,
and/or  evidenced by the Employer's  payroll  practice) with such  individual or
with another  organization  that provides the services of such individual to the
Employer,  pursuant  to which  such  individual  is  treated  as an  independent
contractor or as an employee of an entity other than the Employer,  irrespective
of  whether  he is  treated  as an  employee  of an  Employer  under  common-law
employment  principles or pursuant to the provisions of section  414(m),  414(n)
(relating to Leased Employees) or 414(o) of the Code.

          1.18.2  Eligible  Participant.   A  Participant  who  is  an  Eligible
Employee.

     1.19 Employer. The Company and any other corporation,  partnership or other
entity  which has adopted the Plan with the  approval of the Board of  Directors
and which  shall not have  discontinued  its  participation  pursuant to Section
12.6.

     1.20 Entry Date.  January 1, 1987, and each January 1 or July 1 thereafter.
Effective January 1, 1992, the Committee (acting on the behalf of the management
of the  Employer  and not as a fiduciary  for the Plan) may  establish a special
Entry Date for  employees


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who receive credit for prior service in  determining  eligibility to participate
pursuant to Section 6.4.

     1.21 ERISA. The Employee  Retirement Income Security Act of 1974 as amended
from time to time. Reference to a specific provision of ERISA shall include such
provision,  any  valid  regulation  or  ruling  promulgated  thereunder  and any
comparable  provision of future law that amends,  supplements or supersedes such

provision.

     1.22  Highly  Compensated  Employee.  A "highly  compensated  employee"  as

defined  in section  414(q) of the Code and  applicable  regulations.  Effective

January 1, 1997,  "Highly  Compensated  Employee" means an employee who received

compensation  (as determined  under section 414(q) of the Code) during the prior

Plan Year in excess of $80,000 (as  adjusted  pursuant to section  414(q) of the

Code) or who was a five percent (5%) owner (as  described in Section  15.1.2(c))

at any time during the current or prior Plan Year.

     1.23 Hour of Service.  An hour for which an employee is paid or entitled to

payment for the performance of duties for an Employer or Affiliate.

     1.24  Investment  Fund.  A portion of the Trust  Fund  which is  separately

invested pursuant to Section 4.2.

     1.25 Leased Employee.  An individual  treated as an employee of an Employer

or Affiliate pursuant to Article XVI, as defined in Section 16.1.

     1.26 Matching Contributions. Contributions by an Employer for a Participant

under Section 3.3, based on the Elective Contributions made for the Participant.

     1.27 Normal Retirement Date. The Participant's 65th birthday.



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     1.28 Participant. Any employee who has become a Participant in this Plan in

accordance with Article II, and any other employee or former employee who has an

undistributed Account under the Plan, or whose Beneficiary has such an Account.

     1.29 Plan.  Prior to January 1,  1990,  the Finlay and  Tru-Run  Retirement

Income Plan (formerly the Seligman & Latz Retirement  Income Plan), as from time

to time in effect.  On and after January 1, 1990, the Finlay  Retirement  Income

Plan, as from time to time in effect.

     1.30 Plan Year. Each twelve  (12)-month  period commencing on January 1 and

ending on December 31.

     1.31  Profit-Sharing  Contributions.  Contributions  by an  Employer  under

Section 3.1.

     1.32 Profit-Sharing and Matching  Contributions Account. A separate account

maintained  for each  Participant  which  reflects  his share of the Trust  Fund

attributable to Profit-Sharing and Matching Contributions, as adjusted from time

to time pursuant to Article IV.

     1.33 Qualified Nonelective Contributions. Discretionary contributions by an

Employer for a Participant under Section 3.6.5.

          1.34 Reemployment  Date. The date on which an employee first completes

an Hour of Service after a Severance Date.

          1.35 Service.  Employment (and certain absences from employment) taken

into account for purposes of vesting as described in Article VI.

     1.36 Severance Date. The earliest of:

          (a) The date on which an employee  quits,  retires,  is  discharged or

dies; or


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          (b) The first  anniversary  of the first  date of a period in which an

employee  remains  absent from service  with an Employer or  Affiliate  (with or

without pay) for any reason (such as vacation, holiday, sickness,  disability or

layoff) other than a quit,  retirement,  discharge,  death,  or leave of absence

approved in writing by both his Employer and the Committee.


     1.37 Severance Period. Each period from an employee's Severance Date to his

next Reemployment Date, subject to Section 1.6.

          1.38  Termination  of  Employment.   References  in  this  Plan  to  a

termination  of  employment,  or to a  Participant  or employee  who  terminates

employment or the like, shall mean an employee's  incurring a Severance Date. If

an employee ceases to be employed by an Employer or Affiliate  because of a sale

or other disposition of all or part of the assets or business operations of such

Employer  or  Affiliate  but  continues  in the employ of a  purchaser  or other

acquirer of such assets or operations  or an affiliate  thereof (or any of their

successors)  to whose  plan the  assets  and  liabilities  attributable  to such

employee are (or are to be)  transferred  in a transaction  described in Section

12.7,  such  employee  shall not  thereby  be  deemed  to  retire  or  terminate

employment  for  purposes  of this Plan,  but upon such  transfer  of assets and

liabilities  shall  cease  to be a  Participant.  If an  employee  ceases  to be

employed by an Employer or Affiliate  because of the  withdrawal  of such entity

from membership in the Company's  controlled group within the meaning of section

414(b) or (c) of the Code (such as by reason of the sale or other disposition of

the stock of such Employer or  Affiliate),  such employee shall be considered to

have  retired or  terminated  employment  for  purposes of this Plan unless such

entity or an  affiliate  thereof  (or any of their  successors)  establishes  or

maintains  a plan to which  the  assets  and  liabilities  attributable  to such

employee are (or are to be)  transferred  in a transaction  described in Section

12.7,  in which  case such  employee  shall not  thereby  be deemed

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to retire or  terminate  employment  for  purposes  of this Plan,  but upon such

transfer of assets and liabilities shall cease to be a Participant. The right to

distribution upon termination of employment shall be subject to Section 8.12.

     1.39 Total Compensation.  Effective January 1, 1987, the total compensation

paid  to an  employee  determined  before  giving  effect  to  any  Contribution

Agreement under this Plan (or any other cash or deferred  arrangement  described

in section 401(k) of the Code) or to any similar reduction agreement pursuant to

any  cafeteria  plan  (within the meaning of section 125 of the Code),  and also

determined without regard to section 911 of the Code, of a type reportable by an

Employer or Affiliate on a Form W-2 with  respect to the  individual  for a Plan

Year, excluding the following:

          (a) employer  contributions to a plan of deferred  compensation  which

are not includible in the employee's  gross income for the taxable year in which

contributed, employer contributions under a simplified employee pension plan and

any distributions from a plan of deferred compensation;

          (b)  amounts  realized  from the  exercise  of a  non-qualified  stock

option,  or when  restricted  stock (or  property)  held by the employee  either

becomes freely  transferable  or is no longer  subject to a substantial  risk of

forfeiture;

          (c) amounts realized from the sale,  exchange or other  disposition of

stock acquired under a qualified or incentive stock option; and

          (d) other amounts which received special tax benefits. For purposes of

Sections  3.4.2  and  3.5.2  Total   Compensation   shall  be  limited  to  such

compensation  paid by an Employer or  Affiliate  to an  individual  after he has

become a Participant  for service as an Eligible  Employee.  Total  Compensation

taken into  account for any  Participant

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for any of the Plan  Years 1989  through  1993,  shall not  exceed  two  hundred

thousand  dollars  ($200,000) (as adjusted from time to time in accordance  with

section 401(a)(17) of the Code), and shall not exceed one hundred fifty thousand

dollars  ($150,000),  as so  adjusted,  for any Plan Year  beginning on or after

January 1, 1994.

          1.40 Trust Agreement. The trust agreement referred to in Article X.

          1.41 Trust Fund.  All the assets held under the Plan by the Trustee as

provided for in Article X.

          1.42 Trustee. The corporation, individual, individuals, or combination

thereof  which may at any time be acting as  trustee  under the Trust  Agreement

entered into in connection with the Plan.

          1.43 Valuation  Date.  Each day on which the national stock  exchanges

are open for trading.














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                                   ARTICLE II

                                  Participation
                                  -------------

     2.1 In General.  An Eligible  Employee  shall become a  Participant  on the

first Entry Date coincident with or next following the later of his reaching age

21 or his completing a 12-consecutive-month  period (a "Computation Period") in

which he is  credited  with  1,000  Eligibility  Hours,  provided  he is then an

Eligible Employee. The first Computation Period shall start on his Date of Hire,

and if he  does  not  complete  1,000  Eligibility  Hours  within  that  period,

subsequent Computation Periods shall be calendar years, beginning with the first

calendar year after such Date of Hire.  If he has a Severance  Date and does not

complete the foregoing service requirement in a Computation Period ending before

such  date  (or  in  which  such  date  occurs)  and  he is  then  rehired,  his

Reemployment Date shall be treated as his Date of Hire in applying the foregoing

rules.  The requirement  that a  12-consecutive-month  period elapse pursuant to

this  Section  2.1 shall not apply with  respect to Entry Dates prior to July 1,

1987. Each individual who was a participant in the Finlay Enterprises Retirement

Income Plan on  December  31, 1988 shall  become a  Participant  in this Plan on

January 1, 1989.

          2.1.1  Eligibility Hour. For purposes of this Section 2.1, and Section

3.1.3,  an  Eligibility  Hour  is  each  of the  following,  determined  without

duplication:

     (a)  each hour for which an  employee  is paid or is entitled to payment by

          an Employer or Affiliate for the performance of duties;

     (b)  each hour for which an  employee  is paid or is entitled to payment by

          an Employer or  Affiliate  on account of a period of time during which

          no duties are performed  (taking into  consideration  no more than 501

          such



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          hours on account of any  single  continuous  period in which no duties

          are performed); and

     (c)  each hour for which back pay,  irrespective  of mitigation of damages,

          is either awarded or agreed to by an Employer or Affiliate;

in all cases  disregarding  (i) hours which are excluded  under  Section 6.3 and

(ii)  payments  made or due solely  for  purposes  of  complying  with  workers'

compensation,   unemployment  compensation  or  disability  insurance  laws  and

payments which solely  reimburse an employee for medical  expenses and severance

pay. Hours to be credited for reasons other than the performance of duties shall

be determined  and credited in accordance  with the  provisions of Department of

Labor Regulation S 2530.200b-2(b) and (c).

          2.1.2 Monthly Equivalency. An employee compensated through the payroll

identified by the Employers as the "home office payroll," who customarily  works

for an Employer for twenty-one  (21) or more hours per week throughout each year

(except for holidays and  vacations),  other than an  individual  employed at an

Employer's   distribution   center  (which   currently  is  located  in  Orange,

Connecticut),   shall  be  credited  with  exactly  one  hundred   ninety  (190)

Eligibility Hours for each month with respect to which he completes at least one

Eligibility Hour (regardless of whether the number of Eligibility Hours actually

completed in such month exceeds one hundred ninety (190)).

     2.2 Transfer to Eligible Employment. If an employee transfers to employment

as an Eligible  Employee from  employment  with an Affiliate or from  employment

with  an  Employer  other  than as an  Eligible  Employee,  he  shall  become  a

Participant  on the later of (a) the  first  Entry  Date  after the date of such

transfer,  or (b)  the  first  Entry  Date on  which  he

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could have become a Participant  pursuant to Section 2.1 if his prior employment

by the Employer or Affiliate had been in a position  eligible for  participation

in the Plan.


     2.3  Reemployment.  If a Participant  or other  employee who has terminated

employment  shall be rehired as an Eligible  Employee,  he shall be treated as a

new Employee for all purposes of the Plan if his prior  Service and  Eligibility

Hours are disregarded  under the rule of parity set forth in Section 6.3. In any

other  case,  he shall  commence or resume  participation  under the Plan on the

later of (a) the date of such  rehire,  or (b) the first  Entry Date on which he

could have become a Participant  pursuant to Section 2.1 if his prior employment

by an Employer or Affiliate had been in a position eligible for participation in

the Plan.

     2.4 Contribution agreement required for elective contributions. An eligible

employee shall be eligible to share in elective contributions under section 3.2,

Effective for payroll periods ending after the first entry date on which he is a

participant,  provided  that  he (i)  completes  and  returns  the  contribution

agreement  described  in section  3.2.1 So that it is received by the  committee

within such period as the committee shall  prescribe,  or (ii) is deemed to have

elected  to  participate  pursuant  to  section  3.2.3.  If a  rehired  eligible

employee, or eligible employee transferred from ineligible employment, commences

or resumes participation pursuant to section 2.2 Or section 2.3, He shall become

eligible to share in  contributions  under section 3.2 Upon execution and filing

of an appropriate  contribution  agreement within such time as the committee may

prescribe,  effective  as of such date as the  committee  shall  determine to be

reasonably  practicable.  If a  participant  fails  to  complete  and  return  a

contribution agreement within the required time set forth above, he may begin to

share in  contributions  under section 3.2 As of any subsequent  entry date, or,

effective july 1, 1999, the first day of any subsequent  calendar quarter, as of

which he is an eligible employee,  by


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completing and returning such Contribution Agreement to the Committee so that it

is  received  by  the  Committee  within  such  period  as the  Committee  shall

prescribe.  No Contribution  Agreement is required in order for a Participant to

share in Profit-Sharing Contributions.


     2.5 Suspension on Transfer to Ineligible Employment.

          2.5.1 If a Participant ceases to be an Eligible Employee but continues

in the employ of an Employer or Affiliate,  his Contribution  Agreement (if any)

shall be suspended until he resumes his status as an Eligible Employee.

     2.5.2 A Participant's  employment during a period of suspension referred to

in Section 2.5.1 shall be included in his employment for purposes of determining

his Service  under Article VI, but during such period of suspension he shall not

be entitled to share in contributions  under the Plan (other than the allocation

for the Plan Year in which such suspension  occurs). If during the period of his

suspension  the  Participant's  employment  terminates or he dies,  his Accounts

shall be distributed in accordance with the provisions of Articles VII and VIII.

          2.5.3 If and when the suspended  Participant again becomes an Eligible

Employee,  he shall resume active  participation on the date he again becomes an

Eligible Employee as provided in Section 2.2.

     2.6 Transfers Between Employers. If a Participant transfers from employment

as an Eligible  Employee with one Employer to employment as an Eligible Employee

with  another  Employer:  (a)  his  participation  in  the  Plan  shall  not  be

interrupted; and (b) his Contribution Agreement (if any) with his prior Employer

shall be deemed to apply to his second Employer in the same manner as it applied

to his prior Employer.

                                      -17-
<PAGE>

     2.7 No  Employment  Rights.  The  establishment  of the Plan  shall  not be

construed  as  conferring  any  rights  upon any  employee  or any  person for a

continuation of his employment, nor shall it be construed as limiting in any way

the right of any Employer or Affiliate to discharge any employee or to treat him

without  regard to the  effect  which  such  treatment  might have upon him as a

Participant under the Plan.

















                                      -18-
<PAGE>

                                   ARTICLE III

                                  Contributions
                                  -------------

     3.1 Profit-Sharing Contributions.

          3.1.1 Amount. Each Employer shall make Profit-Sharing Contributions to

the  Plan for each  Plan  Year in an  amount  equal to two  percent  (2%) of the

Compensation  for  such  Plan  Year  of  its  employees  eligible  to  share  in

Profit-Sharing  Contributions  for that  Plan  Year  (determined  under  Section

3.1.3), reduced by the amount of any available forfeitures arising under Section

5.4 (or 3.5.2). For any Participant who transfers to ineligible  employment,  as

prescribed in Section 2.5.2, any such  Profit-Sharing  Contributions made on his

behalf shall be based only on his Compensation while an Eligible Employee.

          3.1.2 Payment.  Profit-Sharing Contributions by an Employer for a Plan

Year shall be paid to the  Trustee  within  the time for  filing the  Employer's

federal income tax return for such Plan Year (including extensions).

          3.1.3   Eligibility   to  Share   in   Profit-Sharing   and   Matching

Contributions  and  Forfeitures.  A  Participant  shall be  eligible to share in

Profit-Sharing Contributions and Matching Contributions (and forfeitures in lieu

thereof)  for a  Plan  Year  only  if (a) he is a  Participant  and an  Eligible

Employee  for at least a portion of such Plan  Year,  (b) he is  employed  by an

Employer  or  Affiliate  on the  last  day of  such  Plan  Year,  or  terminated

employment  during such Plan Year after reaching his Early Retirement Date or as

a result of death or Disability,  and (c) he has no less than 1,000  Eligibility

Hours (as defined in Section 2.1) during such Plan Year,  provided  that if such

Participant  terminated  employment  during such year after  reaching  his Early

Retirement Date or as a result of death or Disability,  such  Eligibility  Hours

requirement

                                      -19-
<PAGE>

shall be prorated. The 1,000 Eligibility Hours requirement under (c) above shall

be waived for the 1989 Plan Year and, for subsequent Plan Years,  may be reduced

to the highest  lesser  number of  Eligibility  Hours during such year which the

Committee  determines  is  necessary  or  appropriate  in order  for the Plan to

satisfy the requirements of section 410(b) of the Code.

     If any active  Participant's  employment was terminated  involuntarily as a

result of the sale of the Beauty  Salon  Division of S & L  Acquisition  Company

L.P. to Regis Corporation (whether such termination occurred before or after the

date of such sale but in no event  later  than  December  31,  1988),  then such

Participant  shall  be  entitled  to  share  in  any  applicable  Profit-Sharing

Contributions and Matching  Contributions  (and forfeitures in lieu thereof) for

the  Plan  Year  in  which  his  termination  occurred,  based  on his  Elective

Contributions and Compensation for such Plan Year.  Notwithstanding  anything in

this Section 3.1.3 to the contrary, a Participant whose employment is terminated

by the Company on or after July 1, 1989, but in no event later than December 31,

1989,  as  a  result  of  a  reduction  in  force,  sale,  merger,  dissolution,

liquidation or change in control or reorganization of Tru-Run Corporation, shall

be eligible to share in Profit-Sharing  Contributions and Matching Contributions

(and  allocations  in lieu thereof) for the Plan Year in which his employment is

so terminated if he was an Eligible Employee during any portion of such year.

     3.2 Elective Contributions.

          3.2.1 Election of Amount. In order to share in Elective Contributions,

a  Participant  must  elect  in  his   Contribution   Agreement  to  reduce  his

Compensation  otherwise  payable  in cash for each  payroll  period by any whole

percentage  between 1% and 16%,  inclusive;  provided,  that a whole  percentage

shall not be required if necessary or  appropriate to comply with any applicable

limitations  on  the  amount  of  Elective  Contributions   permitted.   In  its


                                      -20-
<PAGE>

discretion,  the Committee may reduce the maximum amount of permissible Elective

Contributions  below  16% for all  Participants,  or for a  specified  group  of

Participants  which  does  not  discriminate  in  favor  of  Highly  Compensated

Employees. In no event shall the limits under Section 3.4 be exceeded. Effective

June 14,  1992,  the  Committee  shall  decrease  the  amount  of  reduction  of

Compensation under a Participant's Contribution Agreement for any payroll period

to the  extent  the sum of  such  reduction,  the  amount  of the  Participant's

deductions  for such  payroll  period  for  welfare  benefits  sponsored  by the

Employer,  and any other  withholding  from pay  required  by law,  exceeds  the

Participant's  Compensation for such payroll period. The Participant's  Employer

shall  contribute to the Plan as Elective  Contributions,  as soon as reasonably

practicable  after the close of each payroll period for which such  Contribution

Agreement is in effect, an amount equal to the elected and applicable  reduction

in the  Participant's  Compensation  otherwise  payable in cash for that payroll

period.

     3.2.2 Change in  Contribution  Rate. A Participant  who has a  Contribution

Agreement in effect may increase or decrease the amount of reduction  thereunder

of his  Compensation  otherwise  payable in cash within the limits  specified in

Section 3.2.1, effective as of such date and upon such notice on the Appropriate

Form to the Committee as shall apply in accordance with procedures prescribed by

the Committee.

     3.2.3 Deemed Election.  The Committee may establish a procedure pursuant to

which an Eligible  Employee is deemed to have elected to reduce his Compensation

by a specified  percentage  to provide  for  Elective  Contributions  unless the

Eligible Employee elects on the Appropriate Form not to make such contributions.

Any such deemed  election  shall be  treated,  for  purposes of the Plan,  as an

election by the Eligible Employee properly made pursuant to Section 3.2.1.

                                      -21-
<PAGE>

     3.2.4  Voluntary  Suspension.  A Participant  may  voluntarily  suspend his

Contribution  Agreement  effective as of any payroll  period by giving notice on

the  Appropriate  Form,  which notice will be  processed  as soon as  reasonably

practicable.  No  Elective  Contributions  under this  Section  3.2 or  Matching

Contributions  under Section 3.3 shall be made for any Participant  with respect

to any period during which his Contribution Agreement has been so suspended.  An

Eligible Employee may reinstate his Contribution  Agreement as of any Entry Date

or,  effective  April 1, 1999, as of the first day of any calendar  quarter,  by

giving notice to the Committee on the Appropriate Form so that it is received by

the Committee within such period as the Committee shall prescribe.


     3.2.5 Mandatory Suspension. The Contribution Agreement of a Participant who

makes a withdrawal from his Elective  Contributions  Account pursuant to Section

7.2 shall be suspended as of the payroll  period in which the withdrawal is made

until the next Entry  Date or,  effective  April 1,  1999,  the first day of the

calendar  quarter that is at least 12 months after the date of such  withdrawal.

An Eligible  Employee may  reinstate his  Contribution  Agreement as of the next

Entry  Date or,  effective  April 1, 1999,  as of the first day of any  calendar

quarter, following a period of mandatory suspension under this Section 3.2.5, by

giving notice to the Committee on the Appropriate Form so that it is received by

the Committee within such period as the Committee shall prescribe.

     3.2.6  Limitation.  Notwithstanding  any other  provision of this Plan,  no

Participant may elect to reduce his Compensation pursuant to Section 3.2.1 for a

Plan Year (or have Elective  Contributions made in respect thereof) by an amount

in  excess  of  the  "elective   deferral   limit."  A  Participant's   Elective

Contributions  under Section 3.2.1 shall be discontinued  for the remainder of a

Plan Year when in the  aggregate  they equal the "elective  deferral  limit"

                                      -22-
<PAGE>

for such Plan Year.  Effective  January 1, 1997,  for  purposes of this  Section

3.2.6, the "elective  deferral limit" means $9,500 as adjusted from time to time

in accordance with section 402(g)(5) of the Code (e.g., $10,000 for the 1998 and

1999 Plan Years),  reduced by the amount of "elective  deferrals" (as defined in

section  402(g)(3) of the Code) made by the Participant  during his taxable year
(which is  presumed  to be the  calendar  year)  under  any plans or  agreements

maintained  by an Employer or by a  Controlled  Group  Affiliate  (described  in

Section  1.2.1)  other  than  this  Plan  (and,  in the sole  discretion  of the

Committee, any plans or agreements maintained by any other employer, if reported

to the  Committee  at  such  time  and in such  manner  as the  Committee  shall

prescribe).  The "elective deferral limit" with respect to a Participant who has

received a withdrawal from his Elective Contributions Account under this Plan as

provided in Section 7.2, or a hardship  withdrawal with respect to his "elective

deferrals" (as defined in section 402(g)(3) of the Code) under any other plan or

agreement of any Employer or Affiliate,  shall,  for his taxable year  following

the taxable year of such  withdrawal,  be reduced by the amount of the "elective

deferrals"  made by the  Participant  during the taxable year of the  withdrawal

under this Plan and all such other plans and agreements. Each such other plan or

agreement  shall  be  deemed  amended  by  reason  of  this  provision  and  the

Participant's  execution of the Appropriate Form to the extent necessary to give

full effect to any reduction required under the preceding sentence.

     3.2.7  Distribution  of Excess  Deferral.  If the "elective  deferrals" (as

defined  in section  402(g)(3)  of the Code)  made by a  Participant  during his

taxable year under this Plan and any other plans or agreements  maintained by an

Employer or Controlled  Group Affiliate  (described in Section 1.2.1) exceed the

"elective deferral limit," the excess Elective  Contributions,  adjusted for any

income or loss  attributable  under the allocation rules of Sections
                                      -23-
<PAGE>


4.5 and 4.6 to such Elective Contributions up to the date of distribution, shall

be  distributed  no later  than  April 15 of the  following  Plan  Year.  If the

Participant's  Elective  Contributions  Account  is  invested  in more  than one

Investment  Fund,  such  distribution  shall be made  pro  rata,  to the  extent

practicable,  from all such Investment  Funds. Any Matching  Contributions  made

with  respect  to  such  excess  Elective  Contributions  and  allocated  to his

Profit-Sharing and Matching Contributions Account shall be forfeited and applied

pursuant to Section 5.4.


     3.3 Matching Contributions.


          3.3.1 Amount.  The Employer shall make Matching  Contributions  to the

Plan for each Plan Year for each Participant who has a Contribution Agreement in

effect  during such year and who is eligible to share in Matching  Contributions

for such year pursuant to Section 3.1.3. Such Matching Contributions shall be in

an amount equal to 25% of such  Participant's  Elective  Contributions  for each

payroll   period   ending  in  such  year,   but  excluding  any  such  Elective

Contributions in excess of five percent (5%) of the  Participant's  Compensation

for the  "applicable  period."  For  purposes  of the  preceding  sentence,  the

"applicable  period" shall be the entire period during which the Participant was

eligible to make Elective  Contributions,  unless the Participant  increased his

contribution  rate during such period from a rate  between  zero to five percent

(5%)  inclusive to more than five  percent  (5%),  in which event each  separate

portion  of such  period in which he had a  different  reduction  rate in effect

shall  constitute the "applicable  period".  The  "applicable  period" shall not

include any period  during  which a  Participant's  Elective  Contributions  are

suspended  pursuant to Section  3.2.3 or Section  3.2.4.  The amount of Matching

Contributions  otherwise  required to be made by an Employer for any

                                      -24-
<PAGE>

month shall be reduced by the amount of any available  forfeitures under Section

5.4 (or Section 3.5.2).


     3.3.2 Payment. Matching Contributions for a payroll period shall be paid to

the Trustee within the time for filing the Employer's  federal income tax return

for the Plan Year in which such payroll period ends (including extensions).

     3.3.3 Matching  Contributions Only for Permissible Elective  Contributions.

No  Matching   Contributions   shall  be  made  (i)  with   respect  to  "excess

contributions" (as defined in Section 3.4.3)  distributable  pursuant to Section

3.4.3,  (ii) with respect to Elective  Contributions  in excess of the "elective

deferral  limit"  (as  defined  in  Section  3.2.5)  or (iii) in  excess  of the

percentage of Elective Contributions  permitted under Section 3.3.1. Any amounts

paid  into the Trust  Fund with the  intention  that  they  constitute  Matching

Contributions  with respect to such amounts  shall be retained in the Trust Fund

and applied to meet the obligation of the Employer to make  contributions  under

this Article III.

     3.4 Section 401(k) Limit on Elective Contributions.

          3.4.1  In  General.  Notwithstanding  anything  in  this  Plan  to the

contrary,  effective January 1, 1997,  Elective  Contributions for any Plan Year

for an Eligible  Participant who is a Highly Compensated  Employee for such year

shall be reduced if and to the  extent  deemed  necessary  or  advisable  by the

Committee in order that the Average  Deferral  Percentage (as defined in Section

3.4.2) for Eligible  Participants who are Highly Compensated  Employees for that

Plan Year shall not exceed the percentage  determined in the following schedule,

based on the Average Deferral Percentage for the immediately preceding Plan Year

(the  "Applicable

                                      -25-
<PAGE>

Plan  Year")  for all  Eligible  Participants  who are  not  Highly  Compensated

Employees for such Applicable Plan Year:



Column 1                                 Column 2
--------                                 --------

Average Deferral Percentage for         Average Deferral Percentage for
Eligible Participants                   Eligible Participants
Highly Compensated Employees            Who Are Highly Compensated
for the Applicable Plan Year            Employees for the Current Plan Year

Less than 2%                            Two (2) times the percentage in Column 1

2% - 8%                                 The percentage in Column 1, plus 2%

More than 8%                            One and one-quarter (1-1/4) times the
                                        percentage in Column 1

The  status  of an  individual  as a  non-Highly  Compensated  Employee  for  an

Applicable  Plan Year  shall be  determined  based on the  definition  of Highly

Compensated Employee in effect for such Applicable Plan Year.


In the event that both the  Average  Deferral  Percentage  and the  Contribution

Percentage  (as  defined in Section  3.5.2) for  Eligible  Participants  who are

Highly Compensated Employees for the Plan Year are more than one and one-quarter

(1-1/4) times the  corresponding  percentages for Eligible  Participants who are

not Highly  Compensated  Employees for the  Applicable  Plan Year,  the Elective

Contributions for Eligible Participants who are Highly Compensated Employees for

the Plan Year  shall be further  reduced  in order  that the sum of the  Average

Deferral Percentage plus the Contribution  Percentage for Eligible  Participants

who are  Highly  Compensated  Employees  for the Plan Year does not  exceed  the

Aggregate Limit (as defined in Section 3.6.3) for the Plan Year.



                                   -26-
<PAGE>

     3.4.2 Determination of Average Deferral  Percentages.  For purposes of this

Section 3.4, the Average Deferral  Percentage for any group of individuals for a

Plan  Year  (including  an  Applicable  Plan  Year)  means  the  average  of the

individual  ratios,  for each person in such group, of (a) his share of Elective

Contributions  for the Plan  Year to (b) his  Total  Compensation  for such Plan

Year. The individual ratios,  and the Average Deferral  Percentage for any group

of individuals,  shall be calculated to the nearest one-hundredth of one percent

(0.01%). For purposes of calculating the Average Deferral Percentage,  Qualified

Nonelective  Contributions  under  Section  3.6.5 may be taken  into  account as

Elective  Contributions  if applicable  regulations  under section 401(k) of the

Code  (which  are  set  forth  in  Treas.  Reg.  S 1.401(k)-1(b)(5))  and  other

applicable  guidance  (including  IRS Notice  98-1 and  corresponding  successor

guidance) are met. The Committee  shall  determine,  during and as of the end of

each Plan Year, the Average Deferral  Percentages  relevant for purposes of this

Section 3.4, based on Participants'  Contribution Agreements and projected Total

Compensation. If, based on such determination, the Committee shall conclude that

a reduction in the Elective  Contributions made for any Eligible  Participant is

necessary or advisable in order to comply with the  limitations  of this Section

3.4, it shall so notify each affected  Eligible  Participant and his Employer of

the reduction  that it deems  necessary or desirable  for this purpose.  In such

event, the allowable Elective Contributions under Section 3.2.1 shall be reduced

in  accordance  with  the  direction  of the  Committee,  and  the  Contribution

Agreement of each Eligible  Participant  affected by such determination shall be

modified  accordingly.  Any such  reduction  may apply  either  to all  Eligible

Participants,   only  to  Eligible   Participants  who  are  Highly  Compensated

Employees,  or to any other  group as the  Committee  shall  determine,  in such


manner as the Committee shall determine.


                                      -27-
<PAGE>

     3.4.3 Treatment of Excess Contributions.  For purposes of this Section 3.4,


"Excess  Contributions"  means, with respect to any Plan Year, the excess of (a)

the aggregate  amount of Elective  Contributions  actually paid into the Plan on

behalf of Highly Compensated  Employees for such Plan Year, over (b) the maximum

amount  of  Elective  Contributions  permitted  for such  Plan  Year  under  the

limitations  set forth in Section  3.4.1,  determined  by reducing the amount of

Elective Contributions to be permitted on behalf of Highly Compensated Employees

in the order of their  individual  ratios (as  determined  under Section  3.4.2)

beginning with the highest of such percentages.


     The aggregate amount of any Excess Contributions so determined for any Plan

Year shall be distributed in cash to Highly  Compensated  Employees on the basis

of the  respective  amounts of Elective  Contributions  (and amounts  taken into

account as Elective  Contributions)  made on their behalf,  reducing the largest

amounts  of  Elective  Contributions  first,  and  successively  to  the  extent

necessary until the entire amount of such Excess  Contributions  is distributed.

The  amount of Excess  Contributions  to be  distributed  for any Plan Year with

respect to any Highly Compensated Employee shall be distributed in cash no later

than March 15 of the following Plan Year if possible,  and in any event no later

than the close of such following Plan Year. If such  Participant's  Accounts are

invested in more than one Investment Fund, such  distribution  shall be made pro

rata, to the extent  practicable,  from all such Investment Funds. The amount of

Excess  Contributions  distributed to any such Participant shall be adjusted for

any income or loss  attributable to such Excess  Contributions up to the date of

distribution  under the  allocation  rules of Sections 4.5 and 4.6. In the event

that Qualified  Nonelective  Contributions are taken into account in determining

the Average Deferral Percentage with respect to any Highly Compensated Employee,

and  distribution  of  the  Elective  Contributions  allocable  to  such
                                      -28-
<PAGE>

Highly  Compensated  Employee is  insufficient to eliminate the entire amount of

Excess  Contributions  with respect to such Highly Compensated  Employee,  there

shall  be  distributed  so  much  of  the  Qualified  Nonelective  Contributions

allocated  to the  Accounts  of the  Highly  Compensated  Employee  as  shall be

necessary  to eliminate  all Excess  Contributions  for such Highly  Compensated

Employee for such Plan Year. In such event, the amount of Qualified  Nonelective

Contributions so distributed  shall be adjusted for any income or loss up to the

date of distribution,  computed in the manner provided above by reference to the

income or loss allocable to the Participant's  Account balances  attributable to

Qualified  Nonelective  Contributions.  The amount of Excess Contributions to be

distributed for a Plan Year (determined before adjustment for any income or loss
allocable thereto) shall be reduced by the amount of excess "elective deferrals"

(i.e.,  Elective  Contributions in excess of the elective deferral limit for the

Plan Year determined  under Section 3.2.6)  previously  distributed  pursuant to

Section  3.2.6 for the  Participant's  taxable year ending in the same Plan Year

and the  amount of excess  elective  deferrals  to be  distributed  pursuant  to

Section  3.2.6  for a  taxable  year  will be  reduced  by the  amount of Excess

Contributions  previously  distributed  with respect to such Participant for the

Plan Year beginning in such taxable year.

     3.4.4  Adjustment  of  Contributions  Based on Limit on  Annual  Additions.

Notwithstanding any of the foregoing  provisions to the contrary,  a Participant

may, at such time and in such manner as the Committee may prescribe,  suspend or

change the amount of reduction in Compensation provided for under any applicable

Contribution  Agreement in order to avoid an allocation of  contributions to his

Accounts which would violate the limitations of this Section 3.4, Section 3.5 or

Article XIV.

                                      -29-
<PAGE>

     3.4.5 Collective  Bargaining Unit Employees.  The provisions of Section 3.4

shall be applied  separately  to employees  in any  collective  bargaining  unit

participating  in the Plan.  If employees in more than one  bargaining  unit are

eligible  under the Plan,  the  Committee,  in its  discretion,  may apply  such

provisions  separately  to  each  separate  collective  bargaining  unit,  on an

aggregate basis with respect to all collective  bargaining  units, or separately

with respect to such collective  bargaining  units or combinations of bargaining

units as it  determines,  provided that such  treatment is determined on a basis

that is reasonable and reasonably consistent from year to year.


     3.5 Section 401(m) Limit on Matching Contributions.

     3.5.1 In General.  Notwithstanding  anything in this Plan to the  contrary,

effective  January  1,  1997,  Matching  Contributions  for any Plan Year for an

Eligible  Participant who is a Highly  Compensated  Employee shall be reduced if

and to the extent  deemed  necessary or advisable by the Committee in order that

the Contribution Percentage for Eligible Participants who are Highly Compensated

Employees for that Plan Year shall not exceed the  percentage  determined in the

following schedule, based on the Contribution Percentage for the Applicable Plan

Year for all Eligible Participants who are not Highly Compensated Employees:


Column 1                               Column 2

Contribution Percentage for            Contribution Percentage for
Eligible Participants Who Are Not      Eligible Participants Who Are
Highly Compensated Employees           Highly Compensated Employees
for the Applicable Plan Year           for the Current Plan Year

Less than 2%                           Two (2) times the percentage in Column 1

2% - 8%                                The percentage in Column 1, plus 2%
More than 8%                           One and one-quarter (1-1/4) times the
                                       percentage in Column 1

                                      -30-
<PAGE>


In determining  the permitted  Contribution  Percentage  for Highly  Compensated

Employees for Plan Years beginning on or after December 31, 1996, the Applicable

Plan Year for non-Highly  Compensated  Employees shall be the same as determined

under Section  3.4.1.  The status of an  individual as a non-Highly  Compensated

Employee for an Applicable Plan Year shall be determined based on the definition

of Highly Compensated Employee in effect for such Applicable Plan Year.

     3.5.2 Determination of Excess Matching Contributions.  For purposes of this

Section 3.5, the Contribution  Percentage for any group of individuals means the

average of the  individual  ratios,  for each person in such  group,  of (a) his

share of Matching Contributions for the Plan Year or Applicable Plan Year to (b)

his Total  Compensation  for the Plan Year or Applicable Plan Year. For purposes

of calculating part (a) of the Contribution  Percentage,  Qualified  Nonelective

Contributions under Section 3.6.5 and Elective Contributions under Section 3.2.1

may be taken into account if the conditions of the applicable  regulations under

section   401(m)(3)  of  the  Code  (which  are  set  forth  in  Treas.  Reg.  S

1.401(m)-1(b)(5)  and other applicable  guidance  (including IRS Notice 98-1 and

corresponding  successor guidance) are met, to the extent such contributions are

not taken into account for purposes of the Average  Deferral  Percentage test of

Section 3.4. The  individual  ratios,  and the  Contribution  Percentage for any

group of individuals,  shall be calculated to the nearest  one-hundredth  of one

percent (0.01%). If, based on a review of Contribution  Agreements and projected

Total  Compensation  similar to that described in Section  3.4.2,  the Committee

shall  conclude  that a reduction  in the  Matching  Contributions  made for any

Eligible  Participant  is  necessary  or  advisable  in order to comply with the

limitations  of  this  Section  3.5  for  any  Plan  Year,  the  amount  of such

contributions  shall  be

                                      -31
<PAGE>

reduced in accordance with the direction of the Committee.  Without limiting the

generality of the foregoing,  any such  reduction may be made  applicable to all

Eligible Participants,  only to Eligible Participants who are Highly Compensated

Employees,  or to any other group as the Committee shall determine,  and in such

manner as the Committee shall determine. If amounts in excess of the limitations

of this  Section  3.5 have been  previously  paid  into the  Trust  Fund for the

benefit of Highly Compensated  Employees,  such reduction shall be determined in

order of their  individual  ratios and  effected in order of their  contribution

amounts,  beginning with the highest of such amounts.  Such reduction of amounts

previously  paid into the Trust Fund may be effected by the  forfeiture  of such

amounts that are not vested under Article V (notwithstanding any other provision

of the Plan) and application of the amounts so forfeited to reduce contributions

by the Employer  hereunder.  Any excess Matching  Contributions not so forfeited

shall be paid to the Eligible  Participant in cash no later than March 15 of the

following  Plan Year,  if at all possible,  and in any event,  no later than the

close of the following  Plan Year. If any Account from which a  distribution  or

forfeiture  is to be made  pursuant to this Section 3.5 is invested in more than

one Investment Fund, such  distribution or forfeiture shall be made pro rata, to

the extent practicable, from all such Investment Funds.

     3.5.3  Income  on  Excess  Matching  Contributions.  The  amount  of excess

Matching  Contributions  distributed pursuant to Section 3.5.2 shall be adjusted

for any income or loss  attributable  under the allocation rules of Sections 4.5

and 4.6 to such excess Matching Contributions up to the date of distribution.

     3.5.4 Collective  Bargaining Unit Employees.  In applying the provisions of

Section  3.5,  collective  bargaining  unit  employees  shall not be taken  into

account.

                                      -32-
<PAGE>

                  3.6      Special Rules.

     3.6.1 Multiple  Arrangements for Highly Compensated  Employees Combined. If

more than one plan providing for a cash or deferred arrangement, or for matching

contributions,  or employee contributions (within the meaning of sections 401(k)

and 401(m) of the Code) is  maintained  by the  Employer  or an  Affiliate,  the

individual  ratios of any Highly  Compensated  Employee who participates in more

than one such plan or arrangement shall, for purposes of determining the Average

Deferral  Percentage (as defined in Section 3.4.2) and  Contribution  Percentage

(as defined in Section 3.5.2),  be determined as if all such arrangements were a

single plan or arrangement.

     3.6.2  Aggregation  of Plans.  In the event  that this Plan  satisfies  the

requirements  of section 410(b) of the Code only if aggregated  with one or more

other plans,  then this Article III shall be applied by determining  the Average

Deferral Percentage and Contribution  Percentage of Eligible  Participants as if

all such plans were a single plan.  Plans may be  aggregated  under this Section

3.6.2 only if they have the same plan year.

          3.6.3 Aggregate Limit. For purposes of this Article III, the Aggregate

Limit for any Plan Year shall mean a percentage  equal to the greater of the sum

described in Section 3.6.3.1 or 3.6.3.2:

     3.6.3.1 The sum of:

     (a) 125 percent of the greater of (i) the Average Deferral Percentage

(as  defined  in  Section  3.4.2)  for the  Applicable  Plan  Year for  Eligible

Participants who are not Highly Compensated  Employees for such year or (ii) the

Contribution  Percentage  (as  defined in  Section  3.5.2) for such year of such

Eligible Participants, and

                                      -34-
<PAGE>

          (b) two percent plus the lesser of (i) or (ii) of clause (a) above; in

no event, however,  shall the amount determined under this clause (b) exceed 200

percent of the lesser of (i) or (ii) of clause (a) above; or

          3.6.3.2 The sum of:

     (a) 125 percent of the lesser of (i) the Average  Deferral  Percentage  (as

defined in Section 3.4.2) for the Applicable Plan Year for Eligible Participants

who are not Highly Compensated  Employees for such year or (ii) the Contribution

Percentage  (as  defined  in  Section  (3.5.1)  for such  year of such  Eligible

Participants, and

     (b) two percent plus the greater of (i) or (ii) of clause (a) above;  in no

event,  however,  shall the amount  determined  under this clause (b) exceed 200

percent of the greater of (i) or (ii) of clause (a) above.  The Aggregate  Limit

shall be calculated to the nearest  one-hundredth  of one percent  (0.01%).  The

Aggregate Limit shall not apply to reduce allocations  otherwise permissible for

a Plan  Year  unless  the  Average  Deferral  Percentage  and  the  Contribution

Percentage for Eligible  Participants who are Highly  Compensated  Employees for

the Plan Year each exceed 125% of the corresponding  percentages  determined for

Eligible   Participants  who  are  not  Highly  Compensated  Employees  for  the

Applicable Plan Year.

     3.6.4 Status as Eligible Participant. For purposes of Sections 3.4, 3.5 and

3.6, an individual  shall be treated as an Eligible  Participant for a Plan Year

if he so qualifies  for any part of the Plan Year,  and whether or not his right

to share in Elective  Contributions  has been  suspended  under  Section  3.2.4.

Notwithstanding the foregoing, in applying such Sections in Plan Years beginning

on or after January 1, 1999,  an individual  shall not be treated as an Eligible

Participant  for an  Applicable  Plan  Year  during  which  he is  not a  Highly

Compensated

                                      -34-
<PAGE>

Employee  if (i) he has failed to  complete  more than 500 Hours of Service in a

prior Plan Year beginning on or after January 1, 1997 (i.e.,  he has incurred an

"Eligibility  Break")  and (ii) he has not  thereafter,  during or prior to such

Applicable  Plan  Year,  completed  a  12-month  period  in which  he has  1,000

Eligibility  Hours.  The first  12-consecutive-month  period  taken into account

under such clause (ii) (the "Initial Period") shall start on the day on which he

first completes an Hour of Service after such Eligibility  Break. If he does not

complete  1,000  Eligibility  Hours within the Initial  Period,  the  subsequent

12-consecutive-month  periods  taken  into  account  shall  be  calendar  years,

beginning  with the first calendar year after the Plan Year in which the Initial

Period began. However, if the Participant shall have no Eligibility Hours in any

such calendar year, the next  applicable  12-consecutive-month  period (the "new

Initial  Period") shall not begin until he subsequently  has an Hour of Service,

after which the applicable  12-month periods shall again be determined under the

foregoing rules as if the new Initial Period were the Initial Period.  For  Plan

Years  beginning  on or after  January 1, 1998,  the Plan  shall  determine  its

compliance  with  section  410(b) of the Code by applying  section  410(b)(4)(B)

thereof, and the provisions of this Section 3.6.4 (other than the first sentence

thereof)  shall apply only for Plan Years in which the  requirements  of section

410(b) are met on that basis.


     3.6.5 Qualified Nonelective Contributions.  For each Plan Year beginning on

or after January 1, 1997,  each Employer shall  contribute to the Trust Fund, in

cash, such additional  amounts (if any) as the Committee  (acting as an agent of

such Employer and not as a fiduciary)  shall, in its sole discretion,  determine

to be necessary or desirable in order to meet the  requirements  of Sections 3.4

and 3.5 for such Plan Year and/or for the following Plan Year.  Such  additional

contributions shall be made at such time as shall be necessary,  pursuant to IRS

Notice  98-1  (and  corresponding   successor  guidance),  to  comply  with  the

provisions of Article

                                      -35-
<PAGE>

XIV and to meet the  requirements  of Sections  3.4 and 3.5 for each  applicable

Plan  Year.  The  Committee  shall  designate  any such  amounts  as  "qualified

nonelective  contributions"  (within the meaning of section  401(m)(4)(C) of the

Code) and shall  determine the group of  Participants  eligible to share in such

Qualified  Nonelective  Contributions,  the method of apportionment  under which

such eligible  Participants  shall share in such  contributions and the Accounts

and separate  subaccounts under the Plan in which such  contributions,  together
with  the  "investment   adjustments"   (within  the  meaning  of  Section  4.5)

attributable thereto, shall be maintained, and the Investment Fund in which such

contribution shall initally be invested.  In addition to or in lieu thereof, the

Committee may designate a portion of the Profit-Sharing Contributions made for a

Plan Year as Qualified Nonelective Contributions for such year. Anything in this

Plan to the contrary notwithstanding, each Participant shall, at all times, have

a fully vested and  nonforfeitable  right to 100% of the amounts in his Accounts

attributable  to Qualified  Nonelective  Contributions,  and such  contributions

shall be treated as Elective  Contributions for purposes of determining  whether

they may be distributed  under the Plan except as otherwise  provided in Section

7.2. At the direction of the Committee,  Qualified Nonelective Contributions may

be used to satisfy the Average  Deferral  Percentage test under Section 3.4.2 if

applicable  regulations under section 401(k) of the Code (which are set forth in

Treas. Reg.  S 1.401(k)-1(b)(5))  and other applicable  guidance are met, or the

Contribution Percentage test under Section 3.5.2 if applicable regulations under

section   401(m)(3)  of  the  Code  (which  are  set  forth  in  Treas.  Reg.  S

1.401(m)-1(b)(5)) and other applicable guidance are met.


     3.7 Application.  If the allocations to a Participant's  Accounts otherwise

required  under  this Plan for any Plan Year  would  cause  the  limitations  of

Article XIV to be exceeded for that Plan Year, contributions (and forfeitures in

lieu thereof) under this Article III
                                      -36-
<PAGE>

shall be reduced to the extent necessary in order to comply with the limitations

of Article XIV, with such reductions to be made first to Elective  Contributions

which do not relate to Matching  Contributions (i.e., Elective Contributions for

any  "applicable  period" (as determined  under Section 3.3.1) in excess of five

percent (5%) of the  Participant's  Compensation for such "applicable  period");

second,  to the  Participant's  remaining  Elective  Contributions  and Matching

Contributions relating thereto; and third to Profit-Sharing Contributions.

     3.8 Form of Payment.  Profit-Sharing,  Elective and Matching  Contributions

shall be made in cash.

     3.9  Contributions  May Not Exceed  Amount  Deductible.  In no event  shall

Employer  contributions  under this  Article III for any taxable year exceed the

maximum amount (including  amounts carried forward)  deductible for that taxable

year under section 404(a)(3) of the Code.

     3.10  Contributions  Conditioned on Deductibility  and Plan  Qualification.

Notwithstanding  any  other  provision  of the  Plan,  each  contribution  by an

Employer  under this Article III is  conditioned  on the  deductibility  of such

contribution  under  section  404 of the Code  for the  taxable  year for  which

contributed,  and on the initial  qualification of the Plan under section 401(a)

of the Code.

     3.11  Expenses.  Except to the extent paid by an Employer,  the expenses of

the  administration of the Plan shall be deemed to be expenses of the Trust Fund

and shall be paid therefrom.

     3.12 Profits Not Required.  Each Employer shall,  notwithstanding any other

provision of the Plan,  make all  contributions  to the Plan  without  regard to

current or accumulated


                                      -37-
<PAGE>

earnings and profits.  Notwithstanding the foregoing, the Plan shall continue to

be  designated  to qualify as a  profit-sharing  plan for  purposes  of sections

401(a), 402, 412 and 417 of the Code.

     3.13  Contributions  for  Military  Service.  Effective  December 12, 1994,

notwithstanding any provisions of this Plan to the contrary, contributions shall

be made with  respect  to a period  in which an  individual  would  have been an

Eligible  Participant  but for his  military  service to the extent  required by

Chapter 43 of Title 38 of the United States Code (USERRA) and in accordance with

section 414(u) of the Code. The amount of any such Elective Contributions and of

Matching  Contributions in respect thereof shall be based upon such individual's

election made  following his return to  employment  with the Employer  following

such  military  service  (and within the time during  which he had  reemployment

rights) in accordance  with  procedures  established by the Committee;  provided

that no such Elective  Contributions  may exceed the amount the individual would

have  been  permitted  to  elect  to  contribute  had  the  individual  remained

continuously  employed by the Employer  throughout  the period of such  military

service  (and  Matching  Contributions  shall  be  limited  accordingly).   Such

contributions (and Profit-Sharing  Contributions) shall be taken into account as

Annual Additions for purposes of Section 3.4.4 and Article XIV in the Limitation

Year to which they relate,  and for  purposes of applying the elective  deferral
limit set forth in Section  3.2.6 in the  calendar  year to which  they  relate,

rather than in the Limitation  Year or calendar year in which made, and shall be

disregarded  for purposes of applying the limits  described in Sections 3.4, 3.5

and 3.6.3. Any such contribution shall be made no later than five years from the

date of such return to employment or, if less, a period equal to three times the

period of such military service.


                                      -38-
<PAGE>

                                   ARTICLE IV

                  Accounts and Designation of Investment Funds
                  --------------------------------------------

                  4.1      Plan Accounts.

     4.1.1 Profit-Sharing and Matching  Contributions Account. A "Profit-Sharing

and Matching  Contributions Account" shall be maintained for each Participant in

which shall be entered the amount of Profit-Sharing  and Matching  Contributions

(and forfeitures in lieu thereof)  allocable to him pursuant to Sections 3.1 and

3.3 and any amount  credited to such account  pursuant to Section  4.11.  In its

discretion,  the Committee may direct the establishment of separate  subaccounts

within each  Profit-Sharing  and Matching  Contributions  Account to reflect the

portion thereof  attributable to  Profit-Sharing  Contributions  and to Matching

Contributions, respectively.

     4.1.2 Elective Contributions  Account. An "Elective  Contributions Account"

shall be maintained for each Participant in which shall be entered the amount of

Elective Contributions made for his benefit, as described in Section 3.2. In its

discretion,  the Committee may direct the establishment of separate  subaccounts

within  each  Elective  Contributions  Account to reflect  the  portion  thereof

attributable to Elective  Contributions  which have been matched by the Employer

pursuant  to  Section  3.3.1,  and to those  which  remain  unmatched  (if any),

respectively.

     4.1.3  Closed  Savings  Account.   A  "Closed  Savings  Account"  shall  be

maintained for each Participant who was a participant in the Finlay  Enterprises

Retirement  Income  Plan on  December  31,  1988,  in which shall be entered the

amounts credited to such account pursuant to Section 4.11.


                                      -39-
<PAGE>

          4.1.4 Adjustments.  Participant's Accounts shall be adjusted from time

to time in accordance with the further provisions of this Plan.

     4.2 Investment  Funds.  The Committee shall direct the Trustee to subdivide

the Trust Fund into three or more  Investment  Funds which  shall be  separately

invested, and which shall have such investment objectives and characteristics as

the Committee shall  determine.  Notwithstanding  the investment  objectives and

characteristics  of an Investment Fund, such Fund may retain such investments of

another   nature  or  cash  balances  as  may  be  needed  in  order  to  effect

distributions or to meet other  administrative  requirements of the Plan. In the

sole discretion of the Committee,  the investments of any Investment Fund may be

made,  in whole or in part,  through  (a)  securities  issued  by an  investment

company  registered  under the Investment  Company Act of 1940, (b) an insurance

company general or separate account or (c) a group trust.

          4.3 Designation of Investment Funds.

               4.3.1 Existing Account  Balances.  A Participant may designate or

change the  designation of the percentage of his Accounts that shall be invested

in  each  Investment  Fund by  giving  notice,  in  accordance  with  procedures

established by the Committee,  to the Trustee or other Plan fiduciary designated

by the Committee (or their designated agent);  provided,  that the percentage of

such balance to be so invested in any such  Investment  Fund shall be a multiple

of 1% between 0% and 100%,  inclusive,  of such  balance.  Such notice  shall be

given  in  accordance  with  procedures   established  by  the  Committee.   The

Participant  shall have the  opportunity to obtain written  confirmation of each

such  designation  or  change  of  designation.  Such  designation  or change of

designation shall be effective on the first day for which it can be given effect

under the  administrative  procedures  established  by the  Committee.  Any such

election shall apply

                                      -40-
<PAGE>

uniformly to all of the Participant's Accounts. Any portion

of the Participant's  Accounts for which no such designation has been made shall

be  invested in the Fund or Funds  designated  by the  Committee  as the default

option under the Plan.

     4.3.2  Future  Contributions.  A  Participant  may  designate or change the

designation   of  the   percentage   of  his  future   Elective   Contributions,

Profit-Sharing  Contributions and Matching  Contributions that shall be invested

in  each  Investment  Fund by  giving  notice,  in  accordance  with  procedures

established by the Committee,  to the Trustee or other Plan fiduciary designated

by the Committee (or their designated agent);  provided,  that the percentage of

such future contributions to be so invested in any such Investment Fund shall be

a multiple of 1% between 0% and 100%,  inclusive,  of such future contributions.

Such notice shall be given in  accordance  with  procedures  established  by the

Committee.  The  Participant  shall  have  the  opportunity  to  obtain  written

confirmation of each such designation or change of designation. Such designation

shall apply equally to all such future contributions.  Upon failure to make such

a designation,  all  contributions  for the benefit of the Participant  shall be

invested in  accordance  with the most  recent  prior  election in effect  under

Section 4.3.1 or, if no such election exists, in the Fund or Funds designated by

the Committee as the default option under the Plan. Any  designation  under this

Section  4.3.2  shall   continue  in  effect  until  changed  by  filing  a  new

designation.

     4.4 Frequency of Changes of Designation.

          4.4.1 A Participant may change his designation of Investment  Funds at

least  once  each  quarter  and up to  eight  times  per  calendar  year  in the

aggregate.  The  limitation  in the  preceding  sentence  applies  separately to

requests for changes under Section 4.3.1 and under Section 4.3.2.

                                      -41-
<PAGE>

     4.4.2  The  Committee  may from  time to time:  (a)  limit  or  restrict  a

Participant's  ability  to  change  the  allocation  of his  Accounts  among the

Investment Funds and/or withdraw  balances from the various  Investment Funds in

order to  conform  to the  practices,  provisions  or  restrictions  of any such

Investment Fund; and (b) vary the procedures otherwise provided for in this Plan

relating to the  determination  and  allocation of the  "investment  adjustment"

(within the meaning of Section 4.5) among Participants' Accounts (i) in order to

facilitate the administration of the Plan on an equitable and practicable basis,

and (ii) if any portion of Participants'  Accounts are invested in mutual funds,

accounts or group  trusts for which the sponsor  provides a separate  accounting

for each Participant, in order to conform with the sponsor's procedures.

     4.5 Valuation of Investment Funds. The Committee shall determine as of each

Valuation Date the investment  adjustment for each Investment Fund. For purposes

of the preceding sentence, the "investment  adjustment" for each such Investment

Fund shall be:

          (a) The net fair market value of the assets of such Investment Fund as

of the current Valuation Date, less all contributions  paid into such Fund since

the  prior  Valuation  Date   (irrespective   of  the  date  as  of  which  such

contributions are allocated to Participants' Accounts), less

          (b) The net fair market value of the assets of such Investment Fund as

of the prior Valuation Date, plus (i) all transfers to such Investment Fund from

other Investment Funds since such prior Valuation Date, less (ii) withdrawals or

distributions  made from such  Investment  Fund since such prior Valuation Date,

and less (iii)  transfers to other  Investment  Funds since such prior Valuation

Date.

                                      -42-
<PAGE>

In  determining  as of each  Valuation  Date the net fair  market  value of each

Investment  Fund, the Trustee shall disregard  liabilities to  Participants  and

Beneficiaries for benefits hereunder.


     4.6  Allocation of Investment  Adjustments.  As of each  Valuation Date the

Committee  shall allocate the  "investment  adjustment" for each Investment Fund

(as determined under Section 4.5) among the Accounts of all then Participants in

proportion  to their  respective  interests  in such  Investment  Fund as of the

preceding  Valuation  Date, as adjusted to reflect  contributions  thereto since

such  Valuation  Date on a  time-weighted  basis  applied in such  manner as the

Committee  shall  determine to be  administratively  practicable  and equitable;

provided,  however,  that no Account  shall share in such  allocation  after the

Valuation Date established for distribution  thereof under  Section 7.1.2 or, if

distribution  is to be deferred in accordance with Option II of Section 8.1, the

Valuation Date established by the Committee for purposes of making such deferred

distribution.  For this purpose, a Participant's  interest in an Investment Fund

as of the preceding  Valuation Date shall be reduced by the amount of subsequent

distributions  therefrom  (including transfers to any other Investment Fund) and

by any charges  thereto as of such preceding  Valuation Date pursuant to Section

4.7.3  (relating  to  withdrawals)  and shall be  increased by the amount of any

transfers thereto from any other Investment Fund since such Valuation Date.

     4.7 Account Adjustments.

          4.7.1  Allocation  of Elective  and Matching  Contributions.  Elective

Contributions  (and  forfeitures  in lieu  thereof) in respect of a  Participant

shall be credited to his Elective  Contributions  Account as of the close of the

payroll period for which such  contributions  are made.  Matching  Contributions

(and forfeitures in lieu thereof) in respect of a Participant  shall be credited

to his Profit-Sharing and Matching  Contributions  Account as of the last day of


                                      -43-
<PAGE>

the Plan Year for which such contributions are made; provided,  however, that in

accordance  with  procedures  adopted by the Committee,  the amounts so credited

shall  be  taken  into  account  in  determining  the  Participant's   share  of

"investment  adjustments"  under  Section  4.6  only  to the  extent  that  such

contributions have actually been paid into the Plan.

          4.7.2 Allocation of Profit-Sharing  Contributions and Forfeitures.  As

of each December 31, a Participant's  Profit-Sharing and Matching  Contributions

Account shall be credited with his share of  Profit-Sharing  Contributions  (and

forfeitures  in lieu  thereof) for the Plan Year ending on such date;  provided,

however, that in accordance with procedures adopted by the Committee, the amount

so credited shall be taken into account in determining the  Participant's  share

of  "investment  adjustments"  under  Section  4.6 only to the extent  that such

contributions have actually been paid into the Plan.

     4.7.3 Adjustment for Withdrawals. Withdrawals from a Participant's Accounts

in response to a withdrawal  request under  Sections 7.2 or 7.3 shall be charged

against such Account as of the date such withdrawal request is processed.


     4.8  Correction  of Error.  The Committee may adjust the Accounts of any or

all  Participants  or  Beneficiaries  in  order to  correct  errors  or  rectify

omissions,  including,  without  limitation,  any allocations to a Participant's

Accounts made in excess of the limit  specified in Section 3.2.5, in such manner

as it  believes  will  best  result  in  the  equitable  and  non-discriminatory

administration of the Plan.

     4.9 Allocation  Shall Not Vest Title.  The fact that allocation is made and

amounts  credited  to the  Account  of a  Participant  shall  not  vest  in such

Participant any right, title or interest in and to any assets except at the time

or times and upon the terms and conditions


                                      -44-
<PAGE>

expressly set forth in this Plan, nor shall the Trustee be required to segregate

physically the assets of the Trust Fund by reason thereof.

     4.10 Statement of Accounts.  As soon as  practicable  after the end of each

Plan Year,  the  Committee  shall  distribute  to each  Participant  a statement

showing his interest in the Trust Fund.

     4.11  Merger  of Field  Plan.  Effective  as of the  close of  business  on

December 31, 1988,  the Finlay  Enterprises  Retirement  Income Plan (the "Field

Plan") shall be merged into this Plan and the terms of this Plan shall supersede

in all  respects  the terms of the Field Plan.  Effective  as of such time,  the

assets of the trust fund under the Field Plan shall be  transferred  in the form

then held,  whether in cash or in kind,  to the Trustee  under this Plan,  to be

held in trust under this Plan.  The assets so transferred  attributable  to each

Participant's  "profit-sharing  contributions  account" under the Field Plan (as

therein   defined)   shall  be  credited  to  a   Profit-Sharing   and  Matching

Contributions  Account  maintained  for him under this  Plan,  and the assets so

transferred  attributable to a Participant's  "voluntary  contributions account"

under the Field Plan (as therein  defined) shall be credited to a Closed Savings

Account  maintained  for him under this Plan.  The Committee may establish  such

sub-accounts  within the  Participant's  Accounts  under this Plan,  in order to

account  separately for the portion of such Accounts  attributable to the assets

transferred  thereto from the Field Plan, as it may deem  necessary or advisable

in connection with the administration of this Plan. An Eligible Employee who was

a  participant  in the Field Plan prior to  January 1,  1989,  must complete and

return a  Contribution  Agreement as provided in Section 2.4 in order to be able

to share in  Elective  Contributions  under  this  Plan.  All  other  elections,

investment  directions and beneficiary  designations in effect with respect to a

                                      -45-
<PAGE>

Participant  under  the Field  Plan,  except  any  election  to make  "voluntary

contributions" thereunder, shall continue in effect under the terms of this Plan

until changed by the Participant.





































                                      -46-
<PAGE>

                                    ARTICLE V

                                     Vesting
                                     -------

     5.1 Profit-Sharing and Matching  Contributions Account. A Participant shall

have a vested and nonforfeitable right to a percentage of his Profit-Sharing and

Matching Contributions Account determined as follows:


                  Years of Service                        Vested Percentage
                  ----------------                        -----------------

                  Less than 3 years                              0%
                  3 years but less than 4                        20%
                  4 years but less than 5                        40%
                  5 years but less than 6                        60%
                  6 years but less than 7                        80%
                  7 or more years                                100%

     5.2  Elective   Contributions   Account  and  Closed  Savings  Account.   A

Participant's  interest  in his  Elective  Contributions  Account and his Closed

Savings Account shall be fully vested and nonforfeitable at all times.

     5.3 Earlier Vesting in Profit-Sharing and Matching  Contributions  Account.

Notwithstanding  any other provision  hereof,  a  Participant's  interest in his

Profit-Sharing  and  Matching  Contributions  Account  shall be fully vested and

nonforfeitable:  (a) on the date of his  termination  of employment by reason of

death, Disability or retirement at or after age 55 and after completing five (5)

years of Service,  (b) on his attainment of his Normal  Retirement  Date (or any

later age) while employed by an Employer or Affiliate, (c) when and if this Plan

shall  at any  time  be  terminated  for  any  reason,  (d)  upon  the  complete

discontinuance of contributions to this Plan by all Employers hereunder,  or (e)

upon partial  termination of this Plan (within the meaning of section  411(d)(3)

of the Code) if such  Participant  is a  Participant  affected  by such  partial

termination.

                                      -47-
<PAGE>

     5.4 Forfeitures. If a Participant's employment terminates before he is 100%

vested in his Profit-Sharing and Matching  Contributions Account and he receives

a distribution  of his vested interest in his Accounts  (including,  as provided

below, a vested interest having a value of zero), the non-vested  portion of his

Profit-Sharing and Matching  Contributions  Account shall be forfeited as of the

date of such  distribution.  If  such a  Participant  does  not  receive  such a

distribution,   the  non-vested  portion  of  his  Profit-Sharing  and  Matching

Contributions  Account  shall be  forfeited  as of the date on which he incurs a

Break in Service of five years.  For  purposes of the Plan,  if a  Participant's

vested  interest in the Account has a value of zero,  the  Participant  shall be

deemed to have received a single-sum  distribution  of such vested interest upon

his Termination of Employment. If a Participant who has forfeited the non-vested

portion of his Profit-Sharing and Matching  Contributions  Account is reemployed

before he incurs a Break in Service of five or more years,  the amount forfeited

shall be restored to his Profit-Sharing and Matching Contributions Account as of

his  Reemployment  Date, and such restored amount shall be credited to a special

subaccount.  His vested  portion of such  subaccount as of any  subsequent  time

shall, notwithstanding Section 5.1, be expressed by the formula:


                                  P(A + D) - D

where P is the Participant's  vested percentage at such time determined  without

regard to this sentence;  A is the amount in such subaccount at such time; and D

is the amount of the  distribution  previously  made to him. The restored amount

shall be funded by forfeitures, and to the extent forfeitures are inadequate for

this purpose, by a special  contribution which his Employer shall be required to

make for this purpose (without regard to the otherwise applicable limitations of

Articles  III and XIV).  All  forfeitures,  whether  pursuant  to the  foregoing

provisions

                                      -48-
<PAGE>

of this  Section  5.4 or  effected  to  correct  excess or  improper

contributions  or allocations  under the Plan, shall be applied to reduce future

contributions under the Plan.

     5.5 Former Tru-Run Employees. Notwithstanding any other provision hereof, a

Participant  whose  employment  is terminated by the Company on or after July 1,

1989,  but in no event later than June 30,  1990,  as a result of a reduction in

force,  sale,  merger,   dissolution,   liquidation  or  change  in  control  or

reorganization   of  Tru-Run   Corporation   shall  have  a  fully   vested  and

nonforfeitable interest in his Profit-Sharing and Matching Contributions Account

as of the date of such termination of employment.

     5.6 Former  Adrien Arpel  Employees.  Notwithstanding  any other  provision

hereof, a Participant in this Plan who became an employee of Adrien Arpel,  Inc.

on or after  December  6, 1988  shall  have a fully  vested  and  nonforfeitable

interest in his Profit-Sharing and Matching Contributions Account.














                                      -49-
<PAGE>

                                   ARTICLE VI

                                     Service
                                     -------

     6.1 Service. Subject to Sections 6.2-6.5, "Service" is the aggregate of the

following (including any such periods prior to January 1, 1987):

          (a) Each period from an employee's Date of Hire (or Reemployment Date)

to his next Severance Date; and

          (b) If an  employee  performs  an Hour of Service  within  twelve (12)

months of a Severance  Date, the period from such Severance Date to such Hour of

Service; and

          (c) In the case of an employee who leaves  employment to enter service

with the armed forces of the United States, the period of such military service,

provided  that the employee  resumes  employment  with the Employer or Affiliate

within  the  period  during  which his  reemployment  rights  are  protected  by

applicable law.

     6.2 Break in  Service.  If an  employee  incurs a Break in  Service  and is

subsequently  reemployed by an Employer or  Affiliate,  then except as otherwise

provided in Section 6.3:

          (a) His  Service  completed  prior to such Break in  Service  shall be

restored to him upon his reemployment; and

          (b) He shall  resume his place on the  vesting  schedule  set forth in

Section 5.1 at the point he occupied immediately prior to such Break in Service;

provided, that this Section 6.2 shall not operate to restore amounts irrevocably

forfeited under Section 5.4.

     6.3 Rule of Parity. If an employee who has no vested rights to any Accounts

maintained  for his  benefit  under this Plan incurs a  Severance  Period  which

equals or exceeds the length of his aggregate periods of Service and which is at

least six (6) years,  his years of Service

                                      -50-
<PAGE>

and  Eligibility  Hours (as defined in Section  2.1.1)  prior to such  Severance

Period shall thereafter be excluded in determining Service and Eligibility Hours

under this Plan.

     6.4 Service  with  Predecessors.  In  determining  an  employee's  Hours of

Service,  Eligibility Hours (as defined in Section 2.1.1), Service and Severance

Periods,  employment  with one or more  predecessors of an Employer or Affiliate

(including  employment  with a  corporation  or other  entity  which  was not an

Employer or Affiliate at the time of reference,  but which later became such, or

part or all of the  business or assets of which were  acquired by an Employer or

Affiliate)  shall not be taken into account except to the extent required by law

or to the extent  determined by the Committee in its  discretion  exercised in a

manner that does not discriminate in favor of Highly Compensated Employees so as

to prevent the Plan from  qualifying  under section 401(a) of the Code. Any such

determination  under this Section 6.4 shall be made by the  Committee  acting on

the  behalf  of the  management  of the  Employer  or  Affiliate,  and  not as a

fiduciary for the Plan.


     6.5  Nonduplication.  In no event  shall  there be any  duplication  of the

Service of any employee attributable to the same period of time.





                                      -51-
<PAGE>
                                   ARTICLE VII
                          Distributions and Withdrawals

     7.1 Distribution on Termination of Employment.

          7.1.1 In General.  When a Participant's  employment terminates for any
reason (including death), the vested amount of his Accounts shall be distributed
to him or, if  distribution is being made by reason of death (or after his death
following  termination of employment for any other reason),  to his Beneficiary.
Such  distribution  shall be made in accordance  with the  provisions of Article
VIII. Any portion of a Participant's Accounts in which he does not have a vested
interest in accordance  with Article V at the time of  termination of employment
shall be  forfeited  as provided in Section 5.4 and shall be applied as provided
in Article IV.

     7.1.2 Valuation. The vested amount of a Participant's Accounts for purposes
of Section  7.1.1,  and the  nonvested  amount of his  Account  to be  forfeited
pursuant to Section  5.4,  shall be based on the value of his Accounts as of the
date his termination of employment is reported to the Committee.

     7.2 Hardship Withdrawals.

          7.2.1 Withdrawal Option. Before age 59-1/2, a Participant may withdraw
in cash from his Elective  Contributions  Account and his Closed Savings Account
such amounts as the Committee shall, in a uniform and  nondiscriminatory  manner
determine to be necessary (based on such representations or other information as
the Committee may request in its  discretion)  to meet any condition of hardship
affecting such  Participant,  provided that the Participant has already received
all other amounts  available to him as a loan, or a  distribution  other than on
account of  "hardship"  as herein  defined,  under this Plan and all other plans



                                       52
<PAGE>

maintained  by any  Employer  or  Affiliate.  Withdrawals  from a  Participant's
Elective  Contributions Account shall be limited to the total amount of Elective
Contributions made,  exclusive of investment  earnings allocable thereto,  which
have not previously been withdrawn,  and shall exclude any amounts  attributable
to "qualified nonelective  contributions" as defined in Section 3.6.5. Effective
January 1, 1998, a Participant shall be entitled to a hardship  withdrawal under
this  Section  7.2.1 if (a) he meets all  requirements  therefor  other than the
receipt of all amounts  available to him as a loan, (b) the need is for funds to
purchase a principal  residence of the  Participant,  (c) the obtaining of loans
other than the mortgage loan in connection  with such purchase would  disqualify
the  Participant  from obtaining the necessary  amount of mortgage loan, and (d)
the  Participant  demonstrates  to the  satisfaction  of the Committee  that the
amount to be withdrawn for the purpose of such purchase  cannot be obtained from
other  resources that are  reasonably  available to the  Participant  (including
assets of the  Participant's  spouse  and  minor  children  that are  reasonably
available to the Participant).

          7.2.1.1  Sequence.  Any withdrawals  under this Section 7.2.1 shall be
made first from the  Participant's  Closed Savings  Account,  if any, until such
Account  has  been  exhausted,   and  then  from  the   Participant's   Elective
Contributions Account.

     7.2.2  Hardship.  Effective  August 15, 1991,  for purposes of this Section
7.2, the term "hardship" shall mean any one or more of the following needs:

     (a)  medical  expenses  described  in  section  213(d)  of the Code and not
covered by insurance,  previously  incurred by a Participant or a  Participant's
spouse  or  dependent  (as  defined  in  section  152 of the  Code) or  expenses
necessary in order for such persons to obtain  medical care described in section
213(d) of the Code (which expenses will never be covered by insurance);


                                      -53-
<PAGE>

     (b) tuition  payments,  related  educational  fees (not including books and
supplies),  and, effective May 1, 1995, room and board expenses, for the next 12
months of post-secondary  education of a Participant or a Participant's  spouse,
child or dependent (as defined in section 152 of the Code);

     (c) costs (other than mortgage  payments)  directly related to the purchase
of the principal residence of a Participant; or,

     (d) effective February 1, 1992,  payments necessary to prevent the eviction
of the Participant from the Participant's  principal residence or foreclosure on
the mortgage on that residence.

     7.2.3  Values.  The amount that may be withdrawn  pursuant to Section 7.2.1
shall be  determined  based on the  value of the  Participant's  Closed  Savings
Account or the amount of the Elective  Contributions  and any prior  withdrawals
made  by the  Participant,  whichever  applies,  as of the  date  on  which  the
withdrawal request is processed.

     7.2.4  Payment.  A withdrawal  request under Section 7.2.1 shall be made by
filing  the  Appropriate  Form  with  the  Committee,  within  such  time as the
Committee may prescribe.  The Appropriate Form with respect to a withdrawal from
his Elective Contributions Account shall include an agreement by the Participant
to the suspension of contributions  described in Section 3.2.5, and to a similar
suspension of "elective deferrals" (as defined in section 402(g)(3) of the Code)
and of  employee  contributions  under  this Plan and each other  qualified  and
nonqualified  plan  of  deferred  compensation   (excluding  mandatory  employee
contributions under any defined benefit plan), or stock option,  stock purchase,
or similar plans,  of any Employer or Affiliate  until the first  anniversary of
the date of such withdrawal, and to the adjustment described in Section 3.2.6 of
the  "elective  deferral  limit" with  respect to the

                                      -54-
<PAGE>

Participant for the year following the year of the  withdrawal.  Each such other
plan shall be deemed amended by reason of this  provision and the  Participant's
execution of the Appropriate Form to the extent necessary to give full effect to
such agreement.  A Participant may direct on the Appropriate  Form, at such time
and in such manner as the  Committee  may  prescribe  and  subject to  Committee
consent,  the proportions in which any withdrawal from his Accounts  pursuant to
this Section 7.2 shall be allocated  among the  Investment  Funds;  failing such
direction or consent,  the allocation  shall be made pro rata.  All  withdrawals
pursuant to this  Article VII shall be made no less than thirty (30) days and no
more than ninety (90) days after the  Participant  is given the notice  required
under section 402(f) of the Code, provided,  however,  that effective January 1,
1994,  such  withdrawal may be made less than thirty (30) days after such notice
is given, if (a) the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least thirty (30) days after receiving
the  notice to  consider  the  decision  of  whether or not to elect to take the
withdrawal (and, if applicable,  a particular  distribution option), and (b) the
Participant, after receiving the notice, affirmatively elects the withdrawal.

     7.3 Withdrawals After Age 59-1/2.  After age 59-1/2, a Participant shall be
permitted to withdraw, no more frequently than once in any two years, all or any
portion of his Accounts (prior to May 1, 1999, his Elective Contribution Account
and Closed Savings Account).







                                      -55-
<PAGE>

                                  ARTICLE VIII

                               Payment of Benefits
                               -------------------

     8.1 In General.


          8.1.1 Elective  Distributions.  All amounts distributable  pursuant to
Article VII with respect to a Participant  whose  employment  terminates for any
reason shall be paid in cash in a single sum as soon as  reasonably  practicable
(taking into account the Committee's  administrative procedures) after whichever
of the following dates applies:

          (i) If the  Participant  elects or Section 8.1.2 applies,  the date on
which the Participant's  termination of employment is reported to the Committee;
provided,  that the  Committee  may direct the  Participant's  share (if any) of
Profit Sharing Contributions and Matching Contributions (and forfeitures in lieu
thereof)  for the  Plan  Year in  which  his  employment  terminates  to be paid
separately and in the following Plan Year.


          (ii)  Any  later   date  that  the   Participant   elects  up  to  the
Participant's   Normal  Retirement  Date  (if  later  than  his  termination  of
employment); or


          (iii) The  Participant's  Normal  Retirement  Date,  in the event that
Section  8.1.2  does not  apply  and no  timely  election  was  made to  receive
distribution as of any earlier date.


          8.1.2 Automatic Distribution.  Effective January 1, 1998, if the value
of a Participant's vested interest in his Accounts does not exceed $5,000 or the
Participant has

                                      -56-
<PAGE>

attained his Normal Retirement Date, payment shall be made as soon as reasonably
practicable  (taking into  account the  Committee's  administrative  procedures)
after  the date on which  his  termination  of  employment  is  reported  to the
Committee.  Prior  distributions shall not be taken into account in applying the
foregoing $5,000 cashout limit, effective March 22, 1999.


          8.1.3  Death.   Distribution  upon  death  (whether  before  or  after
termination  of  employment  for  any  other  reason)  shall  be made as soon as
reasonably  practicable  (taking  into  account the  Committee's  administrative
procedures)  after the date such  death is  reported  to the  Committee.  If the
Beneficiary is the Participant's  spouse,  distribution shall be made (x) within
90 days of the Participant's death if reasonably practicable,  and (y) otherwise
as soon as  practicable.  Any  amount  credited  to the  deceased  Participant's
Accounts  as of the  last  day of the  Plan  Year  in  which  he dies  shall  be
distributed to his Beneficiary as soon as practicable.


          8.1.4  Valuation.  Any  amount  not  distributed  shall be held in the
Participant's  Accounts  and shall  share in the  revaluation  of the Trust Fund
described  in  Article IV until such  amount is  distributed.  The amount of any
distribution  shall  be  determined  based  on the  value  of the  Participant's
Accounts as of the date on which the distribution is processed.


     8.2  Non-Alienation  of  Benefits.   Except  as  otherwise  required  by  a
"qualified  domestic  relations order" (as defined in section 414(p) of the Code
and set forth in Section 8.10) or other applicable law, no benefit, interest, or
payment  under  the  Plan  shall  be  subject  in any  manner  to  anticipation,
alienation, sale, transfer,  assignment,  pledge, encumbrance or charge, whether
voluntary  or  involuntary,  and no attempt to so  anticipate,  alienate,  sell,
transfer,  assign,

                                      -57-
<PAGE>

pledge,  encumber or charge the same shall be valid nor shall any such  benefit,
interest,  or  payment  be in any  way  liable  for  or  subject  to the  debts,
contracts,  liabilities,  engagements  or torts of the person  entitled  to such
benefit,  interest, or payment or be subject to attachment,  garnishment,  levy,
execution or other legal or equitable process.

     8.3 Doubt as to Right to  Payment.  In the event that at any time any doubt
exists as to the right of any person to any payment  hereunder  or the amount or
time of such payment  (including,  without  limitation,  any case of doubt as to
identity,  or any case in which  any  notice  has been  received  from any other
person claiming any interest in amounts payable hereunder,  or any case in which
a claim from other persons may exist by reason of community  property or similar
laws), the Committee shall be entitled, in its discretion, to direct the Trustee
to hold such sum as a  segregated  amount in trust until such right or amount or
time is  determined or until order of a court of competent  jurisdiction,  or to
pay such sum into court in accordance with appropriate rules of law in such case
then  provided,  or to make  payment  only  upon  receipt  of a bond or  similar
indemnification  (in such  amount  and in such form as is  satisfactory  to such
Committee).

     8.4 Incapacity.  If any benefits hereunder are due to a legally incompetent
person, the Committee may, in its sole discretion,  direct that any distribution
due  him be made  (a)  directly  to  him,  or (b) to his  duly  appointed  legal
representative,  and any  distribution so made shall be a complete  discharge of
the liabilities of the Plan therefor.

     8.5 Time of Payment.

          8.5.1  Subject  to  Sections  8.5.2,  8.5.3 and  8.5.4,  payment  to a
Participant  under this Article  VIII shall be made or commenced  not later than
the 60th day after the close of

                                      -58-
<PAGE>

of the Plan Year in which  occurs the later of his most  recent  Termination  of
Employment or his Normal Retirement Date.

     8.5.2 (a) With  respect to a  Participant  who attained age 70-1/2 prior to
January 1, 1988 and was a  5-percent  owner for any part of any Plan Year during
or after which such Participant attained age 66-1/2, distribution of benefits to
such a Participant  shall commence no later than the April 1 following the later
of the calendar year in which such  Participant  attained age 70-1/2 or became a
5-percent owner, even if such Participant is still employed.


          (b) For Plan Years beginning prior to January 1, 1998, with respect to
a  Participant  who attained age 70-1/2 on or after January 1, 1988 and prior to
January 1, 1997,  distribution of benefits to such a Participant  shall commence
no later than the April 1 following the calendar year in which such  Participant
attained  age  70-1/2,  regardless  of such  Participant's  ownership  interest.
Effective  January 1, 1998,  such a Participant  who was not a five percent (5%)
owner with respect to the Plan Year ending with or within the  calendar  year in
which such Participant attained age 70-1/2 may elect to continue distribution of
his benefits or to suspend such  distributions  until the April 1 following  any
calendar year until the Participant retires,  pursuant to procedures established
by the Committee.


          (c) With respect to a Participant  who attained age 70-1/2 on or after
January 1, 1997 and was a five  percent (5%) owner with respect to the Plan Year
ending with or within the calendar year in which such  Participant  attained age
70-1/2, distribution of benefits under the Plan shall commence no later than the
April 1 following  the  calendar  year in which such  Participant  attained  age
70-1/2.

                                      -59-
<PAGE>



          (d) A  Participant  who attains age 70-1/2 on or after January 1, 1997
and prior to January 1, 1999, and was not a five percent (5%) owner with respect
to the  Plan  Year  ending  with or  within  the  calendar  year in  which  such
Participant attained age 70-1/2 may elect, pursuant to procedures established by
the  Committee,  to  commence  distribution  of his  benefits  as of the April 1
following either of

     (1) the calendar year in which such  Participant  reaches the age of 70-1/2
or

     (2) any calendar year until the Participant retires.


          (e) A Participant  who attained age 70-1/2 on or after January 1, 1999
and was not a five  percent (5%) owner with respect to the Plan Year ending with
or within the calendar year in which such Participant  attained age 70-1/2 shall
be subject to Section 8.5.1 of this Plan but not to the foregoing  provisions of
this Section 8.5.2.


For purposes of this Section  8.5.2,  the term "five percent (5%) owner" has the
meaning given in Section  15.1.2(c).  Where initial  distribution is required or
elected to be made by April 1 of the year following the calendar year in which a
Participant  attains age 70-1/2, the Participant may elect to receive either the
entire  balance  of his  Accounts  as of the  December  31 prior to the year the
Participant  attained age 70-1/2 or the minimum amount  determined under section
401(a)(9)  of the  Code and the  regulations  thereunder.  For  each  subsequent
distribution,  the Participant may elect to receive either the entire balance of
his Accounts as of the preceding  December 31 or the minimum  amount  determined
under section 401(a)(9) of the Code and the regulations  thereunder.  In no case
shall any distribution  exceed the balance of the  Participant's  Accounts as of
the date of distribution.  Such elections shall be made at such time and in such
manner as the Committee shall prescribe.

                                      -60-
<PAGE>

     8.5.3 Any Employer  contribution  made subsequent to the  distribution of a
Participant's  benefits (and any forfeitures in lieu thereof)  allocable to such
Participant's  Accounts shall be paid to the  Participant as soon as practicable
after the date of such contribution.

     8.5.4  Notwithstanding any provisions of this Plan to the contrary,  in the
event that the amount of a payment  required to  commence on the date  otherwise
determined  under this Plan cannot be  ascertained by such date, or if it is not
possible to make such payment on such date because the Committee has been unable
to locate  the  Participant  (or,  in the case of a  deceased  Participant,  his
Beneficiary) after making reasonable efforts to do so, a payment  retroactive to
such date may be made no later than 60 days after the earliest date on which the
amount of such payment can be  ascertained  under this Plan or the date on which
the Participant (or Beneficiary) is located, whichever is applicable.


     8.5.5 Notices required for  distributions  under this Article VIII pursuant
to section 402(f) of the Code and Treas.  Reg. section  1.411(a)-11(c)  shall be
given to the  Participant  no less than thirty (30) days and no more than ninety
(90) days prior to the date of distribution;  provided,  however, that effective
January 1, 1994, such  distribution may be made less than thirty (30) days after
such  notice  is  given,  if (a) the  Plan  Administrator  clearly  informs  the
Participant that the Participant has a right to a period of at least thirty (30)
days after  receiving  the notice to consider  the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution option), and
(b)  the  Participant,  after  receiving  the  notice,  affirmatively  elects  a
distribution.


                                      -61-
<PAGE>


     8.6  Payments  to Minors.  If at any time a person  entitled to receive any
payment  hereunder is a minor,  such payment may, in the sole  discretion of the
Committee,  be made for the benefit of such minor to his parent, guardian or the
person with whom he  resides,  or to the minor  himself,  and the release of any
such parent,  guardian,  person or minor shall be a valid and complete discharge
for such payment.

     8.7 Identity of Proper Payee. The  determination of the Committee as to the
identity  of the proper  payee of any payment  and the amount  properly  payable
shall be conclusive,  and payment in accordance  with such  determination  shall
constitute a complete discharge of all obligations on account thereof.

     8.8 Inability to Locate Payee.  Notwithstanding  any other provision of the
Plan, in the event that the Committee cannot locate any person to whom a payment
is due under this Plan,  the  benefit in respect of which such  payment is to be
made shall be forfeited  at such time as the  Committee  shall  determine in its
sole  discretion  (but in all  events  prior  to the  time  such  benefit  would
otherwise escheat under any applicable law);  provided,  that such benefit shall
be reinstated if such person  subsequently  makes a valid claim for such benefit
prior to termination of the Plan.

     8.9  Estoppel  of  Participants  and Their  Beneficiaries.  The  Employers,
Committee  and  Trustee  may  rely  upon  any  certificate,  statement  or other
representation  made to them  by any  employee,  Participant,  spouse  or  other
beneficiary  with respect to age, length of service,  leave of absence,  date of
cessation of employment, marital status, or other fact required to be determined
under any of the  provisions of this Plan, and shall not be liable on account of
the  payment  of any  moneys or the doing of any act in  reliance  upon any such
certificate,  statement or other representation. Any such certificate, statement
or other representation made by an employee or Participant shall be conclusively
binding upon such employee or Participant  and his spouse or other  beneficiary,
and such  employee,  Participant,  spouse or  beneficiary  shall  thereafter and
forever  be  estopped  from   disputing  the  truth  and   correctness  of  such
certificate,  statement or other representation. Any such certificate, statement
or other  representation  made

                                      -62-
<PAGE>

by a Participant's  spouse or other  beneficiary  shall be conclusively  binding
upon such spouse or beneficiary, and such spouse or beneficiary shall thereafter
and  forever  be  estopped  from  disputing  the truth and  correctness  of such
certificate, statement or other representation.

     8.10 Qualified Domestic Relations Orders.

          8.10.1  Definition.  For  purposes of this  Section  8.10,  "Qualified
Domestic  Relations  Order"  means  any  judgment,  decree  or order  (including
approval of a property  settlement) made pursuant to a state domestic  relations
law (including a community property law) which relates to the provision of child
support,  alimony payments or marital property to a spouse, former spouse, child
or other  dependent  of a  Participant  and  which  creates  or  recognizes  the
existence of a right of such spouse,  former spouse, child or other dependent to
receive all or a portion of the benefits  payable with respect to a  Participant
under the Plan. A Qualified  Domestic  Relations  Order must clearly specify the
amount or percentage of the Participant's  benefits to be paid to such recipient
by the  Plan  (or the  manner  in  which  such  amount  or  percentage  is to be
determined).  A Qualified  Domestic Relations Order (a) may not require the Plan
(i) to provide any form or type of benefits or any option not otherwise provided
under the Plan,  (ii) to pay benefits to a recipient  under such order which are
required to be paid to another  recipient  under  another such order  previously
filed with the Plan, or (iii) to provide increased  benefits  (determined on the
basis of actuarial equivalents),  but (b) may require payment of benefits to the
recipient under the order (i) at any time after the date of the order (ii) as if
the

                                      -63-
<PAGE>

Participant had retired on the date on which such payment is to begin under such
order (taking into account only the present benefits in which the Participant is
then  vested)  and (iii) in any form in which such  benefits  may be paid to the
Participant.

          8.10.2  Distributions.  The  Committee  shall  recognize and honor any

judgment,  decree or order  entered  on or after  January  1, 1985 under a state
domestic relations law which the Committee determines to be a Qualified Domestic
Relations Order in accordance with such reasonable  procedures to determine such
status as the Committee shall  establish.  Without  limitation of the foregoing,
the  Committee  shall notify a Participant  and the person  entitled to benefits
under a  judgment,  decree or order which  purports  to be a Qualified  Domestic
Relations  Order of  (a) the  receipt  thereof,  (b) the Plan's  procedures  for
determining  whether  such  judgment,  decree or order is a  Qualified  Domestic
Relations  Order and (c) any  determination  made with  respect to such  status.
During  any  period  during  which the  Committee  is  determining  whether  any
judgment,  decree or order is a Qualified  Domestic  Relations Order, any amount
which  would have been  payable to any person  pursuant  to such order  shall be
separately  accounted for (and adjusted to reflect its appropriate  share of the
"investment  adjustment"  as of each  Valuation  Date  pursuant  to Article  IV)
pending payment to the proper recipient thereof,  and the Committee may restrict
the  availability or amount of any withdrawal  under Section 7.2 or distribution
under Section 8.1 if such withdrawal or  distribution  may prevent the Plan from
giving full effect to such an order, as determined in the sole discretion of the
Committee. Any such amount, as so adjusted, shall be paid to the person entitled
to such  payment  under  any such  judgment,  decree  or order if the  Committee
determines such judgment,  decree or order to be a Qualified  Domestic Relations
Order within 18 full calendar months commencing with the date on which the first
payment would be required to be made under such  judgment,  decree or order.

                                      -64-
<PAGE>

If the Committee is unable to make such a determination within such time period,
payment  under the Plan  shall be as if such  judgment,  decree or order did not
exist and any such  determination  made after such time period  shall be applied
prospectively  only.  Distribution  to a  person  entitled  to  payment  under a
Qualified  Domestic  Relations  Order shall be made on a pro rata basis from the
Participant's Accounts in such manner as the Committee shall direct.

     8.11 Benefits Payable Only from Trust Fund. All benefits payable under this
Plan shall be paid or provided  for solely from the Trust Fund,  and neither any
Employer  nor  its  shareholders,  directors,  employees  or any  member  of the
Committee  shall  have any  liability  or  responsibility  therefor.  Except  as
otherwise  provided by law, no Employer assumes any obligations  under this Plan
except those specifically stated in the Plan.

     8.12 Restrictions on Distribution.  Notwithstanding  any other provision of
the  Plan,  a  Participant's   Elective   Contributions  Account  shall  not  be
distributable  prior to his  separation  from  service,  Disability,  death,  or
attainment of age 59-1/2, except (a) in cases of hardship as provided in Section
7.2, (b) upon termination of the Plan without  establishment or maintenance of a
successor  plan  within the  meaning  of  applicable  regulations,  (c) prior to
termination of the Plan, as authorized under section  401(k)(2)(B)(i)(II) of the
Code (i) upon  disposition by an Employer or Affiliate to an unrelated entity of
substantially  all of the assets used by such corporation in a trade or business
if such Employer or Affiliate  continues to maintain this Plan and the acquiring
entity  does not  maintain  the Plan  after  the  disposition,  in the case of a
Participant who continues employment with the corporation acquiring such assets,
or (ii) upon  disposition by an Employer or Affiliate to an unrelated  entity of
such  corporation's  interest in a subsidiary if such  corporation  continues to
maintain this Plan and the acquiring entity does not maintain the Plan after the
disposition,  with respect to a Participant who

                                      -65-
<PAGE>

continues  employment  with such a  subsidiary.  No portion  of a  Participant's
Accounts shall be distributed  under the Plan without his prior written  consent
during any period that the Participant's  Elective  Contributions Account is not
distributable  by reason of this Section 8.12,  and the  Participant's  Accounts
shall  continue to be adjusted as provided in Section 4.6 during any period that
distribution is deferred by reason of this Section 8.12.

     8.13 Direct  Rollover  of Eligible  Rollover  Distributions.  This  Section
applies to distributions made on or after January 1, 1993.  Notwithstanding  any
provision of the Plan to the contrary that would otherwise limit a distributee's
election  under this Section,  a distributee  may elect,  at the time and in the
manner prescribed by the plan administrator,  to have any portion of an eligible
rollover  distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.

          8.13.1 Definitions.


          (a) Eligible rollover distribution.  An eligible rollover distribution
is any  distribution  of all or any  portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: 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  or  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; any distribution to the extent such distribution is
required under section  401(a)(9) of the Code;  the portion of any  distribution
that is not  includible  in  gross  income  (determined  without  regard  to the
exclusion for net unrealized  appreciation with respect to employer securities);
and effective January 1, 1999, any hardship withdrawal under Section 7.2.

                                      -66-
<PAGE>

          (b)  Eligible  retirement  plan.  An  eligible  retirement  plan is an
individual  retirement  account  described  in  section  408(a) of the Code,  an
individual  retirement  annuity  described  in  section  408(b) of the Code,  an
annuity  plan  described  in section  403(a) of the Code,  or a qualified  trust
described in section 401(a) of the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, an eligible retirement plan is an individual retirement
account or annuity.


          (c)  Distributee.   A  distributee  includes  an  employee  or  former
employee. In addition,  the employee's 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 section 414(p) of
the Code, are  distributees  with regard to the interest of the spouse or former
spouse.


          (d) Direct rollover. A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.


          8.13.2 Limitations. No more than one direct rollover may be elected by
a distributee for each eligible rollover distribution. A combination of a direct
rollover  and cash  distribution  shall be  permitted  only if at least  $500 is
transferred by direct rollover. The Committee may determine not to permit direct
rollovers of distributions  that it reasonably  expects will in the aggregate be
less than $200 in the year of distribution.


          8.13.3 Default  Procedure.  If a Participant (or his surviving spouse,
if applicable)  does not make a timely election  whether or not to directly roll
over his eligible

                                      -67-
<PAGE>

rollover  distribution within a reasonable period permitted by the Committee for
making  such  election,   such  distribution  shall  be  made  directly  to  the
Participant (or his surviving spouse, if applicable).





























                                      -68-
<PAGE>

                                   ARTICLE IX

                             Beneficiary Designation
                             -----------------------

     9.1 Designation of Beneficiary.  Subject to the further  provisions of this
Article IX, each  Participant may designate,  at such time and in such manner as
the Committee shall prescribe,  a Beneficiary or  Beneficiaries  (who may be any
one or more members of his family or any other persons, executor, administrator,
any trust,  foundation  or other  entity) to receive any benefits  distributable
hereunder  to his  Beneficiary  after the death of the  Participant  as provided
herein.  Such  designation  of a  Beneficiary  or  Beneficiaries  shall  not  be
effective for any purpose unless and until it has been filed by the  Participant
with  the  Committee,  provided,  however,  that  a  designation  mailed  by the
Participant  to the Committee  prior to death and received by it after his death
shall  take  effect  upon  such  receipt,  but  prospectively  only and  without
prejudice to any payor or payee on account of any payments  made before  receipt
by the Committee.

     9.2  Spouse as  Presumptive  Beneficiary.  Notwithstanding  Section  9.1, a
Participant's sole Beneficiary shall be his surviving spouse, if the Participant
has  a  surviving  spouse,   unless  the  Participant  has  designated   another
Beneficiary  with the  written  consent of such  spouse (in which  consent  such
Beneficiary  is  specified  by name or class,  and the effect of such consent is
acknowledged)  witnessed by a notary public or authorized  Plan  representative.
Any  such  consent  shall  be  irrevocable.  The  Committee  may,  in  its  sole
discretion,  waive the requirement of spousal consent if they are satisfied that
the spouse cannot be located, or if the Participant can show by court order that
he has been  abandoned  by the  spouse  within the  meaning of local law,  or if
otherwise permitted under applicable regulations.


                                      -69-
<PAGE>

     9.3 Change of  Beneficiary.  A  Participant  may, from time to time in such
manner as the Committee shall  prescribe,  change his designated  Beneficiary or
Beneficiaries,  but any such designation which has the effect of naming a person
other than the surviving  spouse as sole  Beneficiary  is subject to the spousal
consent requirement of Section 9.2.

     9.4  Failure to  Designate.  If a  Participant  has failed  effectively  to
designate  a  Beneficiary  to receive the  Participant's  death  benefits,  or a
Beneficiary  previously  designated  has  predeceased  the  Participant  and  no
alternative designation has become effective, such benefits shall be distributed
to the Participant's estate.

     9.5 Proof of Death.  The Committee may, as a condition  precedent to making
payment to any Beneficiary, require that a death certificate, burial certificate
or other evidence of death acceptable to it be furnished.

     9.6 Discharge of Liability.  If  distribution in respect of a Participant's
Accounts  is  made to a  person  reasonably  believed  by the  Committee  or its
delegate  (taking into account any document  purporting to be a valid consent of
the Participant's  spouse,  or any  representation by the Participant that he is
not  married) to properly  qualify as the  Participant's  Beneficiary  under the
foregoing  provisions  of this  Article  IX,  the  Plan  shall  have no  further
liability with respect to such Accounts (or the portion thereof distributed).









                                      -70-
<PAGE>

                                    ARTICLE X

                                   Trust Fund
                                   ----------

     10.1  Trust   Agreement.   By  adopting  the  Plan,   each  Employer  shall
automatically  become party to the Trust  Agreement  between the Company and the
Trustee  under which the Trustee  shall  receive the  contributions  made by the
Employers under the Plan and shall hold, invest and distribute the Trust Fund in
accordance  with the terms and  provisions of the Trust  Agreement.  Any and all
rights or  benefits  which  may  accrue to any  person  under the Plan  shall be
subject to all the terms and  provisions  of the Trust  Agreement.  In the event
that the Trustee shall be a bank or similar financial institution  supervised by
the United States or a State,  the Committee,  in its discretion,  may authorize
the Trustee to invest all or a part of the Plan's assets in deposits  which bear
a reasonable interest rate in such bank or financial institution.

     10.2 No Diversion of Trust Fund.  The Trust Fund shall in no event  (within
the taxable year or  thereafter)  be used for or diverted to purposes other than
for the exclusive benefit of Participants and their Beneficiaries (including the
payment  of the  expenses  of the  administration  of the Plan and of the  Trust
Fund), except that at the Committee's request:

          (a) A  contribution  that is made by an  Employer by a mistake of fact
may be  returned  to such  Employer  within  one year  after the  payment of the
contribution;

          (b) A contribution  that is conditioned upon its  deductibility  under

section  404 of the  Code  pursuant  to  Section  3.9  may  be  returned  to the
contributing  Employer,  to the extent that the  contribution is disallowed as a
deduction, within one year after such disallowance; and

          (c) A contribution that is conditioned on initial qualification of the
Plan under section  401(a) of the Code pursuant to Section 3.10 may, if the Plan
does not so qualify,  be

                                      -71-
<PAGE>

returned  (together  with any  earnings  thereon) to the  contributing  Employer
within one year after the date of denial of qualification of the Plan.

     10.3  Duration of Trust.  The Trust shall  continue for such time as may be
necessary to accomplish the purposes for which it is created.

     10.4 Company as Agent. The Company is hereby authorized to act as agent for
all other Employers in dealings with the Trustee under the Plan.

















                                      -72-
<PAGE>

                                   ARTICLE XI

                                 Administration
                                 --------------

     11.1  Administrative  Committee.  There is hereby created an Administrative
Committee  (the  "Committee")  which  shall  consist  of not less than three (3)
members to be appointed by and serve at the pleasure of the Board of  Directors.
The  Board of  Directors  may,  at any  time,  fill  vacancies  or  require  the
resignation  of one or more of the members of a Committee with or without cause.
In the event that a vacancy  or  vacancies  shall  occur on the  Committee,  the
remaining  member  or  members  shall  act as the  Committee  until the Board of
Directors fills such vacancy or vacancies. No person shall be ineligible to be a
member of a  Committee  because he is, was or may become  entitled  to  benefits
under the Plan or because  he is a director  and/or  officer of an  Employer  or
Affiliate or a Trustee;  provided,  that no Participant shall participate in any
determination by the Committee  specifically  relating to the disposition of his
own Account.

     11.2 Limitation of Liability; Indemnity.

          11.2.1 Except as otherwise  provided by law, no person who is a member
of the  Committee,  or any  employee,  director  or officer of any  Employer  or
Affiliate,  shall  incur any  liability  whatsoever  on  account  of any  matter
connected with or related to the Plan or the  administration of the Plan, unless
such person  shall have acted in bad faith or been guilty of willful  misconduct
in respect of his duties, actions or omissions in respect of the Plan.

          11.2.2 Each Company  shall  indemnify and save harmless each member of
the Committee, and each employee,  director or officer of such Company or of any
of its  subsidiaries,  from and  against  any and all  loss,  liability,  claim,
damage,  cost and expense  which may arise by reason of, or be based  upon,  any
matter connected with or related to the Plan or the

                                      -73-
<PAGE>

administration of the Plan (including,  but not limited to, any and all expenses
whatsoever reasonably incurred in investigating,  preparing or defending against
any  litigation,  commenced or  threatened,  or in  settlement of any such claim
whatsoever),  unless such person shall have acted in bad faith or been guilty of
willful misconduct in respect of his duties,  actions or omissions in respect of
the Plan.

     11.3  Compensation  and Expenses.  The members of the Committee shall serve
without compensation for their services as such members. All expenses reasonably
incurred  by the  Committee  shall be  treated  as an  expense of the Trust Fund
unless  paid by the  Company  and/or  the other  Employers.  The  members of the
Committee  shall serve without bond unless the Company or the  provisions of any
applicable laws shall require otherwise,  in which event the Employers shall pay
the premium thereon.

     11.4 Voting, Chairmen, Subcommittees.
11.4.1 If there are less than three  members of the  Committee at any time,  the
Committee may do any act which the Plan  authorizes or requires the Committee to
do only upon the unanimous consent of the members of the Committee. If there are
three or more members of the Committee at any time, a majority of the members of
the Committee at the time in office may do any act which the Plan  authorizes or
requires  the  Committee  to do.  The  action of such  majority  of the  members
expressed  from time to time by a vote at a  meeting,  or in  writing  without a
meeting, or by telephone  communication without a meeting,  shall constitute the
action of the  Committee  and shall have the same effect for all  purposes as if
assented  to by all  members  at the time in  office.  Where  action is taken by
members of the  Committee  by  telephone  communication,  such  action  shall be
confirmed  in writing by such  members as soon as  practicable  thereafter.  The
Secretary of the Committee shall maintain minutes reflecting

                                      -74-
<PAGE>

Committee  meetings  and shall  cause each  action  taken in  writing  without a
meeting,  and each  written  confirmation  of action taken by  telephone,  to be
included in the minutes of the Committee.

          11.4.2 The members of the Committee shall elect one of their number as
Chairman  and shall elect a Secretary  who may, but need not be, a member of the
Committee.  They may appoint from their number such  subcommittees as they shall
determine.

     11.5 Payment of Benefits. The Committee shall advise the Trustee in writing
with respect to all benefits  which become  payable  under the terms of the Plan
and  shall  direct  the  Trustee  to pay  such  benefits  to or on  order of the
Committee.  In the event that the Trust Fund  shall be  invested  in whole or in
part in one or more insurance  contracts,  or distribution under this Plan is to
be made through the purchase of an annuity  contract from an insurance  company,
the  Committee  shall  be  authorized  to give  such  instructions  to any  such
insurance company as may be necessary or appropriate in order to provide for the
payment of benefits in accordance with the Plan.

     11.6 Powers and Authority; Action Conclusive. Except as otherwise expressly
provided in the Plan or in the Trust Agreement, or by the Board of Directors:

          11.6.1 The Committee  shall be responsible for the  administration  of
the Plan.

          11.6.2 The  Committee  shall have all powers  necessary or helpful for
the carrying  out of its  responsibilities,  and the  decisions or action of the
Committee in good faith in respect of any matter  hereunder  shall be conclusive
and binding upon all parties concerned.


                                      -75-
<PAGE>

     11.6.3 The  Committee  may  delegate  to one or more of its  members or any
other  person the right to act on its behalf in all matters  connected  with the
administration of the Plan.

     11.6.4  Without  limiting the  generality of the  foregoing,  the Committee
shall:

          11.6.4.1  Determine all questions arising out of or in connection with
the provisions of the Plan except as otherwise expressly provided herein;

          11.6.4.2 Make rules and regulations for the administration of the Plan
which are not  inconsistent  with the terms and  provisions of the Plan, and fix
the annual  accounting period of the trust established under the Trust Agreement
as required for tax purposes;

          11.6.4.3 Construe all terms, provisions, conditions and limitations of
the Plan;

          11.6.4.4  Determine all questions  relating to (i) the  eligibility of
persons  to  receive  benefits   hereunder,   (ii)  the  years  of  Service  and
Compensation  of a  Participant,  and  (iii) all  other  matters  upon which the
benefits  or  other  rights  of a  Participant  or other  person  shall be based
hereunder;

          11.6.4.5 Determine all questions relating to the administration of the
Plan (i) when  disputes  arise  between an  Employer  and a  Participant  or his
Beneficiary,  spouse or legal  representatives,  and (ii) whenever the Committee
deems it advisable to determine  such  questions in order to promote the uniform
administration of the Plan for the benefit of all parties concerned.


                                      -76-
<PAGE>

The foregoing list of powers is not intended to be either complete or exclusive,
and the Committee shall, in addition, have such powers as it may determine to be
necessary  for the  performance  of its  duties  under  the Plan  and the  Trust
Agreement.

     11.7 Counsel and Agents.  The Committee may employ such counsel  (including
legal counsel,  who may be counsel for any Employer or Affiliate),  accountants,
investment advisors,  physicians, agents and such clerical and other services as
it may require in carrying out the  provisions of the Plan, and shall charge the
fees,  charges and costs  resulting  from such  employment  as an expense of the
Trust Fund unless paid by an  Employer.  Unless  otherwise  provided by law, any
person so employed by a Committee  may be legal or other counsel to an Employer,
a member of a Committee  or an officer or member of the Board of Directors of an
Employer or any Affiliate.

     11.8 Reliance on Information. The members of the Committee and any Employer
and its officers,  directors  and  employees  shall be entitled to rely upon all
tables,  valuations,   certificates,  opinions  and  reports  furnished  by  any
accountant,  trustee,  insurance  company,  counsel or other expert who shall be
engaged by an Employer or the  Committee,  and the members of the  Committee and
any Employer and its officers, directors and employees, and if an Employer shall
be a partnership,  any partner  thereof,  shall be fully protected in respect of
any action taken or suffered by them in good faith in reliance thereon,  and all
action  so taken or  suffered  shall be  conclusive  upon all  persons  affected
thereby.

     11.9 Fiduciaries.  Subject to Section 11.10, the provisions of this Section
11.9 shall apply  notwithstanding  any contrary provisions of the Plan or of the
Trust Agreement.

          11.9.1 The named  fiduciaries  under the Plan shall be the  members of
the  Committee,  who shall be named  fiduciaries  with  respect  to  control  or
management of the assets

                                      -77-
<PAGE>

of the Plan, and who shall have authority to control or manage the operation and
administration of the Plan, except with respect to those matters which under the
Plan or the Trust Agreement are the responsibility, or subject to the authority,
of the Trustee.

     11.9.2 The named  fiduciaries  under the Plan  shall have the right,  which
shall be exercised in accordance with the procedures set forth in Section 11.4.1
and/or  in the  Trust  Agreement  for  action  by  the  Committee,  to  allocate
responsibilities, fiduciary or otherwise, among named fiduciaries, and the named
fiduciaries  (or any of them to whom such right shall be  allocated)  shall have
the  right to  designate  persons  other  than  named  fiduciaries  to carry out
responsibilities, fiduciary or otherwise, under the Plan.

     11.9.3 The  funding  policy  and method for this Plan shall  consist of the
making of  contributions,  the investments and reinvestments in respect thereof,
and the making of distributions,  as provided in the foregoing provisions of the
Plan.

     11.9.4 Any person or group of persons may serve in more than one  fiduciary
capacity with respect to the Plan.

     11.9.5 Any named fiduciary under the Plan, and any fiduciary  designated by
a named fiduciary  pursuant to Section 11.9.2 to whom such power is granted by a
named  fiduciary under the Plan, may employ one or more persons to render advice
with regard to any responsibility such fiduciary has under the Plan.


     11.9.6  The  members  of the  Committee,  or any of them to whom such right
shall be allocated, may appoint an investment manager or managers, as defined in
ERISA,  to manage  (including  the power to acquire,  invest and dispose of) any
assets of the Plan.


     11.9.7  Except to the  extent  otherwise  provided  by law,  if any duty or
responsibility of a named fiduciary has been allocated or delegated to any other
person in

                                      -78-
<PAGE>

accordance with any provision of this Plan or of the Trust Agreement,  then such
named  fiduciary  shall not be liable for an act or  omission  of such person in
carrying out such duty or responsibility.


     11.10 Plan  Administrator.  The Committee shall be the administrator of the
Plan, as defined in section 3(16)(A) of ERISA.



























                                      -79-
<PAGE>

                                   ARTICLE XII

                     Right of Company to Amend and Terminate
                     ---------------------------------------

     12.1 Amendment.  Effective January 1, 1990,  except as herein limited,  the
Company  shall  have the right to amend the Plan by  resolution  of the Board of
Directors or the Committee  (acting in its capacity as management and delegee of
the Board of  Directors,  and not in the  capacity of Plan  fiduciaries)  to any
extent that it may deem advisable,  and all Employers and Participants  shall be
bound thereby. Where deemed necessary or advisable in order to ensure compliance
with  applicable  law  (including   administrative   interpretations   thereof),
amendments  may be  put  into  effect  in  practice  and  in  communications  to
Participants  prior to the time that they are embodied in formal  amendments  to
the Plan  document.  No  amendment  shall (a) have the  effect of vesting in any
Employer  any  interest  in any  property  of  the  Trust  Fund;  (b)  have  any
retroactive effect so as to deprive any Participant or Beneficiary of any amount
theretofore  credited to his Accounts,  except as provided in Section 12.2 or as
otherwise  permitted by law; or (c) adversely  affect the  qualification  of the
Plan under section 401(a) of the Code.

     12.2 Amendments  Required for  Qualification.  All provisions of this Plan,
and all benefits and rights granted  hereunder,  are subject to any  amendments,
modifications  or  alterations  which are necessary from time to time to qualify
the Plan under section 401(a) of the Code, to continue the Plan as so qualified,
or to  comply  with any other  provision  of law.  Accordingly,  notwithstanding
Section  12.1 or any other  provision  of this Plan,  the Company may by written
action of any member of the  Committee  who is an officer of the Company  amend,
modify or alter the Plan, with or without  retroactive effect, in any respect or
manner  necessary  to qualify  the Plan  under  section  401(a) of the Code,  to
continue the Plan as so qualified,  to assure

                                      -80-
<PAGE>

that  amounts  held in  Participants'  Accounts are not taxable to them prior to
actual receipt, or to comply with any other provision of applicable law.

     12.3  Right  to  Terminate.  The  Plan  may be  terminated  at any  time by
resolution of the Board of Directors,  provided that no such action shall permit
any part of the corpus or income of the Trust Fund to be used for or diverted to
purposes  other than for the  exclusive  benefit of the  Participants  and their
Beneficiaries under the Plan and for the payment of the administrative  costs of
the Plan prior to the satisfaction of all liabilities under the Plan.

     12.4  Termination of Trust.  If the Plan is terminated  pursuant to Section
12.3  and the  Board  of  Directors  determines  that the  Trust  Fund  shall be
terminated,  all of the Participants  Accounts shall be nonforfeitable,  and the
current value of all Accounts shall be  distributed  in the manner  described in
Article  VIII;  provided,  however,  that the  value of such  Accounts  shall be
adjusted to reflect the expenses of  termination to the extent such expenses are
not  paid  by  the  Company,  and  further  provided  that  if  another  defined
contribution  plan (other than an employee  stock  ownership  plan as defined in
section 4975(e)(7) of the Code) is established or maintained (within the meaning
of section  401(k)(10)(A)(i)  of the Code) distribution shall not be made except
as permitted under Section 8.12. Until all Accounts are fully  distributed,  any
remaining  Accounts  held in the Trust Fund shall  continue  to be  adjusted  in
accordance with Article IV, and to reflect the expenses of termination.

     12.5  Continuation  of  Trust.  If the Plan is  terminated  by the Board of
Directors  but the Board of  Directors  determines  that the Trust Fund shall be
continued  pursuant to its terms and the  provisions  of this Section  12.5,  no
further  contributions  shall  be  made,  the  Participants'  Accounts  shall be
nonforfeitable, and the Trust Fund shall be administered as though the Plan


                                      -81-
<PAGE>

were  otherwise  in full force and  effect.  If the Trust  Fund is  subsequently
terminated, the provisions of Section 12.4 shall then apply.

     12.6  Discontinuance  of  Contributions.  Any Employer may at any time,  by
resolution of its board of directors,  completely  discontinue its participation
in and contributions  under the Plan. Unless otherwise agreed to by the Board of
Directors, an Employer shall discontinue its participation and all contributions
and shall cease to be an Employer  with respect to the Plan if it ceases for any
reason to be a member of a controlled  group of trades or  businesses  including
the Company,  within the meaning of section  414(b) or 414(c) of the Code. If an
Employer  completely  discontinues its  contributions  under the Plan, either by
resolution  of its  board  of  directors  or for  any  other  reason,  and  such
discontinuance is deemed a partial termination of the Plan within the meaning of
section  411(d)(3)  of the Code,  the amounts  credited  to the  Accounts of all
affected  Participants  (other than  Participants  who, in  connection  with the
discontinuance  of Employer  contributions,  transfer  employment to an Employer
which continues to contribute under the Plan) shall be nonforfeitable.

     12.7 Plan Merger.  Subject to the provisions of this Section 12.7, the Plan
may be amended to provide for the merger of the Plan with,  or a transfer of all
or part of its assets to, any other qualified plan within the meaning of section
401(a) of the Code, or applicable provisions of subsequent law (including such a
merger or transfer in lieu of a distribution  which might  otherwise be required
under the Plan). In the case of any merger or consolidation with, or transfer of
assets or liabilities to, any other plan, each Participant in this Plan shall be
entitled to a benefit immediately after the merger,  consolidation,  or transfer
(if such  other  plan then  terminated)  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 been terminated).


                                      -82-
<PAGE>

                                  ARTICLE XIII

                                  Miscellaneous
                                  -------------

     13.1  Filing with  Committee.  For all  purposes of this Plan,  the date on
which an  Appropriate  Form,  Contribution  Agreement,  or any other document is
returned  to or filed  with  the  Committee  shall  be the  date on  which  such
Appropriate Form,  Contribution Agreement or other document is actually received
by the Committee or its designated agent.

     13.2  Separability.  If any  provision  of this  Plan is  held  invalid  or
unenforceable,  its  invalidity or  unenforceability  shall not affect any other
provisions  of the Plan and the Plan shall be construed  and enforced as if such
provisions had not been included therein.

     13.3  Captions.  The  captions  contained  herein and the table of contents
prefixed  hereto are inserted only as a matter of convenience  and for reference
and in no way define,  limit,  enlarge or  describe  the scope or intent of this
Plan nor in any way shall affect the Plan or the  construction  of any provision
thereof.

     13.4 Limitation of Liability. Except as provided in Section 11.2 and except
to the extent  otherwise  provided by law, no  liability  shall  attach to or be
incurred  by  any  stockholder,  officer  or  director  of any  Employer  or any
Affiliate,  and if an Employer or Affiliate shall be a partnership,  any partner
thereof, under or by reason of the terms, conditions and provisions contained in
this Plan or in the Trust Agreement,  or for the acts or decisions taken or made
thereunder  or in  connection  therewith;  and as a condition  precedent  to his
participation in the Plan or the receipt of benefits  thereunder,  or both, such
liability,  if any, is  expressly  waived and released by each  Participant  and
Beneficiary,  and by any and all persons claiming under or through such persons,
such waiver and release to be conclusively evidenced by any act or participation
in or the acceptance of benefits or the making of elections under this Plan.

                                      -83-
<PAGE>

     13.5  Construction.  The Plan is intended to  constitute  a qualified  plan
under section  401(a) of the Code (which  includes a qualified  cash or deferred
arrangement within the meaning of section 401(k) of the Code) and to comply with
applicable  provisions of ERISA.  Accordingly,  the Plan shall, at all times, be
construed and administered in a manner  consistent with the requirements of said
sections 401(a) and 401(k) and of ERISA.

     13.6 Usage.  Whenever  applicable,  the masculine gender,  when used in the
Plan,  shall  include the  feminine or neuter  gender,  and the  singular  shall
include the plural.

     13.7 Family Members of Highly Compensated Employees. The family aggregation
rules  previously  effective  under the Plan are repealed  effective  January 1,
1997.

     13.8  Governing  Law. The validity of this Plan or of any of its provisions
shall be determined under, and shall be construed and administered according to,
the  laws  of the  State  of New  York  (without  regard  to its  choice  of law
principles),  except to the extent  preempted by ERISA, or any other  applicable
laws of the United  States of America.  No action  (whether at law, in equity or
otherwise) shall be brought by or on behalf of any person for or with respect to
benefits due under this Plan unless the person  bringing  such action has timely
exhausted  the Plan's claim  review  procedure.  Any action  (whether at law, in
equity or otherwise)  must be commenced  within three (3) years from the earlier
of (a) the date a final determination denying such benefit, in whole or in part,
is issued under the Plan's claim review procedure and (b) the date such person's
cause of action first accrued.





                                      -84-
<PAGE>

                                   ARTICLE XIV

                       Limitation on Maximum Contributions

                          and Benefits Under all Plans

     14.1 Definitions.

          14.1.1  Annual  Addition.  For purposes of this  Article XIV,  "Annual
Addition"  means  the  sum  for  any  year  of  (a) employer  contributions  and
forfeitures  allocable to a  Participant  under all plans (or portions  thereof)
maintained by an Employer or an Affiliate subject to section 415(c) of the Code,
(b) the Participant's  employee  contributions under all such plans (or portions
thereof),  and (c) amounts described in section 419A(d)(2) of the Code (relating
to post-retirement  medical benefits of key employees) or allocated to a pension
plan individual  medical account described in section 415(l) of the Code, to the
extent includible for purposes of section 415(c)(2) of the Code. A Participant's
employee  contributions  described  in clause  (b) shall be  determined  without
regard to (i) any rollover contributions, (ii) any repayments of loans, or (iii)
any prior  distributions  repaid upon the exercise of buy-back rights.  Employer
and employee  contributions taken into account as Annual Additions shall include
"excess  contributions" as defined in section  401(k)(8)(B) of the Code, "excess
aggregate  contributions"  as defined in section  401(m)(6)(B)  of the Code, and
"excess  deferrals"  as described  in section  402(g) of the Code (to the extent
such "excess deferrals" are not distributed to the Participant before the end of
the  taxable  year of the  Participant  in  which  such  deferrals  were  made),
regardless of whether such amounts are distributed or forfeited.

          14.1.2  Earnings.  "Earnings"  for any year means  Total  Compensation
actually  paid or made  available  by all  Employers  and  Affiliates,  but, for
Limitation  Years (as defined in Section 14.5) beginning before January 1, 1998,
determined after giving effect to any Contribution Agreement under this Plan (or
any other cash or deferred arrangement  described in

                                      -85-
<PAGE>

section  401(k)  of the  Code) or any  salary  reduction  arrangement  under any
cafeteria plan (within the meaning of section 125 of the Code).

     14.2 Limitation on Annual Additions. The aggregate Annual Additions to this
Plan and all other plans maintained by all Employers and Affiliates for any year
shall not exceed the lesser of (a)  $30,000,  as  adjusted  pursuant  to section
415(d)  of the  Code,  or (b)  twenty-five  percent  (25%) of the  Participant's
Earnings for such year.

     14.3 Application.  If the allocations to a Participant's  Account otherwise
required  under  this Plan for any Plan Year  would  cause  the  limitations  of
Section 14.2 to be exceeded for that Plan Year, contributions otherwise required
with respect to such  Participant  under  Article  III,  shall be reduced to the
extent  necessary  to comply  with the  limitations  of  Section  14.2.  If such
reduction is not effected in time to prevent such allocations for any Limitation
Year (as defined in Section  14.5) from  exceeding  the  limitations  of Section
14.2,  effective August 15, 1991, any reduction in Elective  Contributions shall
be effected by distributing  such excess Elective  Contributions to the affected
Participant.  Any such  distribution of excess Elective  Contributions  shall be
limited to the extent such excess  Elective  Contributions  were the result of a
reasonable error in determining the amount of Elective  Contributions  permitted
with respect to an individual  under the limits of section 415 of the Code after
taking  into  consideration  other  Annual  Additions  under the Plan.  Matching
Contributions related to distributed excess Elective Contributions and any other
excess  contributions shall be used to reduce contributions for such Participant
in the next Limitation  Year and each  succeeding  Limitation Year if necessary;
provided,  that if the  Participant is not covered by the Plan at the end of the
current  Limitation  Year,  the portion  exceeding the  limitation  set forth in
Section 14.2 shall be held unallocated in a suspense account for such Limitation
Year and shall be allocated

                                      -86-

<PAGE>

and reallocated to the Accounts of all  Participants in the next Limitation Year
before any other Annual  Additions (as defined in Section  14.1.1) are allocated
to the Accounts of such  Participants.  The suspense  account will reduce future
contributions  for all remaining  Participants in the next Limitation  Year, and
each  succeeding  Limitation  Year if  necessary.  If a  suspense  account is in
existence at any time during the Limitation  Year pursuant to this Section 14.3,
it will  participate in the allocation of the Trust Fund's  investment gains and
losses. In the event of a termination of the Plan,  unallocated  amounts held in
such  suspense  account  shall be  allocated to the extent  possible  under this
Article XIV for the Limitation Year of termination. Any amount remaining in such
suspense  account  upon  termination  of the Plan shall then be  returned to the
Employer, notwithstanding any other provision of the Plan or Trust Agreement.

     14.4  Coverage by Defined  Benefit Plan.  For  Limitation  Years  beginning
before  January  1, 2000,  if a  Participant  has at any time been  covered by a
defined  benefit plan  maintained by an Employer or an  Affiliate,  his benefits
under this plan shall be further  limited as required  by section  415(e) of the
Code.

     14.5  Limitation  Year. The Limitation Year under this Article XIV shall be
the Plan Year.

     14.6 Ordering Rule for Reduction of  Allocations.  If the  allocations to a
Participant's  Accounts for any Limitation  Year exceed the  limitations of this
Article XIV for that year, contributions (and forfeitures in lieu thereof) under
Article III shall be reduced to the extent necessary in order to comply with the
limitation  of this  Article  XIV with such  reductions  made first to  Elective
Contributions  which do not  relate  to  Matching  Contributions,  second to the
Participant's  remaining Elective  Contributions and the Matching  Contributions
relating thereto, and third to Profit-Sharing Contributions.

                                      -87-


<PAGE>

                                   ARTICLE XV

                             "Top-Heavy" Provisions

                  15.1     Determination of "Top-Heavy" Status.


          15.1.1 Applicable Plans. For purposes of this Article XV,  "Applicable
Plans" shall include (a) each plan of an Employer or an Affiliate in which a Key
Employee (as defined in Section  15.1.2  below for this Plan,  and as defined in
section 416(i) of the Code for each other Applicable Plan)  participates  during
the  five  (5)-year  period  ending  on such  plan's  "determination  date"  (as
described in Section  15.1.4 below) and (b) each other plan of an Employer or an
Affiliate  which,  during  such  period,  enables any plan in clause (a) of this
sentence to meet the  requirements of section  401(a)(4) or 410 of the Code. Any
plan not  required  to be  included  under the  preceding  sentence  may also be
included,  at the  option of the  Company,  provided  that the  requirements  of
sections 401(a)(4) and 410 of the Code continue to be satisfied for the group of
Applicable Plans after such inclusion. Applicable Plans shall include terminated
plans,  frozen plans and, to the extent that  benefits are provided with respect
to service with an Employer or an Affiliate,  multiemployer  plans (described in
section 414(f) of the Code) and multiple  employer  plans  (described in section
413(c) of the Code) to which an Employer or an Affiliate makes contributions.

          15.1.2 Key Employee.  For purposes of this Article XV, "Key  Employee"
for any Plan Year shall mean an employee (including a former employee whether or
not  deceased)  of an Employer or an  Affiliate  who, at any time during a given
Plan Year or any of the four (4)  preceding  Plan  Years,  is one or more of the
following.

                                      -88-

<PAGE>

     (a) An officer of an Employer or an Affiliate having Top-Heavy Compensation
of more than fifty  percent  (50%) of the dollar  amount in effect under section
415(b)(1)(A)  of the Code for any such Plan Year;  provided,  that the number of
employees treated as officers shall be no more than fifty (50) or, if fewer, the
greater of three (3) employees or ten percent (10%) of the employees  (exclusive
of employees described in section 414(q)(5) of the Code).

     (b) One of the ten (10) employees (i) having Top-Heavy Compensation of more
than the dollar  limit under  Section  14.2,  and (ii) owning or  considered  as
owning within the meaning of section 416(i) of the Code) the largest  percentage
interests in value of an Employer or an Affiliate, provided that such percentage
interest exceeds one-half percent (.5%) in value. If two employees have the same
interest in the Employer or an Affiliate,  the employee having the greater Total
Compensation shall be treated as having a larger interest.

     (c) A person owning (or considered as owning, within the meaning of section
416(i) of the Code) more than five percent (5%) of the  outstanding  stock of an
Employer or an Affiliate, or stock possessing more than five percent (5%) of the
total  combined  voting power of all stock of the  Employer or an Affiliate  (or
having more than five  percent  (5%) of the  capital or profits  interest in any
Employer or an Affiliate  that is not a  corporation,  determined  under similar
principles).

     (d) A  one  percent  (1%)  owner  of an  Employer  or an  Affiliate  having
Top-Heavy   Compensation  of  more  than  one  hundred  fifty  thousand  dollars
($150,000).  "One percent (1%) owner" means any person who would be described in
paragraph (c) of Section 15.1.2 if "one percent (1%)" were substituted for "five
percent (5%)" in each place where it appears in paragraph (c).

                                      -89-
<PAGE>

     For  purposes  of  this  Section  15.1.2,  "Top-Heavy  Compensation"  means
"compensation" as that term is defined in section 414(q)(4) of the Code.

     15.1.3 Top Heavy Condition. In any Plan Year for which the sum, for all Key
Employees  (as defined in Section  15.1.2  above for this Plan and as defined in
section 416(i) of the Code for each other Applicable Plan), of the present value
of the cumulative  accrued benefits under all Applicable Plans which are defined
benefit plans  (determined  based on the actuarial  assumptions set forth in the
"top-heavy"  provisions of such plans) and the aggregate of their accounts under
all Applicable Plans which are defined contribution plans, exceeds sixty percent
(60%) of a similar  sum  determined  for all  participants  in such  plans  (but
excluding  participants who are former Key Employees),  the Plan shall be deemed
"Top-Heavy."

     15.1.4  Determination  Date. The  determination  as to whether this Plan is
"Top-Heavy" for a given Plan Year shall be made on the last day of the preceding
Plan Year (the  "Determination  Date");  and other  plans  shall be  included in
determining  whether this Plan is "Top-Heavy" based on the determination date as
defined in section  416(g)(4)(C)  of the Code for each such plan which occurs in
the same calendar year as such Determination Date for this Plan.

     15.1.5  Valuation.  The value of account  balances and the present value of
accrued benefits for each Applicable Plan will be determined, subject to section
416 of the Code and the regulations thereunder,  as of the most recent valuation
date that falls within or ends with the 12-month period ending on the applicable
determination date for such plan.

     15.1.6  Distribution  within Five Years.  Subject to Section  15.1.7 below,
distributions  from  the  Plan or any  other  Applicable  Plan  during  the five
(5)-year period ending on the applicable  Determination Date shall be taken into
account in determining whether the Plan is "Top-Heavy."

                                      -90-
<PAGE>

     15.1.7 No Services within Five Years.  Benefits and distributions shall not
be taken into account with  respect to any  individual  who has not rendered any
services to any  Employer  or  Affiliate  at any time  during the five  (5)-year
period ending on the applicable Determination Date.

     15.1.8 Compliance with Code Section 416. The calculation of the "top-heavy"
ratio, and the extent to which distributions, rollovers, and transfers are taken
into  account  will  be  made  in  accordance  with  Code  section  416  and the
regulations thereunder.

     15.1.9 Deductible Employee Contributions. Deductible employee contributions
will not be taken into account for purposes of computing the "top-heavy" ratio.

     15.1.10  Beneficiaries.  The terms "Key Employee" and "Participant" include
their Beneficiaries.

     15.1.11 Accrued Benefit Under Defined Benefit Plans.  Effective  January 1,
1987,  solely  for  purposes  of  determining  whether  this  Plan or any  other
Applicable  Plan is "Top-Heavy" for a given Plan Year, the accrued benefit under
any defined  benefit plan of a  Participant  other than a Key Employee  shall be
determined  under (a) the  method,  if any, that  uniformly  applies for accrual
purposes  under all  defined  benefit  plans  maintained  by the  Employer or an
Affiliate,  or (b) if there is no such method,  as if such  benefit  accrued not
more rapidly than at the slowest  accrual rate  permitted  under the  fractional
accrual rule of section 411(b)(1)(C) of the Code.

     15.2 Provisions Applicable in "Top-Heavy" Years. For any Plan Year in which
the Plan is deemed to be "Top-Heavy,"  the following  provisions  shall apply to
any Participant who has not terminated employment before such Plan Year:


                                      -91-
<PAGE>

     15.2.1  Required  Allocation.  The  amount of  Employer  contributions  and
forfeitures  which shall be allocated to the Account of any  Participant who (a)
is employed by an Employer or an  Affiliate on the last day of the Plan Year and
(b) is  not a Key  Employee  shall be (i) at least  three  percent  (3%) of such
Participant's Total Compensation for such Plan Year, or, (ii) if less, an amount
equal to such Total  Compensation  multiplied by the highest allocation rate for
any Key Employee.  For purposes of the preceding  sentence,  the allocation rate
for each  individual  Key Employee  shall be determined by dividing the Employer
contributions  and  forfeitures   allocated  to  such  Key  Employee's   account
(including  elective   contributions)  under  all  Applicable  Plans  considered
together by his Total Compensation;  provided,  however,  that clause (ii) above
shall not apply if this Plan  enables a  defined  benefit  plan  required  to be
aggregated with this Plan under Section 15.1.1 above to meet the requirements of
section 401(a)(4) or 410 of the Code. The minimum allocation  provisions of this
Section 15.2.1 shall, to the extent necessary,  be satisfied by special Employer
contributions  made  by the  Employer  for  that  purpose.  Notwithstanding  the
foregoing,  the minimum  allocations  otherwise  required by this Section 15.2.1
shall not be required to be made for any Participant (y) if such  Participant is
covered under a defined  benefit plan  maintained by an Employer or an Affiliate
which provides the minimum benefit required under section 416(c)(1) of the Code,
and/or (z) to the extent that the minimum allocation  otherwise required by this
Section 15.2.1 is made under another defined  contribution plan maintained by an
Employer or an Affiliate.  In addition,  any minimum  allocation  required to be
made for a Participant  who is not a Key Employee  shall be deemed  satisfied to
the extent of the benefits provided by any other qualified plan maintained by an
Employer or an Affiliate.  For Plan Years beginning on or after January 1, 1989,
Elective Contributions by a non-Key Employee shall be disregarded in determining
the amount of

                                      -92-
<PAGE>

contributions  required  to be  allocated  for his  benefit  under this  Section
15.2.1.  For  Plan  Years  beginning  on or  after  January  1,  1989,  Matching
Contributions  for a non-Key  Employee  that are taken into  account to meet the
minimum  allocation  requirements of this Section 15.2.1 shall be disregarded in
applying the provisions of Sections 3.4 and 3.5 of the Plan.

     15.2.2  Multiplier.  Except as otherwise  provided by law,  "1.00" shall be
substituted for the multiplier  "1.25" required by section  415(e)(2)(B)(i)  and
(3)(B)(i) of the Code, as applied pursuant to Section 14.4, unless the following
conditions are met:

     (a) the percentage described in Section 15.1.3 above does not exceed ninety
percent (90%), and

     (b) "four percent (4%)" is substituted  for "three percent (3%)" in Section
15.2.1 above.  Notwithstanding  any other  provision of this Plan, if the sum of
the combined limitation  fractions described in section 415(e)(2) and (3) of the
Code, as applied pursuant to Section 14.4, calculated by substituting "1.00" for
"1.25" in applying  section  415(e)(2)(B)(i)  and (3)(B)(i) of the Code, for any
Participant exceeds one hundred percent (100%) for the last Plan Year before the
Plan becomes  "Top-Heavy," such fractions shall be adjusted,  in accordance with
applicable  regulations,  so that their sum does not  exceed  100% for such Plan
Year.

     15.2.3 Vesting.  Any Participant shall be vested in his  Profit-Sharing and
Matching  Contributions  Account on a basis at least as favorable as is provided
under the following schedule:

         Years of Service                              Vested Percentage
         Less Than 2 Years                                       0%
         2 Years But Less Than 3                                20%
         3 Years But Less Than 4                                40%
         4 Years But Less Than 5                                60%

                                      -93-
<PAGE>

         5 Years But Less Than 6                                80%
         6 Years or More                                        100%

In any Plan Year in which the Plan is not deemed to be "top-  heavy," the vested
percentage shall be no less than that which was determined as of the last day of
the last Plan Year in which the Plan was deemed to be  "top-heavy."  The minimum
vesting schedule set out above shall apply to all benefits within the meaning of
Code section  411(a)(7)  except those  attributable  to employee  contributions,
including  benefits  accrued  before the  effective  date of this Article XV and
benefits accrued before the Plan became "top-heavy." Any vesting schedule change
caused by alterations in the Plan's "top-heavy" status shall be deemed to result
from a Plan  amendment  giving  rise to the right of  election  required by Code
section 411(a)(10)(B).

     15.2.4  Bargaining  Unit  Employees.  The provisions of Sections 15.2.1 and
15.2.3  above shall not apply to any  employee  included in a unit of  employees
covered by a collective  bargaining  agreement if, within the meaning of section
416(i)(4)  of the Code,  retirement  benefits  were the  subject  of good  faith
bargaining.













                                      -94-
<PAGE>

                                   ARTICLE XVI

                                Leased Employees
                                ----------------

     16.1  Definitions.  For  purposes of this  Article  XVI,  the term  "Leased
Employee"  means any  person  (a) who  performs  or  performed  services  for an
Employer or Affiliate  (hereinafter  referred to as the "Recipient") pursuant to
an agreement between the Recipient and any other person (hereinafter referred to
as the "Leasing  Organization"),  (b) who has  performed  such  services for the
Recipient  or for the  Recipient  and  related  persons  (within  the meaning of
section  144(a)(3) of the Code) on a substantially  full-time basis for a period
of at least one  year,  and (c)  whose  services  are  performed  under  primary
direction or control by the Recipient.

     16.2  Treatment  of Leased  Employees.  For purposes of this Plan, a Leased
Employee  shall be treated as an employee of an Affiliate  whose service for the
Recipient  (including  service during the one-year period referred to in Section
16.1) is to be taken into  account in  determining  compliance  with the service
requirements of the Plan relating to participation and vesting. However, subject
to Section  1.18.1,  such a Leased  Employee  shall not be  entitled to share in
contributions  under  the Plan  with  respect  to any  service  or  compensation
attributable to the period during which he is a Leased  Employee,  and shall not
be eligible to become a Participant  eligible to accrue  benefits under the Plan
unless  and except to the extent  that he shall at some time,  either  before or
after his service as a Leased Employee,  qualify as an Eligible Employee without
regard to the provisions of this Article XVI, in which event, status as a Leased
Employee shall be determined without regard to clause (b) of Section 16.1.

     16.3  Exception  for  Employees  Covered by Plans of Leasing  Organization.
Section 16.2 shall not apply to any Leased  Employee if such employee is covered
by a  money

                                      -95-
<PAGE>

purchase  pension plan of the Leasing  Organization  meeting the requirements of
section  414(n)(5)(B)  of the Code and Leased  Employees do not constitute  more
than twenty percent (20%) of the aggregate  "non-highly  compensated work force"
(as  defined  in  section  414(n)(5)(C)(ii)  of the Code) of all  Employers  and
Affiliates.

     16.4  Construction.  The purpose of this  Article XVI is to comply with the
provisions of section  414(n) of the Code.  All provisions of this Article shall
be construed  consistently  therewith,  and no individual  shall be treated as a
Leased Employee except as required by such provision.

























                                      -96-
<PAGE>

                                  ARTICLE XVII

                                Participant Loans
                                -----------------

     17.1 Loans to Parties in Interest.  This Article XVII is effective March 4,
1998.  Upon the  application of a Participant  who is a "party in interest" with
respect to  the  Plan (within  the  meaning  of  section 3(14)  of  ERISA),  the
Committee  or its  delegate (in either  case,  the "Loan  Administrator")  shall
instruct the Trustee to make a loan to such Participant  from the  Participant's
Accounts,  provided that such loan meets the  requirements of  Section 17.2.  No
more than one loan may be  outstanding  at the same time. The loan request shall
be made  on the  Appropriate  Form  and  submitted  to the  Loan  Administrator,
together with such application fee as the  Administrator may authorize (if any).
The  Loan  Administrator  shall  notify  the  Participant  in  writing  within a
reasonable  time of the  approval  or  denial  of such  loan  request,  and such
notification  by the Loan  Administrator  shall be final.  The status and rights
under the Plan of a Participant who obtains a loan under this Article XVII shall
not be  affected,  except to the extent  that the  Participant  has  assigned an
interest in the Participant's  Accounts pursuant to the applicable provisions of
Section 17.2. All loans shall be granted  according to rules adopted by the Loan
Administrator  and applicable to all Participants who are parties in interest on
a uniform  basis  that  does not  discriminate  in favor of  highly  compensated
employees  (within the meaning of section 414(q) of the Code). The Committee may
at any time suspend authorization for future loans to Participants,  but no such
suspension shall affect any loan then outstanding under this Article XVII.

     17.2 Loan  Requirements.  A loan shall not be made pursuant to Section 17.1
unless such loan meets all of the following requirements:

                                      -97-
<PAGE>

     17.2.1  Amount.  Such loan  must be in an amount no less than one  thousand
dollars ($1,000) and shall not exceed the lowest of:

          (a)  fifty  thousand   dollars   ($50,000)   reduced  by  the  highest
outstanding  principal  balance  during the preceding  twelve (12) months of all
loans to the  Participant  from this and any other  qualified  employer plan (as
described in section 72(p)(4) of the Code) which is maintained by an Employer or
Affiliate ("controlled group loans"); or

          (b)  one-half  of the vested  balance of the  Participant's  Accounts,
reduced by the current  outstanding  principal  balance of all "controlled group
loans" (as described in paragraph (a) above); or

          (c) such other amount as may be determined  by the Loan  Administrator
in order to comply with any restrictions under an Investment Fund that limit the
liquidation of investments to fund Participant loans or otherwise.

     If there is a  "controlled  group loan"  (other than a loan made under this
Plan) currently  outstanding,  one-half of the value of the Participant's vested
interest  under the plan from which such loan was made shall be  included in the
amount  determined  under paragraph (b), above.  17.2.2 Adequate  Security.  All
loans must be adequately secured. For this purpose, no more than one-half of the
total value of the Participant's  vested Accounts under the Plan may be assigned
as collateral security. If the Loan Administrator  subsequently  determines that
the loan is no longer adequately secured, additional security may be required.


                                      -98-
<PAGE>

          17.2.3  Interest.  All loans  must bear  interest,  payable  with each
scheduled loan payment (and in no event less frequently than quarterly),  at the
prime rate of such bank as the Loan Administrator shall specify plus two percent
(2%). The Loan Administrator  shall at regular intervals (but no less frequently
than  quarterly)  determine  the  applicable  rate on the  basis of a review  of
pertinent information.

          17.2.4 Repayment Term. Such loan must provide for substantially  level
amortization  (within  the  meaning  of  section  72(p)(2)(C)  of the Code) with
payments made at least quarterly for a fixed term of one (1), two (2), three (3)
or four (4) years. A Participant  shall have the right on any scheduled  payment
date to prepay the full  outstanding  balance of such loan and accrued  interest
without  penalty.  Partial  prepayment  shall not be permitted.  Unless the Loan
Administrator  determines  that it is  impractical  to do so, such loan shall be
repaid by substantially  level payroll deductions from pay in each pay period in
which the loan is outstanding.

          17.2.5  Promissory  Note.  Such loan must be evidenced by a promissory

note and  loan  agreement  containing  such  terms  and  provisions  as the Loan
Administrator  shall  determine,  executed by  the Participant  and, if the Loan
Administrator shall so determine, also executed by the Participant's spouse.

     17.3 Funding of Participant Loans.

          17.3.1 Source of Funds. A Participant's loan shall be funded solely by
reduction of the Participant's  Account balances as of the effective date of the
loan in the following  order of priority:  first,  from the  Profit-Sharing  and
Matching  Contributions  Account to the  extent  vested at the date of the loan,
next from the  Participant's  Closed  Savings

                                      -99-
<PAGE>

Account  (including  any  Rollover  Account)  and last,  from the  Participant's
Elective Contributions Account. The promissory note executed pursuant to Section
17.2.5 by a  Participant  who receives a loan shall be held by the Trustee as an
asset of the Trust Fund and  allocated  solely to the Account or Accounts of the
Participant from which the loan was made. For all purposes hereunder,  the value
of such  promissory  note  shall  be  considered  to be the  outstanding  unpaid
principal amount of the note plus accrued interest.

          17.3.2  Allocation Among Investment  Funds;  Valuation.  A Participant
shall specify the  Investment  Fund or Funds from which his loan will be funded;
provided, however, that the Plan Administrator may decide which Investment Funds
are to be used if the Participant's  instructions cannot be given effect because
the specified  Investment  Funds in the relevant  Account(s) are insufficient in
amount.  The value of that  portion of a  Participant's  Accounts to be borrowed
shall be determined as of the date the loan is processed,  and the loan proceeds
will be distributed in a single payment as soon as practicable thereafter.

     17.4 Loan Payments.  Payments of principal and interest on a  Participant's
loan shall be allocated among  Investment Funds in accordance with rules adopted
by the Loan Administrator.

     17.5 Loan  Expenses.  The Loan  Administrator  may  determine to charge any
fees, taxes or other expenses incurred in connection with a loan to the Accounts
of the  Participant  obtaining such loan or to the  Participant  directly.  Such
charges shall be imposed on a uniform and nondiscriminatory basis.

     17.6   Disposition  of  Loan  Upon  Certain  Events.   In  the  event  that
distribution of a  Participant's  Account is required to be made under the terms
of the Plan before the Participant

                                     -100-
<PAGE>

repays an outstanding loan, the Trustee shall offset the outstanding  balance of
any loan from such Account against the value of the Participant's Account before
making a distribution.

     17.7 Compliance with Applicable Law. The Loan Administrator shall take such
actions as are deemed  appropriate in order to assure full  compliance  with all
applicable laws and regulations  relating to Participant  loans and the granting
and repayment thereof.

     17.8 Default.  The outstanding  principal  amount and accrued interest of a
loan made pursuant to Section 17.1 shall become  immediately  due and payable if
the Participant  fails to make a scheduled loan payment by the required date, or
on the date on  which  distribution  of the  Participant's  Accounts  is made or
otherwise  commences following the Participant's  Termination of Employment.  In
such event, the Loan Administrator may execute upon the Plan's security interest
in the  Participant's  Accounts to satisfy  the debt;  provided,  however,  that
execution shall not occur until such time as the Participant's  Account could be
distributed  to  the   Participant   consistent   with  the   requirements   for
qualification   of  the  Plan  under  section  401(a)  of  the  Code.  The  Loan
Administrator may take any other action deemed  appropriate to obtain payment of
the  outstanding  amount of principal  and accrued  interest,  which may include
accepting  payments of principal and interest that were not made on schedule and
permitting the loan to remain  outstanding  under its original payment schedule.
Any costs incurred by the Loan  Administrator  in  collecting,  or attempting to
collect, amounts in default shall be charged against the Participant's Accounts.
If the Loan  Administrator  is  unable  to  obtain  payment  of the  outstanding
principal  and accrued  interest  (or, in the Loan  Administrator's  discretion,
payment of only the overdue amount of such  principal),  the Loan  Administrator
shall take such further  action as is deemed  appropriate to prevent loss to the
Plan as a result of the default.  Any  discretion by the Loan  Administrator  in
this regard shall be exercised in a uniform manner that does not

                                     -101-
<PAGE>

discriminate  in favor of highly  compensated  employees  (within the meaning of
section 414(q) of the Code).

     IN WITNESS  WHEREOF,  the Company has caused this instrument to be executed
by its duly authorized officers, the day of October, 1999.


                                               FINLAY ENTERPRISES, INC.


                                               By:
                                                   ---------------------



                                                   Arthur E. Reiner,
                                                   Chief Executive Officer
ATTEST:
-------------------



Bonni G. Davis,
Secretary














                                     -102-


<PAGE>

                                  SUPPLEMENT A

                             ROLLOVER CONTRIBUTIONS
                             ----------------------

     A.1. Eligibility.  The following individuals are eligible to make "Rollover
Contributions" to the Plan in accordance with Section A.2 below:

     (i) An individual who becomes an Eligible  Employee in connection  with the
acquisition  by an  Employer  of  part or all of the  business  or  assets  of a
predecessor  described  in  Section  6.4 and who  receives  credit for his prior
service in accordance with Section 6.4.

     (ii) An Eligible  Employee  who received a lump-sum  distribution  from the
Seligman & Latz  Pension  Plan as a result of the  termination  of that  pension
plan.

     A.2. Rollover Contributions. An Eligible Employee described in Section A.1.
above may roll over into the Plan all or any part of the "lump-sum distribution"
within  the  meaning  of  section   402(e)  of  the  Code  (other  than  amounts
attributable   to  after-tax   contributions)   that  he  receives  from  (i)  a
tax-qualified  pension,  profit-sharing  or stock  bonus plan  sponsored  by the
predecessor  employer  described  in Section  6.4, or  (ii) the  Seligman & Latz
Pension  Plan,  within  sixty (60) days from the day he  received  the  lump-sum
distribution.  An Eligible Employee who makes such a Rollover Contribution shall
be deemed a  Participant  under this Plan  solely with  respect to his  Rollover
Contributions   Account  until  he  otherwise  qualifies  as  a  Participant  in
accordance with the other provisions in this Plan.

     A.3. Rollover  Contributions  Account. A "Rollover  Contributions  Account"
shall be maintained for each Participant in which shall be entered the amount of
Rollover  Contribution  made  pursuant to this  Supplement  A and which shall be
treated as an Account for all purposes under the Plan.

     A.4.  Vesting.  A  Participant's  interest  in his  Rollover  Contributions
Account shall be fully vested and nonforfeitable at all times.

                                     -103-
<PAGE>

     A.5.  Designation of Investment Funds. A Participant may direct the initial
investment  of his Rollover  Contributions  Account in  accordance  with Section
4.3.2.  Any  later  change  in  the  designation  of  Investment  Funds  by  the
Participant in accordance  with Section 4.3.1 will apply to all of his Accounts,
including his Rollover Contributions Account.

     A.6. Withdrawals from Rollover Contributions  Accounts.  Withdrawals from a
Participant's  Rollover  Contributions  Account shall be permitted in accordance
with Section 7.2, as if the  Rollover  Contributions  Account were a part of the
Participant's Closed Savings Account,  after all permitted  withdrawals from the
Closed  Savings  Account.   No  withdrawals  from  the  Participant's   Elective
Contributions  Account  may be made  under  Section  7.2 until  all  withdrawals
permitted under this Section A.6 have been made.

     A.7.  Distribution  on  Termination  of  Employment.  When a  Participant's
employment  terminates  for any  reason  (including  his  death),  his  Rollover
Contributions  Account shall be distributed in accordance  with Articles VII and
VIII.

     A.8.  Beneficiary  Designation.  Any Beneficiary  designation in accordance
with  Article  IX  shall  apply  to all of the  Participant's  Accounts,  unless
specified otherwise.










                                     -104-
<PAGE>

                                  SUPPLEMENT B

                        1998 PROFIT-SHARING CONTRIBUTIONS
                        ---------------------------------

         Special Contribution for the Plan Year Ending December 31, 1998
         ---------------------------------------------------------------


     For the Plan Year ending December 31, 1998, Finlay Fine Jewelry Corporation
shall contribute to the Plan, as an additional Profit-Sharing Contribution,  the
amount set forth below for each of the specified participant categories:

CLASS A                CLASS B            CLASS C             CLASS D

(Chairman;             (VP and            (CEO; and           (Executive VP;
Former CEO;            Treasurer; and     Group Manager of    VP of Human
VP and Merchant;       Regional VP -      "A" Stores in GA)   Resources; and
Sr. VP and CFO;        Mid Atlantic)                          VP, Secretary and
Regional VP -                                                 General Counsel)
Southeast; and
Sr. VP and
Director of Stores)

$2,500                 $2,100             $1,100              $500

This  contribution  is contingent  on a  determination  by the Internal  Revenue
Service that the aggregate Profit-Sharing Contributions for the Plan Year ending
December 31, 1998 are nondiscriminatory in amount, based on general rule testing
utilizing  imputed  disparity and  cross-testing  by reference to benefits,  and
shall be void and of no effect if such favorable determination is not received.










                                     -105-
<PAGE>

                                TABLE OF CONTENTS
                                -----------------

                                                                            Page
                                                                            ----
Preamble                                                                       2
ARTICLE I                                                                      3
   1.1 Accounts                                                                3
   1.2 Affiliate                                                               3
   1.3 Appropriate Form                                                        4
   1.4 Beneficiary                                                             4
   1.5 Board of Directors                                                      4
   1.6 Break in Service                                                        4
   1.7 Closed Savings Account                                                  5
   1.8 Code                                                                    5
   1.9 Committee                                                               5
   1.10 Company                                                                5
   1.11 Compensation                                                           5
   1.12 Contribution Agreement                                                 6
   1.13 Date of Hire                                                           6
   1.14 Disability                                                             6
   1.15 Early Retirement Date                                                  7
   1.16 Elective Contributions                                                 7
   1.17 Elective Contributions Account                                         7
   1.18 Eligible Employee/Eligible Participant                                 7
   1.19 Employer                                                               8
   1.20 Entry Date                                                             8
   1.21 ERISA                                                                  9
   1.22 Highly Compensated Employee                                            9
   1.23 Hour of Service                                                        9
   1.24 Investment Fund                                                        9
   1.25 Leased Employee                                                        9
   1.26 Matching Contributions                                                 9
   1.27 Normal Retirement Date                                                 9
   1.28 Participant                                                           10
   1.29 Plan                                                                  10
   1.30 Plan Year                                                             10
   1.31 Profit-Sharing Contributions                                          10
   1.32 Profit-Sharing and Matching Contributions Account                     10
   1.33 Qualified Nonelective Contributions                                   10
   1.34 Reemployment Date                                                     10
   1.35 Service                                                               10
   1.36 Severance Date                                                        10
   1.37 Severance Period                                                      11
   1.38 Termination of Employment                                             11
   1.39 Total Compensation                                                    12
                                     -106-
<PAGE>

   1.40 Trust Agreement                                                       13
   1.41 Trust Fund                                                            13
   1.42 Trustee                                                               13
   1.43 Valuation Date                                                        13
ARTICLE II                                                                    14
   2.1 In General                                                             14
   2.2 Transfer to Eligible Employment                                        15
   2.3 Reemployment                                                           16
   2.4 Contribution Agreement Required for Elective Contributions             16
   2.5 Suspension on Transfer to Ineligible Employment                        17
   2.6 Transfers Between Employers                                            17
   2.7 No Employment Rights                                                   18
ARTICLE III                                                                   19
   3.1 Profit-Sharing Contributions                                           19
   3.2   Elective Contributions                                               20
   3.3 Matching Contributions                                                 24
   3.4 Section 401(k) Limit on Elective Contributions                         25
   3.5 Section 401(m) Limit on Matching Contributions                         30
   3.6 Special Rules                                                          33
   3.7 Application                                                            36
   3.8 Form of Payment                                                        37
   3.9 Contributions May Not Exceed Amount Deductible                         37
   3.10 Contributions Conditioned on Deductibility and Plan Qualification     37
   3.11 Expenses                                                              37
   3.12 Profits Not Required                                                  37
   3.13 Contributions for Military Service                                    38
ARTICLE IV                                                                    39
   4.1 Plan Accounts                                                          39
   4.2 Investment Funds                                                       40
   4.3 Designation of Investment Funds                                        40
   4.4 Frequency of Changes of Designation                                    41
   4.5 Valuation of Investment Funds                                          42
   4.6 Allocation of Investment Adjustments                                   43
   4.7 Account Adjustments                                                    43
   4.8 Correction of Error                                                    44
   4.9 Allocation Shall Not Vest Title                                        44
   4.10 Statement of Accounts                                                 45
   4.11 Merger of Field Plan                                                  45
ARTICLE V                                                                     47
   5.1 Profit-Sharing and Matching Contributions Account                      47
   5.2 Elective Contributions Account and Closed Savings Account              47
   5.3 Earlier Vesting in Profit-Sharing and Matching Contributions Account   47
   5.4 Forfeitures                                                            48
   5.5 Former Tru-Run Employees                                               49

                                     -107-
<PAGE>

   5.6 Former Adrien Arpel Employees                                          49
ARTICLE VI                                                                    50
   6.1 Service                                                                50
   6.2 Break in Service                                                       50
   6.3 Rule of Parity                                                         50
   6.4 Service with Predecessors                                              51
   6.5 Nonduplication                                                         51
ARTICLE VII                                                                   52
   7.1 Distribution on Termination of Employment                              52
   7.2 Hardship Withdrawals                                                   52
   7.3 Withdrawals After Age 59-1/2                                           55
ARTICLE VIII                                                                  56
   8.1 In General                                                             56
   8.2 Non-Alienation of Benefits                                             57
   8.3 Doubt as to Right to Payment                                           58
   8.4 Incapacity                                                             58
   8.5 Time of Payment                                                        58
   8.6 Payments to Minors                                                     62
   8.7 Identity of Proper Payee                                               62
   8.8 Inability to Locate Payee                                              62
   8.9 Estoppel of Participants and Their Beneficiaries                       62
   8.10 Qualified Domestic Relations Orders                                   63
   8.11 Benefits Payable Only from Trust Fund                                 65
   8.12 Restrictions on Distribution                                          65
   8.13 Direct Rollover of Eligible Rollover Distributions                    66
ARTICLE IX                                                                    69
   9.1 Designation of Beneficiary                                             69
   9.2 Spouse as Presumptive Beneficiary                                      69
   9.3 Change of Beneficiary                                                  70
   9.4 Failure to Designate                                                   70
   9.5 Proof of Death                                                         70
   9.6 Discharge of Liability                                                 70
ARTICLE X                                                                     71
   10.1 Trust Agreement                                                       71
   10.2 No Diversion of Trust Fund                                            71
   10.3 Duration of Trust                                                     72
   10.4 Company as Agent                                                      72
ARTICLE XI                                                                    73
   11.1 Administrative Committee                                              73
   11.2 Limitation of Liability; Indemnity                                    73
   11.3  Compensation and Expenses                                            74
   11.4   Voting, Chairmen, Subcommittees                                     74
   11.5 Payment of Benefits                                                   75
   11.6 Powers and Authority; Action Conclusive                               75

                                     -108-
<PAGE>

   11.7 Counsel and Agents                                                    77
   11.8 Reliance on Information                                               77
   11.9 Fiduciaries                                                           77
   11.10  Plan Administrator                                                  79
ARTICLE XII                                                                   80
   12.1 Amendment                                                             80
   12.2 Amendments Required for Qualification                                 80
   12.3 Right to Terminate                                                    81
   12.4 Termination of Trust                                                  81
   12.5 Continuation of Trust                                                 81
   12.6 Discontinuance of Contributions                                       82
   12.7 Plan Merger                                                           82
ARTICLE XIII                                                                  83
   13.1 Filing with Committee                                                 83
   13.2 Separability                                                          83
   13.3 Captions                                                              83
   13.4 Limitation of Liability                                               83
   13.5 Construction                                                          84
   13.6 Usage                                                                 84
   13.7 Family Members of Highly Compensated Employees                        84
   13.8 Governing Law                                                         84
ARTICLE XIV                                                                   85
   14.1  Definitions                                                          85
   14.2 Limitation on Annual Additions                                        86
   14.3 Application                                                           86
   14.4 Coverage by Defined Benefit Plan                                      87
   14.5 Limitation Year                                                       87
   14.6 Ordering Rule for Reduction of Allocations                            87
ARTICLE XV                                                                    88
   15.1 Determination of "Top-Heavy" Status                                   88
   15.2 Provisions Applicable in "Top-Heavy" Years                            91
ARTICLE XVI                                                                   95
   16.1 Definitions                                                           95
   16.2 Treatment of Leased Employees                                         95
   16.3 Exception for Employees Covered by Plans of Leasing Organization      95
   16.4 Construction                                                          96
ARTICLE XVII                                                                  97
   17.1 Loans to Parties in Interest                                          97
   17.2 Loan Requirements                                                     97
   17.3 Funding of Participant Loans                                          99
   17.4 Loan Payments                                                        100
   17.5 Loan Expenses                                                        100
   17.6 Disposition of Loan Upon Certain Events                              100
   17.7 Compliance with Applicable Law                                       101

                                     -109-
<PAGE>

   17.8 Default                                                              101
SUPPLEMENT A                                                                 103
SUPPLEMENT B                                                                 105


































                                     -110-