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                                                                 Exhibit 10.16.1


                                    WESTCORP

                          EMPLOYEE STOCK OWNERSHIP PLAN

                                       AND

                               SALARY SAVINGS PLAN

                                2001 RESTATEMENT

                            EFFECTIVE JANUARY 1, 2001
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                                TABLE OF CONTENTS
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<S>               <C>                                                                                            <C>
ARTICLE I                  OVERVIEW.............................................................................  1

ARTICLE II                 DEFINITIONS..........................................................................  1

         2.1      Account.......................................................................................  1
         2.2      Administrative Committee......................................................................  1
         2.3      Affiliated Company............................................................................  1
         2.4      Aggregation Group.............................................................................  2
         2.5      Alternate Payee...............................................................................  2
         2.6      Annual Additions..............................................................................  2
         2.7      Average Contribution Percentage...............................................................  3
         2.8      Average Deferral Percentage...................................................................  4
         2.9      Beneficiary...................................................................................  4
         2.10     Board of Directors............................................................................  4
         2.11     Break in Service..............................................................................  4
         2.12     Code..........................................................................................  5
         2.13     Company.......................................................................................  5
         2.14     Company Contributions.........................................................................  5
         2.15     Company Stock.................................................................................  5
         2.16     Compensation..................................................................................  5
         2.17     Computation Period............................................................................  6
         2.18     Covered Employees.............................................................................  7
         2.19     Determination Date............................................................................  7
         2.20     Disability....................................................................................  7
         2.21     Effective Date................................................................................  8
         2.22     Employee......................................................................................  8
         2.23     Employer Matching Contribution Account........................................................  8
         2.24     Employer Matching Contributions...............................................................  8
         2.25     Employment Commencement Date..................................................................  8
         2.26     Entry Date....................................................................................  9
         2.27     ERISA.........................................................................................  9
         2.28     ESOP Contribution Account.....................................................................  9
         2.29     ESOP Contribution.............................................................................  9
         2.30     Excess Aggregate Contributions................................................................  9
         2.31     Excess Contributions..........................................................................  9
         2.32     Excess Deferrals..............................................................................  9
         2.33     Family Leave of Absence.......................................................................  9
         2.34     Five Percent Owner............................................................................ 10
         2.35     Forfeiture.................................................................................... 11
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<S>               <C>                                                                                            <C>
         2.36     Highly Compensated Employee................................................................... 11
         2.37     Hour of Service............................................................................... 12
         2.38     Investment Manager............................................................................ 13
         2.39     Key Employee.................................................................................. 13
         2.40     Leased Employee............................................................................... 14
         2.41     Leave of Absence.............................................................................. 14
         2.42     Limitation Year............................................................................... 15
         2.43     Non-Key Employee.............................................................................. 15
         2.44     Normal Retirement Age......................................................................... 15
         2.45     Officer....................................................................................... 15
         2.46     One Percent Owner............................................................................. 16
         2.47     Participant................................................................................... 16
         2.48     Plan.......................................................................................... 16
         2.49     Plan Administrator............................................................................ 16
         2.50     Plan Year..................................................................................... 16
         2.51     Qualified Non-elective Contributions.......................................................... 16
         2.52     Reemployment Commencement Date................................................................ 16
         2.53     Salary Savings Contributions.................................................................. 16
         2.54     Salary Savings Contribution Account........................................................... 17
         2.55     Severance..................................................................................... 17
         2.56     Spouse........................................................................................ 17
         2.57     Testing Period................................................................................ 17
         2.58     Top-Heavy Group............................................................................... 17
         2.59     Top-Heavy Plan................................................................................ 17
         2.60     Trust and Trust Fund.......................................................................... 18
         2.61     Trustee....................................................................................... 18
         2.62     Valuation Date................................................................................ 18
         2.63     Interest...................................................................................... 18
         2.64     Year of Service............................................................................... 19

ARTICLE III                ELIGIBILITY AND PARTICIPATION........................................................ 19

         3.1      Eligibility To Participate.................................................................... 19
         3.2      Special Participation Rules................................................................... 20
         3.3      Participation Beyond Normal Retirement Age.................................................... 20

ARTICLE IV                 TRUST FUND AND CONTRIBUTIONS......................................................... 20

         4.1      Trust Fund.................................................................................... 20
         4.2      Company Contribution.......................................................................... 20
         4.3      Irrevocability................................................................................ 21
         4.4      Investments in Employer Securities and Employer Real Property................................. 21
         4.5      Investment Direction by Participants.......................................................... 21
         4.6      Investment of Employer Matching Contribution Accounts......................................... 21
         4.7      ESOP Provisions............................................................................... 22
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<S>               <C>                                                                                            <C>
ARTICLE V                  PARTICIPANT CONTRIBUTIONS............................................................ 25

         5.1      Special Rules................................................................................. 25
         5.2      Amount Subject to a Deferral Election......................................................... 25
         5.3      Average Deferral Percentage Tests............................................................. 26
         5.4      Prospective Reductions of Salary Savings Contributions........................................ 26
         5.5      Distributions of Excess Deferrals............................................................. 27
         5.6      Distributions of Excess Contributions......................................................... 27
         5.7      Average Contribution Percentage Tests......................................................... 28
         5.8      Multiple Use Test............................................................................. 29
         5.9      Rollover Contributions........................................................................ 30

ARTICLE VI                 ALLOCATIONS TO PARTICIPANTS' ACCOUNTS................................................ 30

         6.1      Participants' Accounts........................................................................ 30
         6.2      Allocation of Employer Matching Contributions................................................. 30
         6.3      Allocation of ESOP Contributions.............................................................. 31
         6.4      Allocation of Salary Savings Contributions.................................................... 32
         6.5      Allocation of Qualified Non-elective Contributions............................................ 32
         6.6      Revaluation of Accounts....................................................................... 33
         6.7      Forfeitures From Employer Matching Contribution Account....................................... 33
         6.8      Forfeitures From ESOP Contribution Account.................................................... 34
         6.9      Ordering of Allocations....................................................................... 34
         6.10     Miscellaneous Allocation Rules................................................................ 34

ARTICLE VII                VESTING.............................................................................. 35

         7.1      General Rule.................................................................................. 35
         7.2      Special Vesting Rules......................................................................... 35
         7.3      Fully Vested Accounts......................................................................... 36
         7.4      Forfeitures................................................................................... 36

ARTICLE VIII               PAYMENT OF BENEFITS.................................................................. 36

         8.1      Payment of Benefits........................................................................... 36
         8.2      Latest Payment Date........................................................................... 37
         8.3      Required Beginning Date....................................................................... 37
         8.4      Consent to Receive Early Distribution......................................................... 38
         8.5      Requirement of Spousal Content................................................................ 38
         8.6      No Beneficiary Designation.................................................................... 39
         8.7      Distributions to Partially Vested Participants................................................ 40
         8.8      Distribution of Salary Savings Contribution Accounts.......................................... 41
         8.9      Hardship Distributions........................................................................ 41
         8.10     Distributions Due to Disability............................................................... 44
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<S>               <C>                                                                                            <C>
         8.11     Inability to Locate Participant or Beneficiary................................................ 44
         8.12     Payees under Legal Disability................................................................. 45
         8.13     Notice Regarding Tax Treatment of Distributions............................................... 45
         8.14     Mailing of Payments........................................................................... 45
         8.15     Withholding For Taxes......................................................................... 45

ARTICLE IX                 ANNUITY REQUIREMENTS................................................................. 45

         9.1      Definitions................................................................................... 45
         9.2      Form of Benefits Provided..................................................................... 46
         9.3      Disclosure Requirements....................................................................... 46
         9.4      Consent to Receive Early Distribution......................................................... 47
         9.5      Direct Rollovers.............................................................................. 47
         9.6      Distribution of Company Stock................................................................. 48

ARTICLE X                  TOP-HEAVY PLAN RULES................................................................. 49

         10.1     Applicability................................................................................. 49
         10.2     Special Valuation Rules....................................................................... 49
         10.3     Minimum Contributions......................................................................... 50
         10.4     Minimum Vesting............................................................................... 51
         10.5     Maximum Annual Addition....................................................................... 51
         10.6     Non-Eligible Employees........................................................................ 52

ARTICLE XI                 OPERATION AND ADMINISTRATION OF THE PLAN............................................. 52

         11.1     Named Fiduciaries............................................................................. 52
         11.2     Composition of Administrative Committee....................................................... 53
         11.3     Administrative Committee's Powers............................................................. 53
         11.4     Reporting and Disclosure...................................................................... 54
         11.5     Multiple Fiduciary Capacities................................................................. 54
         11.6     Funding Policy................................................................................ 54
         11.7     Prohibition Against Certain Actions........................................................... 55
         11.8     Committee Procedures.......................................................................... 55
         11.9     Indemnification............................................................................... 56
         11.10    Compensation of Committee and Plan Expenses................................................... 56
         11.11    Bonding....................................................................................... 56
         11.12    Notices and Communications.................................................................... 57
         11.13    Standard of Care.............................................................................. 57

ARTICLE XII                MERGER OF COMPANY, MERGER OF PLAN.................................................... 58

         12.1     Effect of Reorganization or Transfer of Assets................................................ 58
         12.2     Plan Merger Restriction....................................................................... 58
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<S>               <C>                                                                                            <C>
ARTICLE XIII               TERMINATION AND DISCONTINUANCE OF CONTRIBUTIONS...................................... 59

         13.1     Plan Termination.............................................................................. 59
         13.2     Discontinuance of Contributions............................................................... 59
         13.3     Replacement Plan.............................................................................. 59
         13.4     Partial Termination........................................................................... 59

ARTICLE XIV                APPLICATION FOR BENEFITS............................................................. 60

         14.1     Claim for Benefits............................................................................ 60
         14.2     Content of Denial............................................................................. 60
         14.3     Appeals....................................................................................... 61
         14.4     Exhaustion of Remedies........................................................................ 61

ARTICLE XV                 LIMITATIONS ON CONTRIBUTIONS......................................................... 61

         15.1     General Rule.................................................................................. 61
         15.2     Definition of Earnings........................................................................ 62
         15.3     Other Defined Contribution Plans.............................................................. 62
         15.4     (Deleted effective January 1, 2000)........................................................... 63
         15.5     Adjustments for Excess Annual Additions....................................................... 63

ARTICLE XVI                RESTRICTION ON ALIENATION............................................................ 64

         16.1     General Restrictions Against Alienation....................................................... 64
         16.2     QDRO Definition............................................................................... 64
         16.3     Impermissible Terms........................................................................... 65
         16.4     Special Rules................................................................................. 65
         16.5     Procedures.................................................................................... 66
         16.6     Segregation of Funds.......................................................................... 66
         16.7     Loans......................................................................................... 67
         16.8     ESOP Loans.................................................................................... 70

ARTICLE XVII               AMENDMENTS........................................................................... 75

         17.1     Amendments.................................................................................... 75
         17.2     Effect of Amendments.......................................................................... 75
         17.3     Amendment of Vesting Schedule................................................................. 76

ARTICLE XVIII              MISCELLANEOUS MATTERS................................................................ 76

         18.1     No Enlargement of Employee Rights............................................................. 76
         18.2     Interpretation................................................................................ 76
         18.3     Applicable Law................................................................................ 77
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<S>               <C>                                                                                            <C>
         18.4     USERRA........................................................................................ 77

ARTICLE XIX                RIGHTS OFFERING...................................................................... 77

         19.1     2000 Rights Offering.......................................................................... 77
         19.2     Subsequent Rights Offering.................................................................... 77
         19.3     Authority of Administrative Committee......................................................... 77
         19.4     Purchase Under 2000 Rights Offering and Subsequent Rights Offering............................ 77
         19.5     Excess Annual Additions....................................................................... 78
         19.6     Administrative Committee Powers............................................................... 78
</TABLE>



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                                    ARTICLE I
                                    OVERVIEW

Westcorp, a California corporation, established this Employee Stock ownership
Plan and Salary Savings Plan effective January 1, 1975. This restatement is
effective January 1, 2001. This Plan is intended to be a tax-qualified employee
stock ownership plan under section 4975(e)(7) of the Internal Revenue Code of
1986, as amended.

                                   ARTICLE II
                                   DEFINITIONS

Whenever capitalized in the text, the following terms shall have the meaning set
forth below.

         II.1     ACCOUNT. "Account" or "Accounts" shall mean the following
                  Accounts maintained for each Participant,

                  (a)      Salary Savings Contribution Account,

                  (b)      Rollover Account,

                  (c)      ESOP Contribution Account, and

                  (d)      Employer Matching Contribution Account.

         II.2     ADMINISTRATIVE COMMITTEE. "Administrative Committee" or
                  "Committee" shall mean the Plan Committee appointed under
                  Article XI. The Administrative Committee shall be the named
                  fiduciary with respect to the Plan for purposes of ERISA.

         II.3     AFFILIATED COMPANY.

                  (a)      "Affiliated Company" shall mean:

                           (i)      Any corporation that is included in a
                                    controlled group of corporations, within the
                                    meaning of Section 414(b) of the Code, of
                                    which group the Company is also a member;

                           (ii)     Any trade or business that is under common
                                    control with the Company within the meaning
                                    of Section 414(c) of the Code;

                           (iii)    Any service organization that is included in
                                    an affiliated service group, within the
                                    meaning of Section 414(m) of the Code, of
                                    which affiliated service group the Company
                                    is also a member; and
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                           (iv)     Any other organization that is aggregated
                                    with the Company pursuant to the regulations
                                    under Code Section 414(o).

                  (b)      For purposes of applying the limitations of Article
                           XV below, whether or not an entity is an Affiliated
                           Company shall be determined by applying the
                           percentage modifications contained in Code Section
                           415(h).

         II.4     AGGREGATION GROUP.

                  (a)      "Aggregation Group" means

                           (i)      Each plan of the Company or an Affiliated
                                    Company in which a Key Employee is or was a
                                    Participant during the Testing Period
                                    (regardless of whether the plan has been
                                    terminated), and

                           (ii)     Each other plan of the Company or an
                                    Affiliated Company (regardless of whether
                                    the plan has been terminated) which enables
                                    any plan described in Subparagraph (i) above
                                    to meet the requirements of Code Sections
                                    401(a)(4) or 410.

                  (b)      Any plan not required to be included in an
                           Aggregation Group under the rules of Paragraph (a)
                           above may be treated as being part of the group if
                           the group would continue to meet the requirements of
                           Code Sections 401(a)(4) and 410 with the plan being
                           taken into account

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

         II.5     ALTERNATE PAYEE. "Alternate Payee" means any Spouse, former
                  Spouse, child, or other dependent of a Participant who is
                  recognized by a domestic relations order as having a right to
                  receive all or a portion of the benefits payable with respect
                  to the Participant.

         II.6     ANNUAL ADDITIONS.

                  (a)      "Annual Additions" shall include, for any Limitation
                           Year

                           (i)      The amount credited to a Participant's
                                    Accounts from Employer Contributions,

                           (ii)     The Participant's Elective Deferrals,

                           (iii)    Forfeitures, and


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                           (iv)     In the case of a Key Employee, any amounts
                                    allocated to an individual medical benefit
                                    account established under a pension or
                                    annuity plan.

                  (b)      The following amounts shall not be considered part of
                           the Participant's Annual Additions:

                           (i)      Repayments of loans; and

                           (ii)     Any recontributions (of prior distributions)
                                    made pursuant to Section 8.7(b) below.

                  (c)      The following amounts shall be considered part of the
                           Participant's Annual Additions:

                           (i)      Excess Deferrals that are distributed later
                                    than April 15 of the calendar year following
                                    the calendar year to which the amounts
                                    relate;

                           (ii)     Excess Contributions (even if timely
                                    distributed); and

                           (iii)    Excess Aggregate Contributions (even if
                                    timely distributed or forfeited).

         II.7     AVERAGE CONTRIBUTION PERCENTAGE.

                  (a)      The "Average Contribution Percentage" for a Plan Year
                           for the Highly Compensated Employees and for all
                           other Covered Employees is the average of the ratios,
                           calculated separately for each Employee in the group,
                           of the amount of his Employer Matching Contributions
                           during the Plan Year to his compensation for the Plan
                           Year.

                           (i)      In the case of a Participant who does not
                                    defer anything under the Plan and who is not
                                    credited with any Employer Matching
                                    Contributions, his contribution percentage
                                    shall be zero percent (0%).

                           (ii)     The Average Contribution Percentage for each
                                    group shall be calculated to the nearest
                                    one-hundredth percent of compensation.

                  (b)      If the Plan is treated as a single plan for purposes
                           of satisfying the requirements of Code Sections
                           401(a)(4) and 410 along with another plan that
                           contains a cash or deferred arrangement, both plans
                           shall be treated as a single plan for purposes of
                           this Section 2.7.


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                  (c)      For purposes of this Section 2.7, a Participant's
                           compensation shall be determined in accordance with
                           the rules of Code Sections 414(s) and 401(m).

         II.8     AVERAGE DEFERRAL PERCENTAGE.

                  (a)      The "Average Deferral Percentage" for a Plan Year for
                           the Highly Compensated Employees and for all other
                           Covered Employees is the average of the ratios,
                           calculated separately for each Employee in the group,
                           of the amount of his Salary Savings Contributions and
                           Qualified Non-elective Contributions during the Plan
                           Year to his compensation for the Plan Year.

                           (i)      In the case of a Participant who does not
                                    defer anything under the Plan, his deferral
                                    percentage shall be zero percent (0%).

                           (ii)     The Average Deferral Percentage for each
                                    group shall be calculated to the nearest
                                    one-hundredth percent of compensation.

                  (b)      If the Plan is treated as a single plan for purposes
                           of satisfying the requirements of Code Sections
                           401(a)(4) and 410 along with another plan that
                           contains a cash or deferred arrangement, all of the
                           cash or deferred arrangements shall be treated as a
                           single arrangement.

                  (c)      If a Highly Compensated Employee is also a
                           participant in one or more other cash or deferred
                           arrangements maintained by the Company, all such
                           arrangements shall be treated as a single
                           arrangement.

                  (d)      For purposes of this Section 2.8, a Participant's
                           compensation shall be determined in accordance with
                           the rules of Code Sections 414(s) and 401(k).

         II.9     BENEFICIARY. "Beneficiary" shall mean the person designated by
                  a Participant in Article VIII to receive benefits under the
                  Plan upon the Participant's death.

         II.10    BOARD OF DIRECTORS. "Board of Directors" or "Board" shall mean
                  the Board of Directors (or its delegate) of the Company.

         II.11    BREAK IN SERVICE.

                  (a)      "Break in Service" shall mean a Computation Period in
                           which the Employee does not complete more than five
                           hundred (500) Hours of Service (as set forth below)
                           including Hours of Service completed while on a
                           Family Leave of Absence.


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                  (b)      An Employee will not be considered to have incurred a
                           Break in Service by reason of a

                           (i)      Leave of Absence,

                           (ii)     Temporary layoff (i.e., a period of not more
                                    than ninety (90) days), or

                           (iii)    Military service (to the extent required by
                                    applicable law).

         II.12    CODE. "Code" shall mean the Internal Revenue Code of 1986, as
                  amended.

         II.13    COMPANY. "Company" or "Employer" shall mean Westcorp and any
                  other Affiliated Companies (or similar entities) which may be
                  included within the coverage of the Plan with the consent of
                  the Board of Directors.

         II.14    COMPANY CONTRIBUTIONS.

                  (a)      "Company Contributions" shall mean all amounts paid
                           by the Company into the Trust Fund, whether in the
                           form of Employer Matching Contributions, Qualified
                           Non-elective Contributions or ESOP Contributions.

                  (b)      Except where the context indicates to the contrary,
                           Company Contributions shall not include Salary
                           Savings Contributions.

         II.15    COMPANY STOCK. "Company Stock" means Westcorp common stock, $1
                  par value.

         II.16    COMPENSATION.

                  (a)      For purposes of allocating ESOP Contributions,
                           Employer Matching Contributions, Qualified
                           Non-elective Contributions or Salary Savings
                           Contributions for a period, a Participant's
                           "Compensation" shall mean all amounts paid to the
                           Participant by the Company during such period or
                           required to be reported on Federal Form W-2 for the
                           period except for the following:

                           (i)      Auto allowance;

                           (ii)     Moving and relocation expenses, whether or
                                    not such expenses are included in the
                                    Participant's gross income;

                           (iii)    Ride share payments;


                                     - 5 -
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                           (iv)     Amounts includable in the Participant's
                                    gross income from the exercise of stock
                                    appreciation rights;

                           (v)      Amounts includable in the Participant's
                                    gross income attributable to group term life
                                    insurance coverage;

                           (vi)     Amounts excludable from the Participant's
                                    gross income under a non-qualified plan of
                                    deferred compensation maintained by the
                                    Employer; and

                           (vii)    Amounts includable in the Participant's
                                    gross income attributable to the Employer's
                                    recognition programs.

                  (b)      In the case of a Participant who is a member of the
                           Board of Directors, his "Compensation" will not
                           include his director's fees.

                  (c)      Except as otherwise expressly provided in this Plan
                           to the contrary, the term "Compensation" shall
                           include those amounts which represent the
                           Participant's Salary Savings Contributions and
                           pre-tax contributions to a cafeteria plan under
                           Section 125 of the Code.

                           In no event shall the amount of Compensation of any
                           Participant taken into account for purposes of
                           determining any benefits under the Plan for an Plan
                           Year exceed the Annual Compensation Limit. For these
                           purposes, the Annual Compensation Limit for Plan
                           Years beginning on or after January 1, 1994, is
                           $150,000, as adjusted by the Commissioner of Internal
                           Revenue for increases in the cost of living in
                           accordance with Section 410(a)(17)(B) of the Code.
                           The cost-of-living adjustment in effect for any
                           calendar year shall apply to any Plan Year beginning
                           in such calendar year. For Plan Years beginning on or
                           after January 1, 1989, but before January 1, 1994,
                           the Annual Compensation Limit is $200,000, as
                           adjusted by the Commissioner of Internal Revenue at
                           the same time and in the same manner as under Section
                           415(d) of the Code, with the exception that the
                           adjustment in effect on January 1 of any calendar
                           year is effective for any Plan Year beginning in such
                           calendar year and the first adjustment to the
                           $200,000 limitation is effective on January 1, 1990.
                           If a Plan Year consists of fewer than 12 months, the
                           Annual Compensation Limit for such Plan Year shall be
                           multiplied by a fraction, the numerator of which is
                           the number of months in such Plan Year and the
                           denominator of which is 12.

         II.17    COMPUTATION PERIOD.

                  (a)      "Computation Period" is the relevant period for
                           determining whether the Employee is to be credited
                           with a Year of Service or a Break in Service.


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                  (b)      For purposes of determining eligibility to
                           participate, an Employee's initial Computation Period
                           shall be the twelve (12) consecutive month period
                           commencing with his Employment Commencement Date. All
                           subsequent eligibility Computation Periods shall be
                           the Plan Year, starting with the Plan Year commencing
                           within his initial Computation Period.

                  (c)      For purposes of determining vesting the Computation
                           Period shall be the Plan Year.

         II.18    COVERED EMPLOYEES. "Covered Employees" means those Employees
                  who have satisfied all of the requirements for eligibility to
                  participate in the Plan and are not otherwise precluded from
                  participating in the Plan.

         II.19    DETERMINATION DATE.

                  (a)      "Determination Date" means the last day of the
                           preceding Plan Year.

                  (b)      In the case of the first plan year, "Determination
                           Date" shall mean the last day of that Plan Year.

         II.20    DISABILITY.

                  (a)      An individual is Disabled if, on the basis of proof
                           satisfactory to the Administrative Committee based on
                           the certification of at least one doctor, he is
                           unable to engage in any substantial gainful activity
                           by reason of any medically determinable physical or
                           mental impairment that can be expected to result in
                           death or that has lasted or can be expected to last
                           for a continuous period of not less than twelve (12)
                           months. Notwithstanding and except as otherwise
                           provided herein, a Participant shall be Disabled if
                           he is receiving disability benefits under the Social
                           Security Act.

                  (b)      No Participant shall be deemed to have incurred a
                           Disability as a result of an injury or illness
                           incurred as a result of:

                           (i)      The commission of a felony;

                           (ii)     Service in the armed forces of any country;

                           (iii)    Intentionally self-inflicted injury (while
                                    sane or insane); or

                           (iv)     Alcoholism or substance abuse.

                  (c)      In the event of a dispute between a Participant and
                           the Administrative Committee as to the occurrence of
                           Disability, the dispute shall be settled


                                     - 7 -
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                           by a majority decision of three doctors, one to be
                           appointed by the Administrative Committee, one to be
                           appointed by the Participant and the third by the two
                           doctors appointed.

         II.21    EFFECTIVE DATE.

                  (a)      The original "Effective Date" of the Plan was January
                           1, 1975.

                  (b)      The Effective Date of this restatement of the Plan is
                           January 1, 2001.

                  (c)      In the case of an Employee whose Severance occurred
                           prior to the Effective Date of this Restatement, his
                           benefit under the Plan will be determined under the
                           provisions of the Plan as it existed prior to this
                           Restatement.

         II.22    EMPLOYEE. "Employee" shall mean each person qualifying as a
                  common law employee of the Company or an Affiliated Company.
                  Notwithstanding any provision in this Plan to the contrary,
                  the term "Employee" does not include any individual who is not
                  classified as an employee of the Employer for purposes of the
                  employer's payroll records (including, without limitation, any
                  leased employee or other individual employed by or through a
                  temporary help firm, technical help firm, employee leasing
                  firm, or professional employer organization), regardless of
                  whether such individual is a common law employee of the
                  Employer.

         II.23    EMPLOYER MATCHING CONTRIBUTION ACCOUNT. The "Employer Matching
                  Contribution Account" of a Participant shall mean his
                  individual account in the Trust Fund in which are held his
                  allocated share of the Employer Matching Contributions and the
                  income thereon. Employer Matching Contribution Accounts shall
                  include where applicable a fully vested subaccount ("Hammond
                  Company Matching Account") in which is held amounts
                  transferred to the Plan on behalf of a Participant from the
                  Hammond Company 401(k) Plan.

         II.24    EMPLOYER MATCHING CONTRIBUTIONS. "Employer Matching
                  Contributions" means those Company Contributions allocated
                  under Section 6.2.

         II.25    EMPLOYMENT COMMENCEMENT DATE.

                  (a)      "Employment Commencement Date" shall mean the date on
                           which an Employee first performs an Hour of Service.

                  (b)      For purposes of determining his Employment
                           Commencement Date, an Employee shall not be deemed to
                           have commenced employment with an Affiliated Company
                           prior to the effective date on which the entity
                           became an Affiliated Company, except as is expressly
                           provided otherwise in this Plan or in resolutions of
                           the Board of Directors.


                                     - 8 -
<PAGE>
         II.26    ENTRY DATE. "Entry Date" shall mean the 1st and the 16th day
                  of each calendar month.

         II.27    ERISA. "ERISA" shall mean the Employee Retirement Income
                  Security Act of 1974, as amended.

         II.28    ESOP CONTRIBUTION ACCOUNT. The "ESOP Contribution Account" of
                  a Participant shall mean his individual account in the Trust
                  Fund in which are held his allocated share of the ESOP
                  Contributions, Forfeitures, and the income thereon.

         II.29    ESOP CONTRIBUTION. "ESOP Contribution" shall mean those
                  Company Contributions allocated under Section 6.3.

         II.30    EXCESS AGGREGATE CONTRIBUTIONS. "Excess Aggregate
                  Contributions" shall mean those contributions in excess of the
                  limitations of Section 5.7 below.

         II.31    EXCESS CONTRIBUTIONS. "Excess Contributions" shall mean those
                  Salary Savings Contributions in excess of the limitation of
                  Section 5.2(a) below.

         II.32    EXCESS DEFERRALS. "Excess Deferrals" shall mean those Salary
                  Savings Contributions in excess of the dollar limitation of
                  Section 5.2(a) below.

         II.33    FAMILY LEAVE OF ABSENCE.

                  (a)      The provisions of this Section 2.33 shall apply with
                           respect to an Employee who is absent from work
                           without pay for any period

                           (i)      By reason of the pregnancy of the Employee,

                           (ii)     By reason of the birth of a child of the
                                    Employee,

                           (iii)    By reason of the placement of a child with
                                    the Employee in connection with the adoption
                                    of the child by the Employee, or

                           (iv)     For purposes of caring for the child for a
                                    period beginning immediately following the
                                    birth or placement.

                  (b)      The number of Hours of Service to which an Employee
                           described in Paragraph (a) above shall be credited
                           with shall be

                           (i)      The number which otherwise would normally
                                    have been credited to the Employee but for
                                    the absence, or


                                     - 9 -
<PAGE>
                           (ii)     If the number described in Subparagraph (i)
                                    above is not capable of being determined,
                                    eight (8) Hours of Service per day of the
                                    absence.

                  (c)      However, the total number of hours treated as Hours
                           of Service under Paragraph (b) above shall not exceed
                           five hundred one (501). Furthermore, these Hours of
                           Service shall be taken into account solely for the
                           purpose of determining whether or not the Employee
                           has incurred a Break in Service.

                  (d)      The Hours described in Paragraph (b) above shall be
                           credited to the Computation Period

                           (i)      In which the absence from work begins, if
                                    the Employee would be prevented from
                                    incurring a Break in Service in that
                                    Computation Period solely because the period
                                    of absence is treated as Hours of Service
                                    under this Section 2.33, or

                           (ii)     In any other case, in the immediately
                                    following Computation Period.

                  (e)      The above provisions of this Section 2.33 shall not
                           apply unless the Employee provides such timely
                           information as the Administrative Committee may
                           reasonably require to establish that

                           (i)      The absence is for reasons described in
                                    Paragraph (a) above, and

                           (ii)     The number of days for which there was an
                                    absence.

         II.34    FIVE PERCENT OWNER.

                  (a)      "Five Percent Owner" means any person who Owns (or is
                           considered as owning within the meaning of Section
                           318 of the Code) more than five percent (5%) of the

                           (i)      Outstanding stock of the Company or an
                                    Affiliated Company, or

                           (ii)     The total combined voting power of all stock
                                    of the Company or an Affiliated Company.

                  (b)      The rules of Subsections (b), (c), and (m) of Code
                           Section 414 shall not apply for purposes of these
                           ownership rules. Thus, this ownership test shall be
                           applied separately with respect to the Company and
                           every Affiliated Company.


                                     - 10 -
<PAGE>
                  (c)      The constructive ownership rules of Code Section
                           318(a)(2)(c) shall be applied by substituting "five
                           percent (5%)" for "fifty percent (50%)" where it
                           appears therein

                  (d)      For purposes of this Section 2.34, if an Employee's
                           ownership interest varies during a Plan Year, his
                           ownership interest shall be the largest interest he
                           owned at any time during the year.

         II.35    FORFEITURE. "Forfeiture" means the nonvested portion of a
                  Participant's Employer Matching Contribution Account or ESOP
                  Contribution Account that is forfeited in accordance with the
                  rules of Article VII.

         II.36    HIGHLY COMPENSATED EMPLOYEE.

                  (a)      "Highly Compensated Employee" means any Employee who,
                           during the preceding Plan Year ("Lookback Year")

                           (i)      Was at any time a Five Percent Owner or

                           (ii)     Received Earnings from the Company and all
                                    Affiliated Companies in excess of
                                    eighty-five thousand dollars ($85,000), as
                                    indexed for inflation in accordance with
                                    Code Section 415(d). The Administrative
                                    Committee may elect for a Plan Year, to
                                    require that such an Employee be also in the
                                    top twenty percent (20%) of all Employees
                                    when ranked on the basis of Earnings paid
                                    during the Plan Year ("Top-Paid Group").

                  (b)      Unless an Employee is a Five Percent Owner, he will
                           not be treated as a Highly Compensated Employee for
                           the current Plan Year ("Determination Year") unless
                           he is a member of the group consisting of the one
                           hundred (100) Employees paid the greatest
                           Compensation during the Determination Year.

                  (c)      For purposes of this Section 2.36, the amount of an
                           Employee's Earnings shall be determined,

                           (i)      In accordance with Code Section 414(q)(7),
                                    and

                           (ii)     Without regard to the dollar limitation of
                                    Section 2.14(c) above.

                  (d)      For purposes of determining the number of Employees
                           in the Top-Paid Group (described in Paragraph (a)
                           (iii above), the following Employees shall be
                           excluded:

                           (i)      Employees who have not completed six (6)
                                    months of service,


                                     - 11 -
<PAGE>
                           (ii)     Employees who normally work less than
                                    seventeen and one-half (17-1/2) hours per
                                    week,

                           (iii)    Employees who normally work at least one (1)
                                    Hour of Service in each of seven (7) or more
                                    months in a year, and

                           (iv)     Employees who have not attained age
                                    twenty-one (21) by the end of the relevant
                                    Plan Year.

                           Except to the extent provided in the regulations
                           under Code Section 414(q), Employees who are included
                           in a unit of Employees covered by an agreement which
                           the Secretary of Labor finds to be a collective
                           bargaining agreement between Employee representatives
                           and the Company must be taken into account.

                  (e)      A former Employee shall be treated as a Highly
                           Compensated Employee if,

                           (i)      He was a Highly Compensated Employee when he
                                    separated from service, or

                           (ii)     He was a Highly Compensated Employee at any
                                    time after attaining age fifty-five (55).

                  (f)      Notwithstanding the foregoing, non-resident aliens
                           without U.S. source income from the Company or an
                           Affiliated Company shall be disregarded for all
                           purposes in determining who are the Highly
                           Compensated Employees.

         II.37    HOUR OF SERVICE.

                  (a)      "Hour of Service" of an Employee shall mean each hour
                           for which he is paid or is entitled to payment by the
                           Company or an Affiliated Company:

                           (i)      For the performance of services as an
                                    Employee;

                           (ii)     Which is attributable to a period of time
                                    during which he performs no duties
                                    (irrespective of whether or not his
                                    employment has been terminated) due to a
                                    vacation (including each hour for which
                                    vacation pay is received but no vacation is
                                    actually taken), holiday, illness,
                                    incapacity (including pregnancy or
                                    disability), layoff, jury duty, military
                                    duty, or a leave of absence.

                                    (A)      However, no such hours shall be
                                             credited to an Employee if


                                     - 12 -
<PAGE>
                                             he is directly or indirectly paid
                                             or entitled to payment for the
                                             hours and the payment or
                                             entitlement-

                           (iii)    Is made or due under a plan maintained
                                    solely for the purpose of complying with
                                    applicable worker's compensation,
                                    unemployment compensation, or disability
                                    insurance laws, or

                           (iv)     Is a payment which solely reimburses the
                                    Employee for his medical or
                                    medically-related expenses; or

                           (v)      For which he is entitled to back pay,
                                    irrespective of mitigation of damages,
                                    whether awarded or agreed to by the Company
                                    or an Affiliated Company, provided that he
                                    has not previously been credited with an
                                    Hour of Service with respect to that hour
                                    under Subparagraph (i) or (ii) above.

                  (b)      Notwithstanding the provisions of Paragraph (a)
                           above: no Employee shall be entitled to credit for
                           more than five hundred and one (501) Hours of Service
                           for any single continuous period during which he
                           performs no duties, whether or not the period occurs
                           in a single Computation Period.

                  (c)      With the exception of Hours of Service attributable
                           to back pay, all Hours of Service determined under
                           the rules of Paragraph (a) above all be credited to
                           the Computation Period in which the payment is
                           actually made: determined in accordance with rules
                           prescribed by the Administrative Committee. Hour of
                           Service attributable to back pay will be attributed
                           to the Computation Period to which they relate. The
                           provisions of this Paragraph (c) shall be applied in
                           a manner consistent with the provisions of Department
                           of Labor Regulation Section 2530.200b-2.

                  (d)      Unless the Board of Directors shall expressly
                           determine otherwise, or as may be expressly provided
                           in this Plan, an Employee shall not receive credit
                           for his Hours of Service completed with an Affiliated
                           Company prior to the date on which the entity became
                           an Affiliated Company.

         II.38    INVESTMENT MANAGER. "Investment Manager" shall have the
                  meaning set forth in Section 3(38) of ERISA.

         II.39    KEY EMPLOYEE.

                  (a)      "Key Employee" shall mean any Employee or former
                           Employee who, at any time during the Testing Period,
                           is or was:

                           (i)      An Officer;


                                     - 13 -
<PAGE>
                           (ii)     One of the ten (10) Employees

                                    (A)      Having annual Earnings from the
                                             Company or an Affiliated Company of
                                             more than the limitation in effect
                                             under Section 15.1(a)(i) below, and

                                    (B)      Owning (or considered as owning
                                             within the meaning of Code Section
                                             318) during the Testing Period both
                                             more than one-half percent (1/2%)
                                             interest and one of the ten largest
                                             interests in the Company or an
                                             Affiliated Company.

                           For purposes of this Subparagraph (ii), if two (2)
                           Employees have the same interest in the Company or an
                           Affiliated Company, the Employee having the greater
                           annual earnings shall be treated as having the larger
                           interest;

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

                           (iv)     A One Percent owner of the Company or an
                                    Affiliated Company having an annual Earnings
                                    of more than one hundred fifty thousand
                                    dollars ($150,000).

                  (b)      The term "Key Employee" shall include his
                           Beneficiaries.

                  (c)      For purposes of this Section 2.39, an Employee's
                           Earnings shall be the amount indicated on the Form
                           W-2 issued to him for the calendar year ending with
                           or within the Plan Year.

         II.40    LEASED EMPLOYEE.

                  (a)      "Leased Employee" shall have the meaning set forth in
                           Section 414(n) of the Code.

                  (b)      For purposes of determining the number or identity of
                           Highly Compensated Employees for nor purposes of the
                           pension requirements of Code section 414(n)(3),
                           Leased Employees shall be treated as Employees.

         II.41    LEAVE OF ABSENCE.

                  (a)      "Leave of Absence" shall mean any unpaid personal
                           leave from active employment duly authorized by the
                           Company under the Company's standard personnel
                           practices. Leaves of Absence shall not be granted in
                           a manner that discriminates in favor of Highly
                           Compensated Employees.


                                     - 14 -
<PAGE>
                  (b)      An Employee shall not be deemed to have incurred a
                           Break in Service while on a Leave of Absence of not
                           more than ninety (90) days, provided he returns to
                           employment on or before the date on which the leave
                           expires.

                  (c)      In the event an Employee does not return to
                           employment on or before the end of the leave, he
                           shall be deemed to have incurred a Severance as of
                           the first day of the leave, unless

                           (i)      The failure was due to his death or
                                    disability, or

                           (ii)     The provisions of Section 2.33 apply.

         II.42    LIMITATION YEAR. "Limitation Year" shall mean the Plan Year
                  for purposes of the limitations on contributions contained in
                  Article XV below.

         II.43    NON-KEY EMPLOYEE. "Non-Key Employee" shall mean any Employee
                  who is not a Key Employee.

         II.44    NORMAL RETIREMENT AGE. "Normal Retirement Age" shall mean the
                  Participant's sixty-fifth (65th) birthday. "Normal Retirement
                  Date" shall mean the first day of the month coincident with or
                  next following a Participant's Normal Retirement Age.

         II.45    OFFICER.

                  (a)      "Officer" shall mean any Employee who was at any time
                           an officer of the Company or an Affiliated Company
                           and received Earnings from the Company and all
                           Affiliated Companies greater than fifty percent (50%)
                           of the amount in effect under Code Section
                           415(b)(1)(A) for the year.

                  (b)      However, the number of Employees who shall be treated
                           as Officers will not exceed the lesser of

                           (i)      Fifty (50) Employees, or

                           (ii)     The greater of three (3) Employees or ten
                                    percent (10%) of the Employees.

                  (c)      If no officer is described in Paragraph (a) above,
                           then the highest paid officer of the Company shall be
                           treated as being described therein.

                  (d)      For purposes of Paragraph (b) above

                           (i)      All Leased Employees and all part-time
                                    Employees shall be taken into account, and


                                     - 15 -
<PAGE>
                           (ii)     The number of Employees shall be the
                                    greatest number at any time during the
                                    relevant period.

         II.46    ONE PERCENT OWNER. "One Percent Owner" means any person who
                  would be a Five Percent Owner if the minimum ownership
                  threshold were one percent (1%) instead of five percent (5%).

         II.47    PARTICIPANT.

                  (a)      "Participant" shall mean any Employee who has
                           satisfied the participation eligibility requirements
                           and has been enrolled in this Plan in accordance with
                           the provisions of Article III below.

                  (b)      "Participant" does not include an Employee who has
                           incurred a Severance and has been paid the full
                           amount of his benefits under the Plan.

         II.48    PLAN. "Plan" shall mean the Westcorp Employee Stock Ownership
                  Plan and Salary Savings Plan, as amended from time to time.

         II.49    PLAN ADMINISTRATOR. "Plan Administrator" shall mean the
                  administrator of the Plan within the meaning of ERISA Section
                  3(16)(A), which shall be the Administrative Committee.

         II.50    PLAN YEAR. "Plan Year" shall mean the twelve (12) month period
                  ending on December 31.

         II.51    QUALIFIED NON-ELECTIVE CONTRIBUTIONS. "Qualified Non-elective
                  Contributions" means those Company Contributions that are
                  allocated to Participant's Salary Savings Contribution
                  Accounts under Section 6.5. Qualified Non-elective
                  Contributions shall be fully vested at all times and shall be
                  subject to the distribution restrictions of Section 8.8(a). A
                  Participant may not elect to receive cash compensation in lieu
                  of a Qualified Non-elective Contribution.

         II.52    REEMPLOYMENT COMMENCEMENT DATE. In the case of an Employee who
                  incurs a Severance and who is subsequently reemployed by the
                  Company or an Affiliated Company, his "Reemployment
                  Commencement Date" shall be the first day following the
                  Severance on which he performs an Hour of Service.

         II.53    SALARY SAVINGS CONTRIBUTIONS. "Salary Savings Contributions"
                  shall mean the pre-tax contributions made by Participants
                  pursuant to Article V.

         II.54    SALARY SAVINGS CONTRIBUTION ACCOUNT. "Salary Savings
                  Contribution Account" of a Participant shall mean his
                  individual account in the Trust Fund in which are held his
                  Salary Savings Contributions and the income thereon.


                                     - 16 -
<PAGE>
         II.55    SEVERANCE. "Severance" shall mean the termination of an
                  Employee's employment with the Company or an Affiliated
                  Company by reason of his retirement, death, resignation,
                  dismissal or otherwise.

         II.56    SPOUSE. "Spouse" shall mean the person to whom a Participant
                  is married as of the relevant date.

         II.57    TESTING PERIOD. "Testing Period" means the Plan Year
                  containing the Determination Date and the preceding four (4)
                  Plan Years.

         II.58    TOP-HEAVY GROUP. "Top-Heavy Group" means any Aggregation Group
                  if the sum (as of the Determination Date) of

                  (a)      The present value of the cumulative accrued benefits
                           for Key Employees under all defined benefit plans
                           included in the group, and

                  (b)      The aggregate of the account balances of Key
                           Employees under all defined contribution plans
                           included in the group,

                  exceeds sixty percent (60%) of a similar sum determined for
                  all Employees.

         II.59    TOP-HEAVY PLAN.

                  (a)      Any defined benefit plan is a Top-Heavy Plan if, as
                           of the Determination Date, the present value of the
                           cumulative accrued benefits under the plan for Key
                           Employees exceeds sixty percent (60%) of the present
                           value of the cumulative accrued benefits under the
                           plan for all Employees.

                           (i)      For purposes of this Paragraph (a), the
                                    present value of an Employee's accrued
                                    benefit shall be determined by using the
                                    interest rate and the mortality assumptions
                                    specified in that plan. The same actuarial
                                    assumptions shall be used in measuring
                                    accrued benefits under all defined benefit
                                    plans.

                           (ii)     The accrued benefit of any Employee (other
                                    than a Key Employee) shall be determined

                                    (A)      Under the method that is used for
                                             benefit accrual purposes for all
                                             plans of the Company and all
                                             Affiliated Companies, or

                                    (B)      If there is no such method, as if
                                             the benefit accrued no more rapidly
                                             than the slowest accrual rate
                                             permitted under Section
                                             411(b)(1)(C) of the Code.


                                     - 17 -
<PAGE>
                           (iii)    The date on which the accrued benefit of
                                    each Employee is measured (with respect to
                                    each Determination Date) shall be the date
                                    used for computing costs under the minimum
                                    funding standards of Code Section 412,
                                    determined as if he had incurred a Severance
                                    on that date.

                  (b)      Any defined contribution plan shall be a Top-Heavy
                           Plan if, as of the Determination Date, the aggregate
                           account balances of Key Employees under the plan
                           exceeds sixty percent (60%) of the present value of
                           the aggregate of the account balances of all
                           Employees under the plan.

                           (i)      The date on which the account balance of
                                    each Employee is measured (with respect to
                                    each Determination Date) shall be the last
                                    day of the relevant plan year.

                  (c)      For purposes of this Section 2.59, the accrued
                           benefit and account balances of a Participant shall
                           include amounts attributable to Participant
                           contributions (whether or not the contributions are
                           includable in income). Furthermore, the same date
                           shall be used for valuing benefits under all plans.

         II.60    TRUST AND TRUST FUND. "Trust" or "Trust Fund" shall mean the
                  Trust created by this Agreement.

         II.61    TRUSTEE. "Trustee" shall mean the person(s) or entity acting
                  as Trustee of the Trust created under this Plan.

         II.62    VALUATION DATE.

                  (a)      "Valuation Date" shall mean the last day of each
                           calendar month or such other date or dates as may be
                           selected by the Administrative Committee for valuing
                           the assets of the Plan.

                  (b)      The Administrative Committee may provide for interim
                           Valuation Dates, to protect the Plan from large
                           losses, in the event of precipitous losses. These
                           interim Valuation Dates may be established on a
                           retroactive basis.

         II.63    INTEREST. "Vested Interest" shall mean the interest of a
                  Participant in the Trust Fund which has become vested pursuant
                  to the provisions of Article VII below.

         II.64    YEAR OF SERVICE. Year of Service for vesting purposes shall
                  mean 12 months of service. An Employee will receive credit for
                  the aggregate of all time periods commencing with the
                  Employee's first day of employment or reemployment and ending
                  on the day a Break in Service begins. The first day of
                  employment is the


                                     - 18 -
<PAGE>
                  first day an Employee completes an Hour of Service.


                                   ARTICLE III
                          ELIGIBILITY AND PARTICIPATION

         III.1    ELIGIBILITY TO PARTICIPATE.

                  (a)      Effective January 1, 2001, every Employee shall be
                           eligible to participate in the 401(k) cash or
                           deferred portion of the Plan on or after an Entry
                           Date which is at least 3 months after the Employee's
                           employment commencement date (the date on which the
                           Employee first performs an Hour of Service) and every
                           Employee shall be eligible to participate in the
                           Employee Stock Ownership Plan portion of the Plan on
                           or after an Entry Date which is at least 6 months
                           after the Employee's employment commencement date
                           provided the Employee is still an Employee on such
                           Entry Date(s).

                  (b)      Notwithstanding the above, each Employee who was a
                           Participant on the day before the Effective Date
                           shall be a Participant as of the Effective Date.

                  (c)      Notwithstanding the above, the following classes of
                           Employees shall not be eligible to participate in the
                           Plan

                           (i)      Employees who are included in a unit of
                                    Employees covered by a collective bargaining
                                    agreement, if there is evidence that
                                    retirement benefits were the subject of good
                                    faith bargaining between the Employee
                                    representatives and the Company, unless the
                                    collective bargaining agreement expressly
                                    provides for coverage under this Plan;

                           (ii)     Individuals classified as independent
                                    contractors by the Company, regardless of
                                    any determination to the contrary by the
                                    Internal Revenue Service;

                           (iii)    Leased Employees, if such leased employees
                                    constitute less than twenty percent of the
                                    Employer's nonhighly compensated workforce
                                    (within the meaning of Code section
                                    414(n)(1)(C)) and such leased employees are
                                    covered by a plan described in Code section
                                    414(n)(5).


                                     - 19 -
<PAGE>
         III.2    SPECIAL PARTICIPATION RULES.

                  (a)      In the case of an Employee who has met the
                           eligibility requirements of Section 3.1 but whose
                           Entry Date occurs after the Employee incurred a
                           Severance, the Employee shall be eligible to commence
                           participation in this Plan as of the Entry Date
                           following his Reemployment Commencement Date.

                  (b)      A Participant who incurs a Severance and is
                           thereafter reemployed by the Company shall be
                           entitled to recommence participation in the Plan as
                           of his Reemployment Commencement Date following the
                           Severance.

         III.3    PARTICIPATION BEYOND NORMAL RETIREMENT AGE. Participants who
                  have attained their Normal Retirement Age will continue to
                  participate in the Plan to the same extent as those
                  Participants who have not yet attained their Normal Retirement
                  Age.


                                   ARTICLE IV
                          TRUST FUND AND CONTRIBUTIONS

         IV.1     TRUST FUND. Pursuant to the terms of the Plan, the Company
                  established a trust, with the Trustee to hold and administer
                  in trust all amounts accumulated under the Plan.

         IV.2     COMPANY CONTRIBUTION.

                  (a)      For each Plan Year, the Company shall contribute to
                           the Trust Fund-

                           (i)      The Salary Savings Contributions,

                           (ii)     The Qualified Non-elective Contributions,

                           (iii)    The ESOP Contributions, and

                           (iv)     The Employer Matching Contributions.

                  (b)      In no event shall the amount of the contributions by
                           the Company under this Plan (including Salary Savings
                           Contributions) exceed the maximum allowable deduction
                           available to the Company for its taxable year under
                           Code Section 404.

                  (c)      No contribution shall be made by the Company at any
                           time when its allocation would be precluded by the
                           limitations of Article XV below.


                                     - 20 -
<PAGE>
                  (d)      All contributions by the Company under this Plan may
                           be made in kind or in cash, or in both, and shall be
                           made directly to the Trustee on any date or dates
                           selected by the Company.

                  (e)      All contributions by the Company for a Plan Year
                           shall be made within the time prescribed by law for
                           filing the Company's federal income tax return
                           (including extensions) for the Company's taxable year
                           corresponding to the Plan Year. Qualified
                           Non-elective Contributions for a Plan Year shall be
                           contributed no later than twelve (12) months after
                           the close of such Plan Year.

         IV.3     IRREVOCABILITY. In no event shall any of the assets of the
                  Plan revert to the Company except as provided in this Section
                  4.3.

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

                  (b)      All Company Contributions to the Plan are hereby
                           conditioned on their deductibility under Code Section
                           404. To the extent a deduction is disallowed, at the
                           Company's election, the contribution shall be
                           returned to the Company within one (1) year after the
                           disallowance.

                  (c)      In the case where amounts are held in a Suspense
                           Account under Section 15.5 below that may not be
                           allocated to the Accounts of Participants when the
                           Plan is terminated, the excess amounts may revert to
                           the Company in accordance with the regulations under
                           Code Section 415.

         IV.4     INVESTMENTS IN EMPLOYER SECURITIES AND EMPLOYER REAL PROPERTY.
                  The assets of the Plan may be invested, primarily or
                  exclusively, in qualifying employer securities (as defined in
                  Section 409(1) of ERISA).

         IV.5     INVESTMENT DIRECTION BY PARTICIPANTS. Except as provided in
                  Article XIX and pursuant to such rules and procedures as may
                  be prescribed by the Administrative Committee, Participants
                  may direct the investment of the assets in some or all of
                  their Accounts.

                  The Plan is intended to constitute a plan described in ERISA
                  Section 404(c) and 29 CFR Section 2550.404c-1. It is intended
                  that the fiduciaries of the Plan shall be relieved of
                  liability for any losses which are the direct and necessary
                  result of investment instructions given by a Participant or
                  Beneficiary.

         IV.6     INVESTMENT OF EMPLOYER MATCHING CONTRIBUTION ACCOUNTS.
                  Participant Employer Matching Contribution Accounts shall be
                  invested in Company Stock purchased on the open market or from
                  the Company Treasury at open market


                                     - 21 -
<PAGE>
                  prices. Fractional shares may be invested in cash and the
                  Administrative Committee may keep a portion of the Accounts
                  invested in cash for liquidity purposes.

         IV.7     ESOP PROVISIONS.

                  (a)      Except as provided in Section 4.7(c) below, the
                           Administrative Committee shall direct the Trustee to
                           invest Participants' ESOP Contribution Accounts in
                           Company Stock which has been purchased on the open
                           market or other investment alternatives permitted by
                           the Trust. Fractional shares may be invested in cash.

                           ESOP Contributions made in Company Stock shall remain
                           invested in Company Stock. ESOP Contributions made in
                           cash and other cash received by the Trust may be used
                           to purchase additional shares of Company Stock on the
                           open market at current market price at the time of
                           purchase. The Trustee may also invest such assets in
                           savings accounts, certificates of deposit,
                           high-grade, short-term securities or equity stock,
                           bonds or other investments or such assets may be held
                           in cash. All investments shall be made by the Trustee
                           only upon the direction of the Administrative
                           Committee and all purchases of Company Stock shall be
                           made at fair market value. The Administrative
                           Committee may direct that all of the Trust's ESOP
                           Contribution Accounts be invested and held in Company
                           Stock.

                  (b)      Each Participant, or, in the event of his death, his
                           Beneficiary, shall have the right to instruct the
                           Trustee in writing as to the manner in which to vote
                           the vested and unvested shares of Company Stock
                           allocated to his ESOP Contribution Account and his
                           proportionate share of the shares of Company Stock
                           allocated to all Participants' ESOP Contribution
                           Accounts for which other Participants have not given
                           timely instructions regarding voting to the Trustee
                           as described herein, at any shareholders' meeting of
                           the Company.

                           The Company shall use its best efforts to timely
                           distribute or cause to be distributed to each
                           Participant or Beneficiary the information
                           distributed to shareholders of the Company in
                           connection with any such shareholders' meeting,
                           together with a form requesting confidential
                           instructions to the Trustee on how such shares of
                           Company Stock shall be voted on each such matter.
                           Upon timely receipt of such instructions, the Trustee
                           shall, on each such matter, vote as directed the
                           appropriate number of shares (including fractional
                           shares) of Company Stock.

                           Except as otherwise required by applicable law, the
                           instructions received by the Trustee from
                           Participants or Beneficiaries shall be held by the


                                     - 22 -
<PAGE>
                           Trustee in strict confidence and shall not be
                           divulged to any person, including employees, officers
                           and directors of the Company or any Affiliated
                           Company; provided, however, that, to the extent
                           necessary for the operation of the Plan, such
                           instructions may be relayed by the Trustee to a
                           recordkeeper, auditor or other persons providing
                           services to the Plan if such person (i) is not the
                           Company, an Affiliated Company, or any employee,
                           officer or director thereof, and (ii) agrees not to
                           divulge such directions to any other person,
                           including employees, officers and directors of the
                           Company or any Affiliated Company.

                           An individual's proportionate share of unvoted shares
                           of Company Stock for purposes of the first paragraph
                           of this Section 4.7(b) shall be a fraction, the
                           numerator of which shall be the number of shares held
                           in such individual's ESOP Contribution Account for
                           which he provides timely instruction to the Trustee
                           and the denominator of which shall be the aggregate
                           number of shares held in all such ESOP Contribution
                           Accounts for which timely instructions are provided
                           to the Trustee.

                  (c)      Each Participant or, in the event of his death, his
                           Beneficiary, shall have the right to instruct the
                           Trustee in writing as to the manner in which to
                           respond to a tender or exchange offer with respect to
                           the shares of Company Stock allocated to his ESOP
                           Contribution Account. The Company shall use its best
                           efforts to timely distribute or cause to be
                           distributed to each Participant or Beneficiary the
                           information distributed to shareholders of the
                           Company in connection with any such tender or
                           exchange offer, together with a form requesting
                           confidential instructions to the Trustee on how to
                           respond to such tender or exchange offer.

                           Upon timely receipt of such instructions, the Trustee
                           shall respond as directed with respect to such shares
                           of Company Stock. If, and to the extent that, the
                           Trustee shall not have received timely instructions
                           from any individual given a right to instruct the
                           Trustee with respect to shares of Company Stock by
                           the first sentence of this Section 4.7(c), such
                           individual shall be deemed to have timely instructed
                           the Trustee not to tender or exchange such shares of
                           Company Stock.

                           Except as otherwise required by applicable law, the
                           instructions received by the Trustee from
                           Participants or Beneficiaries shall be held by the
                           Trustee in strict confidence and shall not be
                           divulged to any person, including employees, officers
                           and directors of the Company or any Affiliated
                           Company; provided, however, that, to the extent
                           necessary for the operation of the Plan, such
                           instructions may be relayed by the Trustee to a
                           recordkeeper, auditor or other persons providing
                           services to the Plan if such person (i) is not the
                           Company, an Affiliated Company, or any employee,
                           officer or director thereof, and (ii) agrees not to
                           divulge such


                                     - 23 -
<PAGE>
                           directions to any other person, including employees,
                           officers and directors of the Company or any
                           Affiliated Company.

                  (d)      Each Participant shall have diversification rights
                           beginning with the first Plan Year in which the
                           Participant has both attained age fifty-five (55) and
                           completed ten (10) years of participation in the
                           Plan. Diversification rights shall apply to Company
                           Stock allocated to his ESOP Contribution Account
                           after December 31, 1986. A Participant's
                           diversification rights are:

                           (i)      For each of the first Ave (5) Plan Years he
                                    may elect to transfer an amount up to
                                    twenty-five percent (25%) of his applicable
                                    ESOP Contribution Account less any amounts
                                    previously diversified under this Section
                                    4.7(d), to the other investment options
                                    provided under the Plan for Participants'
                                    Salary Savings Contribution Accounts.

                           (ii)     For the sixth (6th) Plan Year, he may elect
                                    to transfer an amount up to fifty percent
                                    (50%) of his applicable ESOP Contribution
                                    Account, less any amounts previously
                                    diversified under this Section 4.7(d), to
                                    the other investment options provided under
                                    the Plan for Participants' Salary Savings
                                    Contribution Accounts.

                           (iii)    A diversification election for a Plan Year
                                    must be made in writing and filed with the
                                    administrative committee within 90 days
                                    after the close of such Plan Year.

                           (iv)     The Administrative Committee may elect to
                                    distribute amounts which Participants have
                                    elected to diversify in lieu of permitting
                                    the transfer of assets under Sections
                                    4.7(d)(i) and (ii) above. The Administrative
                                    Committee's election as to whether
                                    diversification amounts will be transferred
                                    or distributed for a Plan Year shall be
                                    applied to Participants in a uniform and
                                    non-discriminatory manner.

                           (v)      The diversification requirement of this
                                    Subsection (d) shall be satisfied if, at the
                                    election of the Committee, the portion of
                                    the Participant's ESOP Contribution Account
                                    subject to diversification under this
                                    Subsection (d) is made available for
                                    distribution to such Participant and, unless
                                    such Participant, or the Participant's
                                    spouse, if applicable, shall fail to consent
                                    to such distribution as provided for at
                                    Section 8.4, is in fact distributed to such
                                    Participant within 90 days after the last
                                    day of the period during which the
                                    Participant can elect diversification
                                    hereunder. No distributions shall be made to
                                    a Participant under this Paragraph (v)
                                    unless the consent


                                     - 24 -
<PAGE>
                                    requirements of Section 8.4 have been
                                    satisfied; provided the diversification
                                    requirements of this Subsection (d) shall be
                                    deemed satisfied if a distribution is not
                                    made to such Participant solely because of
                                    the failure of the Participant, or the
                                    Participant's spouse, if applicable, to
                                    consent to such distribution, as required
                                    under Section 8.4.


                                    ARTICLE V
                            PARTICIPANT CONTRIBUTIONS

         V.1      SPECIAL RULES.

                  (a)      Pursuant to such rules and procedures as the
                           Administrative Committee may prescribe, each
                           Participant may elect to make Salary Savings
                           Contributions to the Plan.

                  (b)      Salary Savings Contributions must be made in whole
                           percentages of the Participant's Earnings. The
                           maximum rate of Salary Savings Contributions is
                           fourteen percent (14%) of the Participant's
                           Compensation.

                  (c)      The Administrative Committee shall prescribe such
                           rules and procedures as it deems necessary or
                           appropriate relating to the termination, resumption
                           or change in the rate of Salary Savings
                           Contributions.

                  (d)      Salary Savings Contributions shall be treated as
                           Employer Contributions for purposes of Code Sections
                           401(k) and 414(h).

                  (e)      Salary Savings Contributions shall be collected by
                           the Company only through payroll deductions.

                  (f)      The Company shall remit the Salary Savings
                           Contributions to the Trustee as soon as practicable,
                           but in no event later than the 15th day of the month
                           following the month in which the Salary Savings
                           Contributions were deducted from a Participant's
                           Compensation.

         V.2      AMOUNT SUBJECT TO A DEFERRAL ELECTION.

                  (a)      Notwithstanding anything in this Plan to the
                           contrary, the maximum amount of Salary Savings
                           Contributions that a Participant may make in a single
                           calendar year is limited to $10,500. This amount
                           shall be adjusted for increases in the cost-of
                           living, as determined under Section 402(g) of the
                           Code.

                  (b)      In no event will a Participant be permitted to make
                           Salary Savings


                                     - 25 -
<PAGE>
                           Contributions in excess of the maximum amount
                           permitted under Sections 5.3 or 5.7 below.

         V.3      AVERAGE DEFERRAL PERCENTAGE TESTS.

                  (a)      The Administrative Committee shall monitor the Salary
                           Savings Contributions and Qualified Non-elective
                           Contributions to insure that the requirements of
                           either Paragraph (b) or (c) are satisfied.

                  (b)      The requirements of this Paragraph (b) are satisfied
                           if the Average Deferral Percentage for Highly
                           Compensated Employees for the Plan Year is not more
                           than the Average Deferral Percentage for all other
                           Covered Employees multiplied by 1.25.

                  (c)      The requirements of this Paragraph (c) are satisfied
                           if

                           (i)      The excess of the Average Deferral
                                    Percentage of the group of Highly
                                    Compensated Employees over that of all other
                                    Covered Employees is not more than two (2)
                                    percentage points, and

                           (ii)     The Average Deferral Percentage for the
                                    group of Highly Compensated Employees is not
                                    more than twice the Average Deferral
                                    Percentage for all other Covered Employees.

                  (d)      The Administrative Committee shall maintain records
                           sufficient to demonstrate satisfaction of the
                           requirements of this Section 5.3.

                  (e)      The provisions of this Section 5.3 are intended to
                           comply with the provisions of Code Section 401(k)(3)
                           and Regulations Section 1.401(k)-I(b), the provisions
                           of which are hereby incorporated into this Plan as
                           provided under Regulations Section
                           1.401(k)-1(b)(2)(iii).

         V.4      PROSPECTIVE REDUCTIONS OF SALARY SAVINGS CONTRIBUTIONS.

                  (a)      The Administrative Committee may determine prior to
                           the end of the Plan Year whether or not the Average
                           Deferral Percentage tests of section 5.3 are
                           satisfied. If it appears that the tests will not be
                           satisfied, the Administrative Committee may elect to
                           reduce the Salary Savings Contributions by the Highly
                           Compensated Employees on a prospective basis.

                  (b)      In the event that Salary Savings Contributions by
                           Highly Compensated Employees must be reduced, these
                           reductions will be accomplished reducing Salary
                           Savings Contributions for the Highly Compensated
                           Employee whose Salary Savings Contributions for the
                           Plan Year are the


                                     - 26 -
<PAGE>
                           highest to the extent required to

                           (i)      Enable the Plan to satisfy one of the
                                    Average Deferral Percentage Tests of Section
                                    5.3 above, or

                           (ii)     Cause his Salary Savings Contributions to
                                    equal those of the Highly Compensated
                                    Employee with the next highest Salary
                                    Savings Contributions. If this action does
                                    not cause the Plan to satisfy one of the
                                    Average Deferral Percentage Tests, this
                                    process will be repeated until one of those
                                    tests is satisfied.

         V.5      DISTRIBUTIONS OF EXCESS DEFERRALS. In the event a Participant
                  deferred more than the maximum permitted under Section 5.2(a)
                  above ("Excess Deferrals"), whether under only this Plan, or
                  under this Plan and another plan, the Participant may notify
                  the Plan of the portion of his Excess Deferrals allocable to
                  the Plan no later than March 1 following the calendar year in
                  which the Excess Deferrals were made.

                  (a)      Notwithstanding anything in this Plan to the
                           contrary, the Administrative Committee shall attempt
                           to distribute the amount of the Participant's Excess
                           Deferrals (and the earnings thereon) to the
                           Participant no later than April 15th of the calendar
                           year following the calendar year in which the Excess
                           Deferrals were made.

                  (b)      Distributions may be made under this Section 5.5
                           without regard to the consent requirement of Section
                           8.5 below.

                  (c)      Amounts that are distributed under this Section 5.5
                           will not be taken into account for poses of the
                           minimum distribution rules of Section 8.3 below.

         V.6      DISTRIBUTIONS OF EXCESS CONTRIBUTIONS. In the event that the
                  Plan fails to satisfy the Average Deferral Percentage Tests of
                  Section 5.3 above as of the last day of the Plan Year, the
                  Salary Savings Contributions in excess of those limits and the
                  earnings thereon ("Excess Contributions") shall be distributed
                  from the Plan.

                  (a)      The Administrative Committee shall attempt to
                           distribute these amounts within two and one-half
                           (2-1/2) months after the end of the Plan Year for
                           which the contributions were made, but in no event
                           later than the last day of the Plan Year following
                           the Plan Year in which the Excess Contributions were
                           made.

                  (b)      In the event that the Excess Contributions are
                           distributed, the distributions will be accomplished
                           by distributing the lesser of the following amounts
                           to the Highly Compensated Employee whose deferral
                           amount is the greatest:


                                     - 27 -
<PAGE>
                           (i)      An amount which will enable the Plan to
                                    satisfy one of the Average Percentage Tests
                                    of Section 5.3 above, or

                           (ii)     An amount which will cause his Salary
                                    Savings Contributions to equal those of the
                                    Highly Compensated Employee with the next
                                    highest Salary Savings Contributions. If
                                    this action does not cause the Plan to
                                    satisfy one of the Average Deferral
                                    Percentage Tests, this process will be
                                    repeated until one of those tests is
                                    satisfied.

                  (c)      The amount to be distributed to a Highly Compensated
                           Employee under Paragraph (b) above shall be
                           determined on the basis of the portion of the Excess
                           Contributions attributable to him.

                  (d)      Distributions may be made under this Section 5.6
                           above without regard to the consent requirement of
                           Section 8.5 below.

                  (e)      Amounts that are distributed under this Section 5.6
                           will not be taken info account for purposes of the
                           minimum distribution rules of Section 8.3 below.

         V.7      AVERAGE CONTRIBUTION PERCENTAGE TESTS.

                  (a)      The Administrative Committee shall monitor the
                           Employer Matching Contributions to insure that the
                           requirements of either Paragraph (b) or (c) are
                           satisfied.

                  (b)      The requirements of this Paragraph (b) are satisfied
                           if the Average Contribution Percentage for Highly
                           Compensated Employees for the Plan Year is not more
                           than the Average Contribution Percentage for all
                           other Covered Employees multiplied by 1.25.

                  (c)      The requirements of this Paragraph (c) are satisfied
                           if

                           (i)      The excess of the Average Contribution
                                    Percentage of the group of Highly
                                    Compensated Employees over that of all other
                                    Covered Employees is not more than two (2)
                                    percentage points, and

                           (ii)     The Average Contribution Percentage for the
                                    group of Highly Compensated Employees is not
                                    more than twice the Average Contribution
                                    Percentage for all other Covered Employees.

                  (d)      The Administrative Committee shall maintain records
                           sufficient to demonstrate satisfaction of the
                           requirements of this Section 5.7

                  (e)      In the event that the Plan fails to satisfy the above
                           tests of this Section 5.7,


                                     - 28 -
<PAGE>
                           the non-vested Employer Matching Contributions in
                           excess of those test limits ("Excess Aggregate
                           Contributions") (and the income allocable thereto),
                           shall be forfeited. The vested Excess Aggregate
                           Contributions (and the income allocable thereto),
                           shall be distributed to the appropriate Highly
                           Compensated Employees after the close of the Plan
                           Year in which such vested Excess Aggregate
                           Contributions arose and within 12 months of the close
                           of that Plan Year. The Excess Aggregate Contributions
                           shall be determined by reducing the contributions
                           made on behalf of Highly Compensated Employees,
                           beginning with the individual with the highest amount
                           of contributions.

                  (f)      The amount of the Excess Aggregate Contributions
                           shall be determined after

                           (i)      First determining the amount of Excess
                                    Deferrals; and

                           (ii)     Then determining the amount of Excess
                                    Contributions.

                  (g)      The Company shall not be obligated to make any
                           Employer Matching Contributions with respect to the
                           excess of the maximum amount permitted under the
                           above rules of this Section 5.7.

                  (h)      Distributions may be made under this Section 5.7
                           without regard to the consent requirement of Section
                           8.5 below.

                  (i)      Amounts that are distributed under this Section 5.7
                           will not be taken into account for purposes of the
                           minimum distribution rules of Section 8.3 below.

                  (j)      The provisions of this Section 5.7 are intended to
                           comply with the provisions of Code Section 401(m)(9)
                           and Regulations Section 1.401(m)-2, the provisions of
                           which are hereby incorporated into this Plan as
                           provided under Regulations Section
                           1.401(k)-1(b)(2)(iii).

         V.8      MULTIPLE USE TEST.

         Each Plan Year the Plan shall satisfy the multiple use test of
         Regulations Section 1.401(m)-2, the provisions of which are hereby
         incorporated into this Plan by reference as provided in Regulations
         Section 1.401(m)-2(b).

         The Administrative Committee shall reduce either (but not both of) the
         Average Deferral Percentage or the Average Contribution Percentage for
         the Plan Year with respect to all Highly Compensated Employees for the
         Plan Year in order to satisfy the multiple use test.


                                     - 29 -
<PAGE>
         V.9      ROLLOVER CONTRIBUTIONS.

         A Participant or an Employee who is expected to become a Participant
         may transfer amounts ("Rollover Contributions") previously distributed
         to him from another employer's qualified plan (as described in Code
         Section 401(a)) or from a "conduit" IRA (as described in Code Section
         408).

         Participants shall be required to provide the Administrative Committee
         with proof satisfactory to the Administrative Committee that the
         Rollover Contribution is an eligible rollover distribution within the
         meaning of Code Section 402(f)(2)(A). Rollover Contributions shall
         consist entirely of cash. The Administrative Committee shall not accept
         any Rollover Contribution which would require the Plan to provide a
         form of payment which is not provided for under Article IX.

                                   ARTICLE VI
                      ALLOCATIONS TO PARTICIPANTS' ACCOUNTS

         VI.1     PARTICIPANTS' ACCOUNTS. The Administrative Committee shall
                  open and maintain a separate Account for each type of
                  contribution permitted under the Plan for each Participant.

         VI.2     ALLOCATION OF EMPLOYER MATCHING CONTRIBUTIONS.

                  (a)      The Employer Matching Contribution for each
                           Participant shall be credited on the last day of each
                           Plan Year to the Employer Matching Contribution
                           Account of each Participant who was an Employee on
                           the last day of the Plan Year and who made Salary
                           Savings Contributions during the Plan Year.

                  (b)      The amount of Employer Matching Contribution to be
                           allocated to an eligible Participant's Employer
                           Matching Contribution Account for a Plan Year shall
                           be

                           (i)      100% of up to the first $500 of Participant
                                    Salary Savings contributions for a Plan Year
                                    and

                           (ii)     50% of Participant Salary Savings
                                    Contributions for a Plan Year in excess of
                                    the first $500 and up to a maximum 6% of
                                    Compensation.

                  (c)      Employer Matching Contributions shall be allocated to
                           eligible Participants' Employer Matching Contribution
                           Accounts in the proportion that each eligible
                           Participant's Salary Savings Contributions for the
                           Plan Year bear to the aggregate Salary Savings
                           Contributions for the Plan Year


                                     - 30 -
<PAGE>
                           of all eligible Participants. For this purpose for a
                           Plan Year, a Participant's Salary Savings
                           Contributions that exceed a percentage of the
                           Participant's Compensation for the Plan Year shall be
                           uniformly disregarded, such percentage to be
                           determined by the Administrative Committee in its
                           sole discretion for such Plan Year.

         VI.3     ALLOCATION OF ESOP CONTRIBUTIONS.

                  (a)      The ESOP Contributions (if any) for each Plan Year
                           shall be allocated to the ESOP Contribution Account
                           of each Participant who is entitled to receive an
                           allocation in the proportion that his units bears to
                           the aggregate units of all Participants who are
                           entitled to receive an allocation during that Plan
                           Year.

                  (b)      A Participant will be entitled to receive an
                           allocation of the ESOP Contributions if he --

                           (i)      is employed by the Company on the last day
                                    of the Plan Year, and

                           (ii)     completed at least 1,000 Hours of Service
                                    during the Plan Year.

                  (c)      For purposes of this Section 6.3, each Participant
                           shall be credited with units for a Plan Year as
                           follows:

                           (i)      one unit for each full one hundred dolls
                                    ($100) of Compensation paid to the
                                    Participant by the Employer for the Plan
                                    Year; and

                           (ii)     one unit for each full Year of Service which
                                    is continuous and uninterrupted. For
                                    purposes of this allocation only, Years of
                                    Service shall exclude periods prior to any
                                    Break in Service, but shall include periods
                                    during which a Participant was on a Leave of
                                    Absence. If such computation results in the
                                    total involving a fractional unit, then a
                                    unit of one-half or less shall be
                                    disregarded and more than one-half unit
                                    shall be counted as one unit.

                  (d)      Provisions of this Section 6.3 to the contrary
                           notwithstanding, in the event of a mid-year ESOP
                           Contribution or in the event of a release of any
                           shares, the acquisition of which was financed via an
                           Exempt Loan (as defined and set forth in Section 7.04
                           of the Trust Agreement), the Administrative Committee
                           may allocate such ESOP Contribution or release of
                           shares to the ESOP Contribution Account of each
                           Participant either as of a Valuation Date during the
                           Plan Year or at the end of the Plan Year. Allocations
                           will only be made to the ESOP Contribution Account of
                           Participants who are Employees (as defined in Section
                           2.22), as of the date of such ESOP Contribution. If
                           such ESOP Contribution or released shares


                                     - 31 -
<PAGE>
                           are allocated as of a Valuation Date during the Plan
                           Year, for purposes of allocation to Participant
                           Accounts under the formula contained in Section
                           6.3(c) above, "Compensation" and "Years of Service"
                           shall be projected to the end of the Plan Year
                           assuming the same rate of Compensation and the same
                           accrual of Service as has been experienced by the
                           Participant from the beginning of the Plan Year to
                           the Valuation Date.

                  (e)      Notwithstanding any contrary provision in this Plan
                           and Trust, the ESOP contribution made in connection
                           with that certain 2000 Westcorp Subscription Rights
                           Offering ("Rights Offering") or the Subsequent Rights
                           Offering ("Subsequent Rights Offering") will be
                           allocated among the accounts based upon the ratio of
                           the number of Rights each Participant has in his or
                           her ESOP account bears to the total number of Rights
                           held in all accounts.

         VI.4     ALLOCATION OF SALARY SAVINGS CONTRIBUTIONS.

                  A Participant's Salary Savings Contributions shall be
                  allocated to his Elective Deferral Account.

         VI.5     ALLOCATION OF QUALIFIED NON-ELECTIVE CONTRIBUTIONS.

                  (a)      The Qualified Non-elective Contributions (if any) for
                           each Plan Year shall be allocated to the Salary
                           Savings Contribution Accounts of each Participant who
                           is entitled to receive an allocation in the
                           proportion that his Compensation during that Plan
                           Year bears to the aggregate Compensation of all
                           Participants who are entitled to receive an
                           allocation during that Plan Year. Amounts shall be
                           credited to Participants' Salary Savings Contribution
                           Accounts as of the last day of the Plan Year.

                  (b)      Each Plan Year for which the Employer makes Qualified
                           Non-elective Contributions to the Plan, the
                           Administrative Committee shall determine the group of
                           Participants who are entitled to receive an
                           allocation of Qualified Non-elective Contributions in
                           one of the following ways:

                           (i)      All Participants who are not Highly
                                    Compensated Employees; or

                           (ii)     Such non Highly Compensated Employees or
                                    former Employees as may be selected by the
                                    Administrative Committee.

                           (iii)    All Participants who have Compensation
                                    for-the Plan Year which does not exceed a
                                    dollar amount to be set by the
                                    Administrative Committee for the Plan Year,
                                    whether or not such Participants are Highly
                                    Compensated Employees.


                                     - 32 -
<PAGE>
                           A Participant's entitlement to receive an allocation
                           of Qualified Non-elective Contributions for a Plan
                           Year shall not be contingent upon his participation
                           in the Plan or his performance of any services after
                           the last day of the Plan Year.

         VI.6     REVALUATION OF ACCOUNTS.

                  (a)      Within sixty (60) days after each Valuation Date, the
                           Trustee shall value the assets of the Trust on the
                           basis of fair market values.

                  (b)      Upon receipt of the valuations from the Trustee, the
                           Administrative Committee shall revalue the Accounts
                           of each Participant as of the applicable Valuation
                           Date as to reflect a proportionate share in any
                           increase or decrease in the fair market value of the
                           assets in the Trust Fund, determined as of that date
                           as compared with the value of the assets in the Trust
                           Fund determined as of the immediately preceding
                           Valuation Date. The Administrative Committee shall
                           establish uniform and non-discriminatory accounting
                           procedures to allocate such changes in the market
                           value of Participants' Accounts.

         VI.7     FORFEITURES FROM EMPLOYER MATCHING CONTRIBUTION ACCOUNT. Any
                  amount of a Participant's Employer Matching Contribution
                  Account that is forfeited shall be used in the following
                  manner:

                  (a)      First, to restore the Employer Matching Contribution
                           Accounts or ESOP Contribution Accounts of former
                           Participants under Section 8.7 below;

                  (b)      Second, to reduce the Employer Matching Contributions
                           to the Plan; and

                  (c)      Third, to be allocated to the accounts of
                           Participants in a non-discriminatory manner, to
                           reduce Employer contributions not provided in
                           Sections 6.7 or 6.8, or to be allocated to the ESOP
                           Contribution Accounts pursuant to Section 6.3.

         VI.8     FORFEITURES FROM ESOP CONTRIBUTION ACCOUNT. Any amount of a
                  Participant's ESOP Contribution Account that is forfeited
                  shall be used in the following manner:

                  (a)      First, to restore the Employer Matching Contribution
                           Accounts or ESOP Contribution Accounts of former
                           Participants under Section 8.7 below; and/or

                  (b)      Second, to be allocated to the accounts of
                           Participants in a non-discriminatory manner, to
                           reduce Employer contributions not provided in
                           Sections 6.7 or 6.8, or to be allocated to the ESOP
                           Contribution Accounts


                                     - 33 -
<PAGE>
                           pursuant to Section 6.3.

         VI.9     ORDERING OF ALLOCATIONS. Allocations made pursuant to this
                  Article VI shall be made in the following order:

                  (a)      Those required by Sections 6.7 and 6.8 above;

                  (b)      Those required by Section 15.5 below;

                  (c)      Those required by Section 6.4 above; and

                  (d)      Those required by Sections 6.2, 6.3 and 6.5 above.

         VI.10    MISCELLANEOUS ALLOCATION RULES.

                  (a)      For purposes of making the allocations of Employer
                           Contributions under this Article VI, any Employer
                           Contributions made with respect to a particular Plan
                           Year that are made after the end of the year but on
                           or before the due date for the Company's federal
                           income tax return (including extensions) for its
                           taxable year relating to the Plan Year shall be
                           considered as having been made on the last day of the
                           Plan Year.

                  (b)      Upon a Participant's Severance, pending distribution
                           of the Participant's Vested Interest, the
                           Participant's Accounts shall continue to be
                           maintained and accounted for in accordance with all
                           applicable provisions of this Plan.

                  (c)      The Administrative Committee and the Trustee may
                           establish accounting procedures for the purpose of
                           making the allocations, valuations, and adjustments
                           to Participants' Accounts provided for in this
                           Article VI.

                  (d)      The Company, the Administrative Committee and the
                           Trustee do not guarantee that the value of a
                           Participant's Accounts shall at any time equal or
                           exceed the amount previously contributed thereto.


                                   ARTICLE VII
                                     VESTING

         VII.1    GENERAL RULE.

                  The Vested Interest of each Participant in his Employer
                  Matching Contribution Account shall be determined on the basis
                  of his Years of Service, in accordance with the following
                  schedule:


                                     - 34 -
<PAGE>
<TABLE>
<CAPTION>
                             Years of                                            Vested
                             Service                                            Interest
                             -------                                            --------
                           <S>                                                  <C>
                           Less than 1                                              0%
                                    1                                              30%
                                    2                                              60%
                                    3                                             100%
</TABLE>

                  The Vested Interest of each Participant in his ESOP
                  Contribution Account shall be determined on the basis of his
                  Years of Service, in accordance with the following schedule:

<TABLE>
<CAPTION>
                             Years of                                            Vested
                             Service                                            Interest
                             -------                                            --------
                           <S>                                                  <C>
                           Less than 1                                              0%
                                    1                                              20%
                                    2                                              40%
                                    3                                              60%
                                    4                                              80%
                                    5                                             100%
</TABLE>

         VII.2    SPECIAL VESTING RULES.

                  Notwithstanding the rules of Section 7.1 above, during a
                  Participant's period of employment with the Company or an
                  Affiliated Company, in the event of his death, Disability, or
                  attainment of Normal Retirement Age, he shall become one
                  hundred percent (100%) vested in his Employer Matching
                  Contribution Account and ESOP Contribution Account.

         VII.3    FULLY VESTED ACCOUNTS. A Participant shall always be one
                  hundred percent (100%) vested in his Salary Savings
                  Contribution Account, Rollover Account and Hammond Company
                  Matching Account.

         VII.4    FORFEITURES.

                  (a)      The nonvested portions of a Participant's Employer
                           Matching Contribution Account and ESOP Contribution
                           Account shall be forfeited as of the earlier of

                           (i)      The date of the distribution of his benefit,
                                    or

                           (ii)     The date on which he incurs five (5)
                                    consecutive breaks in Service.

                  (b)      In the case of any Participant who has incurred five
                           (5) consecutive Breaks


                                     - 35 -
<PAGE>
                           in Service, his Years of Service if any, completed
                           after the Breaks in Service shall not be taken into
                           account for purposes of determining his Vested
                           Interest in his Employer Matching Contribution
                           Account and ESOP Contribution Account that accrued
                           before the breaks in Service.

                  (c)      If the Participant is rehired prior to incurring the
                           Forfeiture or the Participant repays the amount of
                           the prior distribution pursuant to Section 8.7(b), he
                           will continue to vest, starting at the point in the
                           vesting schedule where he incurred the Severance, in
                           both the Company Contributions made before and after
                           the Severance.

                  (d)      Forfeitures will be used as provided in Sections 6.7
                           and 6.8.


                                  ARTICLE VIII
                               PAYMENT OF BENEFITS

         VIII.1   PAYMENT OF BENEFITS.

                  (a)      Subject to the following rules of this Article VIII,
                           a Participant's Vested Interest shall not be
                           distributed prior to his Severance.

                  (b)      All distributions to Participants or their
                           Beneficiaries shall be based on_the amount of the
                           Participant's Accounts as of the Valuation Date
                           immediately preceding the date on which the
                           Participant's Vested Interest is distributed.

                  (c)      The Administrative Committee shall prescribe such
                           rules as it deems necessary regarding the timing of
                           payments and the written notice requirements for
                           distributions prior to Severance.

                  (d)      In the case of a distribution made by reason of the
                           Participant's Severance, no distribution will be made
                           if the Participant's Reemployment Commencement Date
                           occurs before his Vested Interest is distributed.

         VIII.2   LATEST PAYMENT DATE.

                  (a)      Subject to the following rules of this Article VIII,
                           payment of the Participant's entire Vested Interest
                           under the Plan shall begin in no event later than hid
                           "Latest Payment Date," which is the sixtieth (60th)
                           day after the close of the Plan Year in which the
                           latest of the following events occurs:

                           (i)      The Participant's Normal Retirement Age;


                                     - 36 -
<PAGE>
                           (ii)     The tenth (10th) anniversary of the date on
                                    which he commenced participation in the
                                    Plan; or

                           (iii)    The termination of his employment with the
                                    Company or an Affiliated Company.

                  (b)      If it is not possible to make payment to a
                           Participant by his Latest Payment Date because the
                           amount of his benefit cannot be ascertained by that
                           date, or because the Administrative Committee has
                           been unable to locate the Participant after making
                           reasonable efforts to do so, the payment shall be
                           made no later than sixty (60) days after the earliest
                           date on which the amount of the payment can be
                           ascertained or the date on which the Participant is
                           located (whichever is applicable).

         VIII.3   REQUIRED BEGINNING DATE.

                  (a)      The interest of each Participant shall be distributed
                           not later than his Required Beginning Date.

                  (b)      "Required Beginning Date" shall mean April 1 of the
                           calendar year following the later of the calendar
                           year in which the Participant attains age seventy and
                           one-half (70-1/2) or the calendar year in which he
                           incurs a Severance.

                  (c)      Except as may be provided in Article IX, if a
                           Participant dies before distribution of his Vested
                           Interest has begun, his entire Vested Interest shall
                           be distributed within five (5) years of his death.

                  (d)      The provisions of this Article VIII are intended to
                           comply with the provisions of Code Section 401(a)(9)
                           and regulations thereunder. If there is any
                           discrepancy between the provisions of this Plan and
                           the provisions of Code Section 401(a)(9) and
                           regulations thereunder, such discrepancy shall be
                           resolved so as to give full effect to the provisions
                           of such Code Section and related regulations.

         VIII.4   CONSENT TO RECEIVE EARLY DISTRIBUTION.

                  (a)      If the Participant's Vested Interest exceeds five
                           thousand dollars ($5,000), either at the time of the
                           current distribution or at the time of a prior
                           distribution, no distribution shall occur prior to
                           the Participant's Normal Retirement Age, unless he
                           elects to receive the distribution.

                  (b)      The Plan must provide the Participant with a notice
                           of his right, and a Participant may waive his right
                           in writing, to defer the receipt of the distribution
                           no less than thirty (30) and no more than ninety (90)
                           days


                                     - 37 -
<PAGE>
                           before the date of the distribution.

                  (c)      The consent of the Participant must not be made

                           (i)      Before he receives the notice, or

                           (ii)     More than ninety (90) days before the date
                                    of the distribution.

                  (d)      A Participant may revoke an election to defer
                           receiving benefits at any time, so as to accelerate
                           the timing of the payment of his benefits.

                  (e)      This consent requirement shall not apply in the case
                           of the

                           (i)      Death of the Participant, or

                           (ii)     Termination of the Plan, provided neither
                                    the Company nor any Affiliated Company
                                    maintains any other defined contribution
                                    plan, other than an employee stock ownership
                                    plan. If the Participant does not consent to
                                    an immediate distribution from this Plan,
                                    his benefit shall be transferred to the
                                    other defined contribution plan.

         VIII.5   REQUIREMENT OF SPOUSAL CONTENT.

                  (a)      In the event of the death of a Participant, his
                           benefit shall be paid to a Beneficiary other than his
                           surviving Spouse only if the requirements of
                           Subparagraphs (i) or (ii) below are satisfied.

                           (i)      The requirements of this Subparagraph (i)
                                    are satisfied if the requirements of Clauses
                                    (A), (B) and (C) below are met.

                                    (A)      The Spouse of the Participant
                                             consents in writing to the
                                             designation of Beneficiary.

                                    (B)      The election designates a
                                             Beneficiary (or a form of benefits)
                                             which may not be changed without
                                             spousal consent (or the spousal
                                             consent expressly permits
                                             designations without any
                                             requirement of further consent by
                                             the Spouse).

                                    (C)      The Spouse's consent acknowledges
                                             the effect of the designation and
                                             is witnessed by a Plan
                                             Representative or a notary public.

                           (ii)     The requirements of this Subparagraph (ii)
                                    are satisfied if it is established to the
                                    satisfaction of a Plan Representative that
                                    the


                                     - 38 -
<PAGE>
                                    consent required by Subparagraph (i) above
                                    may not be obtained--

                                    (A)      Because there is no Spouse,

                                    (B)      Because the Spouse cannot be
                                             located, or

                                    (C)      Because of such other circumstances
                                             as may be set forth in regulations
                                             under Code Section 417(a)(2).

                  (b)      Any consent by a Spouse (or establishment that the
                           consent of a Spouse may not be obtained) under the
                           above rules will be effective only with respect to
                           that Spouse.

                  (c)      For purposes of this Section 8.5, "Plan
                           Representative" shall mean the person or persons
                           designated by the Administrative Committee to Witness
                           the execution of such documents.

         VIII.6   NO BENEFICIARY DESIGNATION.

                  (a)      The rules of Paragraph (b) below shall apply to the
                           distribution of a Participant's Vested Interest if-

                           (i)      The deceased Participant failed to designate
                                    a Beneficiary,

                           (ii)     The Administrative Committee is unable to
                                    locate a designated Beneficiary,

                           (iii)    The Beneficiary predeceased the Participant,
                                    or

                           (iv)     The designation of the Beneficiary by the
                                    Participant is legally ineffective.

                  (b)      In the event the rules of Paragraph (a) above apply,
                           then any distribution on behalf of a Participant
                           shall be paid to the Participant's estate.

         VIII.7   DISTRIBUTIONS TO PARTIALLY VESTED PARTICIPANTS. The following
                  rules shall apply if a Participant incurs a Severance prior to
                  becoming fully vested.

                  (a)      In the event that a distribution of his Employer
                           Matching Account or Employer Profit Sharing Account
                           is made to a Participant at a time when he is not
                           fully vested in such Accounts, the nonvested portion
                           of the Participant's Account shall be forfeited in
                           accordance with the rules of Article VII above.

                  (b)      A Participant who received a distribution described
                           in Paragraph (a) above


                                     - 39 -
<PAGE>
                           may recontribute the amount of the distribution he
                           received. The repayment must be made (if at all),
                           however, not later than the date specified below.

                           (i)      In the case of a distribution upon
                                    Severance, the earlier of-

                                    (A)      The fifth (5th) anniversary of his
                                             Reemployment Commencement Date, or

                                    (B)      The date on which he incurs five
                                             (5) consecutive Breaks in Service.

                           (ii)     In any other case, the fifth (5th)
                                    anniversary of the date of the withdrawal.

                  (c)      If the Participant repays the amount of the
                           distribution within the prescribed time period, the
                           amount of his Company Contributions Account balance
                           shall be completely restored. Neither the amount
                           recontributed nor the Account balance (previously
                           forfeited) shall be adjusted for gains, losses, or
                           interest in the interim period.

                  (d)      If the Participant does not repay the amount of the
                           distribution and he incurs a second Severance prior
                           to becoming fully vested, the amount to be
                           distributed to him shall be equal to the sum of-

                           (i)      The amount in his Account as of the date of
                                    the second distribution, and

                           (ii)     The amount previously distributed to him,
                                    multiplied by his vested percentage, but
                                    reduced by the amount previously distributed
                                    to him.

                  (e)      Forfeitures shall be used as provided in Sections 6.7
                           and 6.8 above.

         VIII.8   DISTRIBUTION OF SALARY SAVINGS CONTRIBUTION ACCOUNTS.

                  (a)      Notwithstanding anything in this Plan to the
                           contrary, a Participant's Salary Savings Contribution
                           Account may not be distributed prior to the
                           occurrence of the earliest of any of the events
                           described below:

                           (i)      Separation from service, death, or
                                    disability;

                           (ii)     Termination of the Plan without
                                    establishment of a successor plan (as
                                    defined in the regulations under Section
                                    401(k) of the Code);


                                     - 40 -
<PAGE>
                           (iii)    Sale of substantially all of the assets used
                                    by the Company in a trade or business
                                    (applicable only to the Employees who
                                    continue employment with the corporation
                                    acquiring such assets); or

                           (iv)     Sale of the Company's interest in a
                                    subsidiary corporation (applicable only to
                                    the transferred Employees).

                           Distributions made pursuant to Subparagraphs (iii) or
                           (iv) must be made by the end of the second calendar
                           year after the end of the calendar year in which he
                           disposition occurred. Furthermore, distributions made
                           pursuant to Subparagraphs (ii), (iii) or (iv) above
                           must be made in the form of a lump sum distribution.

                  (b)      Pursuant to rules and procedures prescribed by the
                           Administrative Committee, a Participant may make
                           withdrawals from his Salary Savings Contribution
                           Account if he incurs a hardship under the rules of
                           Section 8.9 below. Only the amount of the
                           Participant's Salary Savings Contributions and the
                           interest accrued before January 1, 1989 may be
                           distributed.

         VIII.9   HARDSHIP DISTRIBUTIONS. A Participant will be entitled to
                  receive a distribution of his Salary Savings Contributions
                  because of a hardship only in accordance with the provisions
                  of this Section 8.9. The distribution must both made on
                  account of an immediate and heavy financial need (as
                  determined under Paragraph (a) below) and be necessary to
                  satisfy that need (as determined under Paragraph (b) below).

                  (a)      The determination of whether a Participant has an
                           immediate and heavy financial need will be made on
                           the basis of all relevant facts and circumstances.
                           The need may still qualify even if it was reasonably
                           foreseeable or was voluntarily incurred by the
                           Participant. A distribution on account of any of the
                           following reasons will automatically qualify:

                           (i)      Medical expenses (described in Section
                                    213(d) of the Code) incurred by the
                                    Participant, his Spouse, or Dependent (as
                                    defined in Section 152 of the Code) or
                                    necessary for these persons to obtain
                                    medical care;

                           (ii)     Costs directly related to the purchase of
                                    the principal residence for the Participant
                                    (excluding mortgage payments);

                           (iii)    Payment of tuition and related educational
                                    fees for the next twelve (12) months of
                                    post-secondary education for the
                                    Participant, or for his Spouse, children, or
                                    dependents (as defined in Section 152 of the
                                    Code); or

                           (iv)     Need to prevent the eviction of the
                                    Participant from his principal


                                     - 41 -
<PAGE>
                                    residence or foreclosure on the mortgage on
                                    his principal residence.

                           Furthermore, the amount of the distribution may
                           include any amounts necessary to pay the taxes
                           reasonably anticipated to result from the
                           distribution.

                  (b)      Except as is provided below, the determination as to
                           whether a distribution is necessary to satisfy an
                           immediate and heavy financial need is determined on
                           the basis of the facts and circumstances. A
                           distribution will not satisfy this requirement if-

                           (i)      The amount of the distribution is in excess
                                    of the amount required to relieve the
                                    financial need, or

                           (ii)     The need may be satisfied from other
                                    resources that are reasonably available to
                                    the Participant.

                  (c)      A distribution will qualify under Paragraph (b) above
                           if the Participant makes the representations that the
                           need cannot be relieved-

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

                           (ii)     By reasonable liquidation of the
                                    Participant's assets, to the extent the
                                    liquidation itself would not cause an
                                    immediate and heavy financial need. For this
                                    purpose, the Participant's resources shall
                                    include those of his Spouse and minor
                                    children that are reasonably available to
                                    him;

                           (iii)    By cessation of his Salary Savings
                                    Contributions;

                           (iv)     By other distributions or nontaxable loans
                                    from plans maintained by the Company or any
                                    other employer; or

                           (v)      By borrowing from commercial sources on
                                    reasonable commercial terms.

                           The Administrative Committee may rely upon the
                           Participant's representations, unless it has actual
                           knowledge that the representation is untrue.

                  (d)      A distribution will automatically be deemed to meet
                           the requirements of Paragraphs (a) and (b) above if
                           all of the following conditions are satisfied:


                                     - 42 -
<PAGE>
                           (i)      The distribution is not in excess of the
                                    immediate and heavy financial need of the
                                    Participant;

                           (ii)     The Participant has obtained all
                                    distributions, other than hardship
                                    distributions, and all nontaxable loans
                                    currently available under all tax-qualified
                                    retirement plans maintained by the Company;

                           (iii)    The Plan and all other plans of deferred
                                    compensation (whether or not tax-qualified)
                                    maintained by the Company, provide that the
                                    Participant's Salary Savings Contributions
                                    will be suspended for at least twelve (12)
                                    months after receipt of the hardship
                                    distribution.

                                    Upon expiration of the 12-month suspension
                                    period a Participant will be permitted to
                                    resume making Salary Savings Contributions.

                                    This restriction will not apply to mandatory
                                    contributions to defined benefit plans, or
                                    to contributions to health and welfare
                                    benefit plans (including cafeteria plans
                                    under Section 125 of the Code, except to the
                                    except that the cafeteria plan offers a cash
                                    or deferred arrangement under Section 401(k)
                                    of the Code).

                                    The Participant will still be treated as
                                    being eligible to participate in this Plan
                                    for purposes of the Average Deferral
                                    Percentage Tests of Section 5.3 and the
                                    Average Contribution Percentage Tests of
                                    Section 5.7 above; and

                           (iv)     The Plan, and all other tax qualified
                                    retirement plans maintained by the Employer,
                                    preclude the Participant from making pre-tax
                                    contributions for the calendar year
                                    following the calendar year in which the
                                    hardship distribution was made in excess of
                                    the amount determined under Clause (A)
                                    below.

                                    (A)      The Participant's maximum pre-tax
                                             contributions for the next calendar
                                             year will be the maximum Elective
                                             Deferral amount permitted under
                                             Section 5.2 for such year reduced
                                             by.the amount of the Participant's
                                             pre-tax contributions for the prior
                                             calendar year.


                                     - 43 -
<PAGE>
         VIII.10  DISTRIBUTIONS DUE TO DISABILITY.

                  If a Participant has a Severance due to Disability, he shall
                  become fully vested in his Account. His Account shall be
                  payable as provided under Articles VIII and IX except that
                  benefits shall commence no later than 60 days after the close
                  of the Plan Year in which the Severance occurred or, if later,
                  60 days after the earliest date on which the value of his
                  Account can be determined.

                  In the event of the full and complete recovery from Disability
                  of a former Participant prior to his Normal Retirement Date,
                  where such recovery is certified to the Administrative
                  Committee by competent medical authority satisfactory to the
                  Administrative Committee, and his subsequent rehire by the
                  Company, he shall commence participation in the Plan upon his
                  Reemployment Commencement Date and for purposes of vesting of
                  Company Contributions shall be credited for all Years of
                  Service earned prior to the Disability. Any unpaid Account
                  balance due to the Participant because of the Disability shall
                  remain fully vested.

         VIII.11  INABILITY TO LOCATE PARTICIPANT OR BENEFICIARY.

                  (a)      If the Participant or Beneficiary to whom benefits
                           are to be distributed cannot be located, the
                           Administrative Committee will cause the benefits to
                           be forfeited after three (3) years.

                  (b)      In the event that an unlocatable Participant or
                           Beneficiary is later located, the benefits that were
                           forfeited shall be reinstated, without regard for any
                           gains or losses during the interim period.

         VIII.12  PAYEES UNDER LEGAL DISABILITY.

                  (a)      The Administrative Committee may have the payment, or
                           any part of it, made to the person(s) or institution
                           that it believes is caring for or supporting a payee
                           if the Administrative Committee believes that any
                           payee is

                           (i)      A minor, or

                           (ii)     Legally incapable of giving a valid receipt
                                    and discharge for any payment due him.

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

         VIII.13  NOTICE REGARDING TAX TREATMENT OF DISTRIBUTIONS. The Plan
                  Administrator


                                     - 44 -
<PAGE>
                  shall provide a written explanation regarding the Code
                  provisions relating to the tax treatment of distributions to
                  each distributee receiving a distribution any portion of which
                  may be rolled over tax-free to another tax qualified
                  retirement plan or to an individual retirement account.

         VIII.14  MAILING OF PAYMENTS. All payments under the Plan shall be
                  delivered in person or mailed to the last address of the
                  Participant (or, in the case of the death of the Participant,
                  to the last address of his Beneficiary). Each Participant
                  shall be responsible for furnishing the Administrative
                  Committee with his current address and the name and current
                  address of his Beneficiary.

         VIII.15  WITHHOLDING FOR TAXES. Any payments from the Plan may be
                  subject to withholding for taxes as may be required by any
                  applicable federal or state law.


                                   ARTICLE IX
                              ANNUITY REQUIREMENTS

         IX.1     DEFINITIONS.

                  (a)      "Annuity Starting Date" means-

                           (i)      The first day of the first period for which
                                    an amount is received as an annuity, or

                           (ii)     In the case of a benefit not payable in the
                                    form of an annuity, the first day on which
                                    all events have occurred which entitle the
                                    Participant to the benefit.

                  (b)      "Applicable Election Period" means the ninety (90)
                           day period ending on the Annuity Starting Date.

                  (c)      "Qualified Joint and Survivor Annuity" means an
                           annuity for the life of the Participant with a
                           survivor annuity for the life of the Spouse which is
                           fifty percent (50%) of the amount of the annuity
                           which is payable during the joint lives of the
                           Participant and the Spouse.

         IX.2     FORM OF BENEFITS PROVIDED.

                  (a)      In the case of a Participant with a Vested Interest
                           in the Plan who does not die before his Annuity
                           Starting Date, his benefit shall be paid in the form
                           of a lump sum payment of cash or in a combination of
                           cash and Company Stock.

                  (b)      In the case of a married Participant with a Vested
                           Interest who does not die


                                     - 45 -
<PAGE>
                           before his Annuity Starting Date and who elects not
                           to receive his benefit in the form provided under
                           Section 9.2(a) above, his benefit shall be paid in
                           the form of a Qualified Joint and Survivor Annuity.

                  (c)      Provided the requirements of Section 9.4 below are
                           met and, for a married Participant, notwithstanding
                           Section 9.2(b) above, a Participant may elect that
                           his benefit be paid in the form of substantially
                           equal monthly or annual installments of cash or cash
                           and shares of Company Stock converted to cash over a
                           period not to exceed the Participant's life
                           expectancy or, in the case of a married Participant,
                           the joint life expectancy of the Participant and his
                           spouse. If the Participant dies after installments
                           have commenced, any unpaid installments shall
                           continue to be paid to the Participant's Beneficiary
                           according to the same schedule until all scheduled
                           payments have been made to the Participant and his
                           Beneficiary.

         IX.3     DISCLOSURE REQUIREMENTS.

                  (a)      Within a reasonable period of time before the
                           Participant's Annuity Starting Date (and consistent
                           with regulations under Section 417(a)(3)(a) of the
                           Code) each married Participant shall receive a
                           written explanation of-

                           (i)      The terms and conditions of the Qualified
                                    Joint and Survivor Annuity,

                           (ii)     The Participant's right to make, and the
                                    effect of, an election under Section 9.2
                                    above to waive the Qualified Joint and
                                    Survivor Annuity form of benefit, and

                           (iii)    The rights of the Participant's Spouse under
                                    Section 9.2 above.

                  (b)      The person receiving the documents described in
                           Paragraph (a) above will have sixty (60) days from
                           the date of delivery of the written explanation to
                           request in writing additional information concerning
                           the specific financial effect of the election. The
                           Administrative Committee will honor one (1) such
                           request from each person and will furnish the
                           requested information within thirty (30) days of the
                           receipt of the written request.


                                     - 46 -
<PAGE>
         IX.4     CONSENT TO RECEIVE EARLY DISTRIBUTION.

                  A distribution shall not immediately occur prior to the
                  Participant's Normal Retirement Age where the present value of
                  the Participant's Vested Interest exceeds five thousand
                  dollars ($5,000) unless the Participant and the Spouse (or
                  surviving Spouse) of the Participant elect to receive the
                  distribution (in a manner consistent with the regulations
                  under Section 417 of the Code) within ninety (90) days prior
                  to the distribution.

         IX.5     DIRECT ROLLOVERS.

                  (a)      Notwithstanding any provision of the Plan to the
                           contrary that would otherwise limit a distributee's
                           election under this Article IX, a distributee may
                           elect, at the time and in the manner prescribed by
                           the Plan administrator, to have any portion of an
                           eligible rollover distribution paid directly to an
                           eligible retirement plan specified by the distributee
                           in a direct rollover.

                  (b)      Definitions:

                           (i)      Eligible rollover distribution:

                                    An eligible rollover distribution is any
                                    distribution of all or any portion of the
                                    balance to the credit of the distributee,
                                    except that an eligible rollover
                                    distribution does not include any
                                    distribution that is one of a series of
                                    substantially equal periodic payments (not
                                    less frequently than annually) made for the
                                    life (or life expectancy) of the distributee
                                    or the joint lives (or joint life
                                    expectancies) of the distributee and the
                                    distributee's designated beneficiary, or for
                                    a specified period often years or more; any
                                    distribution to the extent such distribution
                                    is required under section 401(a)(9) of the
                                    Code; and the portion of any distribution
                                    that is not includable in gross income
                                    (determined without regard to the exclusion
                                    for net unrealized appreciation with respect
                                    to employer securities).

                           (ii)     Eligible retirement plan:

                                    An eligible retirement plan is an individual
                                    retirement account described in section
                                    408(a) of the Code, an individual retirement
                                    annuity described in section 408(b) of the
                                    Code, or a qualified trust described in
                                    section 401(a) of the Code, that accepts the
                                    distributee's eligible rollover
                                    distribution. However, in the case of an
                                    eligible rollover distribution to the
                                    surviving spouse, an eligible retirement
                                    plan is an individual retirement account or
                                    individual retirement annuity.


                                     - 47 -
<PAGE>
                           (iii)    Distributee:

                                    A distributee includes an employee or former
                                    employee. In addition, the employee's or
                                    former employee's surviving spouse and the
                                    employee's or former employee's spouse or
                                    former spouse who is the alternate payee
                                    under a qualified domestic relations order,
                                    as defined in section 414(p) of the Code,
                                    are distributees with respect to the
                                    interest of the spouse or former spouse.

                           (iv)     Direct rollover:

                                    A direct rollover is a payment by the Plan
                                    to the eligible retirement plan specified by
                                    the distributee.

         IX.6     DISTRIBUTION OF COMPANY STOCK.

                  Distribution of a Participant's ESOP Contribution Account and
                  Employer Matching Contribution Account may be made in cash or
                  in shares of Company Stock, or both, provided, however, that
                  if a Participant or Beneficiary so demands, such benefit shall
                  be distribute in the form of shares of Company Stock, plus
                  cash in lieu of fractional shares. Any balance in a
                  Participant's ESOP Contribution

                  Account and Employer Matching Contribution Account shall be
                  applied to acquire the maximum number of whole shares of
                  Company Stock at the then fair market value. Any remaining
                  balance shall be distributed in cash.

                  The Administrative Committee shall advise the Participant or
                  his Beneficiary in writing prior to any distribution from his
                  ESOP Contribution Account or Employer Matching Contribution
                  Account of the right to demand that benefits from such
                  Accounts be paid in the form of Company Stock. If the
                  Participant or his Beneficiary fails to make such demand in
                  writing within 90 days after receipt of such written notice,
                  the Administrative Committee shall direct the Trustee to make
                  such distribution in cash.

                                    ARTICLE X
                              TOP-HEAVY PLAN RULES

         X.1      APPLICABILITY. Notwithstanding any provision in this Plan to
                  the contrary, the provisions of this Article X shall apply in
                  the case of any Plan Year in which the Plan is determined to
                  be a Top-Heavy Plan.


                                     - 48 -
<PAGE>
         X.2      SPECIAL VALUATION RULES.

                  (a)      For purposes of determining-

                           (i)      The present value of the cumulative accrued
                                    benefit of any Employee, or

                           (ii)     The account balance of any Employee,

                           the present value or account balance shall be
                           increased by the aggregate distributions made with
                           respect to the Employee under the plan during the
                           five (5) year period ending on the Determination
                           Date. The preceding rule shall also apply to
                           distributions under a terminated plan that, if it had
                           not been terminated, would have been required to be
                           included in the Aggregation Group that includes the
                           transferee Plan.

                  (b)      Any rollover contribution or similar transfer
                           initiated by the Employee and made after December
                           31,1983 to a plan shall not be taken into account
                           with respect, to the transferee plan for purposes of
                           determining whether the transferee plan is a
                           Top-Heavy Plan (or whether any Aggregation Group
                           which includes the transferee plan is a Top-Heavy
                           Group).

                  (c)      If any individual-

                           (i)      Is a Non-Key Employee with respect to any
                                    plan for any plan year, but the individual
                                    was a Key Employee with respect to the plan
                                    for any prior plan year, or

                           (ii)     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,

                           his accrued benefit and account balance shall not be
                           taken into account for purposes of determining
                           whether or not the plan is a Top-Heavy Plan.

         X.3      MINIMUM CONTRIBUTIONS. For each Plan Year in which the Plan is
                  Top-Heavy, the minimum contributions for that year shall be
                  determined in accordance with the rules of this Section 10.3.

                  (a)      Except as provided below, the minimum contribution
                           for each Participant who is a Non-Key Employee who is
                           employed on the last day Of the Plan Year shall be
                           not less than three percent (3%) of his Earnings,
                           regardless of the number of Hours of Service he
                           completes that Plan Year or his level of Earnings.


                                     - 49 -
<PAGE>
                  (b)      The minimum required contribution under Paragraph (a)
                           above shall be reduced by the Company contributions
                           and forfeitures allocated to the Participant in any
                           other defined contribution plan included in the
                           Aggregation Group that includes the Plan; however,
                           Matching Contributions may not be taken into account.

                  (c)      Subject to the following rules of this Paragraph (c),
                           the percentage set forth in Paragraph (a) above shall
                           not be required to exceed the percentage at which
                           contributions (including any Tax-Deferred
                           Contributions) are made (or are required to be made)
                           under the Plan for the year for the Key Employee for
                           whom the percentage is the highest for the year.

                           (i)      For purposes of this Paragraph (c), all
                                    defined contribution plans required to.be
                                    included in an Aggregation Group shall be
                                    treated as one plan.

                           (ii)     The rules of this Paragraph (c) shall not
                                    apply to any plan required to be included in
                                    an Aggregation Group if the plan enables a
                                    defined benefit plan to meet the
                                    requirements of Sections 401(a)(4) or 410 of
                                    the Code.

                  (d)      The requirements of this Section 10.3 must be
                           satisfied without taking into account-

                           (i)      Contributions under chapters 2 or 21 of the
                                    Code, title II of the Social Security Act,
                                    or any other Federal or State law, or

                           (ii)     Salary Savings Contributions by Non-Key
                                    Employees.

                  (e)      In the event a Participant is covered by both a
                           defined contribution and a defined benefit plan
                           maintained by the Company or an Affiliated Company,
                           both of which are determined to be Top-Heavy, the
                           minimum benefit shall be provided under this Plan,
                           which shall be a contribution of at least five
                           percent (5%) of Compensation.

         X.4      MINIMUM VESTING. For each Plan Year in which the Plan is
                  Top-Heavy, vesting shall be determined according to the
                  following schedule:


                                     - 50 -
<PAGE>
<TABLE>
<CAPTION>
                             Years of                                           Vested
                             Service                                            Interest
                             -------                                            --------
                           <S>                                                  <C>
                           Less than 2                                              0%
                                    2                                              20%
                                    3                                              40%
                                    4                                              60%
                                    5                                              80%
                                    6                                             100%
</TABLE>

                  If the Plan is not Top-Heavy for a subsequent Plan Year, each
                  Participant's vested percentage shall not be less than his
                  vested percentage as of the last day of the last Plan Year in
                  which the Plan was Top-Heavy. If the Plan ceases to be
                  Top-Heavy, each Participant who has completed at least three
                  (3) Years of Service as of the first day of the first Plan
                  Year for which the Plan ceases to be Top-Heavy shall have the
                  right to have his Vested Interest determined in accordance
                  with the schedule contained in this Section 10.4 or the
                  schedule contained in Section 7.1, as provided under Section
                  17.3 as though the Plan's vesting schedule had been amended.

         X.5      MAXIMUM ANNUAL ADDITION.

                  (a)      Except as set forth below, in the case of any
                           Top-Heavy Plan, the rules of Sections 15.4(b)(ii) and
                           15.4(c)(ii) below shall be applied by substituting
                           "1.0" for "1.25".

                  (b)      The rule set forth in Paragraph (a) above shall not
                           apply if the requirements of both Subparagraphs (i)
                           and (ii) are satisfied.

                           (i)      The requirements of this Subparagraph (i)
                                    are satisfied if the Plan would not be a
                                    Top-Heavy Plan if "ninety percent (90%)"
                                    were substituted for "sixty percent (60%)"
                                    each place it appears in Section 2.58 above.

                           (ii)     The requirements of this Subparagraph (ii)
                                    are satisfied if the required minimum
                                    contribution under Section 10.3 above would
                                    be satisfied if it were applied by
                                    substituting "four percent (4%)" for "three
                                    percent (3%)" each place it appears therein.

                                    (A)      Notwithstanding the provisions of
                                             the preceding sentence, in the case
                                             of an Employee covered by both this
                                             Plan and a defined benefit plan
                                             maintained by the Company or an
                                             Affiliated Company, both of which
                                             are Top-Heavy, the minimum
                                             contribution/benefit shall be
                                             provided solely under this Plan,
                                             which shall be applied by
                                             substituting


                                     - 51 -
<PAGE>
                                             "seven and one half percent
                                             (7-1/2%)" for "three percent" each
                                             place it appears in Section 10.3
                                             above.

                  (c)      The rules of Paragraph (a) shall not apply with
                           respect to any Employee for any Plan Year as long as
                           there are no-

                           (i)      Annual Additions allocated to the Employee
                                    under a defined contribution plan maintained
                                    by the Company or an Affiliated Company, or

                           (ii)     Accruals by the Employee under a defined
                                    benefit plan maintained by the Company or an
                                    Affiliated Company.

                  (d)      The vesting schedule of Paragraph (a) above shall
                           apply, notwithstanding the Participant's withdrawal
                           of any mandatory contributions or in the event that
                           the Plan ceases to be Top-Heavy.

         X.6      NON-ELIGIBLE EMPLOYEES. The rules of Section 10.3 above shall
                  not apply to any Employee--

                  (a)      Included in a unit of Employees covered by an
                           agreement which the Secretary of Labor finds to be a
                           collective bargaining agreement between Employee
                           representatives and one or more employers, if there
                           is evidence that retirement benefits were the subject
                           of good faith bargaining between the Employee
                           representatives and the Company, or

                  (b)      Whose employment was terminated before the Plan
                           became Top-Heavy.


                                   ARTICLE XI
                    OPERATION AND ADMINISTRATION OF THE PLAN

         XI.1     NAMED FIDUCIARIES. The provisions of this Section 11.1 shall
                  determine the various parties who are the "Named Fiduciaries"
                  (within the meaning of Section 402(a) of ERISA) of the Plan
                  and their respective responsibilities.

                  (a)      The Board of Directors shall be the Named Fiduciary
                           with respect to appointing and/or removing the
                           Trustee, and the members of the Administrative
                           Committee.

                  (b)      The Trustee shall be the Named Fiduciary with respect
                           to the management and investment of the assets of the
                           Plan, except to the extent that the Trustee is
                           subject to the directions of an Investment Manager,
                           the Administrative Committee or Participants.


                                     - 52 -
<PAGE>
                  (c)      The Administrative Committee shall be the Named
                           Fiduciary with respect to all of the administrative
                           matters relating to the Plan, except the management
                           and investment of the assets of the Plan.

         XI.2     COMPOSITION OF ADMINISTRATIVE COMMITTEE.

                  (a)      The members of the Administrative Committee (who need
                           not be Participants or even Employees) shall be
                           appointed by the Board of Directors of the Company
                           and shall hold office until termination of such
                           status in accordance with the provisions of this
                           Article XI.

                  (b)      The term of the office of each member of the
                           Administrative Committee shall be determined in
                           accordance with the following rules.

                           (i)      Any member of the Administrative Committee
                                    may resign at any time by giving written
                                    notice to the other members and to the Board
                                    of Directors, effective as of the date
                                    indicated therein.

                           (ii)     Any member of the Administrative Committee
                                    may be removed by the Board of Directors at
                                    any time.

                           (iii)    In the case of a member of the
                                    Administrative Committee who is also an
                                    Employee of the Company, his status as a
                                    member of the Administrative Committee shall
                                    terminate as of the date of his Severance,
                                    except as otherwise provided in resolutions
                                    of the Board of Directors.

                  (c)      Upon the death, resignation, or removal of any
                           Administrative Committee member, the Board of
                           Directors may appoint a successor. Notice of
                           appointment of a successor member shall be given by
                           the Company in writing to the Trustee and to the
                           other members of the Administrative Committee.

         XI.3     ADMINISTRATIVE COMMITTEE'S POWERS. The Administrative
                  Committee shall have all powers necessary to supervise the
                  administration of the Plan and control its operations. In
                  addition to any powers and authority conferred on the
                  Administrative Committee elsewhere in the Plan or by law, the
                  Administrative Committee shall have the following powers and
                  authority:

                  (a)      To allocate fiduciary responsibilities among the
                           Named Fiduciaries and to designate one or more other
                           persons, including Investment Managers, to carry out
                           fiduciary responsibilities.

                           (i)      However, no allocation or delegation under
                                    this Paragraph (a) shall be effective


                                     - 53 -
<PAGE>
                                    (A)      Until the person or persons to whom
                                             the responsibilities have been
                                             allocated or delegated agree to
                                             assume the responsibilities, or

                                    (B)      With respect to Trustee
                                             Responsibilities (within the
                                             meaning of Section 405(c) of
                                             ERISA);

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

                  (c)      To establish rules and procedures for the conduct of
                           the Administrative Committee's business and the
                           administration of this Plan; and

                  (d)      To administer this Plan, to determine eligibility for
                           a benefit, to construe the terms of the Plan and to
                           decide all questions which may arise or which may be
                           raised under this Plan. The decisions of the
                           Administrative Committee shall be binding upon all
                           persons, to the maximum extent permitted under ERISA;
                           and

                  (e)      To perform or cause to be performed such further acts
                           as it may deem to be necessary or appropriate to
                           administer the Plan.

                  (f)      In addition to the Committee's other powers, it shall
                           also have the power and responsibility for exercising
                           the "Rights" that are allocated to each Participant's
                           ESOP account pursuant to the 2000 Rights Offering or
                           Subsequent Rights Offering and it shall also have the
                           power and responsibility for subscribing to any
                           overage that may exist with respect to such "Rights"
                           Offerings.

         XI.4     REPORTING AND DISCLOSURE. The Plan Administrator shall be
                  responsible for the reporting and disclosure of information
                  required to be reported or disclosed pursuant to ERISA or any
                  other applicable law.

         XI.5     MULTIPLE FIDUCIARY CAPACITIES. Any person or group of persons
                  may serve in more than one fiduciary capacity with respect to
                  the Plan.

         XI.6     FUNDING POLICY.

                  (a)      At periodic intervals the Administrative Committee
                           shall review the financial needs of the Plan and
                           shall determine a funding policy for the Plan
                           consistent with the objectives of the Plan.


                                     - 54 -
<PAGE>
                  (b)      In establishing the funding policy, the
                           Administrative Committee shall review and take into
                           account-

                           (i)      The short-term and long-term financial
                                    objectives and liquidity requirements of the
                                    Plan, determined by reference to the age and
                                    tenure characteristics of the Participants,

                           (ii)     The current and projected market conditions,
                                    and

                           (iii)    Such other considerations as appear
                                    pertinent under the circumstances,

                           all with a view toward the realization by the Plan of
                           its maximum investment potential consistent with
                           prudent asset management and the need to pay benefits
                           in accordance with the terms of the Plan, taking into
                           account the ability of Participants to direct the
                           investment of the amounts in their Accounts.

         XI.7     PROHIBITION AGAINST CERTAIN ACTIONS.

                  (a)      In administering this Plan, the Administrative
                           Committee shall not discriminate in favor of Highly
                           Compensated Employees.

                  (b)      The Plan Committees shall not cause the Plan to
                           engage in any transaction that constitutes a
                           nonexempt prohibited transaction under Section
                           4975(c) of the Code or ERISA Section 406(a).

                  (c)      Any member of the Administrative Committee who is
                           also a Participant shall not be qualified to act or
                           vote on any matter relating solely to himself.

         XI.8     COMMITTEE PROCEDURES.

                  (a)      A majority of the members of the Administrative
                           Committee shall constitute a quorum, and any action
                           authorized by a majority of the members-

                           (i)      Present at any meeting, or

                           (ii)     In writing without a meeting,

                           shall constitute the actions of the Administrative
                           Committee.

                  (b)      The Administrative Committee may designate one or
                           more of its members


                                     - 55 -
<PAGE>
                           ("Designated Members") as authorized to execute any
                           document or documents on behalf of the Administrative
                           Committee. In such a case, the Administrative
                           Committee shall notify the Trustee of this action and
                           the name or names of the Designated Members.

         XI.9     INDEMNIFICATION.

                  (a)      To the maximum extent permitted by law, the Company
                           shall indemnify each member of the Board of Directors
                           and of the Administrative Committee and any other
                           Employee with duties under the Plan against expenses
                           (including any amount paid in settlement) reasonably
                           incurred by him in connection with any claims against
                           him by reason of the performance of his duties under
                           the Plan.

                  (b)      This indemnity shall not apply if the individual
                           acted fraudulently or in bad faith in the performance
                           of his duties.

                  (c)      Notwithstanding the above, the Company shall have the
                           right to select counsel and to control the
                           prosecution or defense of the suit. Furthermore, the
                           Company shall not be required to indemnify any person
                           for any amount incurred through any settlement or
                           compromise of any action unless the Company consents
                           in writing to the settlement or compromise.

                  (d)      Payment of the indemnity, fees, or other expenses
                           shall be made solely from the assets of the Company,
                           and shall not be paid, directly or indirectly, from
                           the assets of the Plan.

         XI.10    COMPENSATION OF COMMITTEE AND PLAN EXPENSES.

                  (a)      Members of the Administrative Committee shall serve
                           without compensation unless the Board of Directors
                           shall otherwise determine. However, in no event shall
                           any member of the Administrative Committee who
                           receives full-time pay from the Company receive
                           compensation from the Plan for his services as a
                           member of the Administrative Committee, except for
                           reimbursement of expenses properly and actually
                           incurred.

                  (b)      The expenses incurred in the administration of the
                           Plan, including but not limited to the expenses
                           incurred by the members of the administrative
                           committee in exercising their duties, shall be borne
                           by the Plan. However, the Company may elect to pay
                           these expenses.


                                     - 56 -
<PAGE>
         XI.11    BONDING.

                  Members of the Administrative Committee and all other
                  Employees handling the assets of the Plan shall be bonded to
                  the extent required by Section 412 of ERISA or any other
                  applicable law.

         XI.12    NOTICES AND COMMUNICATIONS.

                  (a)      All communications from Participants to the
                           Administrative Committee shall be in writing, on
                           forms prescribed by the Administrative Committee.

                           (i)      These documents shall be mailed or delivered
                                    to the office designated by the
                                    Administrative Committee, and shall be
                                    deemed to have been given when received by
                                    the office.

                  (b)      Each communication directed to a Participant or
                           Beneficiary shall be in writing and may be delivered
                           in person or by mail.

                           (i)      An item shall be deemed to have been
                                    delivered and received by the Participant
                                    three (3) days after the date when it is
                                    deposited in the United States Mail with
                                    postage prepaid, addressed to the
                                    Participant or Beneficiary at his last
                                    address of record with the Administrative
                                    Committee.

         XI.13    STANDARD OF CARE.

                  The Fiduciaries of the Plan (as defined in ERISA), including
                  the Trustee, the members of the Administrative Committee and
                  any Investment Manager, shall act in accordance with the
                  following standards of care and fiduciary responsibility
                  imposed under ERISA (to the extent they are applicable).

                  (a)      Each fiduciary shall discharge his duties with
                           respect to the Plan solely in the interest of the
                           Participants and Beneficiaries, and-

                           (i)      For the exclusive purposes of-

                                    (A)      Providing benefits to Participants
                                             and their Beneficiaries, and

                                    (B)      Defraying reasonable expenses of
                                             administering the Plan,

                           (ii)     With the care, skill, prudence, and
                                    diligence under the circumstances then
                                    prevailing that a prudent man acting in a
                                    like capacity and familiar with such matters
                                    would use in the conduct of an enterprise of
                                    a like character and with like aims,


                                     - 57 -
<PAGE>
                           (iii)    Subject to the exception for "eligible
                                    individual account plans under Section
                                    404(a)(2) of ERISA, by diversifying the
                                    investments of the Plan so as to minimize
                                    the risk of large losses, unless under the
                                    circumstances it is clearly prudent not to
                                    do so, and

                           (iv)     In accordance with the terms of the Plan and
                                    Trust Agreement, insofar as those documents
                                    are consistent with the provisions of ERISA.

                  (b)      A Fiduciary shall be liable for a breach of fiduciary
                           responsibility by another Fiduciary if-

                           (i)      He participates knowingly in, or knowingly
                                    undertakes to conceal an act or omission of
                                    the other Fiduciary, knowing the act or
                                    omission is a breach,

                           (ii)     By his failure to fulfill his fiduciary
                                    responsibilities, he has enabled the other
                                    Fiduciary to commit a breach, or

                           (iii)    He has knowledge of a breach by the other
                                    Fiduciary, unless he makes reasonable
                                    efforts under the circumstances to remedy
                                    the breach

                  (c)      The inclusion of this Section 11.14 in this document
                           is for the sole purpose of informing the appropriate
                           Fiduciaries of the standard of care that is demanded
                           of them under ERISA. It is not intended that this
                           provision impose any additional duties,
                           responsibilities, or liabilities upon such
                           Fiduciaries than would otherwise apply under ERISA.


                                   ARTICLE XII
                        MERGER OF COMPANY, MERGER OF PLAN

         XII.1    EFFECT OF REORGANIZATION OR TRANSFER OF ASSETS.

                  (a)      in the event of a consolidation, merger, sale,
                           liquidation, or other transfer of substantially all
                           of the operating assets of the Company to any other
                           company, the ultimate successor to the business of
                           the Company shall automatically be deemed to have
                           elected to continue this Plan in full force and
                           effect, in the same manner as if the Plan had been
                           adopted by resolution of its board of directors.

                  (b)      The presumption set forth in Paragraph (a) above
                           shall not apply if the successor, by resolution of
                           its board of directors, elects not to so continue


                                     - 58 -
<PAGE>
                           this Plan in effect. In such a case, the Plan shall
                           terminate as of the effective date set forth in the
                           board resolution.

         XII.2    PLAN MERGER RESTRICTION.

                  (a)      This Plan shall not merge or consolidate with, or
                           transfer its assets and/or liabilities to any other
                           plan ("Transferee Plan") unless each affected
                           Participant in this Plan would receive a benefit from
                           the Transferee Plan immediately after the merger,
                           consolidation, or transfer (if the Transferee Plan
                           was then terminated) which is equal to or greater
                           than the benefit he would have been entitled to
                           receive immediately before the merger, consolidation,
                           or transfer under this Plan (if this Plan had then
                           terminated).

                  (b)      Provided the requirements set forth in Paragraph (a)
                           above are satisfied, the Administrative Committee may
                           direct that the Plan may merge, consolidate with, or
                           transfer its assets and/or liabilities to, or receive
                           such a transfer from another tax-qualified retirement
                           plan.


                                  ARTICLE XIII
                 TERMINATION AND DISCONTINUANCE OF CONTRIBUTIONS

         XIII.1   PLAN TERMINATION.

                  (a)      The Company may terminate the Plan at any time by an
                           instrument in writing executed in the name of the
                           Company by an officer duly authorized to execute the
                           instrument.

                  (b)      The rights of all Employees who are employed by the
                           Company on the date of the termination of the Plan
                           shall automatically become fully vested as of that
                           date.

         XIII.2   DISCONTINUANCE OF CONTRIBUTIONS.

                  On and after the effective date of a discontinuance of
                  Employer Contributions, the rights of all Employees who are
                  employed by the Company on the date of the discontinuance
                  shall automatically become fully vested as of that date.

         XIII.3   REPLACEMENT PLAN.

                  The provisions of Sections 13.1 and 13.2 above shall not apply
                  in the event that the Plan is replaced by a comparable plan.


                                     - 59 -
<PAGE>
         XIII.4   PARTIAL TERMINATION.

                  (a)      In the event of a partial termination of the Plan
                           within the meaning of Code Section 411(d)(3), all
                           Employees who are employed by the Company on the date
                           of the partial termination and who are affected by
                           the partial termination shall become fully vested as
                           of that date.

                  (b)      This Section 13.4 is intended solely to meet the
                           requirements of Code Section 411 and is not intended
                           to create, nor shall it be construed as creating, any
                           contractual rights whatsoever.


                                   ARTICLE XIV
                            APPLICATION FOR BENEFITS

         XIV.1    CLAIM FOR BENEFITS.

                  (a)      The Administrative Committee may require any person
                           claiming benefits under the Plan ("Claimant") to
                           submit an application therefor, together with such
                           other documents and information as the Administrative
                           Committee may require.

                  (b)      Within ninety (90) days following receipt of the
                           application and all necessary documents and
                           information, the Administrative Committee's
                           authorized delegate reviewing the claim shall furnish
                           the Claimant with written notice of the decision
                           rendered with respect to the application.

                  (c)      Should special circumstances require an extension of
                           time for processing the claim, written notice of the
                           extension shall be furnished to the Claimant prior to
                           the expiration of the initial ninety (90) day period.

                           (i)      The notice shall indicate the special
                                    circumstances requiring an extension of time
                                    and the date by which a final decision is
                                    expected to be rendered.

                           (ii)     In no event shall the period of the
                                    extension exceed ninety (90) days from the
                                    end of the initial ninety (90) day period.

         XIV.2    CONTENT OF DENIAL. In the case of a denial of the Claimant's
                  application, the written notice shall set forth:

                  (a)      The specific reasons for the denial;

                  (b)      References to the Plan provisions upon which the
                           denial is based;


                                     - 60 -
<PAGE>
                  (c)      A description of any additional information or
                           material necessary for perfection of the application
                           (together with an explanation of why the material or
                           information is necessary); and

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

         XIV.3    APPEALS.

                  (a)      In order to appeal the decision rendered with respect
                           to his application for benefits or with respect to
                           the amount of his benefits, the Claimant must follow
                           the appeal procedures set forth in this Section 14.3.

                  (b)      The appeal must be made, in writing-

                           (i)      In the case where the claim is expressly
                                    rejected, within sixty-five (65) days after
                                    the date of notice of the decision with
                                    respect to the application, or

                           (ii)     In the case where the claim has neither been
                                    approved nor denied within the applicable
                                    period provided in Section 14.1 above,
                                    within sixty-five (65) days after the
                                    expiration of the period.

                  (c)      The Claimant may request that his application be
                           given full and fair review by the Administrative
                           Committee. The Claimant may review all pertinent
                           documents and submit issues and comments in writing
                           in connection with the appeal.

                  (d)      The decision of the Administrative Committee shall be
                           made promptly, and not later than sixty (60) days
                           after the Administrative Committee's receipt of a
                           request for review, unless special circumstances
                           require an extension of time for processing. In such
                           a case, a decision shall be rendered as soon as
                           possible, but not later than one hundred twenty (120)
                           days after receipt of the request for review.

                  (e)      The decision on review shall be in writing and shall
                           include specific reasons for the decision, written in
                           a manner designed to be understood by the Claimant,
                           with specific references to the pertinent Plan
                           provisions upon which the decision is based.

         XIV.4    EXHAUSTION OF REMEDIES. No legal action for benefits under the
                  Plan may be brought unless and until the Claimant has
                  exhausted his remedies under this Article XIV.


                                     - 61 -
<PAGE>
                                   ARTICLE XV
                          LIMITATIONS ON CONTRIBUTIONS

         XV.1     GENERAL RULE.

                  (a)      Notwithstanding anything to the contrary contained in
                           this Plan, the total Annual Additions under this Plan
                           to a Participant's Accounts for any Plan Year shall
                           not exceed the lesser of:

                           (i)      Thirty thousand dollars ($30,000) or such
                                    greater amount as may be permitted pursuant
                                    to Code Section 415(d)(1) ("Dollar
                                    Limitation"); or

                           (ii)     Twenty-five percent (25%) of the
                                    Participant's Earnings ("Percentage
                                    Limitation").

                  (b)      Because the Limitation Year is also the Plan Year, in
                           the case of a Plan Year of less than twelve (12)
                           months duration, the Dollar Limitation shall be
                           prorated by multiplying it by a fraction, the
                           numerator of which is the number of months in the
                           short Plan Year and the denominator of which is
                           twelve (12).

                  (c)      The Dollar Limitation shall be adjusted annually by
                           the Internal Revenue Service for increases in the
                           cost of living, effective January l of the year for
                           which the adjustment is made. This adjustment shall
                           apply to the Limitation Year ending with or within
                           that calendar year.

                  (d)      This Article XV is intended to comply with Code
                           Section 415 and regulations thereunder and any
                           discrepancy between the provisions of this Plan and
                           the provisions of Code Section 415 and regulations
                           thereunder shall be resolved so as to give full
                           effect to the provisions of such Code Section and
                           related regulations.

         XV.2     DEFINITION OF EARNINGS. For purposes of this Article XV, a
                  Participant's "Earnings" includes all amounts that are subject
                  to income tax withholding under Section 3401 of the Code,
                  determined without regard to any rules that limit the
                  remuneration based on the-

                  (a)      Nature or location of the employment, or

                  (b)      Services performed.


                                     - 62 -
<PAGE>
         XV.3     OTHER DEFINED CONTRIBUTION PLANS.

                  (a)      If the Company or an Affiliated Company is or was
                           contributing to any other defined contribution plan,
                           then the Participant's Annual Additions in the other
                           plan shall be aggregated with the Participant's
                           Annual Additions under this Plan for purposes of
                           applying the limitations of this Article XV.

                  (b)      The rule of Paragraph (a) above shall apply whether
                           or not the other defined contribution plan has been
                           terminated.

         XV.4     (DELETED EFFECTIVE JANUARY 1, 2000).

         XV.5     ADJUSTMENTS FOR EXCESS ANNUAL ADDITIONS. Subject to the
                  limitations of Treasury Regulation Section 1.415-6, in the
                  event the Annual Additions to a Participant's Accounts under
                  this Plan would exceed the applicable limitations described
                  above in this Article XV, the excess amount shall be subject
                  to the following rules.

                  (a)      Where there is an excess Annual Addition in a
                           Participant's account, the excess amount must be used
                           to reduce employer contributions for the next
                           limitation year (and succeeding limitation years, as
                           necessary) for that Participant if that Participant
                           is covered by the Plan as of the end of the
                           limitation year.

                  (b)      If the Participant is not covered by the Plan as of
                           the end of the limitation year, then the excess
                           amount must be held unallocated in a suspense account
                           for the limitation year and allocated and reallocated
                           in the next limitation year to all of the remaining
                           Participants in the Plan.

                  (c)      The excess amounts must be used to reduce Company
                           contributions for the next limitation year (and
                           succeeding limitation years, as necessary) for all of
                           the Participants in the Plan. Excess amounts may not
                           be distributed to Participants or former
                           Participants.

                           Pending allocation of any contribution made to the
                           ESOP made during the Plan Year, the Administrative
                           Committee shall exercise all Rights, powers and
                           privileges relating to such unallocated contribution,
                           including, but not limited to, the decision to
                           purchase additional shares of Company Stock with
                           unallocated cash pursuant to the 2000 Rights Offering
                           or Subsequent Rights Offering made by the Company.
                           The Administrative Committee shall make the decision
                           to exercise any offer, option or right to acquire
                           additional shares of Company Stock for the ESOP in
                           accordance with the terms of such offer, option or
                           right, including the decision of whether or not to
                           purchase additional shares of Company Stock pursuant
                           to the 2000 Rights Offering or any Subsequent Rights
                           Offering made during Plan


                                     - 63 -
<PAGE>
                           Year.

                  (d)      The Suspense Account shall be exhausted before any
                           Company Contributions or Salary Savings Contributions
                           shall be allocated to the Accounts.

                  (e)      The Trustee shall segregate any amounts held in the
                           Suspense Account from other assets of the Plan and
                           may place the cash portions thereof in an
                           interest-bearing account in any bank or savings and
                           loan institution, including the Trustee's own banking
                           department (if applicable).

                           (i)      Any amounts held in the Suspense Account
                                    shall not participate in any allocation of
                                    Forfeitures, or net income or loss of other
                                    assets of the Trust Fund under Article VI
                                    above.

                  (f)      In the event the Plan shall terminate at a time when
                           all amounts in the suspense Account have not been
                           allocated to the Accounts of the Participants, the
                           amounts in the suspense Account shall be applied as
                           follows:

                           (i)      The amount in the Suspense Account shall
                                    first be allocated, as of the date of the
                                    termination of the Plan, to Participants on
                                    the same basis as specified in Paragraph (c)
                                    above, with the allocation to be made to the
                                    maximum extent permissible under the
                                    Limitations of this Article XV; and

                           (ii)     If after those allocations have been made,
                                    any further amounts remain in the Suspense
                                    Account, the residue shall revert to the
                                    Company in accordance with the applicable
                                    Treasury Regulations.


                                   ARTICLE XVI
                            RESTRICTION ON ALIENATION

         XVI.1    GENERAL RESTRICTIONS AGAINST ALIENATION. Benefit under the
                  Plan may not be assigned or alienated. The preceding sentence
                  shall not apply with respect to a "Qualified Domestic
                  Relations Order" described below.

         XVI.2    QDRO DEFINITION. A "Qualified Domestic Relations Order" is a
                  judgment, decree, or order (including approval of a property
                  settlement agreement) that-

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


                                     - 64 -
<PAGE>
                  (b)      Relates to the provision of child support, alimony
                           payments, or marital property rights to a Spouse,
                           child, or other dependent of a Participant,

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

                  (d)      Clearly specifies:

                           (i)      The name and last known mailing address (if
                                    any) of the Participant and the name and
                                    mailing address of each Alternate Payee
                                    covered by the order (if the Plan
                                    Administrator does not have-reason to know
                                    that address independently of the order);

                           (ii)     The amount or percentage of the
                                    Participant's benefits to be paid to each
                                    Alternate Payee, or the manner in which the
                                    amount or percentage is to be determined;

                           (iii)    The number of payments or period to which
                                    the order applies; and

                           (iv)     Each plan to which the order applies.

         XVI.3    IMPERMISSIBLE TERMS. A domestic relations order is not a
                  Qualified Domestic Relations Order if it requires-

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

                  (b)      The Plan to provide increased benefits (determined on
                           the basis of actuarial value), or

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

         XVI.4    SPECIAL RULES.

                  (a)      A domestic relations order will not be considered to
                           fail to satisfy the requirements of Section 16.3(a)
                           above with respect to any payment made before a
                           Participant has separated from service solely because
                           the order requires that payment of benefits be made
                           to an Alternate Payee-

                           (i)      In the case of any payment before a
                                    Participant has separated from service, on
                                    or after the date on which the Participant
                                    attains (or would have attained) Earliest
                                    Retirement Age. "Earliest Retirement Age"
                                    means the earlier of--


                                     - 65 -
<PAGE>
                                    (A)      The date on which the Participant
                                             is entitled to a distribution, or

                                    (B)     The later of

                                            (I)      The date the Participant
                                                     attains age fifty (50), or

                                            (II)     The earliest date on which
                                                     the Participant could begin
                                                     receiving benefits if he
                                                     separated from service,

                           (ii)     As if the Participant had retired on the
                                    date on which such payment is to begin under
                                    the order (based on the value of the
                                    Participant's Account balances at that
                                    time), and

                           (iii)    In any form in which the benefits may be
                                    paid under the Plan to the Participant.

                  (b)      However, if the Participant dies before his Earliest
                           Retirement Age, the Alternate Payee is entitled to
                           benefits (as the Beneficiary of the Participant) only
                           if the Qualified Domestic Relations Order requires
                           survivor benefits to be paid to the Alternate Payee.

         XVI.5    PROCEDURES.

                  (a)      In the case of any domestic relations order received
                           by the Plan-

                           (i)      The Plan Administrator shall promptly notify
                                    the Participant and any Alternate Payee of
                                    the receipt of the order and the Plan's
                                    procedures for determining the qualified
                                    status of domestic relations orders, and

                           (ii)     Within a reasonable period after the receipt
                                    of the order, the Plan Administrator shall
                                    determine whether the order is a Qualified
                                    Domestic Relations Order and shall notify
                                    the Participant and each Alternate Payee of
                                    the determination.

                  (b)      The Plan Administrator shall establish reasonable
                           procedures to determine the qualified status of
                           domestic relations orders and to administer
                           distributions under Qualified Domestic Relations
                           Orders.


                                     - 66 -
<PAGE>
         XVI.6    SEGREGATION OF FUNDS.

                  (a)      During any period in which the issue of whether a
                           domestic relations order is a Qualified Domestic
                           Relations Order is being determined (by the Plan
                           Administrator, by a court of competent jurisdiction,
                           or otherwise), the Plan Administrator shall
                           separately account for the amounts which would have
                           been payable to the Alternate Payee during the period
                           if the order had been determined to be a Qualified
                           Domestic Relations Order.

                  (b)      If within the eighteen (18) month period beginning
                           with the date on which the first payment would be
                           required to be made under the domestic relations
                           order, the order (or a modification thereof) is
                           determined to be a Qualified Domestic Relations
                           Order, the Plan Administrator shall pay the
                           segregated amounts (including any interest thereon)
                           to the person or persons entitled thereto.

                  (c)      If within the eighteen (18) month period beginning
                           with the date on which the first payment would be
                           required to be made under the domestic relations
                           order-

                           (i)      It is determined that the order is not a
                                    Qualified Domestic Relations Order, or

                           (ii)     The issue as to whether or not the order is
                                    a Qualified Domestic Relations Order is not
                                    resolved,

                           then the Plan Administrator shall pay the segregated
                           amounts (including any interest thereon) to the
                           person or persons who would have been entitled to the
                           amounts if there had been no order, or restore the
                           amount to the Participant's Account, whichever is
                           applicable.

                  (d)      Any determination that an order is a Qualified
                           Domestic Relations Order that is made after the close
                           of the eighteen (18) month period shall be applied
                           prospectively only.

                  (e)      Upon the receipt of information that any Participant
                           is anticipating or undergoing a proceeding to
                           establish a legal separation or divorce from his
                           Spouse, the Administrative Committee may (but is not
                           required to) elect to prohibit the Participant from
                           receiving any distributions until the rights of the
                           Participant and his Spouse to the amounts in the
                           Participant's Accounts are finally determined.

         XVI.7    LOANS. The Administrative Committee may, upon written
                  application of a Participant, authorize a loan to such
                  Participant subject to the provisions of this Section 16.7 and
                  to such other written procedures and regulations as may be


                                     - 67 -
<PAGE>
                  promulgated by the Administrative Committee and which shall
                  form a part of this Plan.

                  (a)      Source of Loan:

                           A loan to a Participant shall be made from, in order,
                           each until exhausted, his Salary Savings Contribution
                           Account, his Rollover Account, his Hammond Company
                           Matching Account and his remaining Employer Matching
                           Contribution Account.

                  (b)      Maximum Amount:

                           A Participant's loan may not exceed the lesser of:

                           (1)      $50,000 reduced to the extent of (i) the
                                    highest outstanding loan balance of the
                                    Participant's loans outstanding during the
                                    immediately prior 12-month period (ending
                                    the day before the loan is granted) over,
                                    (ii) the total of the all outstanding loans
                                    the day the loan is granted;

                                    or

                           (2)      fifty percent (50%) of the Participant's
                                    vested balance in the Plan.

                           For purposes of this Section, balances shall be
                           determined as of the Valuation Date coincident with
                           or next preceding the date of the Participant's
                           application.

                  (c)      Minimum Amount:

                           No loan shall be made under this Section 16.7 for an
                           amount which is less than five hundred dollars
                           ($500).

                  (d)      Frequency of Loans:

                           A Participant may have only one (1) loan outstanding
                           at any time and one (1) loan may be approved during
                           any calendar.year. At least thirty (30) days must
                           elapse between the full repayment of a loan and the
                           approval of another loan.


                                     - 68 -
<PAGE>
                  (e)      Availability:

                           Loans shall be made available to all Participants on
                           a reasonably equitable basis without regard to an
                           individual's race, color, religion, sex, age or
                           national origin and such availability shall be
                           communicated to all Participants. The Administrative
                           Committee shall not approve a loan to a Participant
                           unless the Participant can demonstrate that he has an
                           immediate and heavy financial need as provided in
                           Section 8.9(a).

                  (f)      Spousal Consent:

                           The Administrative Committee shall not approve a loan
                           to a married Participant unless the Participant's
                           Spouse consents to the loan as provided under Section
                           8.5 within the 90-day period ending on the date the
                           loan is secured.

                  (g)      Interest Rate:

                           For each calendar month, a rate of interest equal to
                           the prime lending rate as published in The Wall
                           Street Journal on the last business day of the
                           previous month, plus one percent (1%), shall be
                           charged on each loan.

                  (h)      Duration:

                           All loan agreements shall provide for repayment
                           within five (5) years from the date of the loan.
                           Notwithstanding the foregoing, if the loan is for the
                           purchase of the Participant's primary residence, the
                           loan agreement may provide for repayment within a
                           period not to exceed thirty (30) years from the date
                           of the loan.

                  (i)      Security:

                           Each loan shall be secured by the Participant's
                           Vested Interest remaining in the Plan.

                  (j)      Investments:

                           Each loan shall be treated as a separate investment
                           of the Participant's Account. Amounts shall be taken
                           pro-rata from the Investment Funds. Payments by a
                           Participant on any such loan shall be credited to
                           such Account in the various Funds in the same
                           proportion as the Participant's Salary Savings
                           Contributions are made to such Funds at the time such
                           loan payments are made.


                                     - 69 -
<PAGE>
                  (k)      Other Rules:

                           (1)      All qualified plans of the Company and
                                    Affiliated Companies shall be combined for
                                    purposes of maximum limits on loans.

                           (2)      All loans must be evidenced by a written
                                    loan agreement signed by all relevant
                                    parties to the loan and evidenced by a
                                    promissory note of the borrower wherein such
                                    borrower personally guarantees the repayment
                                    of the loan.

                           (3)      The Administrative Committee shall not
                                    direct the Trustee to foreclose on any
                                    Participant's Account securing repayment of
                                    the loan until a permissible distributable
                                    event under Code Section 401(k) occurs.

                           (4)      No distribution shall be made to any
                                    Participant or Former Participant or to a
                                    Beneficiary of any such Participant unless
                                    and until all unpaid loans to such
                                    Participant or Former Participant, including
                                    accrued interest thereon, have been
                                    liquidated.

                           (5)      Repayment of loans shall be by payroll
                                    deduction, or other approved method, on a
                                    level amortization basis, with payment being
                                    made no less frequently than quarterly,
                                    except that a Participant may prepay all or
                                    a portion of the outstanding principal
                                    balance of his loan at any time.

                           (6)      The Administrative Committee will notify the
                                    Participant that, to the extent that his
                                    loan is secured by the vested balance in the
                                    Plan, no interest deduction is allowable.

                           (7)      Loans shall become due and payable in full
                                    upon the Participant's termination of
                                    employment. In the event that the
                                    Participant fails to repay the outstanding
                                    balance of the loan by the close of the
                                    60-day period which commences on the day
                                    following his termination of employment, the
                                    loan shall be deemed to be in default on the
                                    last day of such period. Upon default, the
                                    Participant's interest in his Accounts shall
                                    be reduced to the extent necessary to retire
                                    the outstanding balance of the loan. The
                                    amount of such reduction shall be deemed to
                                    be a distribution.

                           (8)      The Administrative Committee shall impose an
                                    administrative charge for preparing the
                                    documents necessary to make a loan to a
                                    Participant. Such charge shall be
                                    reasonable, shall be deducted from the
                                    proceeds of the loan and shall be imposed in
                                    a uniform and nondiscriminatory manner.


                                     - 70 -
<PAGE>
         XVI.8    ESOP LOANS.

                  The Administrative Committee may direct the Trustee to borrow
                  funds for the benefit of the Trust. Provided that all loans
                  must be primarily for the benefit of the Participants and
                  their beneficiaries and, notwithstanding any other provision
                  of this Plan or the Trust, all Exempt Loans shall meet the
                  following requirements:

                  (a)      At the time the Exempt Loan is made:

                           (1)      The interest rate for the Exempt Loan and
                                    the price of any Company Stock which is to
                                    be acquired with the proceeds of the Exempt
                                    Loan shall not be such as might drain the
                                    Trust of its assets; and

                           (2)      The terms of the Exempt Loan, whether or not
                                    between independent parties, must be at
                                    least as favorable to the Trust as the terms
                                    of a comparable loan resulting from
                                    arms-length negotiations between independent
                                    parties.

                  (b)      The Exempt Loan must be for a specific term and not
                           be payable at the demand of any person, except in the
                           case of default.

                  (c)      The proceeds of an Exempt Loan must be used within a
                           reasonable time after their receipt by the Trustee
                           only for any or all of the following purposes:

                           (1)      To acquire Company Stock which is both
                                    common stock and publicly traded stock or,
                                    if not publicly traded stock, is common
                                    stock, which has a combination of voting
                                    power and dividend rights equal to or in
                                    excess of:

                                    (A)      That class of common stock of the
                                             Company having the greatest voting
                                             power; and

                                    (B)      That class of common stock of the
                                             Company having the greatest
                                             dividend rights.

                           (2)      To repay such Exempt Loan;

                           (3)      To repay a prior Exempt Loan.

                           Except as otherwise provided, no Company Stock
                           acquired with the proceeds of an Exempt Loan may be
                           subject to a put, call or other option, or buy-sell
                           or similar arrangement while held by and when
                           distributed


                                     - 71 -
<PAGE>
                           from the Trust, whether or not the Plan is then an
                           Employee Stock Ownership Plan.

                  (d)      The Exempt Loan must be without recourse against the
                           Trust. The only assets of the Trust which may be
                           given by the Trustee as collateral on an Exempt Loan
                           shall consist of shares of Company Stock which have
                           been acquired with the proceeds of the Exempt Loan or
                           which were used as collateral on a prior Exempt Loan
                           which has been repaid with proceeds of the current
                           Exempt Loan. No person entitled to payment under the
                           Exempt Loan shall have any right to any assets of the
                           Trust other than:

                           (1)      Collateral given for the Exempt Loan;

                           (2)      Contributions (other than contributions of
                                    Company Stock) that are made under the Plan
                                    to meet the Trust's obligations under the
                                    Exempt Loan; and

                           (3)      Earnings attributable to such collateral and
                                    the investment of such contributions.

                  (e)      The payments made with respect to an Exempt Loan by
                           the Trust during a Plan Year may not exceed an amount
                           equal to the sum of:

                           (1)      Contributions (other than contributions of
                                    Company Stock) that are made under the Plan
                                    to meet the Trust's obligations under the
                                    Exempt Loan; and

                           (2)      Earnings attributable to the collateral
                                    given for the Exempt Loan and the investment
                                    of the contributions described in
                                    Subparagraph (1) of this Paragraph (e). Such
                                    contributions and earnings must be accounted
                                    for separately until the Exempt Loan is
                                    repaid.

                  (f)      In the event of default upon an Exempt Loan, the
                           value of Trust assets transferred in satisfaction of
                           the Exempt Loan must not exceed the amount of the
                           default. In the event the lender is a "Disqualified
                           Person" as defined in Section 4975(e)(2) of the
                           Internal Revenue Code, or "Party in Interest", as
                           defined in Section 408(e) of the Employee Retirement
                           Income Security Act of 1974, the loan must provide
                           for a transfer of Trust assets only upon and to the
                           extent of the failure of the Trust to meet the
                           payment schedule of the Exempt Loan. For purposes of
                           this Paragraph, the making of a guarantee does not
                           make a person a lender.

                  (g)      The interest rate for an Exempt Loan must not exceed
                           a reasonable rate of interest. In determining a
                           reasonable rate of interest, all relevant factors
                           shall be considered including the amount and duration
                           of the loan, the


                                     - 72 -
<PAGE>
                           security and guarantee (if any) involved, the credit
                           standing of the Trust and the guarantor (if any), and
                           the interest rate prevailing for comparable loans.
                           Where these factors are considered, a variable
                           interest rate may be reasonable.

                  (h)      An Exempt Loan must provide for the manner in which
                           Trust assets used as collateral for the Exempt Loan
                           are to be released from encumbrance and such
                           provision must be in compliance with either the
                           "General Rule" or the "Special Rule" as described
                           below, as selected by the Committee.

                           (1)      General Rule: For each Plan Year during the
                                    duration of the Exempt Loan, the number of
                                    shares released from encumbrance must equal
                                    the number of encumbered shares held
                                    immediately before release for the current
                                    Plan Year multiplied by a fraction:

                                    (A)      The numerator of which is the
                                             amount of principal and interest
                                             paid for the Plan Year: and

                                    (B)      The denominator of which is the sum
                                             of the numerator plus the principal
                                             and interest to be paid for all
                                             future years.

                           (2)      Special Rule:

                                    (A)      For each Plan Year during the
                                             duration of the Exempt Loan, the
                                             number of shares released from
                                             encumbrance must equal the number
                                             of encumbered shares held
                                             immediately before release for the
                                             current Plan Year multiplied by a
                                             fraction:

                                             (i)      The numerator of which is
                                                      the amount of principal
                                                      paid for the Plan Year;
                                                      and

                                             (ii)     The denominator of which
                                                      is the sum of the
                                                      numerator plus the
                                                      principal to be paid for
                                                      all future Years.

                                    (B)      Anything herein to the contrary
                                             notwithstanding, the Special Rule
                                             described in this Paragraph (2) may
                                             only be utilized with respect to an
                                             Exempt Loan if:

                                            (i)      The Exempt Loan provides
                                                     for annual payments of
                                                     principal and interest at a
                                                     cumulative rate which is
                                                     not less rapid at any time
                                                     than level annual payments
                                                     of such amounts for 10
                                                     years.


                                     - 73 -
<PAGE>
                                             (ii)    The interest included in
                                                     any payment is disregarded
                                                     only to the extent that it
                                                     would be determined to be
                                                     interest under standard
                                                     loan amortization tables;
                                                     and

                                             (iii)   The Exempt Loan provides
                                                     that the General Rule
                                                     described in Paragraph (1)
                                                     above shall be the method
                                                     utilized to determine the
                                                     assets released from
                                                     encumbrance from the time
                                                     that, by reason of a
                                                     renewal, extension or
                                                     refinancing, the sum of the
                                                     expired duration of the
                                                     Exempt Loan, the renewal
                                                     period, the extension
                                                     period and the duration of
                                                     a new Exempt Loan exceeds
                                                     10 years.

                           (3)      In determining the number of shares to be
                                    released for any Plan Year under either the
                                    General Rule or the Special Rule:

                                    (A)      The number of future years under
                                             the Exempt Loan must be definitely
                                             ascertainable and must be
                                             determined without taking into
                                             account any possible extensions or
                                             renewal periods.

                                    (B)      If the Exempt Loan provides for a
                                             variable interest rate, the
                                             interest to be paid for all future
                                             Plan Years must be computed by
                                             using the interest rate applicable
                                             as of the end of the Plan Year for
                                             which the determination is being
                                             made.

                                    (C)      If the collateral for an Exempt
                                             Loan includes more than one class
                                             of shares, the number of shares of
                                             each class to be released for a
                                             Plan Year must be determined by
                                             applying the applicable fraction
                                             provided for in either Subparagraph
                                             (1) or (2) of this Paragraph (h) to
                                             each such class.

                  (i)      The provisions of an Exempt Loan may not restrict the
                           payment provisions set forth with respect to "put
                           options" in Section 5.07 of the Plan unless such
                           restrictions are required by applicable state law.

                  (j)      For purposes of this Section, the term "Exempt Loan"
                           shall mean a loan which is made in accordance with
                           the terms and provisions of this Trust and the Plan
                           and which is made to the Trust by a person who is a
                           "Disqualified Person" as defined in Section
                           4975(e)(2) of the Internal Revenue Code or a "Party
                           in Interest" as defined in Section 408(e) of the
                           Employee Retirement Income Security Act of 1974, or a
                           loan to the Trust which is guaranteed by such a
                           Disqualified Person or Party in Interest. For
                           purposes of this Section:


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<PAGE>
                           (1)      The term "loan " includes a direct loan of
                                    cash, a purchase-money transaction, and an
                                    assumption of an obligation of the Plan or
                                    Trust.

                           (2)      The term "guarantee" includes an unsecured
                                    guarantee and the use of assets of a
                                    Disqualified Person or Party in Interest as
                                    collateral for a loan, even though the use
                                    of assets may not be a guarantee under
                                    applicable state law.


                                  ARTICLE XVII
                                   AMENDMENTS

         XVII.1   AMENDMENTS. This Plan may be amended at any time by action of
                  the Administrative Committee; however, any amendment which
                  would increase the Company's contributions under the Plan or
                  the cost of administering the Plan or which would expand the
                  Administrative Committee's right to amend the Plan shall be
                  subject to review and approval by the Board of Directors.
                  However, except as otherwise permitted by law, no amendment
                  shall be made, the effect of which would be:

                  (a)      To cause any assets of the Plan, at any time prior to
                           the satisfaction of all liabilities with respect to
                           Participants and their Beneficiaries, to be used for
                           or diverted to purposes other than-

                           (i)      Providing benefits to the Participants and
                                    their Beneficiaries, and

                           (ii)     Defraying reasonable expenses of
                                    administering the Plan;

                  (b)      To increase or alter the responsibilities or
                           liabilities of a Trustee or an Investment Manager
                           without its written consent; or

                  (c)      To have any retroactive effect so as to decrease the
                           accrued benefit of any Participant (within.the
                           meaning of Section 411(d)(6) of the Code). This
                           requirement will not be considered to be violated,
                           however, by amendments to the rules regarding
                           hardship distributions under Section 8.11 (including
                           amendments eliminating such form of distributions).

         XVII.2   EFFECT OF AMENDMENTS.

                  (a)      All amendments to the Plan are effective only on the
                           date on which the amendments are adopted, unless-

                           (i)      A different effective date is expressly
                                    provided by resolution of the Board of
                                    Directors of the Company, or


                                     - 75 -
<PAGE>
                           (ii)     The amendment by its own express terms
                                    becomes effective at another date.

                  (b)      Unless and to the extent expressly stated to the
                           contrary in the terms of any amendment the amendment
                           shall not be construed to enlarge the rights of any
                           Participant whose Severance occurred prior to the
                           effective date of the amendment.

         XVII.3   AMENDMENT OF VESTING SCHEDULE.

                  If an amendment changes the vesting schedule of Section 7.1,
                  each Participant who has completed at least three (3) Years of
                  Service for vesting purposes as of the effective date of such
                  amendment shall have the right to elect to have his vested
                  percentage determined without regard to such amendment. The
                  election period begins on the date the amendment is adopted
                  and ends 60 days after the later of:

                  (a)      the date the amendment is adopted;

                  (b)      the date the amendment is effective; or

                  (c)      the date the Participant receives written notice of
                           the amendment from the Company or the Administrative
                           Committee.


                                  ARTICLE XVIII
                              MISCELLANEOUS MATTERS

         XVIII.1  NO ENLARGEMENT OF EMPLOYEE RIGHTS.

                  (a)      Nothing contained in the Plan shall be deemed to give
                           any Employee the right to be retained in the employ
                           of the Company or to interfere with the right of the
                           Company to discharge any Employee at any time.

                  (b)      No Employee shall have any right to, or interest in
                           any assets of the Plan, other than as specifically
                           provided in this Plan.

         XVIII.2  INTERPRETATION.

                  (a)      Article and Section headings are for convenient
                           reference only and shall not be deemed to be part of
                           the substance of the Plan or in any way to enlarge or
                           limit the contents of any Article or Section.

                  (b)      Unless the context clearly indicates otherwise, the
                           masculine gender shall


                                     - 76 -
<PAGE>
                           include the feminine, the singular shall include the
                           plural, and the plural shall include the singular.

                  (c)      The provisions of this Plan shall be interpreted in a
                           manner that is consistent with this Plan satisfying
                           the applicable requirements of the Code and ERISA.

         XVIII.3  APPLICABLE LAW.

                  The Plan shall be construed, administered and enforced
                  according to the laws of the United States and the laws of the
                  state of California to the extent that the latter are not
                  preempted by the former.

         XVIII.4  USERRA.

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

                                   ARTICLE XIX
                                 RIGHTS OFFERING

         This Article XIX is intended to set forth the policies and procedures
         applicable to Company Contributions which have been or will be made in
         connection with certain rights offerings made by the Company.

         XIX.1    2000 RIGHTS OFFERING.

                  This Section references that certain rights offering made by
                  the Company as described in a prospectus dated May 24, 2000
                  (the "2000 Rights Offering").

         XIX.2    SUBSEQUENT RIGHTS OFFERING.

                  This Section references those certain rights offerings made by
                  the Company (if any) subsequent to the 2000 Rights Offering
                  (the "Subsequent Rights Offering").

         XIX.3    AUTHORITY OF ADMINISTRATIVE COMMITTEE.

                  Notwithstanding any provision in this Plan to the contrary,
                  pending the allocation of any contribution made in connection
                  with the 2000 Rights Offering or the Subsequent Rights
                  Offering, the Administrative Committee shall exercise all
                  rights, powers and privileges relating to such unallocated
                  contribution, including, but not limited to the decision to
                  purchase additional shares of Company Stock


                                     - 77 -
<PAGE>
                  with unallocated cash pursuant to the 2000 Rights Offering or
                  the Subsequent Rights Offering.

         XIX.4    PURCHASE UNDER 2000 RIGHTS OFFERING AND SUBSEQUENT RIGHTS
                  OFFERING.

                  Notwithstanding any provision in this Plan to the contrary,
                  the Administrative Committee shall have the exclusive power to
                  make the decision whether or not to exercise the "Right" to
                  acquire additional shares of Company Stock on behalf of
                  Participants in the ESOP pursuant to the 2000 Rights Offering
                  and the Subsequent Rights Offering. In other words,
                  Participants will not decide whether or not to exercise the
                  "Right", but instead the Committee will make such decision on
                  behalf of each Participant.

         XIX.5    EXCESS ANNUAL ADDITIONS.

                  (a)      Where there is an excess Annual Addition in a
                           Participant's account, the excess amount must be used
                           to reduce Company contributions for the next
                           limitation year (and succeeding limitation years, as
                           necessary) for that Participant if that Participant
                           is covered by the Plan as of the end of the
                           limitation year.

                  (b)      If the Participant is not covered by the Plan as of
                           the end of the limitation year, then the excess
                           amount must be held unallocated in a suspense account
                           for the limitation year and allocated and reallocated
                           in the next limitation year to all of the remaining
                           Participants in the Plan.

                  (c)      The excess amounts must be used to reduce Company
                           contributions for the next limitation year (and
                           succeeding limitation years, as necessary) for all of
                           the Participants in the Plan. Excess amounts may not
                           be distributed to Participants or former
                           Participants.

         XIX.6    ADMINISTRATIVE COMMITTEE POWERS.

                  Pending allocation of any contribution made to the ESOP during
                  the Plan Year ended December 31, 2000, the Administrative
                  Committee will have exercised all rights, powers and
                  privileges related to such unallocated contribution,
                  including, but not limited to the decision to purchase
                  additional shares of Company Stock with unallocated cash
                  pursuant to the 2000 Rights Offering. The Administrative
                  Committee shall make the decision to exercise any offer,
                  option or right to acquire additional shares of Company Stock
                  for the ESOP in accordance with the Subsequent Rights
                  Offering.


                                     - 78 -
<PAGE>
To signify its adoption of this restated Plan, Westcorp has caused its duly
authorized officer to execute this document.



                                    Westcorp,
                                    a California Corporation

                                    By:
                                       -----------------------------------------

                                    Its:
                                        ----------------------------------------

                                    Date:
                                         ---------------------------------------







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