<PAGE>


                                                                   Exhibit 10.27


062498














                            MORRIS MATERIAL HANDLING
                               EMPLOYEE RETIREMENT
                                  SAVINGS PLAN






<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>


ARTICLE/SECTION                         TITLE/SECTION HEADINGS                                              PAGE
---------------                         ----------------------                                              -----
                                        PREAMBLE

<S>               <C>                   <C>                                                                  <C>
      I                                 DEFINITIONS                                                           1
                   1.01                 Accounting Year                                                       1
                   1.02                 Accounts                                                              1
                   1.03                 Affiliate                                                             1
                   1.04                 Beneficiary                                                           1
                   1.05                 Board of Directors                                                    1
                   1.06                 Code                                                                  1
                   1.07                 Committee                                                             1
                   1.08                 Compensation                                                          2
                   1.09                 Effective Date                                                        2
                   1.10                 Employee                                                              2
                   1.11                 Employee After-Tax Contributions                                      2
                   1.12                 Employee After-Tax Contribution Account                               2
                   1.13                 Employee Pre-Tax Contributions                                        3
                   1.14                 Employee Pre-Tax Contribution Account                                 3
                   1.15                 Employer or Employers                                                 3
                   1.16                 Employer Discretionary Contributions                                  3
                   1.17                 Employer Discretionary Contribution Account                           3
                   1.18                 Employer Fixed Contributions                                          3
                   1.19                 Employer Fixed Contribution Account                                   3
                   1.20                 Employer Matching Contributions                                       4
                   1.21                 Employer Matching Contribution Account                                4
                   1.22                 Employer Qualified Non-Elective Contributions                         4
                   1.23                 Employer Qualified Non-Elective
                                        Contribution Account                                                  4
                   1.24                 Employer Transition Contributions                                     4
                   1.25                 Employer Transition Contribution Account                              4
                   1.26                 Entry Date                                                            4
                   1.27                 ERISA                                                                 4
                   1.28                 Highly Compensated Employee                                           4
                   1.29                 Investment Funds                                                      5
                   1.30                 Nondiscrimination Compensation                                        5
                   1.31                 Nonhighly Compensated Employee                                        5
                   1.32                 Normal Retirement Age                                                 5
                   1.33                 Participant                                                           5
                   1.34                 Plan                                                                  5
                   1.35                 Rollover Account                                                      5
                   1.36                 Section 415 Compensation                                              5
                   1.37                 Service                                                               6
      `            1.38                 Sponsoring Employer                                                   6
                   1.39                 Spouse                                                                6
</TABLE>


<PAGE>


                            TABLE OF CONTENTS (CONT.)

<TABLE>
<CAPTION>


ARTICLE/SECTION                         TITLE/SECTION HEADINGS                                              PAGE
---------------                         ----------------------                                              -----

<S>               <C>                   <C>                                                                  <C>
                   1.40                 Trust Agreement                                                       6
                   1.41                 Trustee                                                               6
                   1.42                 Trust Fund                                                            7
                   1.43                 Valuation Date                                                        7
                   1.44                 Non-Gender Clause                                                     7

     II                                 PARTICIPATION                                                         8
                   2.01                 Eligibility to Participate                                            8
                   2.02                 Transfer of Employment/Change
                                        of Employment Classification                                          8

    III                                 CONTRIBUTIONS                                                        10
                   3.01                 Employee Contributions                                               10
                   3.02                 Employer Contributions                                               11
                   3.03                 Forfeitures                                                          12
                   3.04                 Maximum Deductible Contributions                                     12
                   3.05                 Limitations on Contributions                                         12
                   3.06                 Section 415 Combined Plans Limit                                     14
                   3.07                 Mathematical Nondiscrimination Test for
                                        Employee Pre-Tax Contributions; Disposition
                                        of Excess Amounts                                                    15
                   3.08                 Mathematical Nondiscrimination Test for Employee
                                        After-Tax and Employer Matching Contributions;
                                        Disposition of Excess Amounts                                        17
                   3.09                 Rollover Contributions                                               19
                   3.10                 Military Leave                                                       20

     IV                                 ACCOUNTS OF PARTICIPANTS                                             21
                   4.01                 Investment Funds                                                     21
                   4.02                 Investment of Accounts                                               21
                   4.03                 Valuation of Trust Fund and Investment Funds                         21
                   4.04                 Adjustment of Participant Accounts                                   21
                   4.05                 Trustee's and Committee's Determination Binding                      22

      V                                 DISTRIBUTIONS UNDER THE PLAN                                         23
                   5.01                 Valuation of Accounts for Distribution                               23
                   5.02                 Distributable Events/Amount of Distributions                         23
                   5.03                 Timing of Distributions                                              23
                   5.04                 Forms of Distributions                                               24
                   5.05                 Qualified Domestic Relations Orders                                  24
                   5.06                 In-Service Withdrawals by Participants                               24
                   5.07                 Direct Rollovers to Eligible Retirement Plans                        26
</TABLE>


<PAGE>


                            TABLE OF CONTENTS (CONT.)


<TABLE>
<CAPTION>

ARTICLE/SECTION                        TITLE/SECTION HEADINGS                                               PAGE
---------------                        ----------------------                                               -----

<S>               <C>                   <C>                                                                  <C>
     VI                                 PLAN LOANS                                                           27
                   6.01                 Loans                                                                27

    VII                                 ADMINISTRATION                                                       29
                   7.01                 Fiduciaries/Allocation of Fiduciary Responsibilities                 29
                   7.02                 Committee                                                            29
                   7.03                 Committee's Powers and Duties                                        30
                   7.04                 Claims Procedure                                                     31
                   7.05                 Claim Review Procedure                                               31
                   7.06                 Indemnification                                                      31
                   7.07                 Payment of Expenses                                                  31

   VIII                                 THE TRUST FUND AND THE TRUSTEE                                       32
                   8.01                 Trust Agreement                                                      32
                   8.02                 Separate Investment Funds                                            32
                   8.03                 Non-Reversion; Exclusive Benefit Clause                              32
                   8.04                 Removal of Trustee                                                   32
                   8.05                 Powers of Trustee                                                    32
                   8.06                 Trust Agreement Part of the Plan                                     32
                   8.07                 Trustee's Settlement of Accounts                                     32

     IX                                 AMENDMENT AND TERMINATION                                            33
                   9.01                 Amendment                                                            33
                   9.02                 Termination                                                          33
                   9.03                 Distribution of Accounts Upon Plan Termination                       33

      X                                 ENTRY AND WITHDRAWAL OF AN EMPLOYER                                  34
                  10.01                 Entry of an Employer                                                 34
                  10.02                 Withdrawal of an Employer                                            34

     XI                                 MISCELLANEOUS PROVISIONS                                             35
                  11.01                 Plan Merger, Consolidation or Transfer of Assets                     35
                  11.02                 No Assignment of Benefits                                            35
                  11.03                 Plan Voluntary                                                       35
                  11.04                 Reservation of Right to Suspend or
                                        Discontinue Contributions                                            35
                  11.05                 Non-Guarantee of Employment                                          35
                  11.06                 Governing Law                                                        36
                  11.07                 Facility of Payment                                                  36
                  11.08                 Severability                                                         36
</TABLE>


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                            TABLE OF CONTENTS (CONT.)


<TABLE>
<CAPTION>

ARTICLE/SECTION                         TITLE/SECTION HEADINGS                                             PAGE
---------------                         ----------------------                                             -----
<S>               <C>                   <C>                                                                  <C>
                  11.09                 Construction of Plan Document                                        36
                  11.10                 Plan in Effect at Termination of
                                        Employment Controls                                                  36

    XII                                 TOP-HEAVY PLAN PROVISIONS                                            37
                  12.01                 Application                                                          37
                  12.02                 Special Minimum Benefit                                              38
                  12.03                 Special Combined Plans Limit                                         38
                  12.04                 Key Employee Defined                                                 38
                  12.05                 Aggregation Group of Plans Defined                                   39

                                        SIGNATURES                                                           39


</TABLE>




<PAGE>



                            MORRIS MATERIAL HANDLING
                        EMPLOYEE RETIREMENT SAVINGS PLAN


                                    PREAMBLE



Effective March 30, 1998, Morris Material Handling, Inc., a Delaware
corporation, (hereinafter referred to as the "Sponsoring Employer" or as an
"Employer") established the Morris Material Handling Employee Retirement Savings
Plan and Trust for the benefit of its eligible employees. Soon thereafter, a
portion of the Harnischfeger Industries Employees Savings Plan was spun off and
merged with this Plan.

It is intended that this Plan shall be approved and qualified by the Internal
Revenue Service as satisfying the pertinent requirements of the Internal Revenue
Code with respect to employee plans and trusts so that (1) the contributions
resulting from reduction of wages by participants will not be subject to federal
income tax when made; (2) the employers may deduct for federal income tax
purposes their contributions to the Trust Fund; (3) the employers' contributions
so made and the income of the Trust Fund shall not be taxable to the
participants as income until received; and (4) the income of the Trust Fund
shall be exempt from federal income tax.

It is also intended that this Plan and Trust shall satisfy the pertinent
requirements of the Employee Retirement Income Security Act of 1974, as amended,
and the Plan and Trust shall be interpreted, wherever possible, to comply with
the terms of such Act.


<PAGE>





                                    ARTICLE I

                                   DEFINITIONS



The following terms, as used in this Plan, shall have the meaning specified in
this Article I, unless a different meaning is clearly required by the context in
which it is used:

SECTION 1.01 The term "ACCOUNTING YEAR" shall mean a twelve (12) month period
beginning on each January 1 and ending on the following December 31, provided
that there shall be an initial short Accounting Year beginning March 30, 1998
and ending December 31, 1998. The Accounting Year is the "Plan Year" for this
Plan.

SECTION 1.02 The term "ACCOUNTS" shall mean, if applicable, a Participant's
Employee Pre-Tax Contribution Account, Employee After-Tax Contribution Account,
Employer Matching Contribution Account, Employer Discretionary Contribution
Account, Employer Fixed Contribution Account, Employer Transition Contribution
Account, Employer Qualified Non-Elective Contribution Account and his Rollover
Account.

SECTION 1.03 The term "AFFILIATE" shall mean any corporation or unincorporated
trade or business which is a member of a group to which an Employer belongs that
is a controlled group of corporations, a group of controlled trades or
businesses (whether or not incorporated), or an affiliated service group, as
such terms are defined in Sections 414(b), (c), (m) and (o) of the Internal
Revenue Code.

SECTION 1.04 The term "BENEFICIARY" shall mean the Spouse of the Participant,
or, in the event that either:

       (i)    the Participant has no Spouse at his death; or

      (ii)    his surviving Spouse has consented to the designation of another
              Beneficiary, in writing, specifically identifying the Beneficiary
              with respect to which consent is given and witnessed by a Plan
              representative or a notary public,

the person or persons (including a trust) designated by the Participant in the
latest written notice to the Committee. The Participant shall have the right to
change his Beneficiary from time to time in the manner hereinabove described. In
the event no designation is effective, upon the Participant's death, his
Accounts shall be paid to his estate.

SECTION 1.05 The term "BOARD OF DIRECTORS" shall mean the Board of Directors of
the Sponsoring Employer.

SECTION 1.06 The term "CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time.


                                       1
<PAGE>


SECTION 1.07 The term "COMMITTEE" shall mean the Committee provided for in
Article VII hereof.

SECTION 1.08 The term "COMPENSATION" shall mean, with respect to each Accounting
Year, a Participant's total compensation paid by an Employer for the Accounting
Year, including Employee Pre-Tax Contributions to this Plan and amounts
contributed pursuant to a salary reduction arrangement under Section 125 of the
Code, but excluding nontaxable fringe benefits. Notwithstanding the above, the
term "Compensation" shall exclude profit sharing bonus payments as provided in
Sections 3.01(e) and 3.02(a).

No amount in excess of one hundred sixty thousand dollars ($160,000) (as such
amount may be adjusted by the Secretary of the Treasury, pursuant to Section
401(a)(17) of the Code) for any Accounting Year shall be treated as Compensation
for purposes of this Plan (provided that this annual limit will be prorated for
the initial short Accounting Year beginning March 30, 1998 and ending December
31, 1998).

SECTION 1.09 The term "EFFECTIVE DATE" shall mean March 30, 1998, the effective
date of the Plan.

SECTION 1.10 The term "EMPLOYEE" shall mean each current or future Employee of
an Employer other than leased employees and employees covered by collective
bargaining agreements which do not provide for their participation in the Plan.
For purposes of this Section, the term "leased employee" shall mean any person
(other than an Employee of the recipient) who pursuant to an agreement between
the recipient and any other person ("leasing organization") has performed
services for the recipient (or for the recipient and related persons determined
in accordance with Section 414(n)(6) of the Code) on a substantially full-time
basis for a period of at least one (1) year, and such services are performed
under the primary direction and control of an Employer.

In addition, the term Employee shall exclude individuals during the period when
they are not designated as "employees" in an Employer's employment records. The
individuals excluded under this paragraph shall include, but not be limited to,
individuals who are engaged by an Employer to perform services for an Employer
in a relationship that the Employer characterizes as other than an employment
relationship. For example, individuals engaged to perform services in a
relationship which an Employer characterizes as that of an "independent
contractor" with respect to the Employer shall not be Employees. Likewise,
individuals whose services an Employer leases from a third party shall not be
Employees. The individuals excluded under this paragraph shall not be Employees
during a period, even if a determination is made by the Internal Revenue
Service, the United States Department of Labor, another governmental agency, a
court or other tribunal that the individual is an "employee" of an Employer
during that period, for purposes of the Code or for any other purpose. An
individual who has not been an Employee on account of this paragraph shall be an
Employee effective on the date as of which an Employer characterizes the
individual as an "employee" in the Employer's employment records, if, on that
date, the individual also meets the other requirements of this Section.

SECTION 1.11 The term "EMPLOYEE AFTER-TAX CONTRIBUTIONS" shall mean the
contributions made by the Participant pursuant to Section 3.01(b) hereof.


                                       2
<PAGE>


SECTION 1.12 The term "EMPLOYEE AFTER-TAX CONTRIBUTION ACCOUNT" shall mean the
account established on behalf of a Participant to which shall be credited (i) an
amount which represents the transfer of the Participant's after-tax contribution
account from the Harnischfeger Industries Employees Savings Plan, (ii) the
amount of his contributions pursuant to Section 3.01(b), and (iii) the account's
proportionate share of any net investment gains, determined in accordance with
Article IV. From said account, its proportionate share of any net investment
losses, determined in accordance with Article IV, and any benefit payments,
withdrawals or other disbursements shall be deducted. The Participant's interest
in his Employee After-Tax Contribution Account shall be fully vested and
nonforfeitable at all times.

SECTION 1.13 The term "EMPLOYEE PRE-TAX CONTRIBUTIONS" shall mean the
contributions made by a Participant pursuant to Section 3.01(a) hereof which are
considered "elective deferrals" as described in Section 402(g)(3) of the Code.

SECTION 1.14 The term "EMPLOYEE PRE-TAX CONTRIBUTION ACCOUNT" shall mean the
account established on behalf of a Participant to which shall be credited: (i)
an amount which represents the transfer of the Participant's pre-tax
contribution account from the Harnischfeger Industries Employees Savings Plan,
(ii) the amount of his contributions pursuant to Section 3.01(a) and (iii) the
account's proportionate share of any net investment gains, determined in
accordance with Article IV. From said account, its proportionate share of any
net investment losses, determined in accordance with Article IV, and any benefit
payments, withdrawals or other disbursements shall be deducted. The
Participant's interest in his Employee Pre-Tax Contribution Account shall be
fully vested and nonforfeitable at all times.

SECTION 1.15 The term "EMPLOYER" or "EMPLOYERS" shall mean the Sponsoring
Employer and any Affiliate who adopts this Plan with the consent of the
Sponsoring Employer and, subject to the provisions of Article XI, any
corporation into which an Employer may be merged or consolidated or to which all
or substantially all of its assets may be transferred.

SECTION 1.16 The term "EMPLOYER DISCRETIONARY CONTRIBUTIONS" shall mean the
additional contributions an Employer may make as described in Section 3.02(b).

SECTION 1.17 The term "EMPLOYER DISCRETIONARY CONTRIBUTION ACCOUNT" shall mean
the account established on behalf of a Participant to which shall be credited:
(i) the amount of any Employer Discretionary Contributions allocated to the
Participant and (ii) the account's proportionate share of any net investment
gains, determined in accordance with Article IV. From said account its
proportionate share of any net investment losses, as determined in accordance
with Article IV, and any benefit payments, or other disbursements shall be
deducted. The Participant's interest in his Employer Discretionary Contribution
Account shall be fully vested and nonforfeitable at all times.

SECTION 1.18 The term "EMPLOYER FIXED CONTRIBUTIONS" shall mean the additional
contributions an Employer shall make as described in Section 3.02(c).

SECTION 1.19 The term "EMPLOYER FIXED CONTRIBUTION ACCOUNT" shall mean the
account established on behalf of a Participant to which shall be credited: (i)
the amount of any Employer Fixed Contributions allocated to the Participant and
(ii) the account's proportionate share of any net investment gains, determined
in accordance with Article IV. From said account, its proportionate share of any
net 


                                       3
<PAGE>


investment losses, as determined in accordance with Article IV, and any
benefit payments, or other disbursements shall be deducted. The Participant's
interest in his Employer Discretionary Contribution Account shall be fully
vested and nonforfeitable at all times.

SECTION 1.20 The term "EMPLOYER MATCHING CONTRIBUTIONS" shall mean the matching
contributions an Employer may make as described in Section 3.02(a).

SECTION 1.21 The term "EMPLOYER MATCHING CONTRIBUTION ACCOUNT" shall mean the
account established on behalf of a Participant to which shall be credited: (i)
the amount of any Employer Matching Contributions allocated to the Participant
and (ii) the account's proportionate share of any net investment gains,
determined in accordance with Article IV. From said account its proportionate
share of any net investment losses, as determined in accordance with Article IV,
and any benefit payments or other disbursements shall be deducted. The
Participant's interest in his Employer Matching Contribution Account shall be
fully vested and nonforfeitable at all times.

SECTION 1.22 The term "EMPLOYER QUALIFIED NON-ELECTIVE CONTRIBUTIONS" shall mean
the additional contributions an Employer may make as described in Section
3.02(e).

SECTION 1.23 The term "EMPLOYER QUALIFIED NON-ELECTIVE CONTRIBUTION ACCOUNT"
shall mean the account established on behalf of a Participant to which shall be
credited: (i) the amount of any Employer Qualified Non-Elective Contributions
allocated to the Participant and (ii) the account's proportionate share of any
net investment gains, determined in accordance with Article IV. From said
account, its proportionate share of any net investment losses as determined in
accordance with Article IV, and any benefit payments or other disbursements
shall be deducted. The Participant's interest in his Employer Qualified
Non-Elective Contribution Account shall be fully vested and nonforfeitable at
all times.

SECTION 1.24 The term "EMPLOYER TRANSITION CONTRIBUTIONS" shall mean the
additional contributions an Employer shall make as described in Section 3.02(d).

SECTION 1.25 The term "EMPLOYER TRANSITION CONTRIBUTION ACCOUNT" shall mean the
account established on behalf of a Participant to whom shall be credited: (i)
the amount of any Employer Transition Contributions allocated to the Participant
and (ii) the account's proportionate share of any net investment gains,
determined in accordance with Article IV. From said account, its proportionate
share of any net investment losses, as determined in accordance with Article IV,
and any benefit payments or other disbursements shall be deducted. The
Participant's interest in his Employer Transition Contribution Account shall be
fully vested and nonforfeitable at all times.

SECTION 1.26 The term "ENTRY DATE" shall mean the first day of any payroll
period.

SECTION 1.27 The term "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.

SECTION 1.28 The term "HIGHLY COMPENSATED EMPLOYEE" shall mean any Employee of
an Employer or an Affiliate who is described in Section 414(q) of the Code and
the regulations thereunder, and generally means an Employee who is employed by
an Employer during the current 


                                       4
<PAGE>


Accounting Year or the previous Accounting Year, whichever is applicable, and is
in one or both of the following groups:

       (i)    Employees who at any time during the current Accounting Year or
              the previous Accounting Year were "five percent (5%) owners" of an
              Employer or an Affiliate. A "five percent (5%) owner" is defined
              in Section 416(i)(1)(B)(i) of the Code and Section 1.416-1 of the
              Treasury Regulations.

      (ii)    Employees who had Section 415 Compensation during the previous
              calendar year from an Employer or an Affiliate in excess of eighty
              thousand dollars ($80,000) (as adjusted pursuant to Section 415(d)
              of the Code) and, if elected by the Committee, were in the
              "top-paid group" of Employees as defined in Section 414(q)(3) of
              the Code.


SECTION 1.29 The term "INVESTMENT FUNDS" shall mean the funds established
pursuant to Section 4.01 in which a Participant's Accounts shall be invested.

SECTION 1.30 The term "NONDISCRIMINATION COMPENSATION" shall mean for each
Participant, that portion of his total compensation with respect to an
Accounting Year earned while a Participant which would be nondiscriminatory
within the meaning of Code Section 414(s) and the regulations thereunder. The
Committee may determine the Nondiscrimination Compensation of each Participant
from year to year for purposes of performing the mathematical nondiscrimination
tests described in Sections 3.07 and 3.08, if applicable, and such determination
shall be made consistently among all Participants to the extent required by Code
Section 414(s) and the regulations thereunder.

SECTION 1.31 The term "NONHIGHLY COMPENSATED EMPLOYEE" shall mean any Employee
of an Employer or an Affiliate who is not a Highly Compensated Employee.

SECTION 1.32 The term "NORMAL RETIREMENT AGE" shall mean age sixty-five (65).

SECTION 1.33 The term "PARTICIPANT" shall mean any Employee of an Employer who
has become a Participant as provided in Article II, or any other person with an
Account in the Plan.

SECTION 1.34 The term "PLAN" shall mean the Morris Material Handling Employee
Retirement Savings Plan as set forth herein.

SECTION 1.35 The term "ROLLOVER ACCOUNT" shall mean an account established on
behalf of an Employee to which shall be credited: (i) the value of any amounts
rolled over into this Plan pursuant to Section 3.09 hereof; and (ii) the
Account's proportionate share of any net investment gains. From said Account the
Account's proportionate share of any net investment losses and any benefit
payments, withdrawals or other disbursements shall be deducted. The
Participant's interest in his Rollover Account shall be fully vested and
nonforfeitable.

SECTION 1.36 The term "SECTION 415 COMPENSATION" shall mean for each calendar
year, the Employee's earned income, wages, salaries, fees for professional
services, commissions paid to salesmen, compensation based on a percentage of
profits, bonuses and other amounts received for 


                                       5
<PAGE>


personal services actually rendered in the course of employment with his
Employer and excluding the following:

       (i)    Except as otherwise provided below, any employer contributions to
              a plan of deferred compensation to the extent contributions are
              not included in the gross income of the Employee for the taxable
              year in which contributed, or on behalf of an Employee to a
              "simplified employee pension plan" to the extent such
              contributions are deductible under Section 219(b)(7) of the Code,
              and any distributions from a plan of deferred compensation whether
              or not includable in the gross income of the Employee when
              distributed;

      (ii)    Amounts realized from the exercise of a non-qualified stock
              option, or when restricted stock (or property) held by an Employee
              becomes freely transferable or is no longer subject to a
              substantial risk of forfeiture;

     (iii)    Amounts realized from the sale, exchange or other disposition of
              stock acquired under a qualified stock option; and

      (iv)    Other amounts which receive special tax benefits, such as premiums
              for group term life insurance (but only to the extent that the
              premiums are not includable in the gross income of the Employee).

In the alternative, the Committee may determine Employees' compensation on the
basis of either (i) his wages subject to federal income tax withholding or (ii)
wages subject to federal income tax withholding plus payments which an Employer
is required to report (on under Code Sections 6041(d) and 6051(a)(3), excluding
moving expense reimbursements which the Employer reasonably believes an Employee
may deduct under Code Section 217. Notwithstanding the preceding provisions of
this Section, in any event Section 415 Compensation shall include Employee
Pre-Tax Contributions to this Plan, elective deferrals (as defined in Code
Section 402(q)(3) to any other plan of an Employer or an Affiliate and amounts
not includable in an Employee's gross income by application of Code Section 125.

SECTION 1.37 The term "SERVICE" shall mean the period for which an Employee is
given credit for the purpose of determining allocations under Section 3.02(d).
An Employee's Service shall be equal to the total number or years (measured from
the date an Employee commences employment until the date the Employee terminates
employment) the Employer or an Affiliate prior to January 1, 1999, but including
employment prior to the Effective Date with Harnischfeger Industries or a
related corporation.

SECTION 1.38 The term "SPONSORING EMPLOYER" shall mean Morris Material Handling,
Inc., a Delaware corporation whose principal offices are located in Oak Creek,
Wisconsin.

SECTION 1.39 The term "SPOUSE" shall mean the legally married husband or wife of
the Participant at the earlier of his date of death or the date benefits
commence to the Participant under this Plan. To the extent required by a
"qualified domestic relations order," as defined in Section 414(p) of the Code,
the term Spouse shall include the former husband or wife of the Participant.


                                       6
<PAGE>


SECTION 1.40 The term "TRUST AGREEMENT" shall mean the agreement between the
Sponsoring Employer and the Trustee as such agreement may be amended from time
to time.

SECTION 1.41 The term "TRUSTEE" shall mean the Trustee under the Trust Agreement
or any successor or substitute Trustee therefore.

SECTION 1.42 The term "TRUST FUND" shall mean all cash, securities and other
property held by the Trustee pursuant to the terms of the Trust Agreement,
together with any income therefrom.

SECTION 1.43 The term "VALUATION DATE" shall mean every day the New York Stock
Exchange is open.

SECTION 1.44 The term "NON-GENDER CLAUSE" shall mean any words herein used in
the masculine shall be read and construed in the feminine where they would so
apply. Words in the singular shall be read and construed as though used in the
plural in all cases where they would so apply.


                                       7
<PAGE>




                                   ARTICLE II

                                  PARTICIPATION



SECTION 2.01 - ELIGIBILITY TO PARTICIPATE Each Employee of an Employer shall
become a Participant in this Plan as provided below.

         SECTION 2.01(a) - PARTICIPATION Any Employee shall become a Participant
         as of the first Entry Date coincident with or immediately following the
         Participant's date of hire by an Employer. A Participant may elect to
         make Employee Pre-Tax Contributions pursuant to the provisions of
         Section 3.01(a) as of the first Entry Date after he becomes eligible by
         filing an enrollment form with the Committee. A Participant shall share
         in the allocation of Employer Contributions under Section 3.02 based on
         his Compensation earned for the entire Accounting Year, if applicable.
         Notwithstanding any other provision of the Plan, only Participants who
         were participants in the Harnischfeger Industries Salaried Employees
         Retirement Plan as of March 30, 1998 will be eligible to share in the
         allocation of the Employer Transition Contribution under Section
         3.02(d). Furthermore, Participants who are covered by a collective
         bargaining agreement are not eligible to share in the allocation of any
         Employer Contributions under Section 3.02. Finally, Participants who
         were not participants in the Harnischfeger Industries Salaried
         Employees Retirement Plan and who are employed at the CMH, BCH, and MPH
         locations, are not eligible to share in the allocation of Employer
         Contributions under Sections 3.02(a), 3.02(c) or 3.02(d).

         SECTION 2.01(b) - PARTICIPATION UPON REEMPLOYMENT OF A FORMER EMPLOYEE
         A Participant who terminates employment and later resumes employment
         with an Employer as an Employee shall be eligible to become a
         Participant on his reemployment date.

SECTION 2.02 - TRANSFER OF EMPLOYMENT/CHANGE OF EMPLOYMENT CLASSIFICATION The
effect under this Plan of a transfer of employment or change in employment
status shall be as set forth in this Section.

         SECTION 2.02(a) If a transfer of employment is such that a Participant
         is transferred from one Employer to another Employer, he shall continue
         to be an active Participant in the Plan. Each Employer shall contribute
         to the Plan based only on the Participant's Compensation while an
         Employee of that Employer.

         SECTION 2.02(b) If a transfer of employment is such that a Participant
         is no longer an Employee, but rather is an Employee of an Affiliate
         that is not an Employer or the change in employment status is such that
         the Participant ceases to be an Employee described in Section 1.10, but
         remains employed by an Employer, then:

                   (i)     Such Participant shall become an inactive Participant
                           and shall share in the allocation of Employer
                           Contributions, if applicable, for the Accounting Year
                           in which such transfer of employment occurs. Such
                           allocation shall be based only on Compensation earned
                           while an Employee of an Employer. 


                                       8
<PAGE>


                                                                            
                           Thereafter, the inactive Participant shall cease to
                           share in the allocation of Employer Contributions, if
                           applicable, until the date he again becomes an
                           Employee;

                  (ii)     Such inactive Participant shall not be entitled to
                           make Employee Pre-Tax Contributions or Employee
                           After-Tax Contributions to the Plan while he is an
                           inactive Participant; and

                 (iii)     The inactive Participant's Accounts shall continue to
                           be held in the Trust Fund for the Plan and shall be
                           adjusted as provided for in Article IV hereof.

         SECTION 2.02(c) If a transfer of employment is such that a person who
         was an Employee of a nonparticipating Affiliate first becomes an
         Employee, or if an Employee otherwise previously excluded as an
         Employee under Section 1.10 becomes an Employee, then he shall be
         eligible to become a Participant on his reemployment date (or, if
         applicable, the date of his change in employment status.



                                       9
<PAGE>



                                   ARTICLE III

                                  CONTRIBUTIONS



SECTION 3.01 - EMPLOYEE CONTRIBUTIONS Each Employee who becomes a Participant in
this Plan shall specify on an enrollment form or other method approved by the
Committee, the rate of Employee Pre-Tax Contributions he wishes to make, by
payroll deduction, as set forth in this Section 3.01. Such contributions, if
any, shall be transmitted by an Employer to the Trustee as soon as reasonably
practicable after each payroll deduction, but in no event later than the
fifteenth (15) business day of the month following the month of such deduction.

         SECTION 3.01(a) - EMPLOYEE PRE-TAX CONTRIBUTIONS A Participant may make
         Employee Pre-Tax Contributions of not less than one percent (1%) nor
         more than ten percent (10%) of his Compensation for a payroll period,
         in one percent (1%) increments.

         SECTION 3.01(b) - EMPLOYEE AFTER-TAX CONTRIBUTIONS A Participant may
         make Employee After-Tax Contributions of not less than one percent (1%)
         nor more than ten percent (10%) of his Compensation for a payroll
         period, in one percent (1%) increments. After May 31, 1998, this
         Section 3.01(b) shall only apply to Participants who are covered by a
         collective bargaining agreement or who are employed at the CMH, BCH and
         MPH locations and were not participants in the Harnischfeger Industries
         Salaried Employees Retirement Plan.

         SECTION 3.01(c) - CHANGE OF CONTRIBUTIONS A Participant may, by giving
         notice to the Committee, elect to change the rate of his Employee
         Pre-Tax Contributions and/or Employee After-Tax Contributions within
         the limitations of Section 3.01(a) and 3.01(b), effective as of any pay
         period. Such notice shall be provided to the Committee at least thirty
         (30) days (or as otherwise required by the Committee) prior to the pay
         period for which the change is to be effective.

         SECTION 3.01(d) - SUSPENSION OF CONTRIBUTIONS A Participant may, by
         giving notice to the Committee, elect to suspend his Employee Pre-Tax
         Contributions and/or Employee After-Tax Contributions in their
         entirety, effective as of any pay period. Such notice shall be provided
         to the Committee at least thirty (30) days (or as otherwise required by
         the Committee) prior to the date it is to be effective. A Participant
         may revoke the suspension and resume Employee Pre-Tax Contributions
         and/or Employee After-Tax Contributions, effective as of any pay
         period, by providing notice to the Committee at least thirty (30) days
         (or as otherwise required by the Committee) prior to the pay period for
         which the change is to be effective.

         SECTION 3.01(e) - SEPARATE ELECTION FOR PROFIT SHARING BONUS For
         purposes of Sections 3.01(a) and 3.01(b), the term "Compensation" shall
         not include any profit sharing bonus payment; however, a Participant
         may make a separate election under Section 3.01(a) with respect to a
         profit sharing bonus payment. Furthermore, notwithstanding the
         limitations in Section 3.01(a), this separate election shall be either
         zero percent (0%) or one hundred 


                                       10
<PAGE>


         percent (100%) of the Participant's profit sharing bonus payment (after
         applicable payroll taxes), provided that for 1998 such separate
         election may also be fifty percent (50%).

SECTION 3.02 - EMPLOYER CONTRIBUTIONS The Employers will make contributions on
behalf of eligible Participants as provided in Section 2.01(a) as set forth in
this Section 3.02. The amount of each Employer's contributions shall be paid to
the Trustee either in cash or other property as the Sponsoring Employer may
determine.

         SECTION 3.02(a) - EMPLOYER MATCHING CONTRIBUTIONS For each payroll
         period in an Accounting Year after March 31, 1998, the Employers will
         make an Employer Matching Contribution equal to one hundred percent
         (100%) of each eligible Participant's Employee Pre-Tax Contributions
         for the payroll period up to three percent (3%) of the Participant's
         Compensation for such payroll period plus fifty percent (50%) of such
         Participant's Employee Pre-Tax Contributions of the next two percent
         (2%) of his Compensation. For purposes of this Section, the term
         "Compensation" shall not include any profit sharing bonus payment.

         SECTION 3.02(b) - EMPLOYER DISCRETIONARY CONTRIBUTIONS The Employers
         may make an Employer Discretionary Contribution to the Plan for an
         Accounting Year. Such Employer Discretionary Contribution shall be
         allocated as of the last day of the Accounting Year to each eligible
         Participant during such Accounting Year. Each such Participant's share
         of any Employer Discretionary Contribution made pursuant to this
         Section 3.02(b) for an Accounting Year shall be that amount which bears
         the same ratio to the total contribution made pursuant to this Section
         3.02(b) for the Accounting Year as the Participant's Compensation for
         the Accounting Year bears to the Compensation of all Participants
         entitled to share in the allocation. For purposes of this Section
         3.02(b) Compensation shall exclude management bonuses.

         SECTION 3.02(c) - EMPLOYER FIXED CONTRIBUTION The Employers will make
         an Employer Fixed Contribution for each Accounting Year. Such Employer
         Fixed Contribution shall be allocated as of the last day of an
         Accounting Year to each eligible Participant during such Accounting
         Year and shall be a fixed percentage of each such Participant's
         Compensation for such Accounting Year based on the Participant's
         attained age on the last day of such Accounting Year determined as
         follows:

<TABLE>
<CAPTION>

                              PARTICIPANT'S                                     CONTRIBUTION AS A
                              ATTAINED AGE                                 PERCENTAGE OF COMPENSATION
                              -------------                                 ----------------------------
<S>                                                                                   <C>
                                Under 35                                               0%
                                35 to 44                                               1%
                                45 to 54                                               3%
                               55 or older                                             5%

</TABLE>

         SECTION 3.02(d) - EMPLOYER TRANSITION CONTRIBUTION The Employers will
         make an Employer Transition Contribution for each Accounting Year. Such
         Employer Transition Contribution shall be allocated as of the last day
         of an Accounting Year to each eligible Participant during such
         Accounting Year and shall be a fixed percentage of each such



                                       11
<PAGE>

         Participant's Compensation for such Accounting Year based on the
         Participant's attained age and Service as of December 31, 1998
         determined as follows:

<TABLE>
<CAPTION>


                         PARTICIPANT'S ATTAINED                                 CONTRIBUTION AS A
                            AGE PLUS SERVICE                               PERCENTAGE OF COMPENSATION
                        ------------------------                           --------------------------
<S>                                                                                    <C>
                                Under 65                                               0%
                                65 to 69                                               2%
                                70 to 79                                               3%
                                80 to 89                                               4%
                               90 or older                                             5%

</TABLE>

         SECTION 3.02(e) - EMPLOYER QUALIFIED NON-ELECTIVE CONTRIBUTION The
         Employers may choose to make an Employer Qualified Non-Elective
         Contribution on behalf of any or all Nonhighly Compensated Employees
         for an Accounting Year.

SECTION 3.03 - FORFEITURES A forfeiture is that portion of a terminated
Participant's Fixed Contribution Account, if applicable, which is forfeited
pursuant to Sections 3.05(a) or 3.07 of the Plan. Such forfeitures shall be used
to reduce future Employer Contributions.

SECTION 3.04 - MAXIMUM DEDUCTIBLE CONTRIBUTIONS The contributions of the
Employers shall be subject to the following limitations:

         (i)      In no event shall an Employer be obligated to make a
                  contribution for an Accounting Year in excess of the maximum
                  amount deductible under Section 404(a)(3)(A) of the Code, or
                  any statute or rule of similar import; and

         (ii)     The contributions made to the Plan by an Employer are
                  conditioned upon the following: (a) the contributions are
                  deductible under Section 404 of the Code; and (b) no good
                  faith mistake of fact was made in making the contribution. If
                  a deduction for federal income tax purposes is disallowed
                  under Section 404 of the Code, the Employer shall withdraw any
                  such disallowed contribution within one (1) year of receipt by
                  the Employer of a notice of the disallowance of a claimed
                  deduction. If within one (1) year of making a contribution, it
                  is discovered all or part of the contribution was due to a
                  good faith mistake of fact, the Employer shall withdraw the
                  portion of the contribution attributable to the mistake within
                  one (1) year of the contribution.

If the Employer cannot withdraw a contribution, such amount shall be applied to
reduce its Employer Contributions for the next Accounting Year.

SECTION 3.05 - LIMITATIONS ON CONTRIBUTIONS

         SECTION 3.05(a) ANNUAL LIMIT ON PRE-TAX CONTRIBUTIONS Notwithstanding
         any provision of the Plan to the contrary, in no event shall a
         Participant's Employee Pre-Tax Contributions (when combined with other
         elective deferrals as defined under Section 402(g)(3) of the Code made
         by the Participant under all other plans, contracts or arrangements of
         the Employers or their Affiliates), exceed ten thousand dollars
         ($10,000) in a calendar year (or such other amount which shall result
         from adjustments under 


                                       12
<PAGE>


         Section 415(d) of the Code). The Sponsoring Employer shall monitor each
         Participant's Employee Pre-Tax Contributions throughout the year and
         may, as necessary, reduce a Participant's Employee Pre-Tax
         Contributions if the applicable annual dollar limit will be exceeded.
         If it is determined that the Participant has exceeded the limit set
         forth in this Section for a calendar year, the excess amount and any
         income allocable to such excess amount shall be distributed to the
         Participant no later than April 15 following the calendar year in which
         such excess contribution was made. Any Employer Matching Contributions
         attributable to excess Employee Pre-Tax Contributions, with the income
         allocable to such Employer Matching Contributions calculated in
         accordance with regulations under Section 401(m) of the Code, shall be
         withdrawn from the affected Participants' Accounts and used to reduce
         future Employer Matching Contributions as described in Section 3.03.
         The return of Employee Pre-Tax Contributions and income and forfeiture
         of Employer Matching Contributions and income shall be accomplished by
         a proportionate reduction of each affected Participant's investments in
         the Investment Funds or as otherwise determined by the Committee.

         A distribution shall be made during the same calendar year in which the
         excess Employee Pre-Tax Contributions were made, only if (i) the
         Participant and the Plan designate the distribution as a distribution
         of an excess deferral, and (ii) the distribution is made after the date
         on which the Plan received the excess deferral. Even though
         distributed, excess Employee Pre-Tax Contributions made by Highly
         Compensated Employees shall continue to be considered as Employee
         Pre-Tax Contributions for purposes of determining the average deferral
         percentage under Section 3.07 for the Accounting Year in which they are
         made.

         SECTION 3.05(b) SECTION 415 DEFINED CONTRIBUTION LIMITS Notwithstanding
         any provisions contained herein to the contrary, except for
         contributions to a Rollover Account, the total annual additions to any
         Participant's Accounts in this Plan and any other defined contribution
         plan of an Employer and Affiliates for any Accounting Year (which shall
         be the Plan's limitation year) shall not exceed the lesser of (i)
         thirty thousand dollars ($30,000) or one-fourth (1/4) of the dollar
         amount described in Section 415(b)(1)(A) of the Code, as such amount
         may hereafter be adjusted pursuant to Section 415(d)(1)(B) of the Code,
         whichever is greater, or (ii) twenty-five percent (25%) of the
         Participant's Section 415 Compensation for such Accounting Year.

         The term "annual addition" shall mean the total additions in the
         Accounting Year to the Participant's Accounts in this Plan and any
         other defined contribution plan of the Employers and Affiliates
         attributable to:

               (i)       employer contributions;

              (ii)       employee contributions;

             (iii)       forfeitures; and

              (iv)       any post-retirement medical benefits or individual
                         medical accounts maintained under any pension or
                         annuity plans of the Employers or Affiliates 


                                       13
<PAGE>


                           pursuant to Sections 419(d)(3) and 415(l)(2) of the
                           Code which are treated as "annual additions" for
                           purposes of Section 415 of the Code.

         If a Participant receives annual additions under another defined
         contribution plan of the Employers and Affiliates, as well as under
         this Plan, the limitation on aggregate annual additions described in
         this Section 3.05(b) shall be complied with by a reduction, if
         necessary, in the contributions under this Plan. During each Accounting
         Year, the Sponsoring Employer shall monitor the aggregate annual
         additions made to defined contribution plans of the Employers and
         Affiliates and may suspend or decrease the rate of the Participant's
         Employee Pre-Tax Contributions and/or Employee After-Tax Contributions
         (and Employer Matching Contributions attributable thereto) so that the
         aggregate limit will be satisfied.

If, as a result of a miscalculation of a Participant's Section 415 Compensation
or such other limited circumstances as the Commissioner of Internal Revenue
finds justify the use of the rules described in Treasury Regulation Section
1.415-6(b)(6), it becomes necessary to reduce the annual additions to a
Participant's Accounts, such reduction shall be accomplished by:

       (i)    A reduction in Participant's Employee After-Tax Contribution
              Account during the Accounting Year and the earnings for the
              Accounting Year attributable to such Employee After-Tax
              Contributions;

      (ii)    Then by a reduction in the Participant's Employee Pre-Tax
              Contribution Account by the amount of any unmatched Employee
              Pre-Tax Contributions during the Accounting Year and the earnings
              for the Accounting Year attributable to such Employee Pre-Tax
              Contributions;

     (iii)    Then, by a reduction in the Participant's Employee Pre-Tax
              Contribution Account by the amount of matched Employee Pre-Tax
              Contributions for the Accounting Year and the related earnings and
              by a reduction in the Employer Matching Account by the amount of
              Employer Matching Contributions attributable to the aforementioned
              Employee Pre-Tax Contributions; and

      (iv)    Then, by a reduction in the Participant's Employer Contribution
              Accounts (other than the Employer Matching Account) by the amount
              of any Employer Contributions (other than Employer Matching
              Contributions) for the Accounting Year.

Such reductions shall be made from the Investment Funds in the manner determined
by the Committee. The amount of any such corrective adjustments attributable to
Employee Pre-Tax Contributions and Employee After-Tax Contributions shall be
accomplished by distributing such amounts. The amount of corrective adjustments
attributable to Employer Contributions shall be held in suspense and applied to
reduce later Employer Contributions to this Plan on behalf of all Participants.

SECTION 3.06 - SECTION 415 COMBINED PLANS LIMIT If a Participant is a
participant in a defined benefit plan maintained by his Employer or an
Affiliate, the sum of his defined benefit plan fraction and his defined
contribution plan fraction for any limitation year may not exceed 1.0.


                                       14
<PAGE>


For purposes of this Section, the term "defined contribution plan fraction"
shall mean a fraction, the numerator of which is the sum of all of the annual
additions to (a) the Participant's Accounts under this Plan and (b) the
Participant's Accounts under any other defined contribution plans which may be
maintained by the Employers and their Affiliates as of the close of the
Accounting Year and the denominator of which is the sum of the lesser of the
following amounts determined for such Accounting Year and for each prior
Accounting Year of his employment by the Employers or their Affiliates:

        (i)     The product of 1.25 multiplied by the dollar limitation
                calculated pursuant to Section 3.05(b) for such Accounting Year;
                or

        (ii)    The product of 1.4 multiplied by the percentage limitation
                calculated pursuant to Section 3.05(b) with respect to the
                Participant for such Accounting Year.

For purposes of this Section, the term, "defined benefit plan fraction" shall
mean a fraction, the numerator of which is the Participant's projected annual
benefit (as defined in the defined benefit plan) determined as of the close of
the Accounting Year and the denominator of which is the lesser of:

       (i)    The product of 1.25 multiplied by the dollar limitation under
              Section 415(b)(1)(A) of the Code for such Accounting Year; or

      (ii)    The product of 1.4 multiplied by the percentage limitation which
              may be taken into account pursuant to Section 415(b)(1)(A) of the
              Code with respect to the Participant for such Accounting Year.

The limitation on aggregate benefits from a defined benefit plan and a defined
contribution plan set forth in this Section shall be complied with by a
reduction (if necessary) in the Participant's benefits under the defined benefit
plan in accordance with the provisions of said plan and his benefits hereunder
shall not be affected by such aggregate limitation. This Section shall not apply
after December 31, 1999.

SECTION 3.07 - MATHEMATICAL NONDISCRIMINATION TEST FOR EMPLOYEE PRE-TAX
CONTRIBUTIONS; DISPOSITION OF EXCESS AMOUNTS Notwithstanding any of the
provisions of this Plan to the contrary, in each Accounting Year prior to 1999,
and in each Accounting Year after 1998 except to the extent such testing is not
required under Section 401(k) of the Code, the Participant's Employee Pre-Tax
Contributions shall be subject to the mathematical nondiscrimination test set
forth in Section 401(k) of the Code: that is, the "average deferral percentage"
of the eligible Highly Compensated Employees for such Accounting Year shall not
exceed the average deferral percentage of the Nonhighly Compensated Employees
for the prior for such Accounting Year by more than the limit determined in
accordance with the following table counting for this purpose each Employee
Pre-Tax Contribution (including zero (0) Employee Pre-Tax Contributions in the
case of any nonparticipating eligible Employee):


                                       15
<PAGE>


<TABLE>
<CAPTION>

                    If the average                                   The average deferral
                  deferral percentage                                 percentage (ADP) of
                (ADP) of the Nonhighly                              the Highly Compensated
               Compensated Employees is                                Employees can be
               ------------------------                             -------------------------

<S>                                                     <C>
         Less than two percent (2%)                     Up to the ADP of the eligible Nonhighly
                                                        Compensated Employees multiplied by 2.0 (the
                                                        "alternative test").

         Two percent (2%) but not                       Up to the ADP of the eligible
         more than eight percent (8%)                   Nonhighly Compensated Employees plus two percent
                                                        (2%) (the "alternative test").

         Eight percent (8%) or more                     Up to the ADP of the eligible Nonhighly
                                                        Compensated Employees multiplied by 1.25 (the
                                                        "general test").
</TABLE>

"Average deferral percentage" as used herein shall mean the average of the
ratios (calculated separately for each eligible Employee) of (i) the amount of
Employee Pre-Tax Contributions actually paid over to the Trust Fund on behalf of
each such Employee for an Accounting Year and (ii) the Employee's
Nondiscrimination Compensation for such Accounting Year. In calculating the
ratio of each Employee for an Accounting Year, an Employee Pre-Tax Contribution
shall be taken into account only if allocated to the Employee as of a date
within such Accounting Year and only if the Employee Pre-Tax Contribution
relates to compensation for services performed within such Accounting Year and
would have been received by the Employee during the Accounting Year or within
two and one-half (2 1/2) months thereafter if not for the election to make an
Employee Pre-Tax Contribution.

The Committee shall monitor the average deferral percentages of the Nonhighly
Compensated Employees and the Highly Compensated Employees during each
Accounting Year. If it appears at any time within an Accounting Year that the
mathematical nondiscrimination test may not be satisfied, the Employers may
suspend or decrease the rate of Employee Pre-Tax Contributions by Highly
Compensated Employees (in accordance with Plan procedures) for the remainder of
the Accounting Year. Further, the Sponsoring Employer shall have the discretion
to declare an Employer Qualified Non-Elective Contribution to the Plan allocable
to the Employer Qualified Non-Elective Contribution Accounts of any or all of
the participating Nonhighly Compensated Employees for an Accounting Year. Any
such Employer Qualified Non-Elective Contribution shall be treated as an
Employee Pre-Tax Contribution for purposes of this Section. If, after the end of
the Accounting Year, it is determined that the mathematical nondiscrimination
test has not been satisfied, the Committee shall direct the Trustee to return
the required amount under Section 401(k) of the Code of the affected
Participants' Employee Pre-Tax Contributions for such Accounting Year, with the
income allocable to such Participants' Employee Pre-Tax Contributions calculated
in accordance with the regulations under Section 401(k) of the Code, beginning
with the Highly Compensated Employees who contributed the highest dollar amount
of Employee Pre-Tax Contributions. Income or loss allocable to the period
between the end of the Accounting Year and the date of distribution shall be
disregarded in determining income or loss. In addition, any Employer Matching
Contributions determined to be attributable to Participant Employee Pre-Tax


                                       16
<PAGE>


Contributions returned pursuant to this Section, with the income allocable to
the Employer Matching Contributions, calculated in accordance with regulations
under Section 401(m) of the Code, shall be withdrawn from the affected
Participants' Employer Matching Contribution Accounts and used to reduce future
Employer Matching Contributions as described in Section 3.03. The return of
Employee Pre-Tax Contributions and income and the withdrawal of Employer
Matching Contributions and income shall occur before the end of the Accounting
Year following the Accounting Year in which the Plan failed to satisfy the
mathematical nondiscrimination test and shall be accomplished by a proportionate
reduction of the investments of the affected Participant's Accounts in the
Investment Funds or as otherwise determined by the Committee.

Notwithstanding any provision of this Section to the contrary:

       (i)    in the event this Plan is aggregated with one or more other plans,
              in order for this Plan or such other plan or plans to satisfy the
              requirements of Sections 401(a)(4) of 410(b) of the Code, then the
              mathematical nondiscrimination test described in this Section
              shall be applied by determining the average deferral percentages
              of eligible Employees as if the aggregated plans were a single
              plan; and

      (ii)    the individual deferral percentage for any eligible Highly
              Compensated Employee who is eligible to make elective deferrals
              (as defined in Section 402(g) of the Code) under two (2) or more
              cash or deferred arrangements of an Employer and its Affiliates
              shall be determined as if all such elective deferrals were made
              under a single arrangement (unless regulations under Sections
              401(k), 401(a)(4) or 410(b) of the Code provide that such cash or
              deferred arrangements must not be aggregated).

SECTION 3.08 - MATHEMATICAL NONDISCRIMINATION TEST FOR EMPLOYEE AFTER-TAX AND
EMPLOYER MATCHING CONTRIBUTIONS; DISPOSITION OF EXCESS AMOUNTS Notwithstanding
any other provisions of this Plan to the contrary, in each Accounting Year prior
to 1999, and in each Accounting Year after 1998 except to the extent such
testing is not required under Section 401(m) of the Code, the Employee After-Tax
and Employer Matching Contributions made to the Plan shall be subject to the
mathematical nondiscrimination test set forth in Section 401(m)(2)(A) of the
Code: that is, the average contribution percentage of the eligible Highly
Compensated Employees in each Accounting Year shall not exceed the average
contribution percentage of the eligible Nonhighly Compensated Employees for such
Accounting Year by more than the limit determined in accordance with the
following table, counting for this purpose each Employee After-Tax and Employer
Matching Contribution (including zero (0) Employee After-Tax and Employer
Matching Contributions in the case of any nonparticipating eligible Employee):


                                       17
<PAGE>


<TABLE>
<CAPTION>


                    If the average                                 The average contribution
                contribution percentage                               percentage (ACP) of
                (ACP) of the Nonhighly                              the Highly Compensated
               Compensated Employees is                                Employees can be
               ------------------------                            --------------------------

<S>                                                     <C>
         Less than two percent (2%)                     Up to the ACP of the eligible Nonhighly
                                                        Compensated Employees multiplied by 2.0 (the
                                                        "alternative test").

         Two percent (2%) but not                       Up to the ACP of the eligible Nonhighly
         more than eight percent (8%)                   Compensated Employees plus two percent (2%)
                                                        (the "alternative test").

         Eight percent (8%) or more                     Up to the ACP of the eligible Nonhighly
                                                        Compensated Employees multiplied by 1.25 (the
                                                        "general test").

</TABLE>

The term "average contribution percentage" as used herein shall mean the average
of the ratios (calculated separately for each eligible Employee) of the Employee
After-Tax and Employer Matching Contributions paid over to the Trust Fund on
behalf of the Employee for an Accounting Year over the Employee's
Nondiscrimination Compensation for such Accounting Year.

During each Accounting Year, the Committee shall monitor the average
contribution percentages of the eligible Highly Compensated Employees and the
eligible Nonhighly Compensated Employees for such Accounting Year and may make
prospective adjustments in the Employee After-Tax and Employer Matching
Contributions, if any, of the eligible Highly Compensated Employees (in
accordance with Plan procedures) to meet the average contribution test herein.
Further, the Sponsoring Employer shall have the discretion to declare a special
contribution to the Plan allocable to the Employer Matching Contribution
Accounts of any or all of the participating Nonhighly Compensated Employees for
an Accounting Year. Any such special contribution shall be treated as an
Employer Matching Contribution for purposes of this Section. If, after the end
of the Accounting Year, it is determined that the average contribution
percentage test herein has not been satisfied, the Committee shall direct the
Trustee to return/distribute to the affected Participants the required amount
for such Accounting Year under Section 401(m) of the Code of Employee After-Tax
Contributions and Employer Matching Contributions, with the income allocable to
such Employee After-Tax Contributions and Employer Matching Contributions
calculated in accordance with regulations under Section 401(m) of the Code,
beginning with the Highly Compensated Employees who had the highest dollar
amount of Employee After-Tax Contributions and Employer Matching Contributions.
Income or loss allocable to the period between the end of the Accounting Year
and the date of distribution shall be disregarded in determining income or loss.
If such a distribution of contributions becomes necessary, the Committee shall
direct the Trustee to first return Employee After-Tax Contributions and income
allocable to such Employee After-Tax Contributions. Second, if necessary, the
Committee shall direct the Trustee to distribute Employer Matching Contributions
and the income allocable to such Employer Matching Contributions. Employee
After-Tax Contributions and/or Employer Matching Contributions distributed in
accordance with this Section shall be distributed no later than the close of the
Accounting Year following the Accounting Year for which the Plan failed to
satisfy the average contribution 


                                       18
<PAGE>


percentage test. The distribution of Employee After-Tax Contributions and
Employer Matching Contributions and income allocable thereto shall be
accomplished by a proportionate reduction of the respective Accounts'
investments in the Investment Funds or as otherwise determined by the Committee.

The "alternative test" described above may only be used to meet one of the
mathematical nondiscrimination tests described in Section 3.07 and this Section
3.08 for the same Accounting Year. The determination of whether there has been a
multiple use of the alternative test shall be made in accordance with
regulations under Section 401(m) of the Code. If, for any Accounting Year, it is
determined that there has been a multiple use of the alternative test, the
Trustee shall reduce the contribution percentage of Highly Compensated Employees
as described in regulations under Section 401(m) of the Code, by returning
Employee After-Tax Contributions/Employer Matching Contributions and income
allocable thereto.

Notwithstanding any provision of this Section to the contrary:

       (i)    in the event this Plan is aggregated with one or more other plans
              in order for this Plan or such other plan or plans to satisfy the
              requirements of Sections 401(a)(4) or 410(b) of the Code, then the
              mathematical nondiscrimination test described in this Section
              shall be applied by determining the average contribution
              percentages of eligible Employees as if the aggregated plans were
              a single plan;

      (ii)    the individual contribution percentage for any eligible Highly
              Compensated Employee who is eligible to make contributions or to
              receive allocations of matching contributions (as defined in
              regulations under Section 401(m) of the Code) under two or more
              plans of an Employer and its Affiliates subject to Section 401(m)
              of the Code, shall be determined as if all such matching
              contributions were made under a single plan (unless regulations
              under Sections 401(m), 401(a)(4) or 410(b) of the Code provide
              that such plans must not be aggregated).

SECTION 3.09 - ROLLOVER CONTRIBUTIONS An Employee who has received or is
entitled to receive an "eligible rollover distribution" within the meaning of
Section 402 of the Code from a qualified retirement plan may, with the approval
of the Committee, contribute or authorize the direct rollover of all or part of
the distribution to the Trust Fund for this Plan, regardless of whether he is
presently eligible to contribute to this Plan; provided, however, no such
contribution may be made unless all of the following conditions are satisfied:

         (a)      If the distribution is contributed by the Employee, such
                  contribution occurs on or before the sixtieth (60th) day
                  following the Employee's receipt of the distribution from the
                  other plan or, if such distribution had previously been
                  deposited in an individual retirement account (as defined in
                  Section 408 of the Code), the contribution occurs on or before
                  the sixtieth (60th) day following his receipt of such
                  distribution from the individual retirement account;


                                       19
<PAGE>


         (b)      The amount contributed or directly rolled over is not more
                  than the distribution from the other plan (or conduit
                  individual retirement account) less the amount, if any,
                  considered to be a return of employee after-tax contributions;
                  and

         (c)      The contribution or direct rollover consists of cash.

The Committee shall develop such procedures and may require such information
from the Employee desiring to make such a contribution or direct rollover as it
deems necessary or desirable to determine that the proposed contribution or
direct rollover shall satisfy the requirements of this Section. Upon approval by
the Committee, the amount contributed or directly rolled over shall be credited
to a Rollover Account established on the Employee's behalf. Upon such a
contribution by an Employee who is not yet a Participant hereunder, his Rollover
Account shall represent his sole interest in this Plan until he becomes a
Participant.

SECTION 3.10 - MILITARY LEAVE 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 Section 414(u) of the Code.




                                       20
<PAGE>



                                   ARTICLE IV

                            ACCOUNTS OF PARTICIPANTS



SECTION 4.01 - INVESTMENT FUNDS There shall be established within the Trust Fund
two (2) or more separate Investment Funds selected by the Committee. The
Committee may change the Investment Funds at its discretion.

SECTION 4.02 - INVESTMENT OF ACCOUNTS All Accounts shall be invested as
hereinafter provided:


         SECTION 4.02(a) - DIRECTION BY PARTICIPANTS A Participant shall direct
         the investment of the contributions to his Accounts in one percent (1%)
         increments among the Plan's Investment Funds.

         Any such direction must be submitted to the Committee in accordance
         with procedures prescribed by the Committee. In the absence of any such
         direction, such contributions shall be invested in a money market fund
         or such other Investment Fund as may be designated by the Committee.

         SECTION 4.02(b) - CHANGE OF INVESTMENT FOR FUTURE CONTRIBUTIONS A
         Participant may elect daily to change the investment of his future
         contributions to his Accounts in one percent (1%) increments among the
         Investment Funds.

         Any such election must be submitted to the Committee in accordance with
         procedures prescribed by the Committee.

         SECTION 4.02(c) - CHANGE OF INVESTMENT FOR CURRENT ACCOUNTS A
         Participant may elect daily to change the investment of his Accounts
         among the Plan's Investment Funds. Any such election must be submitted
         to the Committee in accordance with procedures prescribed by the
         Committee.

SECTION 4.03 - VALUATION OF TRUST FUND AND INVESTMENT FUNDS As of each Valuation
Date the Trustee shall determine the fair market value of the Trust Fund and
each Investment Fund in the Trust Fund and the fair market value of the Accounts
of each Participant shall be determined. Such valuations shall be made in
accordance with usual and customary practices consistently followed and
uniformly applied.

SECTION 4.04 - ADJUSTMENT OF PARTICIPANT ACCOUNTS As of each Valuation Date, the
Accounts of each Participant shall be adjusted in the following manner:

         SECTION 4.04(a) The respective Accounts of each Participant shall be
         increased by the allocation of any contributions to such Accounts since
         the last preceding Valuation Date. The Accounts shall be decreased by
         any distributions, forfeitures, withdrawals or other disbursements
         since the last preceding Valuation Date.


                                       21
<PAGE>


         SECTION 4.04(b) Investment earnings (or losses) of each Investment Fund
         shall be allocated to the Accounts invested in such Investment Funds in
         the ratio that the value of each such Account's investment in the
         Investment Fund as of the last preceding Valuation Date; less any
         distributions, withdrawals or other disbursements from the Account's
         investment in the Investment Fund since the last preceding Valuation
         Date; bears to the total value of all Accounts invested in such
         Investment Fund as of the last preceding Valuation Date after such
         adjustments.

SECTION 4.05 - TRUSTEE'S AND COMMITTEE'S DETERMINATION BINDING In determining
the value of the Trust Fund, Investment Funds and or each Participant's
Accounts, the Trustee and the Committee shall exercise their best judgment and
all such determinations (in the absence of bad faith) shall be binding upon all
Participants and their Beneficiaries. All allocations shall be deemed to have
been made as of the appropriate Valuation Date regardless of when the
allocations are actually made.




                                       22
<PAGE>



                                    ARTICLE V

                          DISTRIBUTIONS UNDER THE PLAN



SECTION 5.01 - VALUATION OF ACCOUNTS FOR DISTRIBUTION When a Participant's
Accounts become distributable pursuant to Section 5.02 hereof, the distributable
amount shall be equal to the value of the Accounts determined as of the most
recent Valuation Date for which a valuation has been completed prior to the date
distribution is made or commences; plus any contribution made to the Accounts
and less any distributions or other disbursements from the Accounts since such
Valuation Date.

SECTION 5.02 - DISTRIBUTABLE EVENTS/AMOUNT OF DISTRIBUTIONS If a Participant
terminates employment with the Employers and all Affiliates at any time and for
any reason, the entire balance of all his Accounts shall become distributable;
valued in the manner set forth in Section 5.01 hereof.

SECTION 5.03 - TIMING OF DISTRIBUTIONS Unless a Participant elects a later
distribution, any benefits that become distributable to the Participant under
this Article V shall commence as soon as reasonably practicable after the
Valuation Date coincident with or next following the occurrence of a
distributable event described in Section 5.02, but in no event later than sixty
(60) days after the end of the Accounting Year in which occurs the latest of:

        (i)     the Participant's attainment of Normal Retirement Age;

        (ii)    the tenth (10th) anniversary of the commencement of his Plan
                participation; or

        (iii)   his termination of employment.

If the value of a terminating Participant's Accounts following his termination
of employment is more than five thousand dollars ($5,000) payments from such
Participant's Accounts shall not be made prior to the Participant's Normal
Retirement Age without the written consent of the Participant obtained within
ninety (90) days prior to the date distribution commences.

Notwithstanding any provision of the Plan to the contrary, distribution of a
Participant's Accounts shall commence by April 1 of the calendar year
immediately 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 the
Participant retires, unless the Participant is a five percent (5%) or greater
owner (as defined in Section 416(i) of the Code), in which event distribution of
the Participant's Accounts shall commence no later than April 1 of the calendar
year immediately following the calendar year in which the Participant attains
age seventy and one-half (70 1/2). Accounts shall be distributed in accordance
with the requirements of Section 401(a)(9) of the Code and regulations
thereunder over a period not longer than the joint life expectancies of the
Participant and any designated Beneficiary. Life expectancies shall not be
recalculated after the initial determination. Solely for the purposes of this
Section, if the designated Beneficiary is not the Participant's Spouse and is
more than ten (10) years younger than the Participant, the joint life expectancy
shall be calculated 


                                       23
<PAGE>


as though the age difference were ten (10) years. If a Participant dies before
his distribution commences, distribution of a Participant's Accounts shall be
completed within five (5) years of the Participant's death. Such distribution
need not be completed within five (5) years of the Participant's death if the
distribution is paid over a period not longer than the life expectancy of the
Beneficiary and commences within one (1) year of the Participant's death, or if
the Beneficiary is the Participant's Spouse, not later than the date the
Participant would have attained age seventy and one-half (70 1/2). If a
Participant dies after his distribution commences, but before his entire
interest has been distributed to him, the remaining portion of such interest
shall be distributed to his Spouse or Beneficiary at least as rapidly as under
the method of distribution as of his date of death.

SECTION 5.04 - FORMS OF DISTRIBUTION Within the ninety (90) day period prior to
the date that distribution commences, a Participant (or the Beneficiary of the
Participant) whose Accounts become distributable under Section 5.02 may elect to
receive the amounts to which he is entitled under the Plan in a lump sum,
substantially equal monthly, quarterly or annual installments over a period not
exceeding ten (10) years, or a combination of such lump sum and installment
payments. Distribution of a Participant's benefit may be made in cash or
Harnischfeger Industries Stock or both, provided, however, that a Participant or
Beneficiary may request distribution of his Accounts in kind to the extent they
are invested in Harnischfeger Industries Stock. No less than thirty (30) and no
more than ninety (90) days prior to the date distribution is to commence, the
Participant (or his Beneficiary, if applicable) shall be provided with a written
notice of the manner of benefit payments available and of the Participant's
right to defer commencement of the distribution until Normal Retirement Age.
Notwithstanding the preceding sentence, distribution may occur less than thirty
(30) days after the notice is given provided that: (i) the Committee clearly
informs the Participant that the Participant has a right to a period of at least
thirty (30) days after receiving the notice to consider the decision of whether
or not to elect a distribution or a particular distribution option, and (ii) the
Participant, after receiving the notice, affirmatively elects a distribution.

Notwithstanding any provision of this Section to the contrary, if the value of a
Participant's Accounts following his termination of employment does not exceed
five thousand dollars ($5,000), then the value of such Accounts shall
automatically be paid in a single lump sum payment of cash provided that the
Participant may request distribution of his Accounts in kind to the extent they
are invested in Harnischfeger Industries Stock. If such a distribution is or
includes an "eligible rollover distribution" (within the meaning of Section 402
of the Code), a written notice regarding the distribution shall be provided to
the Participant (or, if applicable, his Spouse) no less than thirty (30) and no
more than ninety (90) days prior to the date of the distribution provided that
the thirty (30) day minimum notice period may be waived in the same manner as
provided above.

SECTION 5.05 - QUALIFIED DOMESTIC RELATIONS ORDERS Notwithstanding any provision
of the Plan to the contrary, the Plan and Trustee shall comply with the
provisions of a "qualified domestic relations order" as defined in Section
414(p) of the Code.

SECTION 5.06 - IN-SERVICE WITHDRAWALS BY PARTICIPANTS A Participant may, while
employed by an Employer, withdraw amounts from his Employee Pre-Tax Contribution
Account, his Employee After-Tax Contribution Account or his Rollover Account,
provided the withdrawal satisfies the terms and conditions of this Section. The
withdrawal shall be accomplished by a reduction in the Accounts' investment in
the Investment Funds in the manner prescribed by the Committee. Any withdrawal
under this Section 5.06 shall be paid from the Trust Fund as soon as reasonably


                                       24
<PAGE>


practicable after the Valuation Date coincident with or immediately following
approval by the Committee of the Participant's written request for such
distribution. (Under Section 5.06(a), the approval of the Committee shall
automatically be given if the Committee determines that the applicable objective
requirements are satisfied.)

         SECTION 5.06(a) - NON-HARDSHIP WITHDRAWALS With respect to his Employee
         After-Tax Contribution Account, the Participant may withdraw an amount
         of not less than three hundred dollars ($300) and not more than the
         value of such Account as of the Valuation Date coincident with or
         immediately preceding the withdrawal. Such a withdrawal shall not be
         made more frequently than twice in any twelve (12) month period and
         shall be made in a single lump sum payment.

         A Participant who has attained age fifty-nine and one-half (59 1/2)
         years may elect at any time prior to the Participant's termination of
         employment to withdraw all or any part of the balance of his Employee
         Pre-Tax Contribution Account, Employee After-Tax Contribution Account
         and Rollover Account as of the Valuation Date coincident with or
         immediately preceding the withdrawal. Such withdrawal shall be in a
         single lump sum payment.

         SECTION 5.06(b) - HARDSHIP WITHDRAWAL A Participant may, while employed
         by an Employer and after taking the maximum withdrawal available under
         Section 5.06(a), obtain a withdrawal from his Employee Pre-Tax
         Contribution Account, except for earnings which accrue after December
         31, 1988, upon his establishment to the satisfaction of the Committee
         that the withdrawal is necessary to alleviate a financial hardship. In
         no event shall such a hardship withdrawal exceed the greater of the
         amount necessary to alleviate the financial hardship or the amount of
         the Participant's Employee Pre-Tax Contribution Account as of the
         Valuation Date coincident with or immediately preceding the withdrawal.
         Such a hardship withdrawal shall be made in a single lump sum payment.

         For purposes of this Section, financial hardship shall mean an
         immediate and heavy financial need of the Participant which cannot be
         satisfied from other reasonably available resources on account of:

                (i)     Medical expenses incurred by the Participant, his spouse
                        or his dependents, or expenses necessary to obtain
                        medical care;

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

                (iii)   The purchase of a principal residence of the Participant
                        (not including mortgage payments);

                (iv)    The need to prevent eviction of the Participant from his
                        principal residence or foreclosure on the mortgage of
                        such principal residence; or

                (v)     Any other extraordinary financial situation which is
                        approved by the Committee under uniform standards,
                        consistently applied, which shall be 


                                       25
<PAGE>


                        limited to those matters which the Commissioner of the
                        Internal Revenue Service may approve from time to time.

         Prior to a hardship withdrawal, the Participant must first obtain all
         distributions, other than hardship distributions, and all nontaxable
         loans, if any, currently available under all plans maintained by an
         Employer. Immediately following a hardship withdrawal, a Participant's
         Employee Pre-Tax Contributions and Employee After-Tax Contributions
         will be suspended for a period of twelve (12) months.

         For purposes of determining a Participant's maximum Employee Pre-Tax
         Contributions for an Accounting Year under Section 3.05(a), if a
         Participant resumes making Employee Pre-Tax Contributions during the
         Accounting Year immediately following the Accounting Year in which a
         withdrawal under this Section 5.06(b) occurs, the Participant's
         Employee Pre-Tax Contributions made in the Accounting Year during which
         the withdrawal occurs shall be included with the Participant's Employee
         Pre-Tax Contributions for the Accounting Year in which his
         participation resumes.

SECTION 5.07 - DIRECT ROLLOVERS TO ELIGIBLE RETIREMENT PLANS At the election of
a Participant (or other distributee) who is eligible for a distribution from the
Plan (including in-service withdrawals pursuant to Section 5.06) that is an
"eligible rollover distribution" (within the meaning of Section 401(a)(31) of
the Code), the Committee shall authorize the direct rollover of the distributed
amount from the Trust Fund of this Plan to an "eligible retirement plan" (within
the meaning of Section 401(a)(31) of the Code). Such direct rollovers shall be
made in accordance with procedures established by the Committee conforming to
the requirements of Section 410(a)(31) of the Code and regulations thereunder.


                                       26
<PAGE>


                                   ARTICLE VI

                                   PLAN LOANS



SECTION 6.01 - LOANS While it is the primary purpose of the Plan to provide
funds for Participants when they terminate employment, it is recognized that
under some circumstances it would be in the best interest of Participants to
permit loans to be made to them from their Employee Pre-Tax Contribution
Accounts. Accordingly, the Committee may direct that a loan be made to a
Participant for such purposes as the Committee in its discretion may approve,
subject to the rules developed and applied by the Committee in a uniform and
nondiscriminatory manner and subject to the following:

         SECTION 6.01(a) Each request for a loan under this Section must be by
         application to the Committee, supported by such evidence and with such
         reasonable loan processing fee as the Committee may request. Each prior
         loan must be repaid in full before a new loan may be approved.

         SECTION 6.01(b) Each loan must be evidenced by a note in a form
         furnished by the Committee, must be secured by a pledge of the
         Participant's accounts or by other adequate security, must authorize
         repayment by payroll deductions and must consent to the distribution
         thereof in the event of a default (provided that distribution at such
         time is otherwise allowed by the Plan).

         SECTION 6.01(c) Each loan will bear interest at a reasonable rate
         established by the Committee in a uniform and nondiscriminatory manner
         (generally the current prime rate plus two percent (2%), but not
         greater than the maximum rate permitted by law), and must be amortized
         in level payments, made not less frequently than quarterly, over the
         life of the loan.

         SECTION 6.01(d) The principal amount of each loan may not be less than
         one thousand dollars ($1,000) and, when added to any other outstanding
         loan balances of the Participant under this Plan and all other plans of
         the Employers and Affiliates, may not exceed the least of fifty
         thousand dollars ($50,000) (reduced by the aggregate of principal
         payments made on any other plan loans during the one (1) year period
         prior to the date of the new loan), fifty percent (50%) of the
         Participant's vested Account balances, or the amount in the
         Participant's Employee Pre-Tax Contribution Account.

         SECTION 6.01(e) Each loan will be for a term not exceeding five (5)
         years; provided that the term of a loan may be for up to fifteen (15)
         years where the loan is used to acquire any dwelling unit which within
         a reasonable time is to be used as the principal residence of the
         Participant. Full prepayment shall be permitted at any time.


                                       27
<PAGE>


         SECTION 6.01(f) Each note evidencing a loan to a Participant shall be
         held on the Participant's behalf and shall be considered an investment
         of the Participant's Employee Pre-Tax Contribution Account.
         Accordingly, principal and interest payments on the note shall be
         credited to such Account on the Participant's behalf. The distribution
         of a Participant's canceled note to the Participant (or to the
         Participant's Beneficiary in the event of the Participant's death)
         shall be considered as a payment for purposes of the Plan.

         SECTION 6.01(g) If a Participant should be in default on any loan, the
         entire amount of unpaid principal and accrued interest shall
         immediately become due and payable. A default shall occur on the last
         day of a calendar quarter following the calendar quarter in which a
         required installment loan payment was due and which remains unpaid on
         such date. Further, if a Participant is on an authorized unpaid leave
         of absence, such Participant shall not be treated as in default on any
         Plan loan for a period of up to one year. After the expiration of this
         one year grace period, the Participant shall resume loan repayments;
         otherwise, the loan shall be deemed in default on the last day of the
         calendar quarter following the calendar quarter in which the one year
         grace period ended. Loan repayments will be suspended under this Plan
         as permitted under Section 414(u)(4) of the Code.


                                       28
<PAGE>



                                   ARTICLE VII

                                 ADMINISTRATION



SECTION 7.01 - FIDUCIARIES/ALLOCATION OF FIDUCIARY RESPONSIBILITIES For purposes
of Part 4 of Title I of ERISA, the Sponsoring Employer, the other Employers, the
Committee, the Trustee, and those parties to whom fiduciary duties are allocated
pursuant to the Trust Agreement shall be named fiduciaries. All actions by named
fiduciaries shall be consistent with the terms of the Plan and Trust to the
extent such documents are consistent with the provisions of Title I of ERISA.
Each named fiduciary shall act solely in the interest of Participants and
Beneficiaries and for the exclusive purposes of providing benefits and defraying
reasonable administrative expenses of the Plan. Each named fiduciary shall
discharge his respective duties 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. Among the duties specifically
allocated to named fiduciaries shall be the following:

         (a)      The Sponsoring Employer shall have the sole authority to
                  appoint and remove a Trustee and to appoint and remove members
                  of the Committee. The Sponsoring Employer shall be the "Plan
                  Administrator" for purposes of ERISA.

         (b)      The Committee shall have the general responsibility for the
                  administration of this Plan, which responsibility is
                  specifically described in this Plan and the Trust Agreement.

         (c)      The Trustee shall have the sole responsibility for the
                  administration of the Trust and the management of the assets
                  held under the Trust, except to the extent delegated to an
                  investment manager under the Trust Agreement.

A fiduciary may rely upon any direction, information or action of another
fiduciary as being proper under this Plan or the Trust, and is not required
under this Plan or the Trust to inquire into the propriety of any such
direction, information or action.

Each named fiduciary shall be responsible only for the specific duties assigned
above and shall not be directly or indirectly responsible for the duties
assigned to another fiduciary.

SECTION 7.02 - COMMITTEE The general administration of the Plan and the
responsibility for carrying out its provisions shall be placed in a Committee
(the Morris Material Handling Benefits Committee) of one (1) or more members,
each appointed by the Sponsoring Employer and serving at the pleasure of the
latter. The Committee may designate one (1) member to act on the Committee's
behalf in all Committee responsibilities. Any member of the Committee may resign
by notice in writing filed with the Sponsoring Employer, such resignation to
become effective no earlier than the date of such written notice.



                                       29
<PAGE>


All customary and reasonable expenses of the Committee shall be paid by the
Employers. Members of the Committee shall not receive compensation for their
services to the Committee. The Committee shall hold meetings at such places and
times as they may determine. A majority of the members of the Committee at the
time in office shall constitute a quorum for the transaction of business. All
actions taken by the Committee at a meeting shall be by majority vote of the
members present. Action by the Committee may also be taken without a formal
meeting by consent of a majority of the members.

A Committee member shall be disqualified from acting upon any matter affecting
only himself.

SECTION 7.03 - COMMITTEE'S POWERS AND DUTIES Except as specifically reserved for
the Sponsoring Employer, the Committee shall have such powers and duties as may
be necessary to discharge its functions hereunder, including but not limited to,
the following:

        (a)     The sole and absolute discretion to (i) construe and interpret
                the Plan, (ii) decide all questions of eligibility to
                participate in the Plan, (iii) determine the amount, manner and
                time of payment of any benefits to any Participant or
                Beneficiary;

        (b)     To formulate and modify rules and regulations wherever, in the
                opinion of the Committee, such rules and regulations are
                required by the terms of the Plan or would facilitate the
                operation of the Plan;

        (c)     To obtain from the Employers and from Employees such information
                as is necessary for the proper administration of the Plan, to
                fully rely upon such information and, when appropriate, to
                furnish such information promptly to the Trustee or other
                persons entitled thereto;

        (d)     To prepare and distribute information explaining the Plan;

        (e)     To prescribe procedures to be followed by Participants or
                Beneficiaries regarding contribution elections, investment
                elections, applications for benefits, in-service withdrawals, or
                loans;

        (f)     To furnish the Employers, upon request, such reports as are
                reasonable and appropriate;

        (g)     To take appropriate remedial action in the event of error in the
                administration of the Plan or misstatement by a Participant;

        (h)     To instruct the Trustee with respect to the payment of benefits
                hereunder;

        (i)     To provide for any required bonding of fiduciaries and other
                persons who may from time to time handle Plan assets;

        (j)     To appoint agents and clerks, and acquire such professional
                services as may be required in carrying out the provisions of
                the Plan;


                                       30
<PAGE>


        (k)     To keep all such books of accounts, records and other data as
                may be necessary for the proper administration of the Plan;

        (l)     To prescribe the contents of all forms and agreements it deems
                necessary for administration of the Plan; and

        (m)     To adopt amendments as provided in Section 9.01.

SECTION 7.04 - CLAIMS PROCEDURE Claims for benefits under the Plan shall be
filed on forms approved by the Committee and filed with the Committee or its
delegate. If a claim for benefits made by a Participant, or a Participant's
Beneficiary or estate, is wholly or partially denied, the claimant shall be
provided, within sixty (60) days of receipt of such claim, a written notice of
the denial setting forth: (i) the specific reasons for the denial in a manner
calculated to be understood by the claimant; (ii) the provisions of the Plan
upon which the denial is based; (iii) a description of additional materials, if
any, needed to perfect the claim; and (iv) an explanation of the Plan's claim
review procedure.

SECTION 7.05 - CLAIM REVIEW PROCEDURE Any claimant whose request for benefits is
denied in whole or in part may, within sixty (60) days after receipt of notice
of the denial, submit a written appeal to the Committee for a review of the
denial. The claimant or his authorized representative may review pertinent
documents and submit issues and comments to the Committee in writing. Within
sixty (60) days after receipt of such an appeal (up to one hundred twenty (120)
days if special circumstances prevent a decision within sixty (60) days), the
Committee shall notify the claimant in writing of its decision and if the
Committee confirms the denial in whole or in part, the notice shall set forth
the specific reasons for the decision and the provisions of the Plan upon which
the decision is based. The decision of the Committee shall be final.

SECTION 7.06 - INDEMNIFICATION The Employers shall indemnify and save the
members of the Committee and any Employees to whom the Committee has allocated
or delegated its responsibilities in accordance with the provisions hereof, as
well as any other fiduciary who is also an officer, director or Employee of an
Employer, and each of them, harmless from and against any and all claims, loss,
damages, expense and liability arising from their responsibilities in connection
with the administration of the Plan and Trust and not otherwise paid or
reimbursed by insurance, unless the same shall result from their own willful
misconduct.

SECTION 7.07 - PAYMENT OF EXPENSES Unless otherwise determined by the Board of
Directors of the Sponsoring Employer, the members of the Committee shall serve
without compensation for services as such, but all expenses of the Committee
shall be paid by the Employer(s) or the Sponsoring Employer may cause such
expenses to be paid from the Trust Fund. Such costs and expenses shall include
any expenses incident to the functioning of the Committee, including, but not
limited to, fees of accountants, counsel, and other specialists and other costs
of administering the Plan and Trust Fund.


                                       31
<PAGE>


                                  ARTICLE VIII

                         THE TRUST FUND AND THE TRUSTEE


SECTION 8.01 - TRUST AGREEMENT The Sponsoring Employer has entered into a Trust
Agreement with the Trustee to hold the funds set aside pursuant to this Plan.

SECTION 8.02 - SEPARATE INVESTMENT FUNDS At the direction of the Sponsoring
Employer, the Trustee may establish one (1) or more Investment Funds within the
Trust Fund. The investment earnings (or losses) of such separate Investment
Funds shall be allocated to the Participant's respective Accounts pursuant to
the terms of the Plan.

SECTION 8.03 - NON-REVERSION; EXCLUSIVE BENEFIT CLAUSE The Trust Fund shall be
received, held in Trust and disbursed by the Trustee in accordance with the
provisions of the Trust Agreement and this Plan. Except as provided in Section
3.03 or Section 3.04(ii), no part of the Trust Fund shall be used for or
diverted to purposes other than for the exclusive benefit of Participants or
their Beneficiaries under this Plan. No person shall have any interest in, or
right to, the Trust Fund or any part thereof, except as specifically provided
for in this Plan or the Trust Agreement. Notwithstanding the above, nothing in
this Section nor the Plan shall preclude the Trustee from complying with a
"qualified domestic relations order" as defined in Section 414(p) of the Code.

SECTION 8.04 - REMOVAL OF TRUSTEE The Trustee may, but need not, be a banking
corporation organized and doing business under the laws of the United States of
America or any state therein, authorized under such laws to exercise corporate
trust powers and subject to supervision or examination by federal or state
authority. The Sponsoring Employer may remove the Trustee at any time upon the
notice required by the terms of the Trust Agreement and, upon such removal or
upon the resignation of the Trustee, the Sponsoring Employer shall designate and
appoint a successor Trustee.

SECTION 8.05 - POWERS OF THE TRUSTEE The Trustee shall have such powers to hold,
invest, reinvest, control, and disburse funds as at that time shall be set forth
in the Trust Agreement.

SECTION 8.06 - TRUST AGREEMENT PART OF THE PLAN The Trust Agreement shall be
deemed to form a part of the Plan and all the rights of Participants or others
under this Plan shall be subject to the provisions of the Trust Agreement to the
extent such provisions are not contradicted by specific provisions of this Plan.

SECTION 8.07 - TRUSTEE'S SETTLEMENT OF ACCOUNTS The Trust Agreement may contain
provisions granting authority to the Sponsoring Employer to settle the accounts
of the Trustee on behalf of all persons having or claiming an interest in the
Trust Fund.


                                       32
<PAGE>


                                   ARTICLE IX

                            AMENDMENT AND TERMINATION



SECTION 9.01 - AMENDMENT The Sponsoring Employer reserves the right, at any
time, to amend, in whole or in part, any or all of the provisions of the Plan,
including specifically the right to make any such amendment effective
retroactively, if necessary, to bring the Plan into conformity with any
governmental regulations which must be complied with so that the Plan and Trust
Fund shall qualify under Sections 401(a), 401(k) and 401(m) of the Code.
Notwithstanding the preceding sentence, the Committee is specifically authorized
to adopt amendments which do not materially affect the cost of the Plan and
which may be necessary or appropriate to facilitate the administration,
management, or interpretation of the Plan or to conform the Plan thereto, or to
qualify or maintain the Plan and Trust as a plan and trust meeting the
requirements of Code Sections 401(a), 401(k) and 501(a) or any other applicable
section of law (including ERISA) and governmental regulations. No amendment
shall make it possible for the Trust assets to be used for or diverted to
purposes other than the exclusive benefit of Participants and their
Beneficiaries or defraying reasonable administrative expenses except as provided
in Section 3.03 and Section 3.04(ii) hereof. No amendment shall reduce an
accrued benefit of a Participant or eliminate an optional form of benefit within
the meaning of Section 411(d)(6) of the Code, except as otherwise allowed by
Section 411(d)(6).

SECTION 9.02 - TERMINATION Any Employer may terminate its participation in this
Plan at any time. The Sponsoring Employer may terminate this Plan at any time.

SECTION 9.03 - DISTRIBUTION OF ACCOUNTS UPON PLAN TERMINATION If the Sponsoring
Employer terminates the entire Plan, contributions are completely discontinued,
or a partial termination of the Plan occurs, the Committee shall compute the
value of the Accounts of the affected Participants which shall be fully vested
and nonforfeitable. In the event of complete termination of the Plan and Trust,
subject to the limitations of Code Section 401(k)(10), the Trustee shall
liquidate the Trust and distribute the Participants' Accounts as soon as
administratively feasible in the manner provided in Article V. The distribution
of such Accounts shall be made in accordance with the Participant consent
provisions of Section 411(a)(11) of the Code to the extent such consent
provisions are applicable to Accounts having a value at the time of such
distribution or any prior distribution of more than five thousand dollars
($5,000).


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<PAGE>


                                    ARTICLE X

                       ENTRY AND WITHDRAWAL OF AN EMPLOYER



SECTION 10.01 - ENTRY OF AN EMPLOYER An Affiliate may become a party to this
Plan and Trust Agreement by delivering to the Sponsoring Employer a resolution
of its Board of Directors authorizing such participation. With the consent of
the Sponsoring Employer, any such Affiliate shall become an Employer hereunder
as of an effective date approved by the Sponsoring Employer and shall be subject
to the terms and provisions of this Plan and the Trust Agreement as then in
effect or thereafter amended.

SECTION 10.02 - WITHDRAWAL OF AN EMPLOYER An Employer hereunder who wishes to
withdraw from this Plan and the Trust Agreement shall deliver to the Sponsoring
Employer a resolution of its Board of Directors authorizing its withdrawal as an
Employer hereunder and indicating the reason or reasons for such withdrawal.
Withdrawal may take place on a Valuation Date only and notice thereof to the
Sponsoring Employer must be submitted at least thirty (30) days prior to the
Valuation Date such withdrawal is to be effective, unless such requirement is
waived by the Sponsoring Employer.

         SECTION 10.02(a) Subject to the limitations of Code Section 401(k)(10),
         the provisions of Article IX hereof shall apply to an Employer's
         withdrawal as if the withdrawal were a part of the complete termination
         of this Plan with respect to withdrawing Employer's Employees, but the
         participation of other Employers hereunder shall not be affected nor
         shall the continuation of the Plan with respect to the participation
         therein by other Employers be affected by such a withdrawal by an
         Employer.

         SECTION 10.02(b) If the withdrawal of an Employer hereunder is the
         result of the adoption of a different defined contribution plan for its
         Employees which will, immediately upon withdrawal of the Employer from
         this Plan, cover Employees of the Employer who are covered by this
         Plan, the Sponsoring Employer, upon being furnished evidence of the
         terms of such different defined contribution plan and that such
         different plan has been approved by the Internal Revenue Service as
         qualified under Section 401(a) of the Code as now in effect or
         hereafter amended, shall compute the value of the Accounts of the
         affected Participants and establish such Employer's interest in the
         value of the Trust Fund. The Employer's interest in the value of the
         Trust Fund so determined after reduction for charges and other expenses
         incurred to process the withdrawal of the Employer, shall be
         transferred to the trustee or trustees of the different plan or to the
         insurance company which is to hold the funds of the different defined
         contribution plan, whichever is applicable.

The application of the withdrawing Employer's interest in the Trust Fund,
pursuant to the terms of this Section, shall constitute a complete discharge of
the responsibility of the Sponsoring Employer and the Trustees, without any
responsibility on their part collectively or individually to see to the
application thereof.


                                       34
<PAGE>


                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS



SECTION 11.01 - PLAN MERGER, CONSOLIDATION OR TRANSFER OF ASSETS In the event of
a merger or consolidation of the Sponsoring Employer or any Employer or the
transfer of all or substantially all of its assets to any other corporation,
provision may be made by such successor corporation at its election, subject in
the case of an Employer other than the Sponsoring Employer to the consent of the
Sponsoring Employer, to continue this agreement and the Plan created hereunder
as to such successor entity. Such successor shall, upon its election to continue
this Plan and, if applicable, with the consent of the Sponsoring Employer, be
substituted in place of such Employer by an instrument duly authorizing such
substitution and duly executed by such successor. Upon notice of such
substitution accompanied by (i) a certified copy of the resolutions of the Board
of Directors of such successor authorizing such substitution, and (ii) a
certified copy of the resolutions of the Board of Directors of the Sponsoring
Employer consenting to such substitution, if applicable, delivered to the
Committee, the Trustees, and all other Employers, they shall be authorized to
recognize such successor in the place of such Employer.

In the case of any merger, consolidation or transfer of assets or liabilities to
any other plan, such plan shall provide that each Participant would, if the Plan
terminated immediately after the merger, consolidation or transfer, receive a
benefit which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation or transfer if
the Plan had then terminated.

SECTION 11.02 - NO ASSIGNMENT OF BENEFITS Except in the case of a loan from the
Plan secured by a Participant's Accounts, none of the benefits under the Plan
are subject to the claims of creditors of Participants or their Beneficiaries
nor are they subject to attachment, garnishment or any other legal process.
Neither a Participant nor his Beneficiary may assign, sell, borrow on or
otherwise encumber his beneficial interest in the Plan and Trust Fund, nor shall
such interest be liable for or subject to the deeds, contracts, liabilities,
engagements or torts of any Participant or Beneficiary. Notwithstanding the
above, nothing in the Plan shall preclude compliance with a "qualified domestic
relations order" as defined in Section 414(p) of the Code.

SECTION 11.03 - PLAN VOLUNTARY Although the Employers intend that this Plan
shall be continued, it is entirely voluntary on the part of the Employers and
continuance of the Plan and any payments hereunder are not a contractual
obligation of any Employer.

SECTION 11.04 - RESERVATION OF RIGHT TO SUSPEND OR DISCONTINUE CONTRIBUTIONS The
Employers reserve the right in their sole and uncontrolled discretion to modify
or suspend (in whole or in part) at any time and for any period, or to
discontinue at any time their contributions under this Plan.

SECTION 11.05 - NON-GUARANTEE OF EMPLOYMENT Nothing contained in this Plan shall
give any Participant or Employee the right to be retained in the service of an
Employer or interfere with the right of an Employer to discharge any Participant
or Employee at any time regardless of the effect of such discharge upon such
individual as a Participant.


                                       35
<PAGE>


SECTION 11.06 - GOVERNING LAW This Plan shall be construed in accordance with
the laws of the State of Delaware, except where such laws are superseded by
ERISA or the Code, in which case ERISA or the Code, as the case may be, shall
control.

SECTION 11.07 - FACILITY OF PAYMENT In making any distribution to or for the
benefit of any minor or incompetent Participant or Beneficiary, the Committee,
in its sole, absolute and uncontrolled discretion may, but need not, order the
Trustee to make such distribution to a legal or natural guardian of such minor
or incompetent and any such guardian shall have full authority and discretion to
expend such distribution for the use and benefit of such minor or incompetent
and the receipt by such guardian shall be a complete discharge of the Trustee
without any responsibility on its part or on the part of the Committee to see to
the application thereof.

SECTION 11.08 - SEVERABILITY If any provisions of this Plan document shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining provisions of the document, which shall be fully severable,
and the document shall be construed and enforced as if the illegal or invalid
provision had never been inserted herein.

SECTION 11.09 - CONSTRUCTION OF PLAN DOCUMENT Titles of Articles and Sections in
this Plan are inserted for convenience only and in the event of any conflict,
the text of this instrument, rather than such titles, shall control.

SECTION 11.10 - PLAN IN EFFECT AT TERMINATION OF EMPLOYMENT CONTROLS Unless
expressly indicated otherwise, any amendment to this Plan shall not apply to any
Employee who terminated employment prior to the effective date of such
amendment.


                                       36
<PAGE>


                                   ARTICLE XII

                            TOP-HEAVY PLAN PROVISIONS



SECTION 12.01 - APPLICATION The provisions of this Article XII shall only be
applicable if the Plan becomes "top-heavy" as defined in Section 416(g) of the
Code aggregating this plan and any other qualified retirement plans maintained
by the Employers and Affiliates, including those plans which may have
terminated, which are part of an "aggregation group of plans" (as hereinafter
defined). Generally, the plan would be "top-heavy" if sixty percent (60%) or
more of the aggregate present value of the accrued benefits of members of the
qualified retirement plans maintained by the Employers and Affiliates which are
part of an "aggregation group of plans" as of any "determination date" (as
defined in Section 416(g)(4) of the Code, i.e., each December 31) is
attributable to "key employees" (as defined in Section 416(i)(1) of the Code).
For this purpose, benefit payments to members of the "aggregation group of
plans" during the Accounting Year (ending with such determination date) or for
any of the four (4) immediately preceding Accounting Years shall be taken into
consideration. The present value of accrued benefits of defined benefit plans
included in the aggregation group shall be determined on the basis of the
interest and mortality assumptions then being used to comply with Section
401(a)(25) of the Code. If the plan becomes "top-heavy" as of any determination
date, then effective in the next succeeding Accounting Year, the provisions of
this Article XII shall apply.

If the Employers or Affiliates maintain one (1) or more defined contribution
plans (including any simplified employee pension plan) and the Employers or
Affiliates maintain or have maintained one (1) or more defined benefit plans,
which during the five (5) year period ending on the determination date has or
has had any accrued benefits, the top-heavy ratio for any required or permissive
aggregation group, as appropriate, is a fraction, the numerator of which is the
sum of account balances under the aggregated defined contribution plans for all
"key employees," and the present value of accrued benefits under the aggregated
defined benefit plans for all "key employees" as of the determination date, and
the denominator of which is the sum of the account balances under the aggregated
defined contribution plans for all participants, and the present value of
accrued benefits under the defined benefit plans for all participants as of the
determination date, all determined in accordance with Section 416 of the Code
and the regulations thereunder. The account balances under a defined
contribution plan and accrued benefits under the defined benefit plan in both
the numerator and denominator of the top-heavy ratio are adjusted for any
distribution of an accrued benefit made in the five (5) year period ending on
the determination date. For purposes of this paragraph, the value of account
balances and the present value of accrued benefits will be determined as of the
most recent Valuation Date that falls within the twelve (12) month period ending
on the determination date, except as provided in Section 416 of the Code and the
regulations thereunder for the first and second plan years of a defined benefit
plan. The account balances and accrued benefits of a participant (1) who is not
a "key employee," but who was a key employee in a prior year, or (2) who has not
been credited with at least one (1) hour of service with any Employer
maintaining the plan at any time during the five (5) year period ending on the
determination date will be disregarded. The calculation of the top-heavy ratio
and the extent to which distributions, rollovers and transfers are taken into
account will be made in accordance with Section 416 of the Code and the
regulations thereunder. Deductible employee contributions will 


                                       37
<PAGE>


not be taken into account for purposes of computing the top-heavy ratio. When
aggregating plans, the value of account balances and accrued benefits will be
calculated with reference to the determination dates that fall within the same
calendar year. The accrued benefit of any Employee who is not a "key employee"
shall be determined as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under Section 411(b)(1)(C) of the Code.

SECTION 12.02 - SPECIAL MINIMUM BENEFIT If this Plan becomes "top-heavy," for
each year the Plan is top-heavy, the Employers shall make a minimum annual
contribution for each Participant who is employed on the last day of the
Accounting Year and who is not a "key employee," to the extent not already
provided by an Employer through another qualified plan maintained by an Employer
in which the Participant also participates. No amount in excess or the
applicable dollar amount under Section 401(a)(17) of the Code shall be treated
as Section 415 Compensation for purposes of this Section. Such annual
contribution shall be an amount equal to the lesser of three percent (3%) of
this Section 415 Compensation or the highest percentage of compensation
contributed on behalf of a key employee. For purposes of this Section, Employee
Pre-Tax Contributions of "key employees" shall be treated as employer
contributions. Such Participant shall receive this contribution regardless of:
(i) his level of compensation; (ii) whether or not the Participant has made
Employee Pre-Tax Contributions, or (iii) whether or note the Participant
completes one thousand (1,000) Hours of Service during the Accounting Year. For
purposes of this Section, the term "compensation" shall mean a Participant's
Section 415 Compensation (except that only compensation earned while a
Participant will be taken into account).

The minimum annual contribution described in the preceding paragraph shall not
be made if a Participant is also a participant in a top-heavy defined benefit
plan of the Employers and the Participant receives a top-heavy minimum benefit
under such top-heavy defined benefit plan. Said benefit shall be an accrued
benefit equal to: (i) the amount otherwise provided by the top-heavy defined
benefit plan, or (ii) an amount equal to two percent (2%) of the Participant's
annual monthly Section 415 Compensation for the period of consecutive plan years
(not exceeding five (5) years) of the top-heavy defined benefit plan during
which the Participant had the greatest aggregate Section 415 Compensation,
multiplied by his years of benefit accrual service under the top-heavy defined
benefit plan, up to ten (10) years earned in plan years after 1983 in which the
defined benefit plan was top-heavy, whichever is greater.

SECTION 12.03 - SPECIAL COMBINED PLANS LIMIT Notwithstanding the provisions of
Section 3.06 hereof to the contrary, the denominators of the defined benefit
plan fraction and defined contribution plan fraction shall, if this Plan becomes
"top-heavy," be amended by the product of 1.0 rather than 1.25 of the applicable
dollar limits.

SECTION 12.04 - KEY EMPLOYEE DEFINED The term "key employee" shall have the same
meaning as is specified in Section 416(i)(1) of the Code, to wit:

       (i)    certain officers of an Employer or any Affiliate of an Employer
              (but not more than fifty (50) officers or, if less, the greater of
              three (3) officers or ten percent (10%) of all Employees of an
              Employer and all Affiliates);

       (ii)   the ten (10) Employees with the largest equity interest in an
              Employer whose total annual compensation in the applicable
              Accounting Year was more than one hundred


                                       38
<PAGE>


              percent (100%) of the maximum annual additions to a defined
              contribution plan for such year under Section 415(c)(1)(A) of the
              Code;

       (iii)  any Participant with more than five percent (5%) equity interest
              in an Employer or any Affiliate of an Employer; or

       (iv)   any Participant with more than one percent (1%) equity interest in
              an Employer or its Affiliates whose total annual compensation in
              the applicable Accounting Year is more than one hundred fifty
              thousand dollars ($150,000).

In determining "equity interest," the attribution rules set forth in Section 318
of the Code shall be taken into consideration. The term "key employee" as of any
determination date shall be applied to any Employee or former Employee (or his
Spouse) who was a "key employee" during the Accounting Year (ending with such
determination date) or in any of the four (4) immediately preceding Accounting
Years. The term "non-key employee" shall mean any Employee who is not a "key
employee." The term "officer," for this purpose, shall only include any officer
of an Employer or its Affiliates whose total cash compensation for the
applicable Accounting Year was at least fifty percent (50%) of the maximum
annual benefit from a defined benefit plan for such year under Section
415(b)(1)(A) of the Code. For purposes of this Section, "compensation" shall
mean Section 415 Compensation.

SECTION 12.05 - AGGREGATION GROUP OF PLANS DEFINED The term "aggregation group
of plans" shall have the same meaning as is specified in Section 416(g)(2) of
the Code, including for this purpose, both required and permissive aggregation
groups of plans. A required aggregation shall include (i) each qualified plan of
the Employers or Affiliates in which at least one key employee participates or
participated at any time during the determination period (regardless of whether
the plan has terminated), and (ii) any other qualified plan of the Employers or
Affiliates which enables a plan described in (i) to meet the requirements of
Section 401(a)(4) or 410 of the Code. A permissive aggregation group shall
include the required aggregation group of plans plus any other plan or plans of
the Employers or Affiliates, when considered as a group with the required
aggregation group, will continue to satisfy the requirements of Section
401(a)(4) or 410 of the Code.

IN WITNESS WHEREOF, the Sponsoring Employer has caused this Plan to be executed
as of the _____ day of ___________________, 1998, but to be effective as of
March 30, 1998.


                                          MORRIS MATERIAL HANDLING, INC.




                                          BY:
                                             ---------------------------------





                                       39