EXHIBIT 4.3

            --------------------------------------------------------


                                  MERRILL LYNCH

                                 ---------------
                                     SPECIAL
                                 ---------------

                                PROTOTYPE DEFINED

                                CONTRIBUTION PLAN

                               ADOPTION AGREEMENT


            --------------------------------------------------------




                                   401(K) PLAN

                              EMPLOYEE THRIFT PLAN

                               PROFIT-SHARING PLAN


                         LETTER SERIAL NUMBER: D359287B
                      NATIONAL OFFICE LETTER DATE: 6/29/93





THIS PROTOTYPE PLAN AND ADOPTION AGREEMENT ARE IMPORTANT LEGAL INSTRUMENTS WITH
LEGAL AND TAX IMPLICATIONS FOR WHICH THE SPONSOR, MERRILL LYNCH, PIERCE, FENNER
& SMITH, INCORPORATED, DOES NOT ASSUME RESPONSIBILITY. THE EMPLOYER IS URGED TO
CONSULT WITH ITS OWN ATTORNEY WITH REGARD TO THE ADOPTION OF THIS PLAN AND ITS
SUITABILITY TO ITS CIRCUMSTANCES.


<PAGE>


ADOPTION OF PLAN
----------------

The Employer named below hereby establishes or restates a profit-sharing plan
that includes a [X] 401(k), [ ] profit-sharing and/or [ ] thrift plan feature
(the "Plan") by adopting the Merrill Lynch Special Prototype Defined
Contribution Plan and Trust as modified by the terms and provisions of this
Adoption Agreement.

EMPLOYER AND PLAN INFORMATION
-----------------------------


Employer Name:*  SAMUELS JEWELERS, INC.

Business Address: 2914 Montopolis Drive, Suite 200

                  Austin, TX  78741

Telephone Number: (512) 369-1400

Employer Taxpayer ID Number: 95-3746316

Employer Taxable Year ends on: DECEMBER 31ST

Plan Name: SAMUELS JEWELERS, INC.
           401(K)

Plan Number: 001
<TABLE>
                                          401(K)        PROFIT SHARING          THRIFT
<S>                                      <C>             <C>                 <C>
Effective Date of Adoption
          or Restatement:                06/01/99        ___/___/___         ___/___/___



Original Effective Date:                 01/01/95        ___/___/___         ___/___/___
</TABLE>
IF THIS PLAN IS A CONTINUATION OR AN AMENDMENT OF A PRIOR PLAN, ALL OPTIONAL
FORMS OF BENEFITS PROVIDED IN THE PRIOR PLAN MUST BE PROVIDED UNDER THIS PLAN TO
ANY PARTICIPANT WHO HAD AN ACCOUNT BALANCE, WHETHER OR NOT VESTED, IN THE PRIOR
PLAN.

--------------------------------------------------

* If there are any Participating Affiliates in this Plan, list below the proper
name of each Participating Affiliate.

________.
________.
________.


                                       2
<PAGE>


                             ARTICLE I. DEFINITIONS
A.  "COMPENSATION"

(1)   With respect to each Participant, except as provided below, Compensation
      shall mean the (select all those applicable for each column):

401(K) AND/       PROFIT
OR THRIFT         SHARING

[X]               [ ] (a) amount reported in the "Wages Tips and Other
                  Compensation" Box on Form W-2 for the applicable period
                  selected in Item 5 below.

[ ]               [ ] (b) compensation for Code Section 415 safe-harbor purposes
                  (as defined in Section 3.9.1 (H)(i) of basic plan document
                  #03) for the applicable period selected in Item 5 below.

[ ]               [ ] (c) amount reported pursuant to Code Section 3401(a) for
                  the applicable period selected in Item 5 below.

[ ]               [ ] (d) all amounts received (under options (a) (b) or (c)
                  above) for personal services rendered to the Employer but
                  excluding (select one):

         [ ] overtime
         [ ] bonuses
         [ ] commissions
         [ ] amounts in excess of $_______
         [ ] other (specify)_______.

(2)  Treatment of Elective Contributions (select one):

    [X] (a) For purposes of contributions, Compensation shall include
         Elective Deferrals and amounts excludable from the gross income of the
         Employee under Code Section 125, Code Section 402(e)(3), Code Section
         402(h) or Code Section 403(b) ("elective contributions").

    [ ] (b) For purposes of contributions, Compensation shall not include
         "elective contributions."

(3)  CODA Compensation (select one):

    [X] (a) For purposes of the ADP and ACP Tests, Compensation shall include
         "elective contributions."

    [ ] (b) For purposes of the ADP and ACP Tests, Compensation shall not
         include "elective contributions."


                                       3
<PAGE>


(4) With respect to Contributions to an Employer Contributions Account,
Compensation shall include all Compensation (select one):

    [ ] (a) during the Plan Year in which the Participant enters the Plan.

    [X] (b) after the Participant's Entry Date.

(5)  The applicable period for determining Compensation shall be (select one):

    [X] (a) the Plan Year.

    [ ] (b) the Limitation Year.

    [ ] (c) the consecutive 12-month period ending on _____.

B.  "DISABILITY"

(1)  Definition

     Disability shall mean a condition which results in the Participant's
(select one):

    [ ] (a) inability 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 which has lasted or can be expected to
        last for a continuous period of not less than 12 months.

    [X] (b) total and permanent inability to meet the requirements of the
        Participant's customary employment which can be expected to last for a
        continuous period of not less than 12 months.

    [ ] (c) qualification for Social Security disability benefits.

    [ ] (d) qualification for benefits under the Employer's long-term
        disability plan.

(2)  Contributions Due to Disability (select one):

    [X] (a) No contributions to an Employer Contributions Account will be made
        on behalf of a Participant due to his or her Disability.

    [ ] (b) Contributions to an Employer Contributions Account will be made on
        behalf of a Participant due to his or her Disability provided that: the
        Employer elected option (a) or (c) above as the definition of
        Disability, contributions are not made on behalf of a Highly Compensated
        Employee, the contribution is based on the Compensation each such
        Participant would have received for the Limitation Year if the
        Participant had been paid at the rate of Compensation paid immediately
        before his or her Disability, and contributions made on behalf of such
        Participant will be nonforfeitable when made.


                                       4
<PAGE>

C "EARLY RETIREMENT" is (select one):

    [X] (1) not permitted.

    [ ] (2) permitted if a Participant terminates Employment before Normal
        Retirement Age and has (select one):

        [ ] (a) attained age ______.

        [ ] (b) attained age ______ and completed ______ Years of Service.

        [ ] (c) attained age ______ and completed ______ Years of Service as a
            Participant.

D.  "ELIGIBLE EMPLOYEES" (select one):

    [ ] (1) All Employees are eligible to participate in the Plan.

    [X] (2) The following Employees are not eligible to participate in the Plan
        (select all those applicable):

        [X] (a) Employees included in a unit of Employees covered by a
            collective bargaining agreement between the Employer or a
            Participating Affiliate and the Employee representatives (not
            including any organization more than half of whose members are
            Employees who are owners, officers, or executives of the Employer or
            Participating Affiliate) in the negotiation of which retirement
            benefits were the subject of good faith bargaining, unless the
            bargaining agreement provides for participation in the Plan.

        [ ] (b) non-resident aliens who received no earned income from the
            Employer or a Participating Affiliate which constitutes income from
            sources within the United States.

        [ ] (c) Employees of an Affiliate.

        [ ] (d) Employees employed in or by the following specified division,
            plant, location, job category or other identifiable individual or
            group of Employees: ______.


                                       5
<PAGE>


E. "ENTRY DATE"   Entry Date shall mean (select as applicable):

401(K)
AND/OR      PROFIT
THRIFT      SHARING

[ ]     [ ]     (1) If the initial Plan Year is less than twelve months, the
                _______ day of _______ and thereafter:

[ ]     [ ]     (2) the first day of the Plan Year following the date the
                Employee meets the eligibility requirements. If the Employer
                elects this option (2) establishing only one Entry Date, the
                eligibility "age and service" requirements elected in Article II
                must be no more than age 20-1/2 and 6 months of service.

[X]     [ ]     (3) the first day of the month following the date the Employee
                meets the eligibility requirements.

[ ]     [ ]     (4) the first day of the Plan Year and the first day of the
                seventh month of the Plan Year following the date the Employee
                meets the eligibility requirements.

[ ]     [ ]     (5) the first day of the Plan Year, the first day of the fourth
                month of the Plan Year, the first day of the seventh month of
                the Plan Year, and the first day of the tenth month of the Plan
                Year following the date the Employee meets the eligibility
                requirements.

[ ]     [ ]     (6) other:     .
                provided that the Entry Date or Dates selected are no later
                than any of the options above.

F.  "HOURS OF SERVICE"

Hours of Service for the purpose of determining a Participant's Period of
Severance and Year of Service shall be determined on the basis of the method
specified below:

    (1) Eligibility Service: For purposes of determining whether a Participant
    has satisfied the eligibility requirements, the following method shall be
    used (select one):

     401(K)
     AND/OR      PROFIT
     THRIFT      SHARING

     [ ]    [ ]    (a) elapsed time method
     [X]    [ ]    (b) hourly records method


                                       6
<PAGE>


    (2) Vesting Service: A Participant's nonforfeitable interest shall be
    determined on the basis of the method specified below (select one):

    [X] (a) elapsed time method
    [ ] (b) hourly records method
    [ ] (c) If this item (c) is checked, the Plan only provides for
        contributions that are always 100% vested and this item (2) will not
        apply.

    (3) Hourly Records: For the purpose of determining Hours of Service under
    the hourly record method (select one):

    [X] (a) only actual hours for which an Employee is paid or entitled to
        payment shall be counted.

    [ ] (b) an Employee shall be credited with 45 Hours of Service if such
        Employee would be credited with at least 1 Hour of Service during the
        week.

G.  "INTEGRATION LEVEL"

    [X] (1) This Plan is not integrated with Social Security.

    [ ] (2) This Plan is integrated with Social Security. The Integration Level
        shall be (select one):

        [ ] (a) the Taxable Wage Base.
        [ ] (b) $______ (a dollar amount less than the Taxable Wage Base).
        [ ] (c) ______% of the Taxable Wage Base (not to exceed 100%).
        [ ] (d) the greater of $10,000 or 20% of the Taxable Wage Base.

H.  "LIMITATION COMPENSATION"

For purposes of Code Section 415, Limitation Compensation shall be compensation
as determined for purposes of (select one):

    [ ] (1) Code Section 415 Safe-Harbor as defined in Section 3.9.1(H)(i) of
        basic plan document #03.

    [X] (2) the "Wages, Tips and Other Compensation" Box on Form W-2.

    [ ] (3) Code Section 3401(a) Federal Income Tax Withholding.

I.  "LIMITATION YEAR"

For purposes of Code Section 415, the Limitation Year shall be (select one):

    [X] (1) the Plan Year.

    [ ] (2) the twelve consecutive month period ending on the _______ day of the
    month of _______.


                                       7
<PAGE>

J. "NET PROFITS" are (select one):

    [X] (1) not necessary for any contribution.

    [ ] (2) necessary for (select all those applicable):

        [ ] (a) Profit-Sharing Contributions.
        [ ] (b) Matching 401(k) Contributions.
        [ ] (c) Matching Thrift Contributions.

K. "NORMAL RETIREMENT AGE"

Normal Retirement Age shall be (select one):

    [ ] (1) attainment of age ______ (not more than 65) by the Participant.

    [X] (2) attainment of age 65 (not more than 65) by the Participant or the
        5TH anniversary (not more than the 5th) of the first day of the Plan
        Year in which the Eligible Employee became a Participant, whichever is
        later.

    [ ] (3) attainment of age _____ (not more than 65) by the Participant or
        the ______. anniversary (not more than the 5th) of the first day on
        which the Eligible Employee performed an Hour of Service, whichever is
        later.

L. "PARTICIPANT DIRECTED ASSETS" are:

        401(K) AND/       PROFIT
        OR THRIFT         SHARING

        [X]      [ ]      (1) permitted.

        [ ]      [ ]      (2) not permitted.

M.  "PLAN YEAR"

The Plan Year shall end on the 31ST day of DECEMBER.

N.  "PREDECESSOR SERVICE"

Predecessor service will be credited (select one):

    [X] (1) only as required by the Plan.

    [ ] (2) to include, in addition to the Plan requirements and subject to
        the limitations set forth below, service with the following predecessor
        employer(s) determined as if such predecessors were the Employer: _____.


                                       8
<PAGE>


Service with such predecessor employer applies [select either or both (a) and/or
(b); (c) is only available in addition to (a) and/or (b)]:

        [ ] (a) for purposes of eligibility to participate;
        [ ] (b) for purposes of vesting;
        [ ] (c) except for the following service: _______.

O.  "VALUATION DATE"

Valuation Date shall mean (select one for each column, as applicable):

401(K) AND/      PROFIT
OR THRIFT        SHARING

    [ ]      [ ]    (1) the last business day of each month.

    [ ]      [ ]    (2) the last business day of each quarter within the Plan
                        Year.

    [ ]      [ ]    (3) the last business day of each semi-annual period within
                        the Plan Year.

    [ ]      [ ]    (4) the last business day of the Plan Year.

    [X]      [ ]    (5) other: DAILY BASIS.

                            ARTICLE II. PARTICIPATION

PARTICIPATION REQUIREMENTS

An Eligible Employee must meet the following requirements to become a
Participant (select one or more for each column, as applicable):

401(K) AND/       PROFIT
OR THRIFT         SHARING

[ ]         [ ]     (1) Performance of one Hour of Service.

[ ]         [ ]     (2) Attainment of age ________ (maximum 20 1/2) and
                        completion of ________ (not more than 1/2) Years
                        of Service. If this item is selected, no Hours of
                        Service shall be counted.

[X]         [ ]     (3) Attainment of age 21 (maximum 21) and completion
                        of 1 Year(s) of Service. If more than one Year of
                        Service is selected, the immediate 100% vesting
                        schedule must be selected in Article VII of this
                        Adoption Agreement.


                                       9
<PAGE>

401(K) AND/       PROFIT
OR THRIFT         SHARING

[ ]         [ ]     (4)       Attainment of age (maximum 21) and completion of
                              Year(s) of Service. If more than one Year of
                              Service is selected, the immediate l00% vesting
                              schedule must be selected in Article VII of this
                              Adoption Agreement.

[ ]         [ ]     (5)       Each Employee who is an Eligible Employee on will
                              be deemed to have satisfied the participation
                              requirements on the effective date without regard
                              to such Eligible Employee's actual age and/or
                              service.


            ARTICLE III. 401(K) CONTRIBUTIONS AND ACCOUNT ALLOCATION

A.  ELECTIVE DEFERRALS

If selected below, a Participant's Elective Deferrals will be (select all
applicable):

    [X] (1) a dollar amount or a percentage of Compensation, as specified by the
        Participant on his or her 401(k) Election form, which may not exceed
        _______ % of his or her Compensation.

    [ ] (2) with respect to bonuses, such dollar amount or percentage as
        specified by the Participant on his or her 401(k) Election form with
        respect to such bonus.

B.  MATCHING 401(K) CONTRIBUTIONS

If selected below, the Employer may make Matching 401(k) Contributions for each
Plan Year (select one):

    [ ] (1) Discretionary Formula:

    Discretionary Matching 401(k) Contribution equal to such a dollar amount or
    percentage of Elective Deferrals, as determined by the Employer, which shall
    be allocated (select one):

        [X] (a) based on the ratio of each Participant's Elective Deferral for
            the Plan Year to the total Elective Deferrals of all Participants
            for the Plan Year. If inserted, Matching 40l(k) Contributions shall
            be subject to a maximum amount of $_______ for each Participant or
            _______% of each Participant's Compensation.


                                       10
<PAGE>


        [ ] (b) in an amount not to exceed ______% of each Participant's first
            ______% of Compensation contributed as Elective Deferrals for the
            Plan Year. If any Matching 401(k) Contribution remains, it is
            allocated to each such Participant in an amount not to exceed
            ______% of the next ______% of each Participant's Compensation
            contributed as Elective Deferrals for the Plan Year.

    Any remaining Matching 401(k) Contribution shall be allocated to each such
    Participant in the ratio that such Participant's Elective Deferral for the
    Plan Year bears to the total Elective Deferrals of all such Participants for
    the Plan Year. If inserted, Matching 40l(k) Contributions shall be subject
    to a maximum amount of $______ for each Participant or ______% of each
    Participant's Compensation.

    [ ] (2) Nondiscretionary Formula:

    A nondiscretionary Matching 401(k) Contribution for each Plan Year equal to
    (select one):

        [ ] (a) _______% of each Participant's Compensation contributed as
            Elective Deferrals. If inserted, Matching 40l(k) Contributions shall
            be subject to a maximum amount of $_______ for each Participant or
            _______% of each Participant's Compensation.

        [ ] (b) _______% of the first _______% of the Participant's
            Compensation contributed as Elective Deferrals and _______% of the
            next _______% of the Participant's Compensation contributed as
            Elective Deferrals. If inserted, Matching 40l(k) Contributions shall
            be subject to a maximum amount of $_______ for each Participant or
            _______% of each Participant's Compensation.

C.  PARTICIPANTS ELIGIBLE FOR MATCHING 401(K) CONTRIBUTION ALLOCATION

The following Participants shall be eligible for an allocation to their Matching
401(k) Contributions Account (select all those applicable):

    [X] (1) Any Participant who makes Elective Deferrals.

    [ ] (2) Any Participant who satisfies those requirements elected by the
        Employer for an allocation to his or her Employer Contributions Account
        as provided in Article IV Section C.

    [ ] (3) Solely with respect to a Plan in which Matching 401(k)
        Contributions are made quarterly (or on any other regular interval that
        is more frequent than annually) any Participant whose 401(k) Election is
        in effect throughout such entire quarter (or other interval). ________
        (quarterly, monthly or semi-annual)


                                       11
<PAGE>

D.  QUALIFIED MATCHING CONTRIBUTIONS

If selected below, the Employer may make Qualified Matching Contributions for
each Plan Year (select all those applicable):

    (1) In its discretion, the Employer may make Qualified Matching
        Contributions on behalf of (select one):

        [ ] (a) all Participants who make Elective Deferrals in that Plan Year.

        [X] (b) only those Participants who are Nonhighly Compensated Employees
                and who make Elective Deferrals for that Plan Year.

    (2) Qualified Matching Contributions will be contributed and allocated to
        each Participant in an amount equal to (select one):

        [ ] (a) _______% of the Participant's Compensation contributed as
            Elective Deferrals. If inserted, Qualified Matching Contributions
            shall not exceed _______% of the Participant's Compensation.

        [X] (b) Such an amount, determined by the Employer, which is needed to
            meet the ACP Test.

    (3) In its discretion, the Employer may elect to designate all or any part
        of Matching 401(k) Contributions as Qualified Matching Contributions
        that are taken into account as Elective Deferrals -- included in the ADP
        Test and excluded from the ACP Test -- on behalf of (select one):

        [ ] (a) all Participants who make Elective Deferrals for that Plan
            Year.

        [X] (b) Only Participants who are Nonhighly Compensated Employees who
            make Elective Deferrals for that Plan Year.

E.  QUALIFIED NONELECTIVE CONTRIBUTIONS

If selected below, the Employer may make Qualified Nonelective Contributions for
each Plan Year (select all those applicable):

    (1) In its discretion, the Employer may make Qualified Nonelective
        Contributions on behalf of (select one):

        [ ] (a) all Eligible Participants.

        [X] (b) only Eligible Participants who are Nonhighly Compensated
            Employees.


                                       12
<PAGE>

    (2) Qualified Nonelective Contributions will be contributed and allocated to
        each Eligible Participant in an amount equal to (select one):

        [ ] (a) ______% (no more than 15%) of the Compensation of each Eligible
            Participant eligible to share in the allocation.

        [X] (b) Such an amount determined by the Employer, which is needed to
            meet either the ADP Test or ACP Test.

    (3) At the discretion of the Employer, as needed and taken into account as
        Elective Deferrals included in the ADP Test on behalf of (select one):

        [ ] (a) all Eligible Participants.

        [X] (b) only those Eligible Participants who are Nonhighly Compensated
            Employees.

F.  Elective Deferrals used in ACP Test (select one):

    [X] (1) At the discretion of the Employer, Elective Deferrals may be used to
        satisfy the ACP Test.

    [ ] (2) Elective Deferrals may not be used to satisfy the ACP Test.

G.  MAKING AND MODIFYING A 401(K) ELECTION

An Eligible Employee shall be entitled to increase, decrease or resume his or
her Elective Deferral percentage with the following frequency during the Plan
Year (select one):

    [ ] (1) annually.
    [ ] (2) semi-annually.
    [X] (3) quarterly.
    [ ] (4) monthly
    [ ] (5) other (specify): ________.


    Any such increase, decrease or resumption shall be effective as of the first
    payroll period coincident with or next following the first day of each
    period set forth above. A Participant may completely discontinue making
    Elective Deferrals at any time effective for the payroll period after
    written notice is provided to the Administrator.


                                       13
<PAGE>

         ARTICLE IV. PROFIT-SHARING CONTRIBUTIONS AND ACCOUNT ALLOCATION

A.  PROFIT-SHARING CONTRIBUTIONS


If selected below, the following contributions for each Plan Year will be made:

Contributions to Employer Contributions Accounts (select one):

    [ ] (a) Such an amount, if any, as determined by the Employer.
    [ ] (b) _______% of each Participant's Compensation.


B. ALLOCATION OF CONTRIBUTIONS TO EMPLOYER CONTRIBUTIONS ACCOUNTS (select one):


    [ ] (1) Non-Integrated Allocation

        The Employer Contributions Account of each Participant eligible to share
        in the allocation for a Plan Year shall be credited with a portion of
        the contribution, plus any forfeitures if forfeitures are reallocated to
        Participants, equal to the ratio that the Participant's Compensation for
        the Plan Year bears to the Compensation for that Plan Year of all
        Participants entitled to share in the contribution.

    [ ] (2) Integrated Allocation

        Contributions to Employer Contributions Accounts with respect to a Plan
        Year, plus any forfeitures if forfeitures are reallocated to
        Participants, shall be allocated to the Employer Contributions Account
        of each eligible Participant as follows:

        (a) First, in the ratio that each such eligible Participant's
            Compensation for the Plan Year bears to the Compensation for that
            Plan Year of all eligible Participants but not in excess of 3% of
            each Participant's Compensation.

        (b) Second, any remaining contributions and forfeitures will be
            allocated in the ratio that each eligible Participant's Compensation
            for the Plan Year in excess of the Integration Level bears to all
            such Participants' excess Compensation for the Plan Year but not in
            excess of 3%.


                                       14
<PAGE>

        (c) Third, any remaining contributions and forfeitures will be allocated
            in the ratio that the sum of each Participant's Compensation and
            Compensation in excess of the Integration Level bears to the sum of
            all Participants' Compensation and Compensation in excess of the
            Integration Level, but not in excess of the Maximum Profit-Sharing
            Disparity Rate (defined below).

        (d) Fourth, any remaining contributions or forfeitures will be allocated
            in the ratio that each Participant's Compensation for that year
            bears to all Participants' Compensation for that year.

        The Maximum Profit-Sharing Disparity Rate is equal to the lesser of:


        (a) 2.7% or

        (b) The applicable percentage determined in accordance with the
            following table:


IF THE INTEGRATION LEVEL IS
(AS A % OF THE TAXABLE WAGE
BASE ("TWB")).                                  THE APPLICABLE PERCENTAGE IS:


20% (or $10,000 if greater)
or less of the TWB                                             2.7%


More than 20% (but not less than $10,001 but
not
more than 80% of the TWB                                       1.3%


More than 80% but not less
than 100% of the TWB                                           2.4%


100% of the TWB                                                2.7%


                                       15
<PAGE>

C.  PARTICIPANTS ELIGIBLE FOR EMPLOYER CONTRIBUTION ALLOCATION

The following Participants shall be eligible for an allocation to their Employer
Contributions Account (select all those applicable):

    [ ] (1) Any Participant who was employed during the Plan Year.

    [ ] (2) In the case of a Plan using the hourly record method for
        determining Vesting Service, any Participant who was credited with a
        Year of Service during the Plan Year.

    [ ] (3) Any Participant who was employed on the last day of the Plan Year.

    [ ] (4) Any Participant who was on a leave of absence on the last day of
        the Plan Year.

    [ ] (5) Any Participant who during the Plan Year died or became Disabled
        while an Employee or terminated employment after attaining Normal
        Retirement Age.

    [ ] (6) Any Participant who was credited with at least 501 Hours of
        Service whether or not employed on the last day of the Plan Year.

    [ ] (7) Any Participant who was credited with at least 1,000 Hours of
        Service and was employed on the last day of the Plan Year.

                         ARTICLE V. THRIFT CONTRIBUTIONS

A.  EMPLOYEE THRIFT CONTRIBUTIONS

If selected below, Employee Thrift Contributions, which are required for
Matching Thrift Contributions, may be made by a Participant in an amount equal
to (select one):


    [ ] (1) A dollar amount or a percentage of the Participant's Compensation
        which may not be less than ________% nor may not exceed ________% of his
        or her Compensation.

    [ ] (2) An amount not less than ________% of and not more than ________%
        of each Participant's Compensation.


                                       16
<PAGE>

B.  MAKING AND MODIFYING AN EMPLOYEE THRIFT CONTRIBUTION ELECTION

A Participant shall be entitled to increase, decrease or resume his or her
Employee Thrift Contribution percentage with the following frequency during the
Plan Year (select one):

        [ ] (1) annually
        [ ] (2) semi-annually
        [ ] (3) quarterly
        [ ] (4) monthly
        [ ] (5) other (specify): _______.


Any such increase, decrease or resumption shall be effective as of the first
payroll period coincident with or next following the first day of each period
set forth above. A Participant may completely discontinue making Employee Thrift
Contributions at any time effective for the payroll period after written notice
is provided to the Administrator.

C.  THRIFT MATCHING CONTRIBUTIONS

If selected below, the Employer will make Matching Thrift Contributions for each
Plan Year (select one):

[ ] (1) Discretionary Formula:

    A discretionary Matching Thrift Contribution equal to such a dollar amount
    or percentage as determined by the Employer, which shall be allocated
    (select one):

        [ ] (a) based on the ratio of each Participant's Employee Thrift
            Contribution for the Plan Year to the total Employee Thrift
            Contributions of all Participants for the Plan Year. If inserted,
            Matching Thrift Contributions shall be subject to a maximum amount
            of $_______ for each Participant or _______% of each Participant's
            Compensation.

        [ ] (b) in an amount not to exceed _______% of each Participant's
            first _______% of Compensation contributed as Employee Thrift
            Contributions for the Plan Year. If any Matching Thrift Contribution
            remains, it is allocated to each such Participant in an amount not
            to exceed _______% of the next _______% of each Participant's
            Compensation contributed as Employee Thrift Contributions for the
            Plan Year.

    Any remaining Matching Thrift Contribution shall be allocated to each such
    Participant in the ratio that such Participant's Employee Thrift
    Contributions for the Plan Year bears to the total Employee Thrift
    Contributions of all such Participants for the Plan Year. If inserted,
    Matching Thrift Contributions shall be subject to a maximum amount of
    $_______ for each Participant or ________% of each Participant's
    Compensation.


                                       17
<PAGE>

    [ ] (2) Nondiscretionary Formula:

        A nondiscretionary Matching Thrift Contribution for each Plan Year equal
to (select one):

        [ ] (a) % of each Participant's Compensation contributed as Employee
            Thrift Contributions. If inserted, Matching Thrift Contributions
            shall be subject to a maximum amount of $_______ for each
            Participant or _______% of each Participant's Compensation.

        [ ] (b) _______% of the first _______% of the Participant's
            Compensation contributed as Employee Thrift Contributions and
            _______% of the next _______% of the Participant's Compensation
            contributed as Employee Thrift Contributions. If inserted, Matching
            Thrift Contributions shall be subject to a maximum amount of
            $_______ for each Participant or _______% of each Participant's
            Compensation.

D.  QUALIFIED MATCHING CONTRIBUTIONS

If selected below, the Employer may make Qualified Matching Contributions for
each Plan Year (select all those applicable):

    (1) In its discretion, the Employer may make Qualified Matching
        Contributions on behalf of (select one):

        [ ] (a) all Participants who make Employee Thrift Contributions.

        [ ] (b) only those Participants who are Nonhighly Compensated Employees
                and who make Employee Thrift Contributions.

    (2) Qualified Matching Contributions will be contributed and allocated to
        each Participant in an amount equal to:

        [ ] (a) _______% of the Participant's Employee Thrift Contributions.
            If inserted, Qualified Matching Contributions shall not exceed
            _______% of the Participant's Compensation.

        [ ] (b) such an amount, determined by the Employer, which is needed to
            meet the ACP Test.

                      ARTICLE VI. PARTICIPANT CONTRIBUTIONS

    PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS

    Participant Voluntary Nondeductible Contributions are (select one):

        [ ] (a) permitted.
        [X] (b) not permitted.


                                       18
<PAGE>

                              ARTICLE VII. VESTING


A.  EMPLOYER CONTRIBUTION ACCOUNTS


   (1)  A Participant shall have a vested percentage in his or her
        Profit-Sharing Contributions, Matching 401(k) Contributions and/or
        Matching Thrift Contributions, if applicable, in accordance with the
        following schedule (Select one):


MATCHING 401(K)
AND/OR MATCHING                  PROFIT-SHARING
THRIFT CONTRIBUTIONS            CONTRIBUTIONS


    [ ]      [ ]    (a) 100% vesting immediately upon participation.

    [ ]      [ ]    (b) 100% after ________ (not more than 5) years of Vesting
                    Service.

    [X]      [ ]    (c) Graded vesting schedule:

<TABLE>
<S>                  <C>               <C>
      0    %                  %        after 1 year of Vesting Service;
  ---------          ---------

     25    %                  %       after 2 years of Vesting Service;
  ---------          ---------

     40    %                  %       (not less than 20%) after 3 years of Vesting Service;
  ---------          ---------

     60    %                  %       (not less than 40%) after 4 years of Vesting Service;
  ---------          ---------

     80    %                  %       (not less than 60%) after 5 years of Vesting Service;
  ---------          ---------

</TABLE>


                100% after 5 years of Vesting Service.


                                       19
<PAGE>

    (2) Top Heavy Plan


MATCHING 401(K)
AND/OR MATCHING                  PROFIT-SHARING
THRIFT CONTRIBUTIONS             CONTRIBUTIONS


Vesting Schedule (Select one):


    [ ]    [ ]  (a) 100% vesting immediately upon participation.

    [ ]    [ ]  (b) 100% after_______ (not more than 3) years of Vesting
                    Service.

    [X]    [ ]  (c) Graded vesting schedule:


<TABLE>
<S>                  <C>               <C>
      0    %                  %        after 1 year of Vesting Service;
  ---------          ---------

     20    %                  %       (not less than 20%) after 2 years of Vesting Service;
  ---------          ---------

     40    %                  %       (not less than 40%) after 3 years of Vesting Service;
  ---------          ---------

     60    %                  %       (not less than 60%) after 4 years of Vesting Service;
  ---------          ---------

     80    %                  %       (not less than 80%) after 5 years of Vesting Service;
  ---------          ---------

</TABLE>

                  100% after 6 years of Vesting Service.

Top Heavy Ratio:

    (a) If the adopting Employer maintains or has ever maintained a qualified
        defined benefit plan, for purposes of establishing present value to
        compute the top-heavy ratio, any benefit shall be discounted only for
        mortality and interest based on the following:

            Interest Rate: 8%
            Mortality Table: UP'84

    (b) For purposes of computing the top-heavy ratio, the valuation date shall
        be the last business day of each Plan Year.


                                       20
<PAGE>

B.  ALLOCATION OF FORFEITURES

    Forfeitures shall be (select one from each applicable column):

MATCHING 401(K)
AND/OR MATCHING                PROFIT-SHARING
THRIFT CONTRIBUTIONS           CONTRIBUTIONS

    [X]       [ ]  (1) used to reduce Employer contributions for succeeding
                    Plan Year.

    [X]       [ ]  (2) allocated in the succeeding Plan Year in the ratio which
                   the Compensation of each Participant for the Plan Year bears
                   to the total Compensation of all Participants entitled to
                   share in the Contributions. If the Plan is integrated with
                   Social Security, forfeitures shall be allocated in accordance
                   with the formula elected by the Employer.

C.  VESTING SERVICE

For purposes of determining Years of Service for Vesting Service [select (1) or
(2) and/or (3)]:

    [X] (1) All Years of Service shall be included.

    [ ] (2) Years of Service before the Participant attained age 18 shall be
            excluded.

    [ ] (3) Service with the Employer prior to the effective date of the Plan
            shall be excluded.

                ARTICLE VIII. DEFERRAL OF BENEFIT DISTRIBUTIONS,
                        IN-SERVICE WITHDRAWALS AND LOANS


A.  DEFERRAL OF BENEFIT DISTRIBUTIONS

       401(K) AND/    PROFIT
       OR THRIFT      SHARING

         [ ]       [ ]     If this item is checked, a Participant's vested
                           benefit in his or her Employer Accounts shall be
                           payable as soon as practicable after the earlier of:
                           (1) the date the Participant terminates Employment
                           due to Disability or (2) the end of the Plan Year in
                           which a terminated Participant attains Early
                           Retirement Age, if applicable, or Normal Retirement
                           Age.


                                       21
<PAGE>

B.  IN-SERVICE DISTRIBUTIONS

    [X] (1) In-service distributions may be made from any of the Participant's
        vested Accounts, at any time upon or after the occurrence of the
        following events (select all applicable):

        [ ] (a) a Participant's attainment of age 59-1/2.
        [X] (b) due to hardships as defined in Section 5.9 of the Plan.

    [ ] (2) In-service distributions are not permitted.

C.  LOANS ARE:

401(K) AND/        PROFIT
OR THRIFT          SHARING

    [X]           [ ]   (1) permitted.

    [ ]           [ ]   (2) not permitted.


                             ARTICLE IX. GROUP TRUST

[ ] If this item is checked, the Employer elects to establish a Group Trust
    consisting of such Plan assets as shall from time to time be transferred to
    the Trustee pursuant to Article X of the Plan. The Trust Fund shall be a
    Group Trust consisting of assets of this Plan plus assets of the following
    plans of the Employer or of an Affiliate: _______.


                            ARTICLE X. MISCELLANEOUS


A.  IDENTIFICATION OF SPONSOR

    The address and telephone number of the Sponsor's authorized representative
    is 800 Scudders Mill Road, Plainsboro, New Jersey 08536; (609) 282-2272.
    This authorized representative can answer inquiries regarding the adoption
    of the Plan, the intended meaning of any Plan provisions, and the effect of
    the opinion letter.

    The Sponsor will inform the adopting Employer of any amendments made to the
    Plan or the discontinuance or abandonment of the Plan.


                                       22
<PAGE>

B.  PLAN REGISTRATION

    1. Initial Registration

        This Plan must be registered with the Sponsor, Merrill Lynch, Pierce,
        Fenner & Smith Incorporated, in order to be considered a Prototype Plan
        by the Sponsor. Registration is required so that the Sponsor is able to
        provide the Administrator with documents, forms and announcements
        relating to the administration of the Plan and with Plan amendments and
        other documents, all of which relate to administering the Plan in
        accordance with applicable law and maintaining compliance of the Plan
        with the law.

        The Employer must complete and sign the Adoption Agreement. Upon receipt
        of the Adoption Agreement, the Plan will be registered as a Prototype
        Plan of Merrill Lynch, Pierce, Fenner & Smith Incorporated. The Adoption
        Agreement will be countersigned by an authorized representative and a
        copy of the countersigned Adoption Agreement will be returned to the
        Employer.

    2. Registration Renewal

        Annual registration renewal is required in order for the Employer to
        continue to receive any and all necessary updating documents. There is
        an annual registration renewal fee in the amount set forth with the
        initial registration material. The adopting Employer authorizes Merrill
        Lynch, Pierce, Fenner & Smith Incorporated, to debit the account
        established for the Plan for payment of agreed upon annual fee;
        provided, however, if the assets of an account are invested solely in
        Participant-Directed Assets, a notice for this annual fee will be sent
        to the Employer annually. The Sponsor reserves the right to change this
        fee from time to time and will provide written notice in advance of any
        change.

C.  PROTOTYPE REPLACEMENT PLAN

       This Adoption Agreement is a replacement prototype plan for the (1)
       Merrill Lynch Special Prototype Defined Contribution Plan and Trust -
       401(k) Plan #03-004 and (2) Merrill Lynch Asset Management, Inc., Special
       Prototype Defined Contribution Plan and Trust - 401(k) Plan Adoption
       Agreement #03-004.

D.  RELIANCE

       The adopting Employer may not rely on the opinion letter issued by the
       National Office of the Internal Revenue Service as evidence that this
       Plan is qualified under Code Section 401. In order to obtain reliance,
       the Employer must apply to the appropriate Key District Director of the
       Internal Revenue Service for a determination letter with respect to the
       Plan.


                                       23
<PAGE>

                              EMPLOYER'S SIGNATURE
                              --------------------



     Name of Employer: /s/ Samuels Jewelers, Inc.
                       ---------------------------------------------
                       By: /s/ E. Peter Healey
                           -----------------------------------------
                           Authorized Signature


                               E. Peter Healey
                           -----------------------------------------
                                  Print Name


                       Chief Financial Officer - Plan Administrator
                       --------------------------------------------
                                      Title


DATED: JUNE 16, 1999





TO BE COMPLETED BY MERRILL LYNCH:
---------------------------------

SPONSOR ACCEPTANCE:
-------------------

Subject to the terms and conditions of the Prototype Plan and this Adoption
Agreement, this Adoption Agreement is accepted by Merrill Lynch, Pierce, Fenner
& Smith Incorporated as the Prototype Sponsor.

Authorized Signature: /s/ Donald Galnielartis
                      ---------------------------------------


                                       24
<PAGE>

                              TRUSTEE(S) SIGNATURE
                              --------------------


This Trustee Acceptance is to be completed only if the Employer appoints one or
more Trustees and does not appoint a Merrill Lynch Trust Company as Trustee.

The undersigned hereby accept all of the terms, conditions, and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group Trust
in this Adoption Agreement, the undersigned Trustee(s) shall be the Trustee(s)
of the Group Trust.

                                   AS TRUSTEE:


------------------------------------ ------------------------------------------
                  (Signature)                 (print or type name)

------------------------------------ ------------------------------------------
                  (Signature)                 (print or type name)

------------------------------------ ------------------------------------------
                  (Signature)                 (print or type name)

------------------------------------ ------------------------------------------
                  (Signature)                 (print or type name)

------------------------------------ ------------------------------------------
                  (Signature)                 (print or type name)

------------------------------------ ------------------------------------------
                  (Signature)                 (print or type name)


DATED:  ________________________,  19 ________


                                       25
<PAGE>


                  THE MERRILL LYNCH TRUST COMPANIES AS TRUSTEE
                  --------------------------------------------


This Trustee Acceptance and designation of Investment Committee are to be
completed only when a Merrill Lynch Trust Company is appointed as Trustee.


TO BE COMPLETED BY THE EMPLOYER:

                       DESIGNATION OF INVESTMENT COMMITTEE


The Investment Committee for the Plan is (print or type names):

Name: /s/ Randy McCullough, President and Chief Executive Officer
      -------------------------------------------------------------------------

Name: /s/ E. Peter Healey, Executive Vice President and Chief Financial Officer
      -------------------------------------------------------------------------

Name: /s/ Chad Haggar, Senior Vice President
      -------------------------------------------------------------------------

Name: /s/ Ronald P. Schott, Vice President
      -------------------------------------------------------------------------

Name: /s/ Emily Gray,  HR Director
      -------------------------------------------------------------------------

Name:
      -------------------------------------------------------------------------


TO BE COMPLETED BY MERRILL LYNCH TRUST COMPANY:
-----------------------------------------------


                             ACCEPTANCE BY TRUSTEE:

The undersigned hereby accept all of the terms, conditions, and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group Trust
in this Adoption Agreement, the undersigned Trustee(s) shall be the Trustee(s)
of the Group Trust.



SEAL                         MERRILL LYNCH TRUST COMPANY of Texas


                             By: /s/ Melanie Madecia
                                 -------------------



DATED: July 1, 1999


                                       26