EXHIBIT 10.33




                        VIATEL, INC. 401(K) SAVINGS PLAN

     Effective  January 1, 2000,  Viatel,  Inc. (the  ) has amended and
restated  the  Viatel,  Inc.  401(k)  Savings  Plan  (the  "Plan"),   originally
established in 1996 for its eligible employees, in accordance with the following
terms and conditions:
                                  SECTION ONE

                                 PURPOSE OF PLAN

     A.  DESIGNATION.  The Plan is designated the "Viatel, Inc.  401(k) Savings
Plan."

     B.  PURPOSE.  The purpose of the Plan is to provide retirement, disability,
death and  employment  termination  benefits for the  eligible  employees of the
Company and their beneficiaries.

     C.  AUTOMATIC PARTICIPATION.   Participation in the Plan by employees shall
be  automatic upon   completing   the  eligibility  requirements  set  forth  in
Section Three of the Plan.

                                   SECTION TWO

                                   DEFINITIONS

     A.  DEFINITIONS.  As used in the Plan,  the following  terms shall have the
following meanings:

     "ACCOUNTS"  shall  mean  a  Participant's  Salary  Reduction   Contribution
Account,  his or her Company Matching  Contribution  Account, his or her Company
Discretionary  Contribution  Account  and, if  applicable,  his or her  Rollover
Account and, if applicable,  his or her Transfer  Account.  The term  "Accounts"
shall also  include  any  additional  accounts  established  by the  Pension and
Benefits Committee, in its sole discretion.

     "AFFILIATED COMPANY" or "AFFILIATED COMPANIES" shall mean (i) a member of a
controlled group of corporations of which the Company is a member, as determined
in  accordance  with  Section  414(b)  of the  Internal  Revenue  Code  and  the


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regulations  issued  thereunder,  (ii) a trade or business which is under common
control with the Company, as determined in accordance with Section 414(c) of the
Internal Revenue Code and the regulations issued  thereunder,  or (iii) a member
of an affiliated  service group of which the Company is a member,  as determined
in  accordance  with  Section  414(m) of the  Internal  Revenue  Code.  For this
purpose,  a "controlled group of corporations"  shall mean a controlled group of
corporations  as defined  in  Section  1563(a)  of the  Internal  Revenue  Code,
determined  without regard to subsections  1563(a)(4) and  1563(e)(3)(C)  of the
Internal Revenue Code, except that, with respect to the limitations set forth in
Section Six of the Plan, the phrase "more than 50%" shall be substituted for the
phrase "at least 80%" whenever such percentage  appears in Section 1563(a)(l) of
the Internal Revenue Code.

     "ANNUITY  STARTING  DATE" of a Participant  shall mean the first day of the
first period for which a benefit is payable to the Participant as an annuity or,
in the case of a benefit not  payable as an  annuity,  the first day as of which
all events have occurred which entitle the Participant to such benefit.

     "AVERAGE  CONTRIBUTION  PERCENTAGE"  shall mean the  average of the ratios,
calculated  separately for each applicable Employee,  by which the amount of the
Company Matching  Contributions  allocated to such Employee with respect to such
Plan Year bears to the amount of such Employee's  Testing  Compensation for such
Plan Year or, at the  election  of the  Pension  and  Benefits  Committee,  that
portion of the Plan Year during which the  Employee was eligible to  participate
in the cash or deferred arrangement under the Plan.

     "AVERAGE  DEFERRAL  PERCENTAGE"  shall  mean  the  average  of the  ratios,
calculated  separately for each applicable Employee,  by which the amount of the
Salary  Reduction  Contributions  contributed  to the  Trust on  behalf  of such
Employee  for a given Plan Year bears to the amount of such  Employee's  Testing
Compensation for such Plan Year, or, at the election of the Pension and Benefits


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Committee,  for the  portion  of the Plan Year  during  which the  Employee  was
eligible to participate in the cash or deferred arrangement under the Plan.

     "BENEFICIARY"  shall mean any person entitled to receive benefits which are
payable upon or after a  Participant's  death  pursuant to Section Twelve of the
Plan.

     "BOARD OF  DIRECTORS"  shall mean the Board of  Directors of the Company or
any  individual  or  committee  to which the Board of  Directors  has  delegated
authority to act with respect to a specific activity.

     "CHANGE IN CONTROL" shall mean such time as (i) a person or "group" (within
the meaning of Sections  13(d) and  l4(d)(2) of the  Securities  Exchange Act of
1934,  as amended (the  "Exchange  Act")) (i) becomes the  ultimate  "beneficial
owner" (as defined in Rule l3d-3 under the Exchange Act) of more than 50% of the
total  voting  power of the then  outstanding  Voting  Stock of the Company on a
fully  diluted basis or (ii)  individuals  who at the beginning of any period of
two consecutive calendar years constituted the Board of Directors (together with
any new directors  whose election by the Board of Directors or whose  nomination
for election by the  Company's  stockholders  was approved by a vote of at least
two-thirds  (2/3) of the members of the Board of Directors  then still in office
who either  were  members of the Board of  Directors  at the  beginning  of such
period or whose  election or nomination for election was previously so approved)
cease for any reason to  constitute  a majority  of the  members of the Board of
Directors  then in office.  For these  purposes,  "Voting  Stock" of the Company
shall mean its common stock, $01 par value per share.

     "COMPANY" shall mean Viatel,  Inc. In addition,  for purposes of describing
entities  eligible  to  make  contributions  to the  Plan  on  behalf  of  their
employees, the term Company shall, when so appropriate, include any entity which
is an  Affiliated  Company and which is permitted to adopt the Plan by the Board
of Directors  of Viatel,  Inc. (A list of such  entities  which have adopted the
Plan is set forth on Appendix A attached hereto.) All references in this Plan to


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the term  "Company" in any other  context,  such as the authority to administer,
interpret,  amend or  terminate  the Plan,  and the term  "Company  Stock" shall
constitute a reference solely to Viatel, Inc.

     "COMPANY  DISCRETIONARY  CONTRIBUTION  ACCOUNT"  shall  mean  the  separate
account   maintained  for  a  Participant   reflecting   Company   Discretionary
Contributions,  if any, allocated to such Participant pursuant to Paragraph D of
Section  Six of the  Plan,  as  adjusted  for  earnings  or  losses  thereon  in
accordance with the provisions of Section Eight of the Plan. The Company, in its
sole discretion, may elect to make such contribution in cash or Company Stock.

     "COMPANY DISCRETIONARY CONTRIBUTIONS" shall mean the contributions, if any,
made by or on behalf of the Company to each Participant's  Company Discretionary
Contribution Account pursuant to Paragraph F of Section Five of the Plan.

     "COMPANY  MATCHING  CONTRIBUTION  ACCOUNT" shall mean the separate  account
maintained for a Participant reflecting Company Matching Contributions,  if any,
allocated  to such  Participant  pursuant  to  Paragraph C of Section Six of the
Plan,  as  adjusted  for  earnings  or losses  thereon  in  accordance  with the
provisions  of  Section  Eight  of the  Plan.  The  Company  may,  in  its  sole
discretion, elect to make such contributions in cash or Company Stock.

     "COMPANY MATCHING CONTRIBUTIONS" shall mean the contributions, if any, made
by  or  on  behalf  of  the  Company  to  each  Participant's  Company  Matching
Contribution  Account  pursuant to Paragraph B of Section Five of the Plan.  The
Company may, in its sole discretion, elect to make such contributions in cash or
Company Stock.

     "COMPANY  STOCK" shall mean the Company's  common stock,  $01 par value per
share.

     "COMPENSATION"  shall mean base  salary  paid by the Company to an Employee
during the Plan Year for the period  while such  Employee  has been  eligible to
make  salary  reduction  contributions  to the Plan,  plus any amounts of salary
which the Employee has voluntarily elected to defer in respect of such Plan Year
under this Plan or any other program subject to the provisions of Section 125 or


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132(f) of the Internal Revenue Code. An Employee's  "Compensation"  for any Plan
Year shall not include bonuses,  commissions,  incentive pay, severance payments
or  cost  of  living   adjustments   for  Employees  on  overseas   assignments.
Additionally,  an Employee's  "Compensation" for any Plan Year shall not include
any amounts in excess of One Hundred and Seventy  Thousand  Dollars ($ 170,000),
as adjusted for  increases in the cost of living  pursuant to  40l(a)(l7) of the
Internal Revenue Code.

     "ELIGIBILITY  COMPUTATION  PERIOD"  for each  Employee  shall  mean a three
(3)-consecutive  calendar  month period  beginning on the first day of the month
coinciding  with or following the date such Employee  first  performs an Hour of
Service with the Company.  If the Employee has a One-Year Break in Service prior
to  becoming  eligible  to  participate  in the Plan,  and is then  subsequently
rehired, the Eligibility Computation Period shall be determined pursuant to this
paragraph  beginning on the first day of the month  coinciding with or following
the date the  Employee  first  completes  an Hour of  Service  with the  Company
immediately following his or her rehire.

     "EMPLOYEE" shall mean any person who is employed by the Company,  provided,
however,  that the term  "Employee"  shall not include  non-resident  aliens who
receive  no earned  income  (within  the  meaning of  Section  911(d)(2)  of the
Internal  Revenue Code) from the Company which  constitutes  income from sources
within the United  States  (within  the  meaning  of  Section  861(a)(3)  of the
Internal Revenue Code).  Leased Employees and other  individuals  whose services
are  provided  pursuant  to an  agreement  between  the  Company  and a  leasing
organization  shall be considered  Employees  for purposes of the  provisions of
this Plan, but shall not be eligible to  participate  in the Plan,  even if such
individuals  are  subsequently  reclassified  as  common  law  employees  by the
Internal Revenue Service or any other entity for employment tax purposes.

     "ENTRY DATE" shall mean January 1, April 1, July 1, and October 1.


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     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
amended from time to time.  References in the Plan to any Section of ERISA shall
include any successor provisions thereto.

     "FISCAL YEAR" shall mean the customary fiscal year of the Company.

     "FIVE-PERCENT  OWNER"  shall  mean  an  individual  who  (i)  owns  (or  is
considered as owning  within the meaning of Section 318 of the Internal  Revenue
Code) more than five percent (5%) of the outstanding  stock of the Company or an
Affiliated  Company or stock possessing more than five percent (5%) of the total
combined  voting  power of all stock of the  Company  or an  Affiliated  Company
provided such entity is a  corporation  or (ii) owns more than five percent (5%)
of the capital or profits  interest in the Company or an  Affiliated  Company if
such entity is not a corporation.

     "HIGHLY COMPENSATED EMPLOYEE" shall mean an Employee who at any time during
the  immediately  preceding  Plan Year:

          (a) was a Five-Percent Owner, or

          (b)  received  more than Eighty Five  Thousand  Dollars  ($85,000)  in
               compensation from the Company or any Affiliated Company,  and, if
               elected by the Company pursuant to Section 414(q) of the Internal
               Revenue  Code,  was in the top paid  group of  Employees  for the
               preceding Plan Year.

     For  purposes  of this  definition,  the  "top  paid  group"  is the  group
consisting of the top twenty percent (20%) of Employees when ranked on the basis
of compensation paid by the Company and any Affiliated Companies during the Plan
Year.

     For purposes of determining  the number of Employees in the top paid group,
Employees who have not  completed six (6) months of service,  normally work less
than  seventeen  and one-half (17 1/2) hours per week,  normally work during six
(6) or less months per year,  have not attained the age of twenty-one  (21), are


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non-resident  aliens with no earned income from sources within the United States
(within the meaning of Section  86l(a)(3) of the Internal  Revenue Code), or are
included in a unit of  employees  covered by a collective  bargaining  agreement
(except to the extent provided in regulations), shall not be included.

     The Eighty Five Thousand Dollar  ($85,000) figure specified herein shall be
subject to annual  adjustment  as  provided  in Section  414(q) of the  Internal
Revenue Code.

     As used herein, the term "compensation"  shall mean compensation as defined
in Section 414(q)(4) of the Internal Revenue Code.

     "HOUR OF  SERVICE"  shall be  determined  from  records  maintained  by the
Company and shall include the following:

          (i) PERFORMANCE OF DUTIES. Each hour for which an Employee is directly
or indirectly  paid, or entitled to payment by, the Company for the  performance
of duties (including services performed prior to the effective date on which the
Company  adopted the Plan).  Each such Hour of Service  shall be credited to the
Eligibility  Computation  Period or the Plan Year,  as the case may be, in which
the duties were performed.

          (ii)  BACK  PAY.  Each  hour  for  which  back  pay  (irrespective  of
mitigation of damages) has been either awarded or agreed to by the Company. Each
such Hour of Service shall be credited to the Eligibility  Computation Period or
the Plan Year,  as the case may be, to which the agreement or award for back pay
pertains rather than to the Eligibility  Computation Period or Plan Year, as the
case may be, in which the award, agreement or payment is made.

          (iii)  NON-WORKING  TIME  PAY.  Each  hour for  which an  Employee  is
directly or indirectly paid, or entitled to payment,  by the Company for reasons
other than for the  performance  of duties  during a period of service  with the
Company (such as vacation,  holiday,  sickness,  disability,  layoff, jury duty,
military duty or compensated  leave of absence and similar paid  periods).  Each
such  Hour of  Service  shall  be  computed  and  credited  in  accordance  with
Department of Labor Regulation Section 2530.200b.


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     An  Employee  shall not be  credited  with an Hour of  Service  under  both
Subparagraph (i) or (iii) above (as the case may be) and Subparagraph (ii) above
with respect to the same item.

     "INTERNAL  REVENUE  CODE" shall mean the Internal  Revenue Code of 1986, as
amended from time to time. References in the Plan to any Section of the Internal
Revenue Code shall include any successor provisions thereto.

     "INVESTMENT  ELECTION"  shall  mean the form,  filed with the  Pension  and
Benefits Committee or its delegate,  or such other procedure as may be specified
by the  Pension  and  Benefits  Committee  at any  time,  and from time to time,
through  which a  Participant  may  designate  the  manner  in which  his or her
Accounts shall be allocated among the Investment Funds.

     "INVESTMENT ELECTION DATE" shall mean any business day of the Plan Year.

     "INVESTMENT  FUND"  shall mean each fund,  contract,  or other  arrangement
designated by the Pension and Benefits  Committee as an Investment Fund in which
Participants may direct their Accounts to be invested.

     "INVESTMENT MANAGER" shall mean any party that (i) is either (a) registered
as an investment  adviser under the Investment  Advisers Act of 1940, (b) a bank
(as defined in the Investment  Advisers Act of 1940) or (c) an insurance company
qualified  to manage,  acquire and dispose of Plan assets under the laws of more
than one State, (ii) acknowledges in writing that it is a fiduciary with respect
to the Plan and (iii) is granted the power to manage,  acquire or dispose of any
asset of the Plan pursuant to Paragraph G of Section Fifteen hereof.

     "LEASED  EMPLOYEE" shall mean any individual who performs  services for the
Company  or an  Affiliated  Company in a  capacity  other  than as a  common-law
employee if (i) the  services are  provided  pursuant to one or more  agreements
between  the  Company  or  the  Affiliated  Company  and  one  or  more  leasing
organizations, (ii) the individual has performed services for the Company or the
Affiliated  Company on a substantially  full-time basis for a period of at least


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one year, and (iii) such services are performed  under the primary  direction or
control of the  Company  or the  Affiliated  Company.  This  paragraph  shall be
interpreted in accordance  with the provisions of Section 414(n) of the Internal
Revenue Code and the regulations thereunder.

     "MAXIMUM  DEFERRAL  AMOUNT"  shall mean Ten Thousand  Five Hundred  Dollars
($10,500)  per calendar  year,  as adjusted for  increases in the cost of living
pursuant to Section 402(g)(5) of the Internal Revenue Code.

     "NONHIGHLY  COMPENSATED EMPLOYEE" shall mean an Employee of the Company who
is not a Highly Compensated Employee.

     "ONE-YEAR  BREAK  IN  SERVICE"  shall  mean  a Plan  Year  during  which  a
Participant has not completed more than five hundred (500) Hours of Service.

         Solely  for the  purpose  of  determining  whether  a  Participant  has
incurred a One-Year Break in Service, such Participant shall be credited with up
to five  hundred  and one (501) Hours of Service  with  respect to any period of
absence attributable to a maternity or paternity leave, based upon the number of
Hours of Service  which  otherwise  normally  would have been  credited  to such
Participant  but for such absence or, in any case in which the Plan is unable to
determine  the  number of Hours of  Service  which  normally  would have been so
credited, such Participant shall be credited with eight (8) Hours of Service per
day of absence.  Any Hours of Service  attributable  to a maternity or paternity
leave of absence  shall be credited in the Plan Year in which the  maternity  or
paternity  leave of absence begins if such crediting is necessary to prevent the
Participant  from  incurring  a  One-Year  Break in  Service  in such Plan Year.
Otherwise,  such Hours of Service  shall be credited in the Plan Year  following
the Plan Year in which the maternity or paternity leave of absence  begins.  For
these purposes, a maternity or paternity leave of absence shall include any time
during which a  Participant  is absent from work for any period (a) by reason of
the pregnancy of the  Participant,  (b) by reason of the birth of a child of the
Participant,  (c) by reason of the placement of a child with the  Participant in


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connection  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.

     "PARTICIPANT"  shall mean an eligible Employee who becomes a Participant in
the Plan as provided in Section Four of the Plan.

     "PENSION AND BENEFITS COMMITTEE" shall mean the person or persons or entity
appointed to administer  the Plan in accordance  with the  provisions of Section
Fifteen of the Plan.  The Pension  and  Benefits  Committee  shall be the "named
fiduciary,"  as  referred  to in Section  402(a) of ERISA,  with  respect to the
management, operation and administration of the Plan.

     "PLAN"  shall  mean the  Viatel,  Inc.  401(k)  Plan,  as set forth in this
document, and as hereafter amended.

     "PLAN ADMINISTRATOR" shall mean the Pension and Benefits Committee.

     "PLAN YEAR" shall mean the twelve  (12)-consecutive  month period beginning
on each January 1 and ending on the following December 31.

     "QUALIFIED  JOINT AND SURVIVOR  ANNUITY" shall mean an annuity for the life
of a  Participant  with an  annuity  for the  life of the  spouse  to whom  such
Participant  was  married on his or her Annuity  Starting  Date,  provided  such
spouse  survives the  Participant,  which is equal to fifty percent (50%) of the
amount of the annuity payable during the joint lives of the Participant and such
spouse.

     "RETIREMENT DATE" of a Participant shall mean the Participant's sixty-fifth
(65th) birthday.

     "ROLLOVER  ACCOUNT"  shall  mean  the  separate  account  maintained  for a
Participant  reflecting  any  rollover  made by  such  participant  pursuant  to
Paragraph B of Section Four, as adjusted by earnings or losses thereon  pursuant
to the provisions of Section Eight of the Plan.

     "ROLLOVER  AMOUNT" shall mean any rollover amount or rollover  contribution
defined in (i) Section  402(c)(5) of the  Internal  Revenue  Code,  (ii) Section
408(d)(3) of the Internal Revenue Code (relating to certain  distributions  from


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an individual  retirement account or an individual retirement annuity), or (iii)
former Section  409(b)(3)(C)  of the Internal  Revenue Code (relating to certain
distributions from a retirement bond).

     "SALARY  REDUCTION  CONTRIBUTION"  shall  mean the  cumulative  amount  the
Company  contributes  to the Trust  equal to the  amount by which a  Participant
elected to reduce his or her Compensation for such Plan Year pursuant to Section
Five.

     "SALARY REDUCTION  CONTRIBUTION  ACCOUNT" shall mean the account maintained
for a Participant reflecting the Salary Reduction Contributions (if any) made on
behalf of such  Participant  pursuant to the "cash or deferred  arrangement" set
forth in Paragraph A of Section Five, as adjusted by earnings or losses  thereon
in accordance  with the  provisions of Section Eight of the Plan.  Except as set
forth in Paragraph G of Section  Fourteen,  all amounts held in a  Participant's
Salary  Reduction  Contribution  Account  shall  not be  distributable  to  such
Participant (or to his or her Beneficiary) before the earliest of:

                (a) His or her  Termination of Employment,  his or her death, or
his or her retirement  after  attaining  Retirement  Date or after  sustaining a
Total and Permanent Disability;

                (b) The  termination  of the Plan without the  establishment  or
maintenance of another defined  contribution  plan (other than an employee stock
ownership plan as defined in Section 4975(e)(7) of the Internal Revenue Code);

                (c)  The  sale  or  other   disposition   by  the   Company   of
substantially  all of the assets (within the meaning of Section 409(d)(2) of the
Internal Revenue Code) used by the Company in a trade or business, but only with
respect to a Participant who continues employment with the corporation acquiring
such assets; or

                (d)  The  sale  or  other  disposition  by  the  Company  of its
interests  in a  subsidiary  (within  the  meaning of Section  409(d)(3)  of the
Internal  Revenue  Code),  but only with respect to a Participant  who continues
employment with such subsidiary.


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     "TERMINATION  OF  EMPLOYMENT"  shall mean a  Participant's  termination  of
employment with the Company and all Affiliated Companies, whether voluntarily or
involuntarily,  other  than  by  reason  of  a  Participant's  retirement  after
attaining his or her  Retirement  Date or after  sustaining  Total and Permanent
Disability, or death.

     "TESTING  COMPENSATION"  shall mean an  Employee's  "compensation"  (as
defined in Section  414(s) of the internal  Revenue  Code) from the Company.  An
Employee's Testing  Compensation for any Plan Year shall not include any amounts
in excess of One Hundred and Seventy  Thousand Dollars  ($170,000),  as adjusted
for  increases  in the cost of living  pursuant  to  Section  401(a)(17)  of the
Internal Revenue Code.

     "TOTAL  AND  PERMANENT   DISABILITY"  shall  mean  physical  and/or  mental
incapacity  of  such  a  nature  that  a  Participant  qualifies  for  long-term
disability under the Company's long-term disability plan.

     The  Company's  long-term  disability  carrier  shall  determine  whether a
Participant has suffered Total and Permanent Disability and its determination in
that respect is binding upon the Participant. The Company's long-term disability
carrier may require the Participant to submit to medical examinations by doctors
it has  selected.  The  provisions  of this  paragraph  shall be  uniformly  and
consistently applied to all Participants.

     "TRANSFER  ACCOUNT"  shall  mean  the  separate  account  maintained  for a
Participant  reflecting  the amount  transferred  to the Plan from  another  tax
qualified  plan  under  Section  401(a) of  Internal  Revenue  Code or a conduit
individual retirement account.

     "TRUST"  shall mean the legal  entity  resulting  from the Trust  Agreement
between the Company and the Trustee,  which entity  receives the  Company's  and
Participants'  contributions,  and holds, invests, and disburses funds to or for
the benefit of Participants and their Beneficiaries.


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     "TRUSTEE" shall mean the party or parties,  individual or corporate,  named
in the Trust Agreement and any duly appointed additional or successor Trustee or
Trustees  acting  thereunder.  The  Trustee  shall  be the  "named  fiduciaries"
referred to in Section  402(a) of ERISA with respect to the control,  management
and disposition of the assets of the Trust.

     "TRUST  AGREEMENT"  shall mean the  Viatel,  Inc.  401(k)  Trust  Agreement
executed by the Company and the Trustee, as amended from time to time.

     "TRUST FUND" shall mean the total of contributions  made by the Company and
the Participants to the Trust pursuant to the Plan, increased by profits, gains,
income and recoveries received, and decreased by losses, depreciation,  benefits
paid and  expenses  incurred in the  administration  of the Plan and Trust.  The
Trust Fund shall  include all assets  acquired by  investment  and  reinvestment
which are held in the Trust by the Trustee.

     "VALUATION  DATE" shall mean each  business day during the Plan Year or any
other date the Pension and Benefits  Committee,  in its sole  discretion,  shall
select as a Valuation Date.

     "YEAR OF SERVICE" shall mean a Plan Year during which an Employee completes
one thousand (1,000) or more Hours of Service with the Company. In addition, the
Board of Directors, in its sole discretion,  may elect to grant Years of Service
in connection with a stock or asset  acquisition to reflect  employment  periods
prior to the date of such stock or asset acquisition. A list of the entities for
which Employees shall receive past credit in the form of Years of Service is set
forth on Appendix B attached hereto.


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      B. USAGE OF TERMS.  Whenever  appropriate  words  used in the Plan in the
singular  may mean the  plural,  the  plural  may  mean  the  singular,  and the
masculine may mean the feminine.

                                  SECTION THREE

                          REQUIREMENTS FOR ELIGIBILITY

      A.  SALARY  REDUCTION  CONTRIBUTIONS.  Any  Employee  (other than a Leased
Employee)  shall  become a  Participant  and shall be  eligible to elect to have
Salary  Reduction  Contributions  made on his or her behalf under the Plan as of
the Entry Date  coinciding  with or following  the date upon which such Employee
has  completed  three (3) full  calendar  months of  service  with the  Company,
provided  such  Employee  is  employed  by the  Company on such  date.  For this
purpose,  a month of service will be considered a "full calendar  month" as long
as the  Employee is employed  by the  Company on the first  business  day of the
month and  continuously  provides service to the Company until the last business
day of the  month.  Any  Employee  who does not elect to have  Salary  Reduction
Contributions  made on his or her behalf  under the Plan when he or she is first
eligible,  shall  be  allowed  to make a  subsequent  election  to  have  Salary
Reduction Contributions made on his or her behalf as of any Entry Date, pursuant
to such  notification  procedures  as the Pension  and  Benefits  Committee  may
establish, from time to time.

      Any  Participant  who  otherwise  meets the  requirements  of this Section
Three, who suffers a Termination of Employment,  and who is subsequently rehired
by the  Company,  shall  again  become a  Participant  in this Plan and shall be
eligible  to elect to have  Salary  Reduction  Contributions  made on his or her
behalf under the Plan effective as of the date of his or her rehire provided the
individual meets the criteria of a Participant for such Plan Year.

      B.  COMPANY  MATCHING  CONTRIBUTIONS.  Any  Employee  (other than a Leased
Employee)  shall be  eligible  to share in the  allocation  of Company  Matching
Contributions  under the Plan as of the Entry Date  coinciding with or following


                                       14
<PAGE>


the date upon which such Employee has completed  three (3) full calendar  months
of service with the Company,  provided  such Employee is employed by the Company
on such date. "Full calendar months" shall have the same definition as set forth
in Paragraph A of this Section Three.

      C. COMPANY DISCRETIONARY CONTRIBUTIONS.  Any Employee (other than a Leased
Employee) shall be eligible to share in the allocation of Company  Discretionary
Contributions  under the Plan for any Plan Year  provided that (i) such Employee
completed at least one thousand  (1,000) Hours of Service  during such Plan Year
for  which  such  Company  Discretionary  Contribution  is made,  and (ii)  such
Employee  is  employed by the Company on the last day of the Plan Year for which
such Company  Discretionary  Contribution  is made,  subject to the exception in
Paragraph D of Section Six for  Participants who have not completed at least one
thousand  (1,000) Hours of Service during the Plan Year and who are not employed
by the  Company  on the  last day of the  Plan  Year  due to death or Total  and
Permanent Disability.

                                  SECTION FOUR

                            PARTICIPATION IN THE PLAN

      A. PARTICIPATION IN PLAN. Any Employee eligible to participate in the Plan
in  accordance   with  the  provisions  of  Section  Three  of  the  Plan  shall
automatically become a Participant in the Plan on the date he or she is eligible
pursuant to Section  Three.  Each Employee shall be notified that he or she is a
Participant and shall be provided with such  information as is required by ERISA
within the time  prescribed for providing such  information.  In addition,  each
Participant shall be provided with a Beneficiary  designation form with which he
or she may designate one or more  Beneficiaries  to receive any benefits payable
under the Plan in the event of the Participant's death.

      B. ROLLOVER AMOUNT. Any Employee (other than a Leased Employee) may file a
written  petition  with the Pension and Benefits  Committee  requesting  that it


                                       15
<PAGE>


direct the Trustee to accept a Rollover Amount from such Employee,  even if such
Employee  is not yet  eligible  to  participate  in the Plan.  The  Pension  and
Benefits Committee, in its sole discretion,  shall determine whether or not such
Employee  shall be permitted to contribute a Rollover  Amount to the Trust.  Any
written  petition  filed pursuant to this Paragraph B shall set forth the amount
of such  Rollover  Amount  and a  statement,  satisfactory  to the  Pension  and
Benefits Committee, that such contribution constitutes a Rollover Amount.

      Any Rollover  Amount  contributed  to the Trust shall be  maintained  in a
separate,  fully-vested Rollover Account on behalf of the Employee. The Employee
may direct the  investment  of such  Rollover  Account  in  accordance  with the
provisions  of  Section  Eight  of the  Plan.  The  Rollover  Account  shall  be
distributed to the Employee or, where applicable,  his or her Beneficiary at the
same time and in the same manner as provided in the Plan for the distribution of
his or her Salary Reduction Contributions in the Plan.

                                  SECTION FIVE

                                  CONTRIBUTIONS

      A. SALARY REDUCTION  CONTRIBUTIONS.  On behalf of each Participant who has
elected to reduce his or her  Compensation  pursuant to Subparagraph (i) of this
Paragraph  A, the Company  shall  contribute  to the Trust the Salary  Reduction
Contributions as elected by such Participant.

           (i) SALARY REDUCTION ELECTION.  The amount by which a Participant may
elect to  reduce  his or her  compensation  under  this  Plan  shall be in whole
percentages   and  shall  not  exceed  fifteen  percent  (15%)  of  his  or  her
compensation  for any Plan  Year.  In no event may the  total  amount by which a
Participant  elects  to  reduce  his or her  compensation  under  this Plan with
respect  to  a  Plan  Year  exceed  the  Maximum  Deferral   Amount.   The  Plan
Administrator  may  adjust  the  Salary  Reduction  Contributions  of any Highly
Compensated  Employee  as  necessary  to meet any  applicable  nondiscrimination
requirements.


                                       16
<PAGE>


           (ii) MAXIMUM DEFERRAL  AMOUNT.  The amount by which a Participant may
elect to reduce  his or her  Compensation  for  Salary  Reduction  Contributions
during any calendar year may not exceed the Maximum Deferral Amount and shall be
subject to the limits set forth in Paragraph C of this Section Five.

          If the total amount of the Salary Reduction  Contributions made to the
Plan on behalf of a  Participant  for a calendar  year,  when  combined with any
other salary reduction  contributions  made on behalf of the Participant  during
the calendar year to any other plans which contain  qualified  "cash or deferred
arrangements"  as described  in Section  401(k) of the  Internal  Revenue  Code,
exceeds the Maximum Deferral Amount, the full amount of such excess (the "Excess
Deferrals")  shall be returned to the  Participant  (together  with any earnings
attributable  thereto  for the  calendar  year)  by no later  than the  April 15
following the end of such calendar year; provided,  however,  that the amount of
Excess Deferrals that shall be distributed to such Participant for such calendar
year shall be reduced by the amount of any Excess  Contributions  (as defined in
Paragraph C of this Section Five)  previously  distributed  to such  Participant
during such calendar year.

           (iii)  SUSPENSION OF REDUCTIONS.  A Participant  may elect to suspend
his or her Salary Reduction  Contributions,  in a manner  prescribed by the Plan
Administrator.   Such  voluntary  suspension  shall  be  effective  as  soon  as
administratively  possible pursuant to the procedures established by the Pension
and Benefits Committee. Any such suspension shall remain in effect until revoked
by the Participant. A Participant may recommence Salary Reduction Contributions,
if any,  to the Plan as of the next  Entry  Date  following  the  suspension.  A
Participant may not make up suspended Salary Reduction Contributions. The Salary
Reduction  Contributions  made on behalf  of a  Participant  shall be  suspended
automatically  for any payroll period in which such Participant does not receive
any Compensation.


                                       17
<PAGE>


           (iv) Remittance of Salary Reduction  Contributions.  Amounts deducted
from a  Participant's  Compensation  under this Paragraph A shall be remitted to
the Trust as soon as practicable after the end of each payroll period, but in no
event shall they be remitted later than the fifteenth (15th) business day of the
month following the month which contains the relevant payroll period.

      B. COMPANY MATCHING CONTRIBUTIONS.

           (i) AMOUNT OF  CONTRIBUTIONS.  On behalf of each  Participant who has
met the  requirements set forth in Paragraph B of Section Three, the Company may
contribute  to the  Trust  each  Plan  Year an  amount  (the  "Company  Matching
Contribution")  equal  to  a  percentage  of  the  amount  of  Salary  Reduction
Contributions made on behalf of each Participant during the Plan Year,  provided
that the aggregate  amount of Company Matching  Contributions  made on behalf of
any  Participant  shall  not  exceed  ten  percent  (10%) of such  Participant's
Compensation.

           (ii) REMITTANCE OF COMPANY MATCHING CONTRIBUTIONS.  The Company shall
make its  Company  Matching  Contributions  to the  Trust  for a Plan Year on or
before the last date,  including any extensions thereof,  for filing its federal
income tax return for its Fiscal  Year ending with or after the last day of such
Plan Year.

      C. NONDISCRIMINATION  RULES APPLICABLE TO SALARY REDUCTION  CONTRIBUTIONS.
Notwithstanding any other provision of the Plan, the Average Deferral Percentage
(as defined below) of the Highly Compensated Employees for a Plan Year shall not
exceed the  GREATER of (i) one  hundred and  twenty-five  percent  (125%) of the
Average  Deferral   Percentage  of  all  the  other  Employees  (the  "Remaining
Employees") for the prior Plan Year, or (ii) a percentage  amount which is equal
to the lesser of (a) the Average Deferral  Percentage of the Remaining Employees
for the  prior  Plan  Year plus two (2)  percentage  points  or (b) two  hundred
percent (200%) of the Average Deferral Percentage of the Remaining Employees for


                                       18
<PAGE>


the prior  Plan  Year.  For  purposes  of this test  (hereinafter  the  "Average
Deferral  Percentage  Test"),  only Employees who are eligible to participate in
the Plan shall be counted.

      In calculating  each Employee's  Average  Deferral  Percentage  ratio, the
Salary  Reduction  Contributions  made on behalf of such Employee shall be taken
into account only if they relate to  Compensation  that would have been received
by the Employee in the Plan Year but for the deferral election,  In addition, in
calculating  each  Employee's  Average  Deferral  Percentage  ratio,  the Salary
Reduction  Contributions  made on behalf of such  Employee  shall be taken  into
account  for a Plan  Year  only  if such  contributions  were  allocated  to the
Employee  under the Plan as of a date within that Plan Year,  which  requirement
shall  be  deemed  satisfied  if the  allocations  are not  contingent  upon the
Employee's  participation in the Plan or the performance of services on any date
subsequent to the end of the Plan Year and the  contributions  are actually paid
to the Trust no later than the end of the twelve (12) month  period  immediately
following the Plan Year to which the contributions  relate.  Notwithstanding the
foregoing,  the  Pension and  Benefits  Committee  may, in its sole  discretion,
adjust the  percentage by which a  Participant  has elected to reduce his or her
Compensation in order to enable the Plan to satisfy the nondiscrimination test.

      If two  (2) or more  plans  maintained  by the  Company  or an  Affiliated
Company which contain  qualified `cash or deferred  arrangements'  under Section
401(k) of the  Internal  Revenue  Code are  aggregated  for  purposes of Section
401(a)(4)  or Section  410(b) of the  Internal  Revenue  Code,  all such cash or
deferred  arrangements shall be treated as one cash or deferred  arrangement for
purposes of this  Average  Deferral  Percentage  Test.  If a Highly  Compensated
Employee  participates  in two or more plans  described in Section 401(a) of the
Internal  Revenue  Code which are  maintained  by the  Company or an  Affiliated
Company and to which  contributions  subject to Section  401(k) of the  Internal
Revenue Code are made, all such  contributions  shall be aggregated for purposes
of this Average Deferral Percentage Test.


                                       19
<PAGE>


      The amount of any Excess  Contributions (as defined below) for a Plan Year
(together with any earnings or losses allocable thereto for the Plan Year) shall
be distributed using the procedures set forth below.

     (1) First, a determination shall be made of the extent to which the Average
Deferral  Percentage ratio of the Highly  Compensated  Employee with the highest
Average Deferral Percentage ratio would have to be reduced to either satisfy the
Average  Deferral  Percentage  test described above or cause such ratio to equal
the Average Deferral  Percentage ratio of the Highly  Compensated  Employee with
the next highest Average Deferral  Percentage ratio.  Second, this process shall
be repeated until the Average Deferral Percentage Test is satisfied.  The amount
of Excess Contributions to be distributed in accordance with (2) below, shall be
equal to the sum of these hypothetical  percentage  reductions,  multiplied,  in
each case, by the Highly Compensated Employee's Compensation.

     (2) In the event  Excess  Contributions  must be  distributed,  the  Highly
Compensated  Employee  having  the  highest  dollar  amount of Salary  Reduction
Contribution shall have Excess Contributions distributed to him or her until the
amount  of  Excess   Contributions   determined   under  (1),  above,  has  been
distributed.   This  process  shall  continue  until  the  Excess  Contributions
described in (1), above, have been distributed in full.

      The  income  allocable  to  Excess  Contributions  shall  be  equal to the
allocable  gain or loss on such  contributions  for the Plan  Year and shall not
include any allocable  gain or loss for the period between the close of the Plan
Year and the date of  distribution.  The Plan  shall  allocate  income to Excess
Contributions  by  multiplying  the  income  for the  Plan  Year  on the  Salary
Reduction  Contribution  Account  of a  Highly  Compensated  Employee  who is to
receive a distribution of Excess Contributions for such Plan Year by a fraction.
The  numerator  of this  fraction  shall be equal to the  amount  of the  Excess
Contributions to be distributed to the Highly Compensated  Employee for the Plan


                                       20
<PAGE>


Year.  The  denominator  of this  fraction  shall be equal to the sum of (i) the
balance in the  Highly  Compensated  Employee's  Salary  Reduction  Contribution
Account  as of the  beginning  of the Plan  Year and (ii) the  Salary  Reduction
Contributions  made on behalf of the Highly  Compensated  Employee  for the Plan
Year.

      Any corrective  distribution of Excess  Contributions  shall be made after
the close of the Plan Year for which such Excess Contributions were made and, if
possible,  within two and one-half  (2-1/2)  months after the close of such Plan
Year (to avoid tax  penalties),  but in any event not later than the last day of
the Plan Year following the Plan Year for which such Excess  Contributions  were
made.  The  amount of any Excess  Contributions  to be  distributed  to a Highly
Compensated  Employee  for a Plan Year  shall be  reduced  by the  amount of any
Excess Deferrals (as defined in Subparagraph (ii) of Paragraph A of Section Five
of the Plan)  which  were  previously  distributed  to such  Highly  Compensated
Employee for his or her taxable year ending with or within such Plan Year.

      As used herein, the term "Excess  Contributions"  shall mean, with respect
to any Plan Year, the excess of (i) the Salary Reduction  Contributions actually
paid over to the Trust on behalf of all the  Highly  Compensated  Employees  for
such Plan Year,  over (ii) the maximum  amount of such  contributions  permitted
under the Average Deferral Percentage Test for such Plan Year.

      D. NONDISCRIMINATION  RULES APPLICABLE TO COMPANY MATCHING  CONTRIBUTIONS.
Notwithstanding  any other  provisions  of the Plan,  the  Average  Contribution
Percentage  of the  Highly  Compensated  Employees  for any Plan Year  shall not
exceed the  greater of (i) one  hundred and  twenty-five  percent  (125%) of the
Average  Contribution  Percentage  applicable to all Remaining Employees for the
prior Plan Year or (ii) a percentage  amount which is equal to the lesser of (a)
the Average  Contribution  Percentage of the  Remaining  Employees for the prior
Plan Year plus two (2)  percentage  points or (b) two hundred  percent (200%) of
the Average  Contribution  Percentage of the  Remaining  Employees for the prior


                                       21
<PAGE>


Plan Year.  For purposes of this test  (hereinafter  the  "Average  Contribution
Percentage Test"), only Employees who are eligible to participate in the cash or
deferred arrangement under the Plan shall be counted.

      If a Highly  Compensated  Employee  participates  in two (2) or more plans
described in Section 401(a) of the Internal Revenue Code which are maintained by
the  Company or an  Affiliated  Company  and to which  contributions  subject to
Section  401(m) of the Internal  Revenue Code are made,  all such  contributions
shall be aggregated for purposes of this Average  Contribution  Percentage Test.
In addition, if two (2) or more plans maintained by the Company or an Affiliated
Company to which contributions subject to Section 401(m) of the Internal Revenue
Code are made are  aggregated  for  purposes of Internal  Revenue  Code  Section
401(a)(4)  or  410(b)  (other  than the  average  benefits  test  under  Section
410(b)(2)(A)(ii)),  all such plans shall be treated as one plan for  purposes of
this Average Contribution Percentage Test.

      The amount of any Excess Aggregate Contributions for a Plan Year (together
with  earnings or losses  allocable  to such  contributions  for such Plan Year)
shall be  distributed  using  the  procedures  set forth  below.

     (1) First, a determination shall be made of the extent to which the Average
Contribution  Percentage  ratio  of the  Highly  Compensated  Employee  with the
highest Average Contribution Percentage ratio would have to be reduced to either
satisfy the Average  Contribution  Percentage Test described above or cause such
ratio  to  equal  the  Average  Contribution  Percentage  ratio  of  the  Highly
Compensated  Employee  with the next  highest  Average  Contribution  Percentage
ratio.  Second,  this process shall be repeated  until the Average  Contribution
Percentage Test is satisfied. The amount of Excess Aggregate Contributions to be
distributed  in  accordance  with (2) below,  shall be equal to the sum of these
hypothetical  percentage  reductions,  multiplied,  in each case,  by the Highly
Compensated Employee's Compensation.


                                       22
<PAGE>


     (2) In the event Excess Aggregate  Contributions  must be distributed,  the
Highly Compensated Employee having the highest dollar amount of Company Matching
Contribution shall have Excess Aggregate Contributions distributed to him or her
until the amount of Excess Aggregate Contributions  determined under (1), above,
has been  distributed.  This process shall continue  until the Excess  Aggregate
Contributions described in (1), above, have been distributed in full.

      The income allocable to Excess Aggregate  Contributions  shall be equal to
the allocable gain or loss on such contributions for the Plan Year and shall not
include any allocable gain or loss for the period between the close of the  Plan
Year and the date of  distribution.  The Plan  shall  allocate  income to Excess
Aggregate  Contributions  by  multiplying  the  income  for the Plan Year on the
Company Matching Contribution Account of a Highly Compensated Employee who is to
receive a distribution of Excess Aggregate Contributions for such Plan Year by a
fraction.  The  numerator of this  fraction  shall be equal to the amount of the
Excess  Aggregate  Contributions  to be  distributed  to the Highly  Compensated
Employee for the Plan Year.  The  denominator of this fraction shall be equal to
the sum of (i) the balance in the Highly Compensated Employee's Company Matching
Contribution  Account as of the  beginning of the Plan Year and (ii) the Company
Matching Contributions made on behalf of the Highly Compensated Employee for the
Plan Year.

      Any Excess  Aggregate  Contributions  (together  with  earnings  or losses
thereon) which are forfeited under this Paragraph D shall be treated in the same
manner as  forfeitures  of  Non-Vested  Amounts  under  Paragraph  B of  Section
Thirteen of the Plan.

      E. ADDITIONAL  ADJUSTMENTS.  In accordance with regulations  issued by the
Internal Revenue Service under Internal Revenue Code Sections 401(k) and 401(m),
the Pension and Benefits  Committee may, in its sole  discretion,  treat some or
all of the  Company  Matching  Contributions  as being  subject  to the  Average


                                       23
<PAGE>


Deferral  Percentage  Test  described in  Paragraph C, above,  and may make such
other adjustments to the amounts contributed and allocated under the Plan as may
be necessary to comply with the multiple  use test  established  under  Treasury
Regulation Section 1.401 (m)-2.

      F. COMPANY DISCRETIONARY  CONTRIBUTIONS.  Each Plan Year, the Company may,
in its sole  discretion,  make  such  contribution  (if any) on  behalf  of each
Participant who has met the eligibility requirements set forth in Paragraph C of
Section  Three  to the Trust Fund in such amount (hereinafter referred to as the
"Company  Discretionary  Contribution")  as may be  determined  by the  Board of
Directors.  The Company shall have sole and complete discretion as to the amount
of its Company  Discretionary  Contribution.  The  determination  of its Company
Discretionary  Contribution  for each  Plan  Year  shall be made by the Board of
Directors no later than the due date (including  extensions  thereof) for filing
its federal income tax return for the Fiscal Year of the Company coinciding with
or ending after such Plan Year. The Company's Discretionary  Contribution to the
Trust Fund may be made in cash or Company Stock.

      G. DATE OF PAYMENT OF COMPANY  DISCRETIONARY  CONTRIBUTIONS.  The  Company
shall make its  contribution  to the Trust for a Plan Year on or before the last
date, including any extensions thereof, for filing its federal income tax return
for its Fiscal Year ending with or after the last day of such Plan Year.

      H. QUALIFIED NONELECTIVE CONTRIBUTIONS. With respect to any Plan Year, the
Company may make Qualified  Nonelective  Contributions to Nonhighly  Compensated
Employees who have completed at least one thousand  (1,000) Hours of Service for
the  Plan  Year  and are  Employees  on the  last  day of the  Plan  Year (i) in
proportion  to the  Nonhighly  Compensated  Employees  Compensation,  (ii)  in a
specific  dollar amount  allocable to each Nonhighly  Compensated  Employee,  or
(iii) in a less than all  Nonhighly  Compensated  Employees,  with the  specific
dollar amount being  allocated  first to those Employees with the lowest Average
Deferral Percentages.


                                       24
<PAGE>


      I. ADDITIONAL DEFERRAL OPPORTUNITIES.  The Pension and Benefits Committee,
in its  sole  discretion,  may  from  time to  time  provide  Participants  with
additional pre-tax deferral opportunities.  Such opportunities shall be provided
on a uniform and nondiscriminatory manner.

                                   SECTION SIX

                      ALLOCATION TO PARTICIPANTS' ACCOUNTS

      A.  MAINTENANCE  OF ACCOUNTS.  There shall be maintained on behalf of each
Participant a Company Matching  Contribution  Account,  a Company  Discretionary
Contribution   Account,  a  Salary  Reduction   Contribution  Account,  and,  if
applicable,  a  Rollover  Account  and a  Transfer  Account.  The  Participant's
interest  in his or her Company  Matching  Contribution  Account,  in his or her
Company  Discretionary  Contribution  Account,  and, if  applicable,  his or her
Transfer Account shall be subject to the vesting schedule set forth in Paragraph
A of Section Thirteen. The Participant's interest in his or her Salary Reduction
Contribution Account, and, if applicable,  his or her Rollover Account, shall be
one hundred percent (100%) vested at all times.

      B. METHOD OF ALLOCATING  SALARY  REDUCTION  CONTRIBUTIONS.  Subject to the
limitations   of  Paragraph  E  of  this  Section  Six,  the  Salary   Reduction
Contributions  for each Plan Year shall be allocated among the Salary  Reduction
Contribution   Accounts  of  all   Participants  who  elected  to  reduce  their
Compensation  for such Plan Year  pursuant to the  provisions  of Paragraph A of
Section  Five.  The amount to be  allocated  to each such  Participant's  Salary
Reduction  Contribution  Account for such Plan Year shall be equal to the amount
by which such  Participant  elected to reduce his or her  Compensation  for such
Plan Year pursuant to the provisions of Paragraph A of Section Five.

      C. METHOD OF ALLOCATING  COMPANY  MATCHING  CONTRIBUTIONS.  Subject to the
limitations   of  Paragraph  E  of  this  Section  Six,  the  Company   Matching
Contribution shall be allocated among the Company Matching Contribution Accounts


                                       25
<PAGE>

of all Participants who met the eligibility  requirements set forth in Paragraph
B of Section Three and who elected,  pursuant to Paragraph A of Section Five, to
reduce  their  compensation  in a  proportional  manner  based  upon the  Salary
Reduction  Contributions  made by each  such  Participant  during  the Plan Year
disregarding for these purposes any Salary Reduction  Contributions made by such
Participant in excess of ten percent (10%) of such Participant's Compensation.

      D. METHOD OF ALLOCATING COMPANY  DISCRETIONARY  CONTRIBUTIONS.  Subject to
the  limitations  of Paragraph E of this Section Six, the Company  Discretionary
Contributions   for  each  Plan  Year  shall  be  allocated  among  the  Company
Discretionary Contribution Accounts of all Participants who meet the eligibility
requirements in Paragraph C of Section Three,  including  Participants  who have
not made Salary  Reduction  Contributions,  in a proportional  manner based upon
Compensation earned by each such Participant during the Plan Year.  Participants
who have not  completed at least one thousand  (1,000)  Hours of Service  during
such Plan Year and who are not  employed on the last day of the Plan Year due to
death or Total  and  Permanent  Disability  during  the Plan  Year for which the
Company  Discretionary  Contribution is made shall receive Company Discretionary
Contribution  based on  Compensation  such  Participant  earned  while he or she
participated in the Plan during the applicable Plan Year.

      E. LIMITATION ON ANNUAL ADDITIONS.

           (i)  Notwithstanding any other provisions of the Plan, the sum of the
Annual Additions to a Participant's Accounts for any Limitation Year, as defined
below,  shall not exceed the lesser of(i) Thirty Thousand  Dollars  ($30,000) or
such  higher  amount to which such amount may be  adjusted  in  accordance  with
regulations  prescribed  by the  Secretary  of Treasury  or his or her  delegate
pursuant to Section 415(d) of the Internal Revenue Code to reflect  increases in
the cost of living,  or (ii)  twenty-five  percent  (25%) of such  Participant's
Limitation Year Compensation, as defined below. The term "Annual Additions" to a
Participant's Accounts for any Limitation Year shall mean the sum of:


                                       26
<PAGE>


                (a) All Company  Discretionary  Contributions  allocated  to the
Participant's Accounts for the Plan Year ending with such Limitation Year; and

                (b)  All  Salary  Reduction   Contributions   allocated  to  the
Participant's  Accounts for the Plan Year ending with such  Limitation  Year and
excluding any Rollover Amount; and

                (c)  All  Company  Matching   Contributions   allocated  to  the
Participant's Accounts for the Plan Year ending with such Limitation Year.

           (ii) In the event that it is determined that, but for the limitations
contained in  Subparagraph  (i) of this  Paragraph E, the Annual  Additions to a
Participant's  Accounts  for any  Limitation  Year  would  be in  excess  of the
limitations contained herein, such Participant's Salary Reduction  Contributions
which did not result in the  allocation  to the  Participant's  Accounts  of any
Company Matching  Contribution shall be reduced to the extent necessary to bring
the Annual  Additions  within the limitations  contained in Subparagraph  (i) of
this Paragraph E.

           (iii) If and to the  extent  that  the  amount  of any  Participant's
Salary  Reduction  Contributions  which do not result in the  allocation  to the
Participant's  Accounts of any  Company  Matching  Contributions  are reduced in
accordance with the provisions of Subparagraph (ii) of this Paragraph E, but the
amount of the Annual Additions to the Participant's Accounts continues to exceed
the limitations  contained herein, such Participant's  Accounts shall be further
reduced by Salary Reduction Contributions made by the Participant which resulted
in  a  Company  Matching   Contribution   together  with  the  Company  Matching
Contributions  which were  attributable to such Salary Reduction  Contributions.
For these  purposes,  each  dollar of Salary  Reduction  Contributions  which is
removed from the  Participant's  Accounts  shall cause a corresponding amount of
Company  Matching  Contributions to be removed from the  Participant's  Accounts
based upon the amount of Company Matching Contributions which resulted from such
Salary Reduction Contribution.


                                       27
<PAGE>


           (iv)  If and to the  extent  the  amount  of a  Participant's  Salary
Reduction  Contributions  are  reduced  in  accordance  with the  provisions  of
Subparagraph (ii) or Subparagraph  (iii) of this Paragraph E, the amount of such
reductions shall be paid out directly to the Participant  together with earnings
attributable  thereto.  If and to the  extent  that the  amount  of any  Company
Matching  Contributions  are  reduced  in  accordance  with  the  provisions  of
Subparagraph  (iii) of this Paragraph E, the amount of such reductions  shall be
maintained in a suspense account under the Trust (hereinafter referred to as the
"Suspense  Account") to be allocated  among  Participants in the next succeeding
Plan Year, in accordance with the provisions of Paragraph C of this Section Six,
as if such  amount were part of the Company  Matching  Contribution  made by the
Company  for such next  succeeding  Plan Year (and  succeeding  Plan  Years,  as
necessary). In addition, the following rules shall apply to any Suspense Account
established in accordance with this Subparagraph (iv):

                (a)  No  portion  of  the  net  income,  loss,  appreciation  or
depreciation  in the value of the Trust Fund may be allocated  to such  Suspense
Account.

                (b) The maximum Company Matching  Contribution for any Plan Year
in which a Suspense Account exists may not exceed the difference between:

                    (I) The maximum Company Matching Contribution which could be
allocated  among all  Participants  who  elected  to reduce  their  Compensation
pursuant to  Paragraph A of Section Five for such Plan Year in  accordance  with
the provisions of this Section Six,

                    LESS

                    (II) The full amount of the Suspense Account.

                (c) In the event  that the Plan is  terminated  at a time when a
Suspense  Account  exists and in the further  event that the full amount of such
Suspense  Account cannot be allocated  among the  Participants in the Plan as of


                                       28
<PAGE>


the date of the  termination  of the Plan due to the  restrictions  set forth in
this Section Six, then,  notwithstanding any other provision of this Plan or the
Trust Agreement to the contrary, the amount of such Suspense Account that cannot
be allocated among the Participants shall revert to the Company.

      F.  LIMITATIONS ON ANNUAL  ADDITIONS DUE TO PARTICIPATION IN OTHER DEFINED
CONTRIBUTION  PLANS.  In the  event  that  any  Participant  in  this  Plan is a
participant in any other Defined  Contribution  Plan (whether or not terminated)
maintained by the Company or an Affiliated  Company,  the total amount of Annual
Additions to such Participant's  accounts in all such Defined Contribution Plans
shall not exceed the  limitations  set forth in Paragraph E of this Section Six.
If it is  determined  that as a  result  of the  limitations  set  forth in this
Paragraph F the Annual  Additions to a Participant's  Accounts in this Plan must
be  reduced,  such  reduction  shall  be  accomplished  in  accordance  with the
provisions of Paragraph E of this Section Six.

      G. DEFINITIONS RELATING TO ANNUAL ADDITIONS  LIMITATIONS.  For purposes of
Paragraphs E, F, and this Paragraph G of Section Six, the following  definitions
shall apply:

           (i) "Retirement Plan" shall mean (a) any  profit-sharing,  pension or
stock bonus plan described in Sections 401(a) and 501(a) of the Internal Revenue
Code, (b) any annuity plan or annuity  contract  described in Sections 403(a) or
403(b) of the Internal  Revenue  Code,  (c) any  qualified  bond  purchase  plan
described in former  Section  405(a) of the Internal  Revenue Code,  and (d) any
individual retirement account,  individual retirement annuity or retirement bond
described  in Sections  408(a),  408(b) or former  Section  409 of the  Internal
Revenue Code.

           (ii) "Defined  Contribution  Plan" shall mean a Retirement Plan which
provides for an individual  account for each  participant and for benefits based
solely on the amount contributed to the participant's  accounts, and any income,
expenses,   gains  and  losses,   and  any  forfeitures  of  accounts  of  other
participants  which  may be  allocated  to  such  participant's  account,

           (iii) "Defined  Contribution Plan Fraction," for any Limitation Year,
shall  mean a  fraction  (a) the  numerator  of which  is the sum of the  Annual


                                       29
<PAGE>


Additions to the  Participant's  accounts under all Defined  Contribution  Plans
maintained by the Company and any Affiliated  Company in such  Limitation  Year,
and (b) the  denominator  of which  is the sum of the  lesser  of the  following
amounts for such Limitation Year and for all prior Limitation Years during which
he or she performed service  recognized under such plans: (I) the product of the
dollar  limitation in effect under Section  415(c)(l)(A) of the Internal Revenue
Code for each such  Limitation  Year  times one and  twenty-five  one-hundredths
(1.25) or (II) the product of  twenty-five  percent (25%) of such  Participant's
Limitation Year  Compensation for such Limitation Year times one and four tenths
(1.4).

           (iv) "Limitation  Year" shall mean the twelve (12) consecutive  month
period beginning on each January 1 and ending on the following  December 31.

           (v) "Limitation  Year  Compensation"  shall mean the aggregate of all
wages, salaries, and other amounts paid for personal services rendered which are
received by an Employee  from the Company and any  Affiliated  Company  within a
Limitation Year, to the extent that such amounts are includible in gross income.
In  general,   Limitation   Year   Compensation   shall  not  include   deferred
compensation, stock  options  and  other distributions which receive special tax
benefit.  However, with respect to Plan Years commencing on and after January 1,
1998, Limitation Year Compensation shall include amounts contributed pursuant to
a salary reduction  agreement and which are not includible in gross income under
Sections 125, 132(f) and 402(g)(3) of the Internal Revenue Code. Limitation Year
Compensation  shall be calculated in accordance  with the  provisions of Section
415(c)(3) of the Internal Revenue Code and the regulations issued thereunder.


                                       30
<PAGE>


                                  SECTION SEVEN

                             VALUATION OF TRUST FUND

      The Trustee shall evaluate the portion of the Trust Fund  attributable  to
this Plan at fair market  value as of the close of  business  on each  Valuation
Date. In making such valuation,  the Trustee shall deduct all charges,  expenses
and other liabilities,  if any, contingent or otherwise, then chargeable against
the Trust Fund, in order to give effect to income  realized and expenses paid or
incurred,   losses  sustained  and  unrealized  gains  or  losses   constituting
appreciation or depreciation  in the value of Trust  investments  since the last
prior valuation. As soon as practicable after such valuation,  the Trustee shall
deliver in writing to the Pension  and  Benefits  Committee  and to the Board of
Directors a valuation of the Trust Fund  together with a statement of the amount
of net income or loss  (including  appreciation  or depreciation in the value of
Trust investments) since the last prior valuation.

                                  SECTION EIGHT

                             PARTICIPANT'S ACCOUNTS

      A. SEPARATE ACCOUNTS.  A Salary Reduction  Contribution  Account,  Company
Matching Contribution Account, Company Discretionary  Contribution Account, and,
if  applicable,  Rollover  Account and  Transfer  Account and any other  account
deemed  necessary by the Pension and Benefits  Committee shall be maintained for
each Participant.  The amount  contributed by a Participant or allocated to such
Participant  shall be credited to his or her Accounts in the manner set forth in
Section  Five  and Six  hereof.  All  payments  to a  Participant  or his or her
Beneficiaries   shall  be  charged  against  the  respective  Accounts  of  such
Participant.

      B. ACCOUNTS OF  PARTICIPANTS  TRANSFERRED TO AN AFFILIATED  COMPANY.  If a
Participant is  transferred  to an Affiliated  Company which has not adopted the


                                       31
<PAGE>


Plan,  the amount in the Trust which is credited  to his or her  Accounts  shall
continue to be governed by the provisions of the Plan and Trust.

      C. ANNUAL ADJUSTMENT OF PARTICIPANT'S ACCOUNTS. Promptly after preparation
of the Trustee's evaluation, as provided in Section Seven above, the Accounts of
each  Participant  shall be  adjusted  so that the amount of net  income,  loss,
appreciation  or  depreciation  in the value of assets invested in an Investment
Fund shall be allocated equitably and exclusively to the Participants'  Accounts
invested in such Investment Fund.

      D. INVESTMENT OF CONTRIBUTIONS AND VOTING OF COMPANY STOCK.

           (i) PARTICIPANT-DIRECTED  INVESTMENTS.  In accordance with procedures
established  by the Pension and  Benefits  Committee  and Section  404(c) of the
Internal  Revenue Code, each  Participant  shall have the  opportunity,  on each
Investment  Election Date, to make an Investment Election for all amounts in his
or her Accounts  with the Pension and Benefits  Committee or its  delegate.  For
future contributions, this election shall be effective as prescribed by the Plan
Administrator.  Fund  transfers of existing  accounts and any  modifications  or
revocations of Investment  Elections shall be made in a manner prescribed by the
Plan  Administrator  and shall be effective at the time  prescribed  by the Plan
Administrator.

     The following restrictions shall apply to such investment elections:

                (a) No  election  may be made  in  violation  of any  applicable
investment contract or other agreement establishing an Investment Fund; and

                (b) Transfers among the available  Investment  Funds may be made
only in whole percentage multiples of one percent (1%) of the balances therein.

                (c)  Shares of Company  Stock  which  have been  allocated  to a
Participant's  Company  Discretionary  Contribution  Account or Company Matching


                                       32
<PAGE>

Contribution  Account may be liquidated or otherwise converted into another form
of  investment.  Any shares of Company Stock which must be acquired by the Trust
to  effectuate  an  investment  election  may be  issued by the  Company  out of
treasury shares or may be purchased on the open market (or otherwise acquired in
any  other  manner as may be  specified  from  time to time by the  Pension  and
Benefits  Committee) as soon as practicable after the next applicable  Valuation
Date. Any dividends paid with respect to Company Stock shall be used to purchase
additional whole or partial shares of Company Stock as soon as practicable after
the next Valuation Date.

           (ii)   PENSION   AND   BENEFITS   COMMITTEE   DIRECTED   INVESTMENTS.
Participants  who  fail to file an  Investment  Election  with the  Pension  and
Benefits  Committee pursuant to Subparagraph (i) above shall have their Accounts
invested in the Guaranteed Interest Fund or other short-term investment or other
cash equivalent selected by the Pension and Benefits Committee.

           (iii) VOTING OF COMPANY STOCK.

                (a)  Company  Stock  held  by the  Trustee  on  behalf  of  each
Participant  shall be voted by the  Trustee at each  annual  meeting and at each
special  meeting  of  the  stockholders  of  the  Company  as  directed  by  the
Participant to whose  Accounts  such stock is credited. Fractional shares may be
combined  and  voted by the  Trustee  to the  extent  possible  to  reflect  the
instructions of the Participant credited with such shares.

                (b) In order to  implement  the above,  the Trustee  shall cause
each Participant to be provided with a copy of a notice of each such stockholder
meeting and the proxy  statement of the Company,  together  with an  appropriate
form for the Participant to indicate his or her voting  instructions.  Such form
shall indicate that if instructions are not received by the Trustee with respect


                                       33
<PAGE>


to any shares of Company Stock allocated to the Participant's  Account three (3)
business  days prior to such  stockholder  meeting,  the Trustee  shall vote the
uninstructed  shares of Company Stock in the same proportions as the Trustee was
instructed  to vote with  respect to all  shares of  Company  Stock for which it
received  instructions from all other Participants.  Each Participant shall also
be given  similar  rights to direct  the  Trustee  as to the sale of  securities
pursuant  to a tender  offer  and the  exercise  of any  conversion  privileges,
subscription  rights or other  similar  rights  arising  with respect to Company
Stock credited to his or her Accounts.  The Trustee shall hold  confidential any
and all voting or other instructions  received from  Participants.

                                  SECTION NINE

                               COMMON TRUST FUND

      The fact that for  administrative  purposes the Trustee maintains separate
Accounts  for  each  Participant  shall  not be  deemed  to  segregate  for such
Participant,  or to give such  Participant  any direct interest in, any specific
assets in the Trust Fund held by the  Trustee.  All such  assets may be held and
administered by the Trustee as a commingled fund.

                                   SECTION TEN

                               DISABILITY BENEFITS

      Upon the  Termination of Employment of a Participant  because of Total and
Permanent  Disability while in the employ of the Company or Affiliated  Company,
his  or  her  Company  Discretionary   Contribution  Account,  Company  Matching
Contribution  Account,  and Transfer Account,  if applicable,  shall fully vest.
Such benefits shall be paid at the time and manner specified in Section Fourteen
of the Plan.


                                       34
<PAGE>


                                 SECTION ELEVEN

                               RETIREMENT BENEFITS

      If a Participant  is employed by the Company or an  Affiliated  Company on
his or her  Retirement  Date,  his or  her  Company  Discretionary  Contribution
Account,   Company  Matching  Contribution  Account  and  Transfer  Account,  if
applicable,  shall fully vest at that time. If the Participant  continues in the
Company's  employ after his or her Retirement  Date, he or she shall continue to
be eligible to elect to have Salary Reduction  Contributions  made on his or her
behalf  under  the  Plan and to share in the  allocations  of  Company  Matching
Contributions and Company  Discretionary  Contributions under the Plan until his
or her actual  retirement.  Upon  retirement  on or after  attaining  his or her
Retirement  Date, a Participant  shall be entitled to receive  benefits equal to
the total amount in his or her Accounts in the Plan as  determined in accordance
with the  provisions of Paragraph A of Section  Fourteen  hereof.  Such benefits
shall be paid at the time and in the manner specified in Section Fourteen of the
Plan.

                                 SECTION TWELVE

                                 DEATH BENEFITS

      A. DEATH BENEFITS.  Upon the death of a Participant who is employed by the
Company  or  an  Affiliated   Company  at  the  time  of  death,  such  deceased
Participant's  Company  Discretionary  Contribution  Account,  Company  Matching
Contribution  Account, and Transfer Account, if applicable,  shall fully vest at
that time,  and his or her  Beneficiary  shall be entitled  to receive  benefits
equal to the total amount in the deceased  Participant's Accounts in the Plan as
determined in accordance with the provisions of Paragraph A of Section  Fourteen
hereof. Upon the death of a Participant who is not employed by the Company or an
Affiliated Company at the time of death, such deceased Participant's Beneficiary
shall be entitled to receive benefits equal to the vested amount in the deceased


                                       35
<PAGE>


Participant's  Accounts  in the  Plan  as  determined  in  accordance  with  the
provisions of Paragraph A of Section  Thirteen.  In either event,  such benefits
shall be paid at the time and in the manner specified in Section Fourteen of the
Plan.

      B.  DESIGNATION  OF  BENEFICIARIES.  Subject  to  rules  contained  in the
following  paragraph,  each Participant may designate one or more  Beneficiaries
and contingent  Beneficiaries by delivering a written  designation  thereof over
his or her signature to the Pension and Benefits Committee. Again subject to the
rules  contained  in  the  following  paragraph,  a  Participant  may  designate
different Beneficiaries at any time by delivering a new written designation over
his or her signature to the Pension and Benefits Committee. Any such designation
shall  become  effective  only upon its  receipt  by the  Pension  and  Benefits
Committee.  The last effective  designation received by the Pension and Benefits
Committee shall supersede all prior designations. A designation of a Beneficiary
shall be effective only if the designated Beneficiary survives the Participant.

      Notwithstanding  the above, if a Participant is married at the time of his
or  her  death,  such  Participant's  surviving  spouse  shall  be  his  or  her
Beneficiary,  unless  such  spouse has waived  this right and  consented  to the
Participant's  designation of a different Beneficiary.  Any such spousal consent
must be in  writing,  must  acknowledge  the effect of the  waiver,  and must be
witnessed by a notary public or plan representative.  Any subsequent designation
of a Beneficiary by the Participant shall require a new spousal consent,  unless
the  spouse's   original  consent   expressly  permits  future  changes  without
additional spousal consent.

      C.  FAILURE  OF  PARTICIPANT  TO  DESIGNATE.  If a  Participant  fails  to
designate  a  Beneficiary,   or  if  no  designated   Beneficiary  survives  the
Participant,  the  Participant  shall be deemed to have designated the following
Beneficiaries  (if then living) in the following  order of priority:  (1) his or
her  spouse,   (2)  his  or  her  children,   including   adopted  children  and
stepchildren,  in equal shares, (3) his or her parents, in equal shares, and (4)
his or her estate.


                                       36
<PAGE>


      D. BENEFICIARIES' RIGHTS.  Whenever the rights of a Participant are stated
or limited in the Plan, his or her Beneficiaries shall be bound thereby.

                                SECTION THIRTEEN

                         EMPLOYMENT TERMINATION BENEFITS

      A. VESTING UPON TERMINATION OF EMPLOYMENT. In the event of the Termination
of Employment of a Participant,  such  Participant  shall be entitled to receive
(i) one  hundred  percent  (100%) of the  amounts  (if any) in his or her Salary
Reduction  Contribution  Account, and Rollover Account, if applicable,  and (ii)
the  following  percentage  of the  amount in his or her  Company  Discretionary
Contribution  Account and Company Matching  Contribution  Account based upon the
number  of the  Participant's  Years of  Service  prior to such  Termination  of
Employment, as follows:

               YEARS OF SERVICE                             PERCENTAGE
               Less than 1 year                             None
               1 year                                       33%
               2 years                                      66%
               3 years or more years                        100%

Notwithstanding  the foregoing,  upon a Change in Control, as defined in Section
Two,  all  Accounts  under the Plan shall  immediately  become 100%  vested.  In
addition, such Participant shall be entitled to receive the vested percentage of
his or her Transfer  Account  pursuant to the rules under Section  411(d) of the
Internal Revenue Code. Such benefits shall be paid at the time and in the manner
set forth in Section Fourteen of the Plan.

      B.  FORFEITURE OF NON-VESTED  AMOUNT.  The excess of (i) the amount in the
Company Discretionary  Contribution Account and/or Company Matching Contribution
Account  and/or  Transfer  Account,  as the case may be, of a Participant  whose
Termination  of  Employment  has  occurred,  over (ii) the vested amount in such


                                       37
<PAGE>


Company Discretionary  Contribution Account and/or Company Matching Contribution
Account and/or Transfer Account, as the case may be, as determined in accordance
with the vesting  schedule  set forth in  Paragraph A of this  Section  Thirteen
(such difference  being referred to herein as the "Non-Vested  Amount") shall be
forfeited upon the earlier of (i) the Participant's receipt of a distribution of
his or her total vested Accounts under the Plan, or (ii)  immediately  following
his or her incurring his or her fifth (5th) One-Year Break in Service  following
such Termination of Employment.

      If a  Participant  who has  received  a  distribution  of his or her total
vested  Accounts under the Plan is rehired by the Company and performs more than
five hundred (500) Hours of Service in any Plan Year before  incurring  five (5)
consecutive  One-Year  Breaks in Service,  any previously  forfeited  Non-Vested
Amount  shall  be  restored  to his or her  Company  Discretionary  Contribution
Account or Company Matching  Contribution  Account or Transfer  Account,  as the
case may be, and he or she shall  continue to earn  future  Years of Service for
purposes of determining the vested amount in such Accounts without regard to his
or her cessation of employment. The funds needed to restore such a Participant's
Non-Vested Amount shall be drawn first from any Account balances forfeited under
the  provisions  of this  Paragraph B or under the  provisions of Paragraph K of
Section Fourteen during the Plan Year in which such restoration is required.  If
such  sources  are not  sufficient  to fully  restore the  previously  forfeited
Non-Vested  Amount  to  the  Participant's  Company  Discretionary  Contribution
Account or Company Matching  Contribution  Account or Transfer  Account,  as the
case may be, the Company shall make a special contribution earmarked to fund the
remainder of the amount needed.

      Subject to the  immediately  preceding  paragraph and to the provisions of
Paragraph K of Section  Fourteen,  all  Non-Vested  Amounts  which are forfeited
during a Plan Year  under  this  Paragraph  B shall be used to reduce the future
cost of benefits of the Company by applying such forfeited Non-Vested Amounts to


                                       38
<PAGE>


the current or the following  year's Company  Matching  Contribution  or Company
Discretionary  Contribution,  as the case may be, required under the Plan by the
Company.

                                SECTION FOURTEEN

                               PAYMENT OF BENEFITS

      A.  RETIREMENT,  DISABILITY AND DEATH  BENEFITS.  The Pension and Benefits
Committee  shall commence  benefit  payment,  make  distribution of the benefits
payable to a Participant (or, if applicable,  his or her Beneficiary)  upon such
Participant's  retirement on or after  attaining his or her  Retirement  Date or
upon  sustaining a Total and  Permanent  Disability  or upon such  Participant's
death while employed by the Company or an Affiliated Company.  Such commencement
or distribution shall be made as soon as administratively feasible following the
date the distribution is requested or otherwise payable, and shall be based upon
the balance in such  Participant's  Accounts as of the Valuation Date coincident
with or immediately preceding such distribution.

      At  the  request  of  the  Participant  (or,  if  applicable,  his  or her
Beneficiary),  the Pension and Benefits Committee shall commence benefit payment
or make such  distribution  prior to the  close of the Plan  Year in which  such
retirement,  Total and Permanent Disability, or death occurs. In such event, the
benefit payable to the Participant  (or, if applicable,  his or her Beneficiary)
shall be based  upon  the  balances  in such  Participant's  Accounts  as of the
Valuation  Date  immediately  preceding the  distribution,  supplemented,  where
applicable,  by an  amount  representing  any  Salary  Reduction  Contributions,
Company  Matching  Contributions,  and any Company  Discretionary  Contributions
contributed  to the  Plan on  behalf  of  such  Participant  subsequent  to such
Valuation Date and any Rollover or Transfer  Amounts  contributed to the Plan by
such Participant subsequent to such Valuation Date.

      Notwithstanding  the  foregoing,  if  the  total  benefits  payable  to  a
Participant  under this Paragraph A exceed Five Thousand Dollars ($5,000) on the


                                       39
<PAGE>


date of  distribution,  such benefits may not be distributed to such Participant
before he or she reaches his or her Retirement Date unless he or she consents to
an earlier distribution.

      B. EMPLOYMENT  TERMINATION  BENEFITS.  The Pension and Benefits  Committee
shall  commence  benefit  payment  or make  an  employment  termination  benefit
distribution  to a Participant  (or, if applicable,  his or her  Beneficiary) as
soon as administratively  feasible following the close of the Plan Year in which
the Participant's  Termination of Employment  occurs.  The benefits payable to a
Participant (or, if applicable,  his or her Beneficiary) upon such Participant's
Termination of Employment shall be based upon (i) the vested amount (as provided
in  Paragraph A of Section  Thirteen)  in (a) his or her  Company  Discretionary
Contribution  Account, (b) his or her Company Matching Contribution Account, (c)
his or her  Transfer  Account  and (ii) the  total  amount  in his or her  other
Accounts as of the Valuation Date coincident  with or immediately  preceding the
date on which the distribution is made. Such commencement or distribution  shall
be made as soon as administratively feasible following the date the commencement
or distribution is requested or otherwise  payable,  and shall be based upon the
balance in such Participant's  Accounts as of the Valuation Date coincident with
or immediately preceding such distribution.

      At  the  request  of  the  Participant  (or,  if  applicable,  his  or her
Beneficiary),  the Pension and Benefits  Committee  shall,  if  administratively
feasible,  commence benefit payment or make such distribution prior to the close
of the Plan Year in which the Participant's Termination of Employment occurs. In
such event, the benefit payable to the Participant or Beneficiary shall be based
upon (i) the vested  amount (as provided in Paragraph A of Section  Fourteen) in
such Participant's (a) Company  Discretionary  Contribution Account, (b) Company
Matching  Contribution  Account,  and (c)  Transfer  Account  and (ii) the total
amount  in his or her  other  Accounts  as of  the  Valuation  Date  immediately
preceding the commencement or distribution,  supplemented,  where applicable, by


                                       40
<PAGE>


an amount  representing  any Salary  Reduction  Contributions,  Company Matching
Contributions and Company Discretionary Contributions contributed to the Plan on
behalf of such  Participant  subsequent to such  Valuation Date and any Rollover
and Transfer Amounts  contributed to the Plan by such Participant  subsequent to
such  Valuation  Date.  In the event that an Employee  incurs a  Termination  of
Employment after the attainment of age fifty-five (55), any distribution made to
such Employee shall be exempt from the ten percent (10%) additional tax on early
distributions imposed under Section 72(t) of the Internal Revenue Code.

      Notwithstanding  the foregoing,  if the total vested benefits payable to a
Participant  under this Paragraph B exceed Five Thousand Dollars ($5,000) on the
date of  commencement  or  distribution,  such  benefits  may not commence or be
distributed to such  Participant  before he or she reaches his or her Retirement
Date unless he or she consents to an earlier distribution.

      In the event that a commencement  or distribution is made pursuant to this
Paragraph  B to  a  Participant  who,  at  the  time  of  such  commencement  or
distribution,  is not one hundred  percent (100%) vested in the amount in his or
her Company  Discretionary  Contribution  Account or his or her Company Matching
Contribution  Account or his or her Transfer Account,  the following rules shall
apply:

           (i)  ESTABLISHMENT  OF  SEPARATE  LEDGER  ACCOUNT.  The  Pension  and
Benefits  Committee  shall  establish  a separate  ledger  account  (hereinafter
referred to as the "Separate  Account") for such  Participant  as of the time of
such  commencement or distribution.  The balance in such  Participant's  Company
Discretionary  Contribution Account,  Company Matching Contribution Account, and
Transfer Account immediately following such distribution shall be transferred to
this Separate  Account and shall constitute the initial balance of this Separate
Account.   For  this  purpose,   all  references  to  a  Participant's   Company


                                      41
<PAGE>


Discretionary Contribution Account and Company Matching Contribution Account and
Transfer  Account in the Plan shall be deemed  applicable to such  Participant's
Separate Account.

           (ii) SUBSEQUENT  PAYMENTS.  In the event that after such distribution
the  former  Employee  is  rehired  by the  Company  but  then  again  incurs  a
Termination  of  Employment  at a time  when such  Participant  is less than one
hundred  percent  (100%)  vested  in his  or  her  Separate  Account,  then  the
nonforfeitable  portion of such  Participant's  Separate Account for purposes of
Paragraph A of Section Thirteen shall be an amount equal to:

                (A) The vesting  percentage  set forth in Paragraph A of Section
Thirteen  applicable  to  such  Participant  at  the  time  of  such  subsequent
distribution,

                MULTIPLIED BY:

                (B) The sum of the present balance in the Separate  Account plus
the sum of all prior distribution amounts,

                LESS:

                The sum of all prior distribution amounts.

      C.  METHODS OF PAYMENT OF BENEFITS.  Except as otherwise  provided in this
Section Fourteen,  the Pension and Benefits Committee shall cause the Trustee to
make  distribution  of benefits  pursuant to Sections  Ten,  Eleven,  Twelve and
Paragraph A of Section Thirteen in accordance with the method of distribution as
set forth below,  based upon the value of the  Accounts as of the last  business
day immediately  preceding the distribution,  selected by the Participant (or in
the case of death benefits, by the Participant's beneficiary):

           (i) NORMAL FORM OF BENEFIT. The normal form of benefit under the Plan
shall be a lump sum distribution to the Participant or Beneficiary.


                                       42
<PAGE>


           (ii) OPTIONAL FORMS OF BENEFIT.  The  Participant or Beneficiary  may
elect a life annuity form of distribution  instead of the normal form of benefit
which is a lump sum distribution. Annuity payments may be made over (a) the life
of  the  Participant,  (b)  the  lives  of  the  Participant  and  a  designated
Beneficiary,  (c) a period certain and continuous not extending  beyond the life
expectancy  of the  Participant,  or (d) a period  certain  and  continuous  not
extending beyond the joint and last survivor expectancy of the Participant and a
designated Beneficiary subject to the following rules:

      D. METHODS OF PAYMENT OF OPTIONAL BENEFITS.

                (a) UNMARRIED  PARTICIPANTS.  If a Participant is not married on
his or her Annuity Starting Date and if such Participant elects an optional form
of payment set forth in Paragraph (C)(ii),  above, such  Participant's  benefits
shall be paid in the form of an annuity  providing  monthly  payments for his or
her lifetime,  unless such  Participant  elects,  not more than ninety (90) days
prior to his or her Annuity  Starting  Date, to have his or her benefits paid to
him or her in an optional form of annuity payment set forth in Paragraph (C)(ii)
above.

                (b) MARRIED PARTICIPANTS.

                I. IN GENERAL. If a Participant is married on his or her Annuity
Starting  Date and if such  Participant  elects an optional  form of payment set
forth in Paragraph C(ii) above,  then such  Participant  shall be deemed to have
elected to receive his or her benefits under the Plan in the form of a Qualified
Joint  and  Survivor  Annuity,   except  as  otherwise   provided  in  Paragraph
C(ii)(b)(II)  below.

                II.  ELECTION  TO RECEIVE  ALTERNATIVE  FORM OF ANNUITY  BENEFIT
PAYMENT.  A Participant who otherwise would be deemed to have elected to receive
any benefit or portion of his or her  benefit in the form of a  Qualified  Joint


                                       43
<PAGE>


and Survivor Annuity may elect to receive his or her benefit in an optional form
of annuity benefit payment provided that (A) the Participant makes such election
in writing not more than  ninety (90) days prior to his or her Annuity  Starting
Date, (B) such election is received by the Pension and Benefits  Committee prior
to the Participant's Annuity Starting Date and (C) EITHER (i) such Participant's
spouse consents in writing to waive the right to receive benefits  pursuant to a
Qualified Joint and Survivor Annuity not more than ninety (90) days prior to the
Participant's Annuity Starting Period or (ii) the Participant establishes to the
satisfaction of the Pension and Benefits Committee that his or her spouse cannot
be located or that such written consent cannot be obtained because of such other
circumstances as the Internal Revenue Service may prescribe by regulation.

      For purposes of this subparagraph  (b)(II), a spousal consent shall not be
valid unless such consent (A) is in writing, (B) acknowledges the effect of such
election and (C) is witnessed by a notary public. The Participant's  spouse must
also  consent to the  identity of any  non-spouse  Beneficiary  designated.  Any
subsequent  election  must also  include such spousal  consent.

                III. NOTICE OF QUALIFIED JOINT AND SURVIVOR ANNUITY AND OPTIONAL
FORMS OF PAYMENT.  If an optional form of benefit is elected by the  Participant
no more than ninety (90) days prior to a  Participant's  Annuity  Starting Date,
the Pension and Benefits  Committee shall provide the  Participant,  by personal
delivery or first class mail,  with a written  explanation  of (A) the terms and
conditions of the Qualified  Joint and Survivor  Benefit payment under the Plan,
(B) the Participant's right to make, and the effect of, an election to waive the
Qualified Joint and Survivor Benefit form of benefit payment under the Plan, (C)
the  Participant's  right to make, and the effect of, a revocation of a previous
election to waive the Qualified Joint and Survivor Benefit form of payment under


                                       44
<PAGE>


the Plan, (D) the rights of the Participant's  spouse with regard to the various
forms  of  benefit  payment  available  under  the  Plan,  (E)  the  eligibility
conditions and other material  features of the optional annuity forms of benefit
payment  available under the Plan and (F) sufficient  additional  information to
explain the relative  values of the optional  annuity  forms of benefit  payment
available  under the  Plan.

                IV. REVOCATION OF ELECTION. Any election by a Participant not to
receive his or her benefit in the Qualified  Joint and Survivor  Annuity form of
benefit payment applicable to such Participant under the Plan may be revoked  by
the  Participant  at any  time  prior  to his or her  Annuity  Starting  Date by
delivery of written notice to the Pension and Benefits Committee.  Once revoked,
such election may be reinstated by the  Participant  at any time, and any number
of times,  prior to his or her  Annuity  Starting  Date in  accordance  with the
provisions of subparagraph (ii)(b)(II) of this Paragraph C.

      E. TIMING OF  DISTRIBUTION.  Unless a Participant  elects  otherwise,  the
distribution  of his or her  benefits  must begin by no later than the  sixtieth
(60th) day after the close of the Plan Year in which the latest of the following
events occurs: (i) the Participant  reaches his or her Retirement Date, (ii) the
tenth  (10th)   anniversary  of  the  date  on  which  the   Participant   began
participation in the Plan, or (iii) the Participant  terminates  employment with
the Company. Notwithstanding the above, if the amount of the distribution cannot
be ascertained by the sixtieth (60th) day after the close of the applicable Plan
Year,  or if it is not  possible to make such  payment on such date  because the
Pension and Benefits  Committee is unable to locate the Participant after making
reasonable  efforts to do so, the  distribution  of the  Participant's  benefits
retroactive  to such date may be made no later  than  sixty  (60) days after the
earliest date on which the amount of such distribution can be ascertained or the
date on which the Participant is located, whichever the case may be.


                                       45
<PAGE>


      F. MINIMUM DISTRIBUTION REQUIREMENTS. Notwithstanding the foregoing and in
accordance  with the  provisions  of Section  40l(a)(9) of the Internal  Revenue
Code,  including  Prop.  Treas.  Reg.  ss.  1.401(a)(9)-2,   a  distribution  of
retirement  benefits  shall  commence  no later  than a  Participant's  Required
Beginning  Date which shall mean the later of (i) April 1 of the  calendar  year
following  the  calendar  year in which a  Participant  attains  age seventy and
one-half  (70-1/2),  or (ii) April 1 of the calendar year following the calendar
year in which  such  Participant  retires  from  employment  with  the  Company.
Notwithstanding  the  foregoing,  with  respect  to a  Five-Percent  Owner,  the
distributions  of such  Participant's  benefit under the Plan shall  commence no
later than April 1 of the calendar year following the calendar year in which the
Participant attains age seventy and one-half (70-1/2) regardless of whether such
Participant  is still  employed by the Company or an Affiliated  Company at that
time.  In the  event  the  Participant  dies  after  distribution  of his or her
benefits  has begun,  but  before  the  Participant's  full  benefits  have been
distributed, the remaining portion of such benefits will be distributed at least
as rapidly as under the method of distribution  being used as of the date of his
or her  death.  In the event a  Participant  dies prior to  commencement  of the
receipt of benefits,  the death benefits  attributable to such Participant shall
be  distributed  within  five (5) years of the  Participant's  death,  provided,
however,  that any portion of the death  benefit which is payable to (or for the
benefit of) a designated  Beneficiary  may be distributed to such  Participant's
Beneficiary  commencing within one (1) year of the Participant's death, over the
life of such  Beneficiary  (or  over a  period  not  extending  beyond  the life
expectancy  of such  Beneficiary),  unless  the  designated  Beneficiary  is the
Participant's  surviving  spouse,  in which  case  distributions  need not begin
earlier than the date on which the  Participant  would have attained age seventy


                                       46
<PAGE>

and one-half  (70-1/2).  The provisions of this Paragraph F of Section  Fourteen
override  any  distribution  options  in this  Plan  inconsistent  with  Section
401(a)(9) of the Internal  Revenue Code.

      For purposes of this  Paragraph,  life  expectancies  shall be  calculated
using the expected return  multiples in Tables V and VI of Treasury  Regulations
Section  1.72-9  and,  unless  the  Participant   elects  otherwise,   shall  be
recalculated  annually. In this regard, a Participant's life expectancy shall be
recalculated  each  year  using the  Participant's  attained  age as of  his/her
birthday during that year. If the Participant elects to have his or her required
minimum  required  distributions  paid  over the  joint  life and last  survivor
expectancy of the  Participant  and  the  Participant's  designated  Beneficiary
is  his or  her  spouse,  such  spouse's  remaining  life  expectancy  shall  be
recalculated  each year  using the  spouse's  attained  age as of such  spouse's
birthday during that year. If the Participant elects to have his or her required
minimum  distributions paid over the joint life and last survivor  expectancy of
the  Participant  and his or her designated  Beneficiary  and the  Participant's
designated  Beneficiary  is  not  his  or her  spouse,  his  or  her  designated
Beneficiary's remaining life expectancy shall be calculated as of the first year
for which the Participant was required to receive a minimum  distribution  under
Section  401(a)(9) of the Internal  Revenue Code and shall be reduced by one (1)
for each year thereafter.

      G.  DISTRIBUTION  OF SMALL  ACCOUNT  BALANCES.  Notwithstanding  any other
provision of the Plan to the contrary, if the total value of the vested Accounts
to be distributed to a Participant  (or, if applicable,  his or her Beneficiary)
on  account  of  such  Participant's  retirement  after  attaining  his  or  her
Retirement Date or after sustaining a Total and Permanent Disability, his or her
death, or his or her Termination of Employment is Five Thousand Dollars ($5,000)
or less on the date of  distribution,  the Pension and Benefits  Committee shall
distribute  such benefits to such  Participant  (or, if  applicable,  his or her


                                       47
<PAGE>

Beneficiary)  in the  form of a  single  payment  of the  total  amount  of such
benefits.  Such  payment  shall be made no later  than sixty (60) days after the
Valuation  Date of the Plan Year within which such  Participant so retires after
attaining his or her Retirement  Date or after  sustaining a Total and Permanent
Disability, dies or incurs a Termination of Employment, or as soon thereafter as
is  administratively  feasible.  Such payment shall be in full  discharge of all
obligations  under the Plan with  respect to such  Participant  or  Beneficiary.
However, no distribution may be made pursuant to this Paragraph F after the date
benefit  payments  commence  under the Plan  without the written  consent of the
Participant (or, if the Participant has died, his or her surviving spouse).

      H. WITHDRAWALS.

           (i) AGE 59-1/2.  A Participant  may withdraw the full value of his or
her  Vested  Accounts,  including  earnings  thereon,  at any  time on or  after
attaining age fifty-nine and one-half (59-1/2), upon giving at least thirty (30)
days advance notice to the Trustee.

           (ii)  HARDSHIP  WITHDRAWALS.  A  Participant  who has not reached age
fifty-nine  and one-half  (59-1/2) may withdraw an amount from his or her vested
Accounts prior to Termination of Employment only if such  Participant  displays,
to the satisfaction of the Pension and Benefits Committee,  that such withdrawal
is necessary in light of a financial  hardship,  that the amount requested to be
withdrawn  does not exceed  the  amount  required  to meet the  financial  needs
created by the hardship and that such an amount is not reasonably available from
the other resources of the Participant. The amounts which may be withdrawn under
this Paragraph H shall not include earnings and gains on a Participant's  Salary
Reduction Contribution Account and may not exceed the value of his or her vested
Accounts at the time of  withdrawal.

           The following expenses shall be deemed to constitute an immediate and
heavy financial need: (i) medical expenses  incurred by the Participant,  his or
her spouse or  dependents;  (ii) the  purchase of a principal  residence  of the
Participant (excluding mortgage payments);  (iii) the payment of tuition for the


                                       48
<PAGE>


next semester or quarter of post-secondary education for the Participant, his or
her spouse,  children or  dependents;  and (iv)  expenses  needed to prevent the
eviction of the  Participant  from, or the  foreclosure  of the mortgage on, the
Participant's  principal  residence.  A withdrawal shall be permitted under this
Paragraph H only if the Participant has obtained all  distributions  (other than
hardship  distributions) and loans (if applicable) currently available under all
plans maintained by the Company.

      A Participant  who has received a withdrawal  pursuant to this Paragraph H
shall not be permitted to make or receive  Salary  Reduction  Contributions  for
twelve months after receipt of the hardship distribution,  and his or her salary
reduction  elections  shall be suspended for such period.  Furthermore,  for the
calendar year  following the  withdrawal,  the Maximum  Deferral  Amount for the
Participant shall be reduced by the amount of the Participant's Salary Reduction
Contributions  for the calendar  year during which the  withdrawal  occurred.  A
Participant who receives a hardship  withdrawal shall not be permitted to submit
an  application  for another  hardship  withdrawal  until the  expiration of six
months from the date of distribution of the prior hardship withdrawal.

      I. ELIGIBLE ROLLOVER DISTRIBUTIONS. Notwithstanding any other provision of
the  Plan  that  would  otherwise  limit a  Distributee's  election  under  this
Paragraph I, a Distributee may elect,  at the time and in the manner  prescribed
by the Pension and Benefits Committee, to have all or any portion of an Eligible
Rollover  Distribution paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover.

      As used in this Paragraph I, the following  terms shall have the following
meanings:

           (i) "Eligible Rollover  Distribution"  shall mean any distribution of
all or any portion of the balance to the credit of a Distributee under the Plan,
except that the term "Eligible Rollover  Distribution" shall not include (a) any
distribution  that is one of a series of substantially  equal periodic  payments
(not less  frequently  than annually) made for the life (or life  expectancy) of
the  Distributee  or  the  joint  lives  (or  joint  life  expectancies)  of the


                                       49
<PAGE>


Distributee and the Distributee's  designated Beneficiary,  (b) any distribution
that is one of a series  of  substantially  equal  periodic  payments  (not less
frequently than annually) made for a specified period of ten (10) years or more,
(c) any distribution to the extent such distribution is  required  under Section
40l(a)(9) of the Internal Revenue Code, (d) 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 Company  securities),  or (e)
effective for  distributions  after December 31, 1999,  any hardship  withdrawal
pursuant to Paragraph H of Section Fourteen.

           (ii)  "Eligible   Retirement  Plan"  shall  mean  (a)  an  individual
retirement account described in Section 408(a) of the Internal Revenue Code, (b)
an individual  retirement  annuity  described in Section  408(b) of the Internal
Revenue Code,  (c) an annuity plan  described in Section  403(a) of the Internal
Revenue Code or (d) a qualified  trust which is  described in Section  401(a) of
the  Internal  Revenue Code and is exempt from tax under  Section  501(a) of the
Internal Revenue Code and which is part of a defined contribution plan the terms
of which permit the acceptance of Eligible Rollover  Distributions.  In the case
of an Eligible Rollover Distribution made to the surviving spouse of an Employee
or former Employee, the term "Eligible Retirement Plan" shall mean an individual
retirement  account  described in Section 408(a) of the Internal Revenue Code or
an individual  retirement  annuity  described in Section  408(b) of the Internal
Revenue Code.

           (iii)  "Distributee"  shall mean an Employee or former Employee,  the
surviving  spouse of an  Employee  or former  Employee,  or the spouse or former
spouse of an  Employee  or former  Employee  who is an  alternate  payee under a
Qualified Domestic Relations Order (as defined in Section 414(p) of the Internal
Revenue Code).

           (iv)  "Direct  Rollover"  shall  mean a  payment  by the  Plan to the
Eligible Retirement Plan specified by the Distributee.


                                       50
<PAGE>


      J. LOANS TO PARTICIPANTS.  Upon application made in the form prescribed by
the Plan  Administrator  of an active  Participant,  the  Pension  and  Benefits
Committee shall make a loan to the Participant, provided

           (i) that the total amount of any such loan to the  Participant  shall
not exceed  the  LESSER of (a) Fifty  Thousand  Dollars  ($50,000)  or (b) fifty
percent (50%) of the total amount of the  Participant's  vested  Accounts at the
time of the loan minus the highest  outstanding  loan balance at any time within
the last twelve (12) months; and

           (ii) that the amount of the loan shall not be less than One  Thousand
Dollars ($1,000).

      A Participant may only have two (2)  outstanding  loans at any given time.
All loans shall be considered as investments of the  Participant  receiving such
loan and interest paid on the outstanding balance of the loan will be treated as
earnings credited to the Participant's Accounts with respect to such outstanding
balance.  Interest  shall be charged on such loans at the prime rate as reported
in the WALL  STREET  JOURNAL  on the first day of the month in which the loan is
withdrawn,  plus two percent  (2%).  Such loans shall be secured by a portion of
the Participant's  vested Accounts (which portion shall not exceed fifty percent
(50%) of the total  amount of such  Accounts)  equal to the  amount of the loan.

      Each loan made to the  Participant  pursuant to this  Paragraph J shall be
subject to  substantially  level  amortization  over the term of the loan,  with
payments due no less frequently than quarterly. Any such loan by its terms shall
be required to be repaid  within five (5) years of the date of the loan is made.
Any such loan shall be repaid through salary withholding or other means approved
by the Pension and Benefits Committee. In the event a Participant does not repay
all or any  portion  of such  loan when the same  becomes  due and  payable,  in
addition to any legal  remedies  which the Pension and  Benefits  Committee  may
have,  the Pension and Benefits  Committee may, upon the occurrence of any event


                                       51
<PAGE>


permitting a distribution of the Participant's  Accounts under this Plan, deduct
the unpaid amount of such loan from the Participant's Accounts in the Plan. If a
Participant  has a Termination  of Employment  before full  repayment of a loan,
such  Participant  must repay the outstanding loan balance in full within thirty
(30) days of the  Termination  of  Employment  or such unpaid amount of the loan
will be  deducted  from the  Participant's  Accounts  in the  Plan  prior to the
distribution pursuant to Paragraph B of Section Fourteen.

      The Participant loan program  established  under this Paragraph J shall be
subject to the terms and conditions of a separate written  document,  titled the
"Rules and Procedures  Governing Plan Loans to Participants,"  which document is
hereby  incorporated  by  reference  into the Plan.  Such "Rules and  Procedures
Governing  Plan  Loans  to  Participants"  shall  contain,  at  a  minimum,  the
information   required   under   Department   of   Labor   Regulations   Section
2550.408b-1(d)(2).  The  terms  and  conditions  of the  "Rules  and  Procedures
Governing Plan Loans to  Participants"  shall be established and approved by the
Pension and  Benefits  Committee,  which shall have the  authority to amend such
terms and  conditions  from time to time.  A copy of the most recent  "Rules and
Procedures  Governing  Plan  Loans  to  Participants"  shall  at  all  times  be
maintained by the Pension and Benefits Committee or its delegate.

      K. BENEFITS OF PERSONS WHO CANNOT BE LOCATED.  If the Pension and Benefits
Committee determines in good faith that a Participant or Beneficiary entitled to
receive a benefit payment hereunder cannot be located,  the Pension and Benefits
Committee shall nevertheless give written notice to such person of the fact that
such  benefit  payment  is payable  to him or her under the Plan.  Such  written
notice  shall be given by  United  States  mail to the  person  entitled  to the
benefit payment (according to the records of the Plan) at the last known address
of such person. In addition,  the Pension and Benefits  Committee shall use such
other means as are reasonably available to it in order to ascertain the location
of such  person.  If such  Participant  or  Beneficiary  makes no claim for such


                                       52
<PAGE>


benefit  payment  before the  earlier of (i) a period of two (2) years after the
giving of such  written  notice or (ii) the  termination  of the Plan,  then the
Pension  and  Benefits  Committee  shall  declare a  forfeiture  of the  benefit
otherwise payable to such person, provided such person has not yet been located.

      Notwithstanding  the foregoing,  if a claim for payment of such benefit is
thereafter  made by the  Participant  or  Beneficiary,  such  benefit  shall  be
reinstated  and paid in full.  If such a valid  claim for payment of benefits is
subsequently  made,  the funds needed to pay such  benefit  shall be drawn first
from any amounts  forfeited  under the provisions of this Paragraph K during the
Plan Year in which such payment is required.  If such sources are not sufficient
to fully pay such  benefits,  the  Company  shall  make a  special  contribution
earmarked to fund the remainder of the amount needed.

      Subject to the  immediately  preceding  paragraph,  all amounts  which are
forfeited  during a Plan Year under this Paragraph K shall be used to reduce the
future cost of benefits by  applying  such  forfeited  amounts to the current or
following  year's  Company  Matching   Contribution  or  Company   Discretionary
Contribution, to the extent made.

      L. DISTRIBUTION FOR MINOR  BENEFICIARY.  In the event a distribution is to
be made to a minor,  then the Pension and  Benefits  Committee  may, in its sole
discretion, direct that such distribution be paid to the legal guardian (as such
term is defined under the applicable state or country),  or if none, to a parent
of such Beneficiary or a responsible  adult with whom the Beneficiary  maintains
his or her residence, or to the custodian for such Beneficiary under the Uniform
Gift to Minors Act or Gift to Minors  Act, if such is  permitted  by the laws of
the  state in which  said  Beneficiary  resides.  Such a  payment  to the  legal
guardian or parent of a minor Beneficiary shall fully discharge the Trustee, the
Company and the Plan from further liability on account thereof.


                                       53
<PAGE>


     M.  DISTRIBUTION  OF COMPANY  STOCK.  Notwithstanding  the  foregoing,  the
distribution of the benefits  attributable to that portion of the  Participant's
Company  Discretionary  Contribution  Account and Company Matching  Contribution
Account  held in the form of  Company  Stock  shall be made in whole  shares  of
Company  Stock.  Any cash  balance in the  Participant's  Company  Discretionary
Contribution  Account  and/or  Company  Matching  Contribution  Account which is
related to Company  Stock (such as dividend  payments)  shall be used to acquire
for  distribution  the maximum  number of whole shares or other units of Company
Stock at the then fair  market  value.  Any  fractional  unit of the  unexpended
balance  shall be  distributed  in cash.  If Company  Stock is not available for
purchase by the Trustee,  then the Trustee  shall hold such cash  balance  until
Company  Stock is acquired  and then make such  distribution.  If the Trustee is
unable to purchase the Company Stock required for distribution,  it shall make a
distribution in cash within six (6) months after the date the  distribution  was
to be made, except in the case of a retirement distribution, which shall be made
within  sixty  (60)  days  after  the  close  of the  Plan  Year  in  which  the
Participant's retirement occurs.


                                       54
<PAGE>


                                 SECTION FIFTEEN

                           ADMINISTRATION OF THE PLAN

      A. RESPONSIBILITY FOR ADMINISTRATION OF THE PLAN. The Pension and Benefits
Committee shall be responsible for the management,  operation and administration
of the Plan.  Notwithstanding the foregoing, the Board of Directors, in its sole
discretion, shall be authorized  to  abolish or suspend the Pension and Benefits
Committee  and to  designate  the  Trustee as  responsible  for the  management,
operation and  administration  of the Plan. Any such  designation of the Trustee
shall  be  valid  only  if  the  Trustee  acknowledges  in  writing  that  it is
responsible for the management, operation and administration of the Plan. In the
event of such designation of the Trustee,  the Trustee shall thereupon have full
authority and control over the management,  operation and  administration of the
Plan,  all functions and powers of the Pension and Benefits  Committee  shall be
exercised by the Trustee and all references in the Plan and Trust to the Pension
and  Benefits  Committee  shall mean the  Trustee  unless and until the Board of
Directors  reappoints or reinstates the Pension and Benefits  Committee pursuant
to the provisions of Paragraph B of this Section Fifteen.

      B. APPOINTMENT OF PENSION AND BENEFITS  COMMITTEE.  The Board of Directors
shall appoint a Pension and Benefits Committee  consisting of at least three (3)
persons  and no more than  five (5)  persons.  Any  member  of the  Pension  and
Benefits  Committee  may resign upon ten (10) days prior  written  notice to the
Board of  Directors.  The Board of Directors  shall be  authorized to remove any
member  of the  Pension  and  Benefits  Committee  at any  time  and in its sole
discretion  and to appoint a  successor  whenever a vacancy on the  Pension  and
Benefits Committee occurs.

      C.  RESPONSIBILITY FOR ADMINISTRATION OF THE TRUST FUND. The Trustee shall
be responsible for the management and investment of the Trust Fund in accordance
with the provisions of the Trust Agreement.


                                       55
<PAGE>


      D.  DELEGATION OF POWERS.  The Pension and Benefits  Committee  and/or the
Trustee may appoint such  assistants or  representatives  as they deem necessary
for the effective  exercise of their duties in administering the Plan and Trust.
The  Pension and  Benefits  Committee  and/or  the  Trustee may delegate to such
assistants  and  representatives  any powers and duties,  both  ministerial  and
discretionary, as they deem expedient or appropriate.

      E. RECORDS. All acts and determinations with respect to the administration
of the Plan made by the Pension and Benefits  Committee  and any  assistants  or
representatives  appointed  by it  shall be duly  recorded  by the  Pension  and
Benefits Committee or by the assistant or representative appointed by it to keep
such  records.  All  records,  together  with  such  other  documents  as may be
necessary for the  administration of the Plan, shall be preserved in the custody
of the Pension and  Benefits  Committee  or the  assistants  or  representatives
appointed by it.

      F. GENERAL ADMINISTRATIVE POWERS. The Pension and Benefits Committee shall
have all powers  necessary to administer the Plan in accordance  with its terms,
including the power to construe the Plan and  determine  all questions  that may
arise thereunder. In the exercise of such powers under the Plan, the Pension and
Benefits Committee shall have discretionary  authority to interpret the terms of
the Plan (including, but not limited to, the power to interpret any ambiguity in
the Plan) and to determine  eligibility  for and entitlement to Plan benefits in
accordance with the terms of the Plan. Any  interpretation or determination made
pursuant to such  discretionary  authority shall be given full force and effect,
unless it can be shown that the  interpretation  or determination  was arbitrary
and capricious.

      G.  APPOINTMENT OF PROFESSIONAL  ASSISTANTS AND INVESTMENT  MANAGERS.  The
Pension and Benefits Committee may engage accountants, attorneys, physicians and
such other  personnel  as it deems  necessary  or  advisable.  The  Pension  and
Benefits Committee,  in its sole discretion,  may appoint one or more Investment


                                       56
<PAGE>


Managers to manage  (including the power to acquire or dispose of) all or any of
the assets of the Trust provided that such appointment is approved  by the Board
of  Directors.  The  functions  of any such  persons  engaged by the Pension and
Benefits  Committee  shall be limited to the  specific  services  and duties for
which they are engaged, and such persons shall have no other duties, obligations
or  responsibilities  under the Plan or Trust.  Such persons  shall  exercise no
discretionary  authority or discretionary  control  respecting the management of
the Plan,  and,  unless  engaged  specifically  as  Investment  Managers,  shall
exercise no authority or control  respecting  management or  disposition  of the
assets of the Trust.  The fees and costs of such services are an  administrative
expense of the Plan to be paid out of the Trust Fund,  except to the extent that
such fees and costs are paid directly by the Company.

      H.  ACTIONS BY THE  PENSION  AND  BENEFITS  COMMITTEE.  All actions of the
Pension and  Benefits  Committee  shall be taken  pursuant to the  decision of a
majority of the then members of the Pension and Benefits Committee.

      I.  DIRECTIVES  OF THE PENSION AND BENEFITS  COMMITTEE.  Directives of the
Pension and  Benefits  Committee  to the Trustee  shall be delivered in writing,
signed by an  appropriate  member of the  Pension  and  Benefits  Committee.

      J.  DISCRETIONARY  ACTS.  Any  discretionary  actions of the  Pension  and
Benefits Committee or the Company with respect to the administration of the Plan
shall  be made in a  manner  which  does not  discriminate  in  favor of  Highly
Compensated Employees. In the event the Pension and Benefits Committee exercises
any discretionary  authority under the Plan with respect to a Participant who is
a member of the Pension and Benefits  Committee,  such  discretionary  authority
shall be exercised  solely and  exclusively  by those members of the Pension and
Benefits  Committee other than such Participant,  or, if such Participant is the
sole member of the Pension and Benefits Committee,  such discretionary authority
shall be exercised solely and exclusively by the Board of Directors.


                                       57
<PAGE>


      K.  RESPONSIBILITY OF PENSION AND BENEFITS  COMMITTEE.  The members of the
Pension and Benefits Committee and their assistants and  representatives  (other
than any  Investment  Managers)  shall be free from all liability for their acts
and  conduct  in the  administration  of the Plan and Trust  except  for acts of
willful misconduct or gross negligence;  provided,  however,  that the foregoing
shall not  relieve  any of them from any  responsibility  or  liability  for any
responsibility, obligation or duty that they may have pursuant to ERISA.

      L.  INDEMNITY BY THE  COMPANY.  In the event and to the extent not insured
against by any  insurance  company  pursuant  to  provisions  of any  applicable
insurance  policy,  the Company shall indemnify and hold harmless the members of
the Pension and Benefits  Committee  and their  assistants  and  representatives
(other than any Investment Managers) from any and all claims,  demands, suits or
proceedings  in  connection  with the Plan or Trust  that may be  brought by the
Company's   employees,   the  Participants  or  their   Beneficiaries  or  legal
representatives,  or by any other  person,  corporation,  entity,  government or
agency thereof, provided,  however, that such indemnification shall not apply to
any such person for such person's acts of willful misconduct or gross negligence
in connection with the Plan or Trust.

      M. PAYMENT OF FEES AND EXPENSES.  The Trustee,  the members of the Pension
and  Benefits  Committee  and  their  assistants  and  representatives  shall be
entitled to payment from the Trust Fund for all  reasonable  costs,  charges and
expenses incurred in the  administration of the Plan and Trust,  including,  but
not  limited  to,  reasonable  fees for  accounting,  legal and  other  services
rendered,  to the extent incurred by the Trustee, the members of the Pension and
Benefits  Committee or their  assistants  and  representatives  in the course of
performance  of their duties under the Plan and the Trust,  except to the extent
that such fees and costs are paid directly by the Company.  Notwithstanding  any
other provision of the Plan or Trust, no person who receives full-time  pay from
the  Company  shall  receive  compensation  from  the  Trust  Fund,  except  for
reimbursement of expenses properly and actually incurred.


                                       58
<PAGE>


      N. PLAN  ADMINISTRATOR.  The Pension and Benefits  Committee  shall be the
"administrator" (as defined in Section 3(l6)(A) of ERISA) of the Plan, and shall
be responsible for the  performance of all reporting and disclosure  obligations
under ERISA and all other  obligations  required or permitted to be performed by
the  Plan  Administrator  under  ERISA.  The  Plan  Administrator  shall  be the
designated  agent for service of legal process.

      O.   ALLOCATION   AND   DELEGATION  OF  PENSION  AND  BENEFITS   COMMITTEE
RESPONSIBILITIES.  The Pension and Benefits  Committee  may,  upon approval of a
majority  thereof,  (i)  allocate  among any of the  members of the  Pension and
Benefits  Committee  any of the  responsibilities  of the Pension  and  Benefits
Committee under the Plan or (ii) designate any person,  firm or corporation that
is not a member of the Pension and  Benefits  Committee  to carry out any of its
responsibilities  under the Plan. Any such  allocation or  designation  shall be
made pursuant to a written  instrument  executed by a majority of the members of
the Pension and Benefits Committee.

                                 SECTION SIXTEEN

                            BENEFIT CLAIMS PROCEDURE

      A. CLAIMS FOR  BENEFITS.  Any claim for  benefits  under the Plan shall be
made in  writing  to the  Pension  and  Benefits  Committee.  If such  claim for
benefits is wholly or  partially  denied,  the Pension  and  Benefits  Committee
shall, within sixty (60) days after receipt of the claim, notify the Participant
or Beneficiary of the denial of the claim. Such notice of denial (i) shall be in
writing,  (ii) shall be written in a manner  calculated  to be understood by the
Participant or  Beneficiary,  and (iii) shall contain (a) the specific reason or
reasons for denial of the claim, (b) a specific reference to the pertinent Plan
provisions  upon which the denial is based,  (c) a description of any additional
material  or  information   necessary  to  perfect  the  claim,  along  with  an
explanation  of why  such  material  or  information  is  necessary,  and (d) an
explanation of the claim review procedure as set forth in this Section Sixteen.


                                       59
<PAGE>


      B. REQUEST FOR REVIEW OF DENIAL.  Within sixty (60) days after the receipt
by the Participant or Beneficiary of a written notice of denial of the claim, or
such later time as shall be deemed  reasonable taking into account the nature of
the  benefit  subject to the claim and any other  attendant  circumstances,  the
Participant  or  Beneficiary  may file a written  request  with the  Pension and
Benefits  Committee  that it conduct a full and fair review of the denial of the
claim for benefits.

      C. DECISION ON REVIEW OF DENIAL.  The Pension and Benefits Committee shall
deliver to the Participant or Beneficiary a written decision on the claim within
sixty (60) days after the receipt of the  aforesaid  request for review,  except
that if there are special  circumstances (such as the need to hold a hearing, if
necessary)  which  require an extension of time for  processing,  the  aforesaid
sixty (60) day period shall be extended sixty (60) days. Such decision shall (i)
be  written  in a manner  calculated  to be  understood  by the  Participant  or
Beneficiary,  (ii) include the  specific  reason or reasons for the decision and
(iii) contain a specific  reference to the pertinent Plan  provisions upon which
the  decision  is based.


                                       60
<PAGE>


                                SECTION SEVENTEEN

                           INALIENABILITY OF BENEFITS

      A. IN GENERAL.  The right of any Participant or Beneficiary to any benefit
or payment  under the Plan or Trust or to any Account  maintained as provided by
the Plan shall not be subject to voluntary or involuntary  transfer,  alienation
or assignment, and, to the fullest extent permitted by law, shall not be subject
to attachment, execution, garnishment, sequestration or other legal or equitable
process.  In the event a  Participant  or  Beneficiary  who is  receiving  or is
entitled to receive  benefits  under the Plan  attempts  to assign,  transfer or
dispose of such  right,  or if an attempt is made to subject  said right to such
process,  such  assignment,  transfer  or  disposition  shall be null and  void.
Notwithstanding  the  above,  a  Participant's  benefits  under this Plan may be
offset by any amount the  Participant  is ordered or required to pay to the Plan
in  connection  with a judgment of  conviction  for a crime,  civil  judgment or
settlement  agreement issued or entered into after August 5, 1997, and described
in Section 40l(a)(13)(C) of the Internal Revenue Code.

      B. QUALIFIED DOMESTIC RELATIONS ORDERS. Notwithstanding Paragraph A above,
benefits  shall  be  payable  to an  individual  other  than  a  Participant  in
accordance with the applicable  requirements of any Qualified Domestic Relations
Order (as defined below) pursuant to the following provisions:

           (i) The  term  "Qualified  Domestic  Relations  Order"  shall  mean a
judgment,  decree,  or  order  (including  approval  of  a  property  settlement
agreement) which relates to the provision of child support, alimony payments, or
marital property rights to a spouse,  former spouse, child or other dependent of
a  Participant,  which  creates or recognizes  the  existence of an  alternative
payee's right to, or assigns to an alternate  payee the right to, receive all or


                                       61
<PAGE>


a portion of the benefits payable with respect to a Participant  under the Plan,
and which meets the following requirements:

                (a) such order  shall  specify  the name and last known  mailing
address (if any) of the  Participant  and each  alternate  payee  covered by the
order,

                (b) such order  shall  specify the amount or  percentage  of the
Participant's  benefits to be paid by the Plan to each such  alternate  payee or
the manner in which such amount or percentage is to be determined,

                (c) such order shall specify the number of payments or period to
which such order applies,

                (d) such  order  shall  specify  each plan to which  such  order
applies,

                (e) such order shall not require the Plan to provide any type or
form of benefits or any option not otherwise provided under the Plan,

                (f) such order shall not  require the Plan to provide  increased
benefits (determined on the basis of actuarial value), and

                (g) such order  shall not  require the payment of benefits to an
alternate  payee which are required to be paid to another  alternate payee under
another order previously determined to be a Qualified Domestic Relations Order.

           (ii) The  Pension and  Benefits  Committee  shall  determine a set of
nondiscriminatory and reasonable procedures to determine the qualified status of
domestic relations orders and to administer  distributions  under such qualified
orders in accordance with Section 414(p) of the Internal Revenue Code.

           (iii)  To  the  extent  that a  Qualified  Domestic  Relations  Order
provides that a former spouse is to be treated as the  Participant's  spouse for
purposes  of the death  benefits  payable  under  this Plan,  the  Participant's
current spouse will not be treated as the Participant's spouse for this purpose.


                                       62
<PAGE>


           (iv) In addition to  establishing  procedures to handle requests made
pursuant  to  Qualified   Domestic   Relations  Orders,  the  Plan  shall  allow
Participants  to make  special  arrangements  for  the  computation  of  Account
balances in order to comply with the provisions of antenuptial  agreements which
require a  differentiation  between  the value of  Account  balances  prior to a
marriage  and  increases  in the  value  of such  Account  balances  whether  by
contributions and/or by earnings subsequent to the date of the marriage.

           (v) If  specified  in the order,  the  alternate  payee may  commence
benefit  payments under the Plan and pursuant to the order upon the later of (a)
the date the  alternate  payee attains age  twenty-one  (21) or (b) the date the
order is finalized.

           (vi) If  specified  in the order,  the  alternate  payee may commence
benefit  payments under the Plan and pursuant to the order upon the later of (a)
the date the assets  subject to the order have been  segregated  or (b) the date
the order is finalized.

                                SECTION EIGHTEEN

                            INVESTMENT OF TRUST FUND

      At a meeting  duly  called for such  purpose,  the  Pension  and  Benefits
Committee  shall  establish  a funding  policy  and method  consistent  with the
objectives of the Plan and the requirements of Title I of ERISA. The Pension and
Benefits  Committee  shall meet at least  annually to review such funding policy
and method.  In establishing  and reviewing such funding policy and method,  the
Pension and Benefits Committee shall endeavor to determine the Plan's short-term
and long-term  objectives and financial needs,  taking into account the need for
liquidity to pay benefits and the need for investment  growth.


                                       63
<PAGE>


                                SECTION NINETEEN

                             AMENDMENT OF THE PLAN

      The  Company  may  amend  the Plan at any  time,  and  from  time to time,
pursuant to written  resolutions of the Board of Directors.  No such  amendment,
however, shall have the effect of reducing any then nonforfeitable percentage of

benefits of any Participant as computed in accordance with the vesting  schedule
under Section  Thirteen of the Plan.  If the Plan is amended and such  amendment
would,  at any  time,  decrease  the  percentage  of vested  benefits  which any
Participant  would  have  been  entitled  to  receive  had the  Plan not been so
amended,  then each  Participant who is employed by the Company on the date such
amendment  is adopted,  or the date such  amendment is  effective,  whichever is
later,  and who has  three  (3) or more  Years of  Service  as of the end of the
period within which such Participant may make the election  provided for herein,
shall be  permitted,  beginning  on the  date  such  amendment  is  adopted,  to
irrevocably  elect to have his or her vested interest computed without regard to
such  amendment.  Written notice of such amendment and the  availability of such
election must be given to each such Participant, and each such Participant shall
be granted a period of sixty (60) days after the later of (i) his or her receipt
of such notice,  or (ii) the effective  date of such  amendment  within which to
make such  election.  Such  election  shall be exercised by the  Participant  by
delivering  or  sending  written  notice  thereof  to the  Company  prior to the
expiration of such sixty (60) day period.

                                 SECTION TWENTY

                             PERMANENCY OF THE PLAN

      A. RIGHT TO TERMINATE PLAN. The Company  contemplates  that the Plan shall
be  permanent  and  that it  shall be able to make  contributions  to the  Plan.
Nevertheless,   in   recognition   of  the  fact  that  future   conditions  and
circumstances cannot now be entirely foreseen, the Company reserves the right to
terminate either the Plan or both the Plan and the Trust.


                                       64
<PAGE>


      B.  MERGER OR  CONSOLIDATION  OF THE  PLAN.  The Plan may not be merged or
consolidated  with, nor may its assets or  liabilities  be  transferred  to, any
other plan unless each Participant would receive a benefit immediately after the
merger, consolidation,  or transfer (if the other plan then terminated) which is
equal to or  greater  than the  benefit he or she would  have been  entitled  to
receive immediately before the merger, consolidation,  or transfer (if this Plan
had then terminated).

                               SECTION TWENTY-ONE

                 DISCONTINUANCE OF CONTRIBUTIONS AND TERMINATION

      A.  DISCONTINUANCE OF CONTRIBUTIONS.  Whenever the Company determines that
it is impossible or inadvisable for it to make further contributions as provided
in the Plan, the Board of Directors may, without terminating the Trust, adopt an
appropriate  resolution  permanently  discontinuing all further contributions by
the  Company.  A certified  copy of such  resolution  shall be  delivered to the
Pension and  Benefits  Committee  and the Trustee.  Thereafter,  the Pension and
Benefits  Committee  and  the  Trustee  shall  continue  to  administer  all the
provisions of the Plan which are  necessary and remain in force,  other than the
provisions  relating to contributions by the Company.  However,  the Trust shall
remain in  existence  and all of the  provisions  of the Trust  Agreement  shall
remain in force.

      B. TERMINATION OF PLAN AND TRUST. If the Board of Directors  determines to
terminate the Plan and Trust completely,  the Plan and Trust shall be terminated
as of the date  specified in certified  copies of  resolutions  of such Board of
Directors, delivered to the Pension and Benefits Committee and the Trustee. Upon
such  termination  of the Plan and  Trust,  after  payment of all  expenses  and
proportional  adjustment of the Accounts of Participants employed by the Company
to reflect such expenses,  Trust Fund profits or losses,  and allocations of any
previously unallocated funds to the date of termination, the  Participants shall


                                       65
<PAGE>


be entitled to receive the amount then credited to their respective  Accounts in
the Trust. The Pension and Benefits Committee may make payment of such amount in
cash or in assets of the Trust Fund.

      C. RIGHTS TO BENEFITS UPON TERMINATION OF PLAN OR COMPLETE  DISCONTINUANCE
OF CONTRIBUTIONS. Upon the termination or partial termination of the Plan or the
complete  discontinuance  of  contributions  by the  Company,  the rights of the
Participants  (or,  in the  case  of a  partial  termination,  each  Participant
affected by the  termination)  to the amount  credited to his or her Accounts at
such time shall be nonforfeitable  without reference to any formal action on the
part of the Company, the Pension and Benefits Committee or the Trustee.

                               SECTION TWENTY-TWO

                         STATUS OF EMPLOYMENT RELATIONS

      The adoption and  maintenance of the Plan and Trust shall not be deemed to
constitute  a  contract   between  the  Company  and  its  Employees  or  to  be
consideration  for, or an  inducement  or condition  of, the  employment  of any
person. Nothing herein contained shall be deemed (i) to give to any Employee the
right to be retained in the employ of the  Company;  (ii) to affect the right of
the Company to discipline  or discharge any Employee at any time;  (iii) to give
the Company the right to require any  Employee to remain in its employ;  or (iv)
to affect any  Employee's  right to terminate his or her employment at any time.

                              SECTION TWENTY-THREE

                            BENEFITS PAYABLE BY TRUST

      All benefits  payable  under the Plan shall be paid or provided for solely
from the Trust. The Company assumes no liability or responsibility therefor.


                                       66
<PAGE>


                               SECTION TWENTY-FOUR

                         EXCLUSIVE BENEFIT OF TRUST FUND

      A. LIMITATION UPON REVERSIONS.  Except as provided in Paragraphs B hereof,
the assets of the Trust Fund shall not inure to the  benefit of the  Company and
shall be held for the exclusive  purposes of providing  benefits to Participants
and their  Beneficiaries and defraying  reasonable expenses of administering the
Plan.

      B. MISTAKE OF FACT. In the event that all or any portion of a contribution
made to the  portion  of the  Trust  attributable  to the Plan is  based  upon a
mistake  of fact,  the excess  amount of the  contribution  attributable  to the
mistake of fact shall be returned to the  Company,  as promptly as  practicable,
but in no event later than one (1) year after the payment of the contribution.

                               SECTION TWENTY-FIVE

                                 APPLICABLE LAW

     The  Plan  and  the  Trust  which  is a part  hereof  shall  be  construed,
regulated, interpreted and administered under and in accordance with the laws of
the State of New York  (except its laws  regarding  choice of law) to the extent
not preempted by ERISA.

                               SECTION TWENTY-SIX

                      INTERPRETATION OF THE PLAN AND TRUST

      It is  the  intention  of  the  Company  that  the  Plan,  and  the  Trust
established  by the  Company  to  implement  the  Plan,  shall  comply  with the
provisions of Section 401 and 501 of the Internal Revenue Code, the requirements
of ERISA  and the  corresponding  provisions  of any  subsequent  laws,  and the
provisions of the Plan and Trust Agreement shall be construed to effectuate such
intention.


                                       67
<PAGE>


                              SECTION TWENTY-SEVEN

                    ADOPTION OF PLAN BY AFFILIATED COMPANIES

      Any Affiliated Company,  whether or not presently existing,  may, with the
approval of the Board of Directors and the Pension and Benefits Committee, adopt
the Plan and Trust by means of appropriate  corporate  action of such Affiliated
Company and by executing such documents as the Board of Directors may require in
order  for such  Affiliated  Company  to become a party to the  Trust.  Any such
Affiliated  Company  which  adopts the Plan and Trust as  provided  above  shall
thereafter be included within the meaning of the term "Company" when used in the
Plan and Trust,  except that the  authority to amend or terminate the Plan shall
remain the exclusive responsibility of Viatel, Inc.

                              SECTION TWENTY-EIGHT

                        TOP-HEAVY CONTINGENCY PROVISIONS

      A. APPLICATION.  The provisions of this Section  Twenty-Eight are included
in the Plan pursuant to Section  401(a)(10)(B)(ii)  of the Internal Revenue Code
and  shall  become  applicable  only if the Plan  becomes a  Top-Heavy  Plan (as
defined  below) under Section  416(g) of the Internal  Revenue Code for any Plan
Year.

      B.  DETERMINATION  OF TOP-HEAVY  STATUS OF PLAN. The  determination  as to
whether  the Plan has  become a  Top-Heavy  Plan for any such Plan Year shall be
made  as  of  the  last  day  of  the  immediately   preceding  Plan  Year  (the
"Determination  Date"),  and the Plan  shall be a  "Top-Heavy  Plan" only if the
present value of the aggregate Account balances under the Plan for Key Employees
(as defined  below)  exceeds  sixty  percent  (60%) of the present  value of the
aggregate  Account  balances  under  the  Plan  for  all  Employees  and  former
Employees.  For such  purpose, the  aggregate Account balances shall be computed
and adjusted  pursuant to Section  416(g) of the  internal  Revenue Code and the
regulations issued thereunder.


                                       68
<PAGE>


      As used herein,  the term "Key Employee" shall mean any Employee or former
Employee  who at any time  during the  current  Plan Year or any of the four (4)
preceding Plan Years meets the criteria under Section  4l6(i)(l) of the Internal
Revenue Code. A "Key Employee" shall include the following:

           (i) an  officer  of the  Company  or an  Affiliated  Company  if such
individual's  annual  compensation  exceeds  fifty  percent  (50%) of the dollar
limitation then in effect under Section  415(b)( 1 )(A) of the Internal  Revenue
Code;

           (ii) an actual or constructive  owner (using the attribution rules of
Section  318 of the  Internal  Revenue  Code)  of one of the  ten  (10)  largest
ownership  interests (as defined in Treas.  Reg. ss. 1.416-1,  T-19) in value in
the Company or an Affiliated Company if such individual's  compensation  exceeds
one hundred percent (100%) of the dollar limitation then in effect under Section
4l5(c)(l)(A) of the Internal Revenue Code;

           (iii) a Five-Percent Owner;

           (iv) a "one-percent owner" (as described in Section  416(i)(1)(B)(ii)
of the Internal Revenue Code) of the Company or an Affiliated Company who has an
annual  compensation from the Company or an Affiliated  Company of more than One
Hundred and Fifty Thousand Dollars ($150,000),  as adjusted for increases in the
cost of living  pursuant to 401(a)(17) of the Internal  Revenue Code; or

           (v) the  Beneficiary  of any  deceased  Employee  or former  Employee
described  in  Subparagraph  (i),  (ii),  (iii),  or (iv) above.  In the event a
Beneficiary of an Employee or former Employee  qualifies as a Key Employee,  any
benefits payable to such  Beneficiary  shall be treated as benefits payable to a
Key Employee.

      For  purposes  of  Subparagraphs  (i),  (ii)  and  (iv)  above,  the  term
"compensation"  shall mean  compensation as defined in Section  4l4(q)(4) of the


                                       69
<PAGE>


Internal  Revenue Code.  For purposes of  Subparagraph  (i) above,  no more than
fifty (50) employees  (or, if lesser,  the greater of three (3) employees or ten
percent (10%) of all employees) shall be treated as officers.

      The term "Non-Key Employee" shall mean any Employee or former Employee who
is not  currently a Key  Employee.  The term  "Non-Key  Employee"  shall include
former Key Employees,  but such former Key Employees shall be excluded  entirely
from the calculations to determine whether the Plan is a Top-Heavy Plan.

      C.  CONSIDERATION  OF MULTIPLE  PLANS IN DETERMINING  TOP-HEAVY  STATUS OF
PLAN. All plans of the Company or an Affiliated  Company which are included in a
Required Aggregation Group or in a Permissive Aggregation Group (both as defined
below) with this Plan shall be considered  together in determining  whether this
Plan is a  Top-Heavy  Plan.  Each plan of the Company or an  Affiliated  Company
which is required to be included in an aggregation  group  (whether  required or
permissive)  shall be treated as a  Top-Heavy  Plan if such group is a Top-Heavy
Group (as defined below).  For these purposes,  a "Required  Aggregation  Group"
shall mean (i) each plan of the Company or an Affiliated  Company in which a Key
Employee  is a  participant  plus  (ii) each  other  plan of the  Company  or an
Affiliated  Company which is required to exist in order for the plans  contained
in (i), above, to meet the  nondiscrimination  requirements of Section 40l(a)(4)
or 410 of the Internal Revenue Code. A "Permissive Aggregation Group" shall mean
(i) a  Required  Aggregation  Group  plus  (ii) any  other  plan or plans of the
Company  or an  Affiliated  Company  which  are  able  to  separately  meet  the
nondiscrimination  requirements  of Sections  401(a)(4)  and 410 of the Internal
Revenue Code but which the Company or an  Affiliated  Company  elects to include
within such group.

      An aggregation group (either permissive or required) shall be a "Top-Heavy
Group"  only if the sum of (a)  the  present  value  of the  cumulative  accrued
benefits for Key  Employees  under all defined  benefit  plans  included in such


                                       70
<PAGE>

group and (b) the total of the  account  balances  for Key  Employees  under all
defined contribution plans included in such group exceeds sixty percent (60%) of
the accrued  benefits and account  balances  determined  for all  employees  and
former employees covered under such plans. For these purposes,  account balances
shall be computed and adjusted  pursuant to the  principles of Section 416(g) of
the Internal  Revenue Code. In determining the cumulative  accrued  benefits and
account balances for purposes of this top-heavy test:

           (i) The present value of the cumulative  accrued  benefits of all Key
Employees shall be increased by the aggregate distributions made with respect to
each such  individual  under the Plan during the previous five (5) years (ending
on  the  Determination   Date).  This  Subparagraph  (i)  shall  also  apply  to
distributions  under a  terminated  plan which  would have been  required  to be
included in an aggregation group had the plan not been terminated;

           (ii) The extent to which  rollovers and transfers  must be taken into
account  shall be made in  accordance  with Section 416 of the Internal  Revenue
Code and the regulations issued thereunder; and

           (iii) The account  balances and accrued benefits of (a) an individual
who is not  currently a Key  Employee but who was a Key Employee in a prior year
or (b) an  individual  who is a Key  Employee  but  who has  not  performed  any
services  for the Company or an  Affiliated  Company at any time during the five
(5)-year period ending on the Determination Date, shall be disregarded.

      D.  MINIMUM  BENEFITS.  For any Plan Year in which the Plan is a Top-Heavy
Plan,  each  Participant  who is a Non-Key  Employee  and who is employed by the
Company or an Affiliated Company on the last day of the Plan Year (regardless of
whether such Participant completed one thousand (1,000) or more Hours of Service
during  such  Plan  Year)  shall  receive  a  minimum   allocation  of  employee
contributions  under this Plan which, when combined with the amount of any other
contributions  and/or  forfeitures  allocated to his or her  accounts  under any
other  defined  contribution  plans  maintained  by the Company or an Affiliated


                                       71
<PAGE>


Company,  shall be no less than the lesser of (i) three  percent  (3%) of his or
her Limitation Year  Compensation  for such Plan Year or (ii) such percentage of
his or her Limitation Year Compensation for such Plan Year which is equal to the
highest  percentage of Limitation Year Compensation for such Plan Year which any
Key  Employee  received  in the  form of  employee  contributions  to his or her
Accounts in this Plan for such Plan Year.  Any  contributions  made to a Non-Key
Employee's accounts under this or any other defined contribution plan maintained
by the Company which are made on behalf of such Non-Key  Employee  pursuant to a
cash or deferred  arrangement  satisfying the  requirements of Section 401(k) of
the Internal  Revenue  Code may not be used to satisfy  this minimum  allocation
requirement.

      For  purposes  of  this  Paragraph  D,  a  Participant's  Limitation  Year
Compensation  for any Plan Year shall not  include  any amounts in excess of One
Hundred and Seventy  Thousand Dollars  ($170,000),  as adjusted for increases in
the cost of living pursuant to Section 401(a)(17) of the Internal Revenue Code.

      E.  ADJUSTMENT OF SECTION 415  LIMITATIONS IN PLAN YEARS IN WHICH THE PLAN
IS  TOP-HEAVY.  For any Plan Year in which  the Plan is a  Top-Heavy  Plan,  the
references  to  a  factor  of  one  and  twenty-five  one-hundredths  (1.25)  in
Subparagraph  (iii) of  Paragraph G of Section Six of the Plan shall be modified
so as to  constitute  references  to a factor of one (1.0) unless the  aggregate
Account  balances  attributable  to Key  Employees  under the Plan do not exceed
ninety  percent  (90%) of the total  Account  balances  under the Plan,  and the
Company   has  made  the   additional   contributions   specified   in   Section
4l6(h)(2)(A)(ii)(II) of the Internal Revenue Code.


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<PAGE>


                               SECTION TWENTY-NINE

        UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT OF 1994

      Notwithstanding any provision of the Plan to the contrary,  contributions,
benefits and Hours of Service with respect to qualified  military  service shall
be provided in accordance with Section 414(u) of the Internal Revenue Code. Loan
repayments  shall be  suspended  under  this  Plan as  permitted  under  Section
4l4(u)(4) of the Internal Revenue Code.


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<PAGE>


                                   APPENDIX A

     Affiliated Companies which have adopted the Plan:

        AFFILIATED COMPANY NAME                              DATE OF ADOPTION

         Destia Communications Inc                            January 1, 2000


<PAGE>


                                   APPENDIX B

     The definition of "Year of Service" as set forth in Section Two of the Plan
shall include Years of Service with the following entities:

     1. Destia Communications Inc.

<PAGE>


                                TABLE OF CONTENTS
                                                                            PAGE
SECTION ONE - PURPOSE OF PLAN..................................................1
         A.       Designation..................................................1
         B.       Purpose......................................................1
         C.       Automatic Participation......................................1
SECTION TWO - DEFINITIONS......................................................1
         A.       Definitions..................................................1
SECTION THREE - REQUIREMENTS FOR ELIGIBILITY..................................14
         A.       Salary Reduction Contributions..............................14
         B.       Company Matching Contributions..............................14
         C.       Company Discretionary Contributions.........................15
SECTION FOUR - PARTICIPATION IN THE PLAN......................................15
         A.       Participation in Plan.......................................15
         B.       Rollover Amount.............................................15
SECTION FIVE - CONTRIBUTIONS..................................................16
         A.       Salary Reduction Contributions..............................16
         B.       Company Matching Contributions..............................18
         C.       Nondiscrimination Rules Applicable to Salary
                  Reduction Contributions.....................................18
         D.       Nondiscrimination Rules Applicable to Company
                  Matching Contributions......................................21
         E.       Additional Adjustments......................................23
         F.       Company Discretionary Contributions.........................24
         G.       Date of Payment of Company Discretionary Contributions......24
         H.       Qualified Nonelective Contributions.........................24
         I.       Additional Deferral Opportunities...........................25
SECTION SIX - ALLOCATION TO PARTICIPANTS' ACCOUNTS............................25
         A.       Maintenance of Accounts.....................................25
         B.       Method of Allocating Salary Reduction Contributions.........25
         C.       Method of Allocating Company Matching Contributions.........25
         D.       Method of Allocating Company Discretionary Contributions....26
         E.       Limitation on Annual Additions..............................26
         F.       Limitations on Annual Additions Due to Participation
                  in Other Defined Contribution Plans.........................29
         G.       Definitions Relating to Annual Additions Limitations........29
SECTION SEVEN - VALUATION OF TRUST FUND.......................................31
SECTION EIGHT - PARTICIPANT'S ACCOUNTS........................................31
         A.       Separate Accounts...........................................31
         B.       Accounts of Participants Transferred to an
                  Affiliated Company..........................................31
         C.       Annual Adjustment of Participant's Accounts.................32
         D.       Investment of Contributions and Voting of Company Stock.....32
SECTION NINE - COMMON TRUST FUND..............................................34
SECTION TEN - DISABILITY BENEFITS.............................................34
SECTION ELEVEN - RETIREMENT BENEFITS..........................................35
SECTION TWELVE - DEATH BENEFITS...............................................35
         A.       Death Benefits..............................................35
         B.       Designation of Beneficiaries................................36


                                       i
<PAGE>


                                TABLE OF CONTENTS
                                  (continued)
                                                                            PAGE
         C.       Failure of Participant to Designate.........................36
         D.       Beneficiaries' Rights.......................................37
SECTION THIRTEEN - EMPLOYMENT TERMINATION BENEFITS............................37
         A.       Vesting Upon Termination of Employment......................37
         B.       Forfeiture of Non-Vested Amount.............................37
SECTION FOURTEEN - PAYMENT OF BENEFITS........................................39
         A.       Retirement, Disability and Death Benefits...................39
         B.       Employment Termination Benefits.............................40
         C.       Methods of Payment of Benefits..............................42
         D.       Methods of Payment of Optional Benefits.....................43
         E.       Timing of Distribution......................................45
         F.       Minimum Distribution Requirements...........................46
         G.       Distribution of Small Account Balances......................47
         H.       Withdrawals.................................................48
         I.       Eligible Rollover Distributions.............................49
         J.       Loans to Participants.......................................51
         K.       Benefits of Persons Who Cannot Be Located...................52
         L.       Distribution for Minor Beneficiary..........................53
         M.       Distribution of Company Stock...............................54
SECTION FIFTEEN - ADMINISTRATION OF THE PLAN..................................55
         A.       Responsibility for Administration of the Plan...............55
         B.       Appointment of Pension and Benefits Committee...............55
         C.       Responsibility for Administration of the Trust Fund.........55
         D.       Delegation of Powers........................................56
         E.       Records.....................................................56
         F.       General Administrative Powers...............................56
         G.       Appointment of Professional Assistants and
                  Investment Managers.........................................56
         H.       Actions by the Pension and Benefits Committee...............57
         I.       Directives of the Pension and Benefits Committee............57
         J.       Discretionary Acts..........................................57
         K.       Responsibility of Pension and Benefits Committee............58
         L.       Indemnity by the Company....................................58
         M.       Payment of Fees and Expenses................................58
         N.       Plan Administrator..........................................59
         O.       Allocation and Delegation of Pension and Benefits
                  Committee Responsibilities..................................59
SECTION SIXTEEN - BENEFIT CLAIMS PROCEDURE....................................59
         A.       Claims for Benefits.........................................59
         B.       Request for Review of Denial................................60
         C.       Decision on Review of Denial................................60
SECTION SEVENTEEN - INALIENABILITY OF BENEFITS................................61
         A.       In General..................................................61
         B.       Qualified Domestic Relations Orders.........................61
SECTION EIGHTEEN - INVESTMENT OF TRUST FUND...................................63


                                       ii
<PAGE>


                                TABLE OF CONTENTS
                                  (continued)
                                                                            PAGE
SECTION NINETEEN - AMENDMENT OF THE PLAN......................................64
SECTION TWENTY - PERMANENCY OF THE PLAN.......................................64
         A.       Right to Terminate Plan.....................................64
         B.       Merger or Consolidation of the Plan.........................65
SECTION TWENTY-ONE - DISCONTINUANCE OF CONTRIBUTIONS AND TERMINATION..........65
         A.       Discontinuance of Contributions.............................65
         B.       Termination of Plan and Trust...............................65
         C.       Rights to Benefits Upon Termination of Plan or
                  Complete Discontinuance of Contributions....................66
SECTION TWENTY-TWO - STATUS OF EMPLOYMENT RELATIONS...........................66
SECTION TWENTY-THREE - BENEFITS PAYABLE BY TRUST..............................66
SECTION TWENTY-FOUR - EXCLUSIVE BENEFIT OF TRUST FUND.........................67
         A.       Limitation upon Reversions..................................67
         B.       Mistake of Fact.............................................67
SECTION TWENTY-FIVE - APPLICABLE LAW..........................................67
SECTION TWENTY-SIX - INTERPRETATION OF THE PLAN AND TRUST.....................67
SECTION TWENTY-SEVEN - ADOPTION OF PLAN BY AFFILIATED COMPANIES...............68
SECTION TWENTY-EIGHT - TOP-HEAVY CONTINGENCY PROVISIONS.......................68
         A.       Application.................................................68
         B.       Determination of Top-Heavy Status of Plan...................68
         C.       Consideration of Multiple Plans in Determining
                  Top-Heavy Status of Plan....................................70
         D.       Minimum Benefits............................................71
         E.       Adjustment of Section 415 Limitations in Plan Years
                  in which the Plan Is Top-Heavy..............................72
SECTION TWENTY-NINE - UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT
                      RIGHTS ACT OF 1994......................................73


                                      iii