COPLEY PHARMACEUTICAL, INC.
                                 RETIREMENT PLAN





                              (Amended and Restated
          Effective January 1, 1998, except as otherwise noted herein)





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                                     - ii -
                           COPLEY PHARMACEUTICAL, INC.
                                 RETIREMENT PLAN

                                TABLE OF CONTENTS


ARTICLE 1.....................................................................1


INTRODUCTION..................................................................1

1.1. AMENDMENT AND RESTATEMENT................................................1
1.2.PLAN AND TRUST INTENDED TO QUALIFY........................................1
1.3.DEFINITIONS...............................................................1

ARTICLE 2.....................................................................1


DEFINITIONS...................................................................1

2.1. "ACCOUNTS"...............................................................1
2.2. "AFFILIATED COMPANY".....................................................1
2.3. "ANNUAL ADDITION"........................................................1
2.4. "BENEFICIARY"............................................................1
2.5. "BOARD...................................................................1
2.6. "BREAK IN SERVICE".......................................................1
2.7. "CODE"...................................................................1
2.8. "COMMITTEE"..............................................................1
2.9. "COMPANY"................................................................1
2.10. "COMPANY CONTRIBUTIONS".................................................1
2.11. "COMPANY CONTRIBUTION ACCOUNT"..........................................1
2.12."COMPANY RETIREMENT SAVINGS CONTRIBUTION"................................1
2.13 "COMPANY RETIREMENT SAVINGS CONTRIBUTION ACCOUNT"........................1
2.14. "COMPANY STOCK".........................................................1
2.15. "COMPENSATION"..........................................................1
2.16. "CONTRIBUTION RATIO"....................................................1
2.17. "DEFERRAL RATIO"........................................................1
2.18. "ELECTIVE CONTRIBUTION".................................................1
2.19. "ELECTIVE CONTRIBUTION ACCOUNT".........................................1
2.20. "EMPLOYEE"..............................................................1
2.21. "ENTRY DATE"............................................................1
2.22. "ERISA".................................................................1
2.23. "ESOP"..................................................................1
2.24. "ESOP CASH ACCOUNT".....................................................1
2.25. "ESOP MERGER DATE"......................................................1
2.26. "ESOP STOCK ACCOUNT"....................................................1
2.27. "HIGHLY COMPENSATED EMPLOYEE"...........................................1
2.28. "HIGHLY COMPENSATED PARTICIPANT"........................................1
2.29 "HOUR OF SERVICE"........................................................1
2.30. "INSURANCE COMPANY".....................................................1
2.31. "LIMITATION YEAR".......................................................1
2.32. "MATCHING CONTRIBUTION".................................................1
2.33. "MATCHING CONTRIBUTION ACCOUNT".........................................1
2.34. "MERGER"................................................................1
2.35. "NORMAL RETIREMENT DATE"................................................1
2.36. "PARTICIPANT"...........................................................1
2.37. "PLAN"..................................................................1
2.38. "PLAN YEAR".............................................................1
2.39. "PROFIT SHARING CONTRIBUTION"...........................................1
2.40. "PROFIT SHARING CONTRIBUTION ACCOUNT"...................................1
2.41. "QUALIFIED DOMESTIC RELATIONS ORDER"....................................1
2.42. "ROLLOVER ACCOUNT"......................................................1
2.43. "TRUST".................................................................1
2.44. "TRUST FUND"............................................................1
2.45.  "TRUSTEES".............................................................1
2.46 "VALUATION DATE".........................................................1
2.47. "YEAR OF SERVICE".......................................................1

ARTICLE 3.....................................................................1


PARTICIPATION.................................................................1

3.1. DATE OF PARTICIPATION....................................................1
3.2. CESSATION OF PARTICIPATION...............................................1
3.3. REHIRED FORMER EMPLOYEE..................................................1
3.4. REHIRED FORMER PARTICIPANT...............................................1

ARTICLE 4.....................................................................1


CONTRIBUTIONS.................................................................1

4.1. ELECTIVE CONTRIBUTIONS...................................................1
4.2. MATCHING CONTRIBUTIONS...................................................1
4.3. PROFIT-SHARING CONTRIBUTIONS.............................................1
4.4. TIME FOR MAKING AND CREDITING OF CONTRIBUTIONS...........................1
4.5. RETURN OF CONTRIBUTIONS..................................................1
4.6. NONDISCRIMINATION REQUIREMENTS...........................................1
4.7. ADJUSTMENTS BY COMMITTEE.................................................1
4.8. DISTRIBUTION OF EXCESS CONTRIBUTIONS AND EXCESS AGGREGATE CONTRIBUTIONS..1
4.9. DISTRIBUTION OF EXCESS DEFERRALS.........................................1
4.10. OTHER LIMITATIONS.......................................................1
4.11. ORDER OF ADJUSTMENTS TO SATISFY LIMITATIONS.............................1
4.12. ROLLOVER OF AMOUNT DISTRIBUTED FROM ANOTHER QUALIFIED PLAN..............1
4.13. TRANSFER OF AMOUNT DISTRIBUTED FROM A ROLLOVER IRA......................1
4.14. MONITORING OF ROLLOVERS.................................................1
4.15. TREATMENT OF ROLLOVER AMOUNT UNDER THE PLAN.............................1
4.16. MILITARY SERVICE........................................................1

ARTICLE 5.....................................................................1


PARTICIPANT ACCOUNTS..........................................................1

5.1. ACCOUNTS.................................................................1
5.2. ADJUSTMENT OF ACCOUNTS...................................................1
5.3. VESTING OF ACCOUNTS......................................................1
5.4. ELECTION OF FORMER VESTING SCHEDULE......................................1

ARTICLE 6.....................................................................1


IN-SERVICE WITHDRAWALS........................................................1

6.1. GENERAL LIMIT............................................................1
6.2. WITHDRAWALS AFTER AGE 59-1/2.............................................1
6.3. HARDSHIP WITHDRAWALS FROM COMPANY CONTRIBUTION ACCOUNTS..................1
6.4. HARDSHIP WITHDRAWALS FROM SALARY REDUCTION ACCOUNTS......................1
6.5. WITHDRAWALS FROM ROLLOVER CONTRIBUTION ACCOUNTS..........................1
6.6. PROCEDURE FOR MAKING WITHDRAWALS.........................................1
6.7. NON-FORFEITURE PROVISION.................................................1
6.8. SPECIAL VESTING PROVISION................................................1
6.9. FREQUENCY OF WITHDRAWAL..................................................1
6.10. RESTRICTION FOR LOANS...................................................1
6.11. REQUIRED DISTRIBUTIONS AFTER AGE 70-1/2.................................1
6.12. DISTRIBUTIONS REQUIRED BY A QUALIFIED DOMESTIC RELATIONS ORDER..........1

ARTICLE 7.....................................................................1


DISTRIBUTIONS.................................................................1

7.1. NORMAL RETIREMENT........................................................1
7.2. OTHER TERMINATION OF EMPLOYMENT..........................................1
7.3. DISABILITY BENEFITS......................................................1
7.4. DEATH....................................................................1
7.5. LATEST PAYMENT OF CERTAIN BENEFITS.......................................1
7.6. METHOD OF PAYMENT........................................................1
7.7. FORFEITURES..............................................................1
7.8. COMMENCEMENT OF BENEFITS.................................................1
7.9. RESTRICTION OF EARLY DISTRIBUTIONS.......................................1
7.10. MINIMUM DISTRIBUTION REQUIREMENTS.......................................1
7.11. BENEFIT PAYMENT ELECTIONS...............................................1
7.12. DIRECT TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTIONS......................1

ARTICLE 8.....................................................................1


ADMINISTRATION................................................................1

8.1. PLAN ADMINISTRATOR AND COMMITTEE.........................................1
8.2. POWERS OF PLAN ADMINISTRATOR.............................................1
8.3. NONDISCRIMINATORY EXERCISE OF AUTHORITY..................................1
8.4. RELIANCE ON TABLES, ETC..................................................1
8.5. CLAIMS AND REVIEW PROCEDURES.............................................1
8.6. INDEMNIFICATION OF COMMITTEE MEMBERS.....................................1
8.7. DELEGATION OF DUTIES.....................................................1
8.8. INVESTMENT MANAGER.......................................................1
8.9. RECORDS AND RECORDKEEPING................................................1
8.10. NOTICE TO TRUSTEE.......................................................1
8.11. COMPENSATION AND EXPENSES...............................................1
8.12. SERVICE OF LEGAL PROCESS................................................1
8.13. PERSON AUTHORIZED TO ACT FOR THE COMPANY................................1

ARTICLE 9.....................................................................1


THE TRUST AND THE TRUSTEES....................................................1

9.1. TRUST FUND...............................................................1
9.2. INVESTMENT OF TRUST FUND.................................................1
9.4. RELIANCE BY TRUSTEES ON OTHER PERSONS....................................1
9.5. CONSULTATION BY TRUSTEES WITH COUNSEL....................................1
9.6. ACCOUNTS.................................................................1
9.7. APPROVAL OF ACCOUNTS.....................................................1
9.8. PROCEDURE FOR TRUSTEE ACTION.............................................1
9.9. ALLOCATION OF RESPONSIBILITY.............................................1
9.10. RESIGNATION.............................................................1
9.11. REMOVAL OF TRUSTEES.....................................................1
9.12. APPOINTMENT OF SUCCESSOR TRUSTEE........................................1
9.13. COMPENSATION OF TRUSTEES AND EXPENSES OF TRUST..........................1
9.14. DISPUTES AS TO PERSONS ENTITLED TO PAYMENT..............................1
9.15. ACTION BY MAJORITY VOTE.................................................1
9.16. LIABILITY OF TRUSTEE....................................................1
9.17. INDEMNIFICATION OF TRUSTEES.............................................1
9.18. INSURANCE POLICIES......................................................1

ARTICLE 10....................................................................1


AMENDMENT AND TERMINATION.....................................................1

10.1. AMENDMENT...............................................................1
10.2. TERMINATION.............................................................1
10.3. DISTRIBUTIONS UPON TERMINATION OF THE PLAN..............................1
10.4. MERGER OR CONSOLIDATION OF PLAN; TRANSFER OF PLAN ASSETS................1

ARTICLE 11....................................................................1


TOP HEAVY PROVISIONS..........................................................1

11.1. GENERAL RULE............................................................1
11.2. ADJUSTMENT TO LIMITATION ON BENEFITS....................................1
11.3. MINIMUM VESTING SCHEDULE................................................1
11.4. DEFINITIONS.............................................................1

ARTICLE 12....................................................................1


LOANS TO PARTICIPANTS.........................................................1

12.1. IN GENERAL..............................................................1
12.2. RULES AND PROCEDURES....................................................1
12.3. MAXIMUM AMOUNT OF LOAN..................................................1
12.4. OTHER LIMITATIONS.......................................................1
12.5. NOTE; SECURITY; INTEREST................................................1
12.6. LIABILITY...............................................................1
12.7. REPAYMENT...............................................................1
12.8. REPAYMENT UPON DISTRIBUTION.............................................1
12.9. DEFAULT.................................................................1
12.10. NONDISCRIMINATION......................................................1

ARTICLE 13....................................................................1


MISCELLANEOUS PROVISIONS......................................................1

13.1. COMMUNICATION TO PARTICIPANTS...........................................1
13.2. LIMITATION OF RIGHTS....................................................1
13.3. NONALIENABILITY OF BENEFITS.............................................1
13.4. FAILURE TO QUALIFY INITIALLY............................................1
13.5. GOVERNING LAW...........................................................1

ARTICLE 14....................................................................1


COMPANY STOCK PROVISIONS......................................................1

14.1. PRE-RETIREMENT DIVERSIFICATION RIGHTS...................................1
14.2. VOTING AND TENDERING OF COMPANY STOCK...................................1
14.3. SHARE LEGEND............................................................1



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                                                                - 10 -




                                    ARTICLE 1

                                  INTRODUCTION

 .........1.1.     Amendment and Restatement.  This document restates the Copley
Pharmaceutical,  Inc. Retirement Plan and Trust which was originally established
effective  February 1, 1988.  The purpose of this  restatement is to reflect (1)
the First  through Third  Amendments to the Plan and (2) recent  changes in law.
This  amendment  and  restatement  shall  be  effective  January  1,  1998  (the
"Effective Date"),  unless  specifically  provided otherwise within a particular
Section of the Plan.
 .........1.2.     Plan and Trust Intended to Qualify.  This Plan and its related
Trust are intended to qualify as a  profit-sharing  plan under Code Sections 401
(a) of the  Internal  Revenue  Code of 1986 (the  "Code"),  the cash or deferred
arrangement  forming part of the Plan is intended to qualify  under Code Section
401(k) and the  employer  matching  contributions  provisions  are  intended  to
qualify under Code Section 401(m).  The Plan also retains certain ESOP features.
Subject to the provisions of Sections 4.5,  9.14,  13.3 and 13.4, no part of the
corpus  or  income  of the  Trust  forming  part of the Plan will be used for or
diverted to purposes  other than for the exclusive  benefit of each  Participant
and Beneficiary.
 .........1.3.     Definitions.  Capitalized words and phrases used in this 
document shall have the respective meanings ascribed to              -----------
them in Article 2.


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                                    ARTICLE 2

                                   DEFINITIONS

 .........Wherever used in the Plan, a pronoun or adjective in the masculine 
gender includes the feminine gender,  the singular includes the plural,  and the
following  terms have the  following  meanings,  unless a  different  meaning is
clearly required by the context:
 .........2.1.     "Accounts" means, for any Participant, his Elective
Contribution  Account, his Matching Contribution Account, his Company Retirement
Savings   Contribution  Account  (formerly  referred  to  as  a  Profit  Sharing
Contribution  Account),  his ESOP Cash Account and his ESOP Stock  Account,  his
Rollover   Account  (if  applicable)  and  any  other  accounts  or  subaccounts
established  pursuant to Section  5.1.  "Account  balance"  shall mean the total
value of a Participant's Accounts.
 .........2.2.     "Affiliated Company" means:
 .........(a)      any corporation (other than the Company) that is a member of a
controlled group of corporations (as defined in CodeSection 414(b)) of which the
Company is also a member;
 .........(b)      any trade or business (other than the Company), whether or not
incorporated, that is under common control (as  defined in Code Section 414(c))
with the Company;
 .........(c)      any trade or business (other than the Company) that is a
member of an affiliated service group (as defined in Code Section 414(m)) of
which the Company is also a member and
 .........(d)      any group of individuals required to be considered employed by
the Company under Code Section 414(o) and the regulations thereunder;  provided,
that  the term  "Affiliated  Company"  shall  not  include  any  corporation  or
unincorporated  trade or business  prior to the date on which such  corporation,
trade or business  satisfies the  affiliation or control tests of (a), (b), (c),
or (d) above.
 .........In identifying any "Affiliated Companies" for purposes of Section 4.10
(concerning  maximum  limitations  on  contributions),  the  definitions in Code
Section 414(b) and (c) of the Code shall be modified as provided in Code Section
415(h).
 .........2.3.     "Annual Addition" means, in the case of any Participant, the 
sum  for  any  Limitation  Year  of  the  Elective   Contributions  and  Company
Contributions made for the Participant's benefit for such Year.
 .........2.4.     "Beneficiary" means any person entitled under Section 7.4 to
receive benefits under the Plan upon the death of a Participant.
 .........2.5.     "Board" means the Board of Directors of the Company.  The
Board may designate a person or persons (including a committee) to carry out any
fiduciary responsibilities, in accordance with ERISA Section 405.
 .........2.6.     "Break in Service" means, with respect to any Employee, a Plan
Year during which the Employee does not complete more than 500 Hours of Service.
For purposes of  determining a Break in Service,  an Employee who is absent from
work by reason of the  pregnancy  of the  Employee,  the birth of a child of the
Employee,  or the placement of a child with the Employee in connection  with the
child's  adoption by the Employee,  will receive credit for the Hours of Service
which would  otherwise have been credited to such Employee but for such absence,
or in any case in which such hours cannot be determined,  8 Hours of Service per
day for such absence.  The Hours of Service  credited under this provision shall
be credited (1) in the Plan Year in which the absence begins if the crediting is
necessary  to prevent a Break in Service in that Plan Year,  or (2) in all other
cases,  in the following  Plan Year. In addition,  for purposes of determining a
Break in Service, an Employee will be credited with Hours of Service for periods
during which the Employee is temporarily laid off,  provided,  however,  that no
additional  Hours  of  Service  will  be  credited  to  the  Employee  after  12
consecutive calendar months of layoff.
 .........2.7.     "Code" means the Internal Revenue Code of 1986, as amended 
from time to time.  Reference to any section or  subsection of the Code includes
reference to any comparable or succeeding  provisions of any  legislation  which
amends, supplements or replaces such section or subsection.
 .........2.8.     "Committee" means the Committee appointed to administer the
Plan in accordance with Section 8.1.
 .........2.9.     "Company" means Copley Pharmaceutical, Inc., and any successor
to  all  or a  major  portion  of its  assets  or  business  which  assumes  the
obligations of the Company.
 .........2.10.    "Company Contributions" means all contributions to the Plan
by the Company, excluding Elective Contributions and Rollover Contributions.
 .........2.11.    "Company Contribution Account" shall mean the sum of all a
Participant's Accounts except his Elective Contribution Account and Rollover
Account.
 .........2.12.    "Company Retirement Savings Contribution" means a contribution
made for the benefit of a Participant under Section 4.3 and in prior plan
versions was referred to as "Profit-Sharing Contribution."
 .........2.13     "Company Retirement Savings Contribution Account" means, for
any  Participant,  the  account  described  in Section  5.1 to which any Company
Retirement  Savings  Contributions  are credited and in prior plan  versions was
referred to as a "Profit-Sharing Contribution Account."
 .........2.14.    "Company Stock" means common stock issued by the Company which
qualifies as an "employer security" within the meaning of Section 409(l) of the
Code.
 .........2.15.    "Compensation" means: the Employee's wages as defined in
Section  3121(a) of the Code for purposes of calculating  Social Security Taxes,
but determined  without regard to the dollar limitation of Section 3121(a)(1) of
the Code, any rules that limit covered  employment based on the type or location
of an Employee's employer, and any rules that limit the remuneration included in
wages based on familial  relationship  or based on the nature or location of the
employment or the services performed (such as the exception to the definition of
employment in Section 3121(b)(1) through (20) of the Code), subject, however, to
the following provisions:
 .........(a)      Compensation shall include only compensation paid during a 
Plan Year.
 .........(b)      Compensation for purposes of determining the limitations 
in  Section  4.10,   and  the  amounts  of  Elective   Contributions,   Matching
Contributions  and  Company  Retirement  Savings  Contributions,  shall  include
compensation  that would have been paid but for  elections  under Code  Sections
125, 401(k), 402(h), 403(b), 457, or 414(h)(2).
 .........(c)      for purposes of determining:
 .........         (i)      the amount of any required top-heavy contribution 
under Section 11.1, and
 .........         (ii)     the status of any individual as a "key employee"
under Article 11, "compensation" shall have the meaning given under Code Section
415(c)(3) and the Treasury Regulations thereunder.
 .........(d)      for purposes of determining whether an individual is a Highly
Compensated  Employee  under  Section  2.27,  the same as  described  in Section
2.15(b)  above,  increased by any amounts  that would have been  received by the
individual  from the  Company or any  Affiliated  Companies  but for an election
under Code Sections 401(k) or 125; and
 .........(e)      for purposes of:
 .........         (i)   the nondiscrimination tests under Section 4.6;
 .........         (ii)  the adjustment provisions under Section 4.7; and
 .........         (iii) the definition of a "Deferral Ratio" under Section 2.17;
 .........The Employee's compensation or Earned Income for services performed for
the  Company  and any  Affiliated  Companies  which  (taking  into  account  the
provisions of Chapter 1, Subtitle A of the Code) is currently  includible in the
Employee's  gross  income  for  the  year in  question,  increased  (unless  the
Committee  elects not to include) by amounts that would have been so  includible
but for an election under Code Sections 401(k) or 125.
 .........In addition to other applicable limitations set forth in the plan, and
notwithstanding  any other  provision  of the Plan to the  contrary,  the annual
compensation of each employee taken into account under the Plan shall not exceed
the OBRA `93 annual  compensation  limit. The OBRA `93 annual compensation limit
is $150,000, as adjusted by the Commissioner for increases in the cost of living
in accordance  with Section  401(a)(17)(B)  of the Internal  Revenue  Code.  The
cost-of-living  adjustment  in effect for a calendar year applies to any period,
not exceeding 12 months,  over which  compensation is determined  (determination
period)  beginning in such calendar year. If a determination  period consists of
fewer than 12 months, the OBRA `93 annual  compensation limit will be multiplied
by a  fraction,  the  numerator  of  which  is  the  number  of  months  in  the
determination  period, and the denominator of which is 12. Any reference in this
Plan to the limitation under Section  401(a)(17) of the Code shall mean the OBRA
`93 annual compensation limit set forth in this provision.
 .........If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current plan year,
the compensation for that prior determination  period is subject to the OBRA `93
annual  compensation  limit in effect for that prior  determination  period. For
this purpose,  for  determination  periods beginning before the first day of the
first plan year  beginning  on or after  January  1,  1994,  the OBRA `93 annual
compensation limit is $150,000.
 .........2.16.    "Contribution Ratio" means, in the case of any Participant for
a Plan Year, the ratio of (a) Matching  Contributions  made on the Participant's
behalf  for the Plan  Year to (b) the  Participant's  Compensation  for the Plan
Year.
 .........2.17.    "Deferral Ratio" means, in the case of any Participant for a
Plan Year,  the ratio of (a) Elective  Contributions  made on the  Participant's
behalf  for the Plan  Year to (b) the  Participant's  Compensation  for the Plan
Year.
 .........2.18.    "Elective Contribution" means a contribution made for the
benefit of a Participant under Section 4.1.
 .........2.19.    "Elective Contribution Account" means, for any Participant,
the account  described in Section 5.1 to which Elective  Contributions  made for
the Participant's benefit are credited.
 .........2.20.    "Employee" means any individual employed by the Company, 
and does not  include  leased  employees  within the  meaning  of Code  Sections
414(n)(2) and 414(o)(2)  unless such leased employees are required to be covered
under the Plan pursuant to Code Section 414(n).
 .........2.21.    "Entry Date" means effective January 1, 1996, the first day of
a calendar  month.  During 1994 and 1995,  Entry Date meant the first day of the
first,  fourth,  seventh and tenth month of each Plan year. Prior to 1994, Entry
Date meant the first day of the first and seventh month of the Plan Year."
 .........2.22.    "ERISA" means the Employee Retirement Income Security Act of 
1974,  as from time to time amended,  and any  successor  statute or statutes of
similar import.
 .........2.23.    "ESOP" shall mean the Copley Pharmaceutical, Inc. Employee
Stock Ownership Plan.
 .........2.24.    "ESOP Cash Account" shall mean the account established on
behalf of each  Participant  to reflect assets other than Company Stock credited
to such Participant  under the ESOP immediately  prior to the Merger,  and gains
and losses thereto after the Merger.
 .........2.25.    "ESOP Merger Date" shall mean January 1, 1994, the effective 
date of the merger of the ESOP into the Plan.
 .........2.26.    "ESOP Stock Account" shall mean the account established on
behalf  of  each   Participant  to  reflect   Company  Stock  credited  to  such
Participant.
 .........2.27.    "Highly Compensated Employee" means, effective January 1,1997,
an employee of the Company or any Affiliated Company who,
 .........(a)      during the Plan Year in question or the preceding Plan Year,
was at any time a 5-percent owner (as defined in Code Section  416(i)(1)) of the
Company or any Affiliated Company; or
 .........(b)      in the preceding Plan Year, received Compensation in excess of
$80,000.  The $80,000 amount in (b) above shall automatically be adjusted if and
to the extent the  corresponding  amounts in Code Section 414(q) are adjusted by
the Secretary of the Treasury.  The determination of who is a highly compensated
employee,  will be made in  accordance  with Section  414(q) of the Code and the
regulations thereunder.
 .........2.28.    "Highly Compensated Participant" means a Participant who is a 
Highly Compensated Employee.
 .........2.29     "Hour of Service" means, with respect to any Employee,
 .........(a)      Each hour for which the Employee is paid or entitled to
payment for the performance of duties for the Company or any Affiliated Company,
each such hour to be credited to the Employee for the 12-month period  described
in Sections 2.38 and 2.47 in which the duties were performed;
 .........(b)      Each hour for which the Employee (A) is directly or indirectly
paid or entitled to payment by the Company or any Affiliated  Company (including
payments  made or due from a trust  fund or  insurer  to which  the  Company  or
Affiliated Company  contributes or pays premiums) on account of a period of time
during which no duties are  performed  (irrespective  of whether the  employment
relationship has terminated) due to holiday, incapacity, military duty, or leave
of  absence,  or (B) is not  performing  any  duties for a period of time due to
sickness or  disability of the Employee or his family,  an authorized  vacation,
jury duty or authorized,  unpaid leave of absence; each such hour to be credited
to the Employee for the 12-month period described in Sections 2.45 in which such
period of time occurs, subject to the following rules:
 .........         (i)      No more than 501 Hours of Service shall be credited
under this  paragraph  (b) to the  Employee on account of any single  continuous
period during which the Employee performs no duties;
 .........         (ii)     Hours of Service shall not be credited under this 
paragraph (b) to an Employee for a payment which solely  reimburses the Employee
for medically related expenses incurred by the Employee, or which is made or due
under a plan  maintained  solely for the purpose of  complying  with  applicable
workers' compensation,  unemployment  compensation or disability insurance laws;
and
 .........         (iii)    If the period during which the Employee performs no 
duties falls within two or more 12 month periods described in Sections 2.45, and
if the payment made on account of such period is not  calculated on the basis of
units of time,  the Hours of Service  credited with respect to such period shall
be  allocated  between not more than the first two such 12 month  periods on any
reasonable  basis  consistently  applied  with  respect  to  similarly  situated
employees;
 .........(c)      Each hour counted under paragraph (a) or (b) for which back 
pay, irrespective of mitigation of damages, has been either awarded or agreed to
be paid by the Company or any Affiliated Company,  each such hour to be credited
to the Employee for the 12 month period  described in Sections 2.45 to which the
award or agreement  for back pay pertains,  provided that  crediting of Hours of
Service under this paragraph (c) with respect to periods  described in paragraph
(b) above shall be subject to the  limitations  and  special  rules set forth in
clauses (i), (ii) and (iii) of paragraph (b); and
 .........(d)      Each non-compensated hour while an Employee during a period of
absence  from the Company or any  Affiliated  Company in the armed forces of the
United States if the Employee  returns to work for the Company or any Affiliated
Company at a time when he has reemployment rights under federal law.
 .........Hours of Service to be credited to an hourly paid Employee under (b) 
and (c) above will be calculated and credited pursuant to paragraphs (b) and (c)
of  Section  2530.200b-2  of the  Department  of Labor  Regulations,  which  are
incorporated  herein  by  reference.  Hours  of  Service  to  be  credited  to a
non-hourly  paid Employee under (b) and (c) above shall be credited on the basis
of 8 hours  per day,  40 hours per week,  with  either  125 work days or 25 work
weeks  completed in an applicable  12-month period  constituting  1,000 Hours of
Service.  The Hours of Service to be  credited  to an  Employee  during a period
described in (d) above will be determined by the Committee with reference to the
individual's most recent normal work schedule, or at the rate of eight Hours per
day in the event the Committee is unable to establish such schedule.
 .........Hours of Service will be credited for employment with other members of 
an  affiliated  group  (under  Code  Section  414(m)),  a  controlled  group  of
corporations  (under  Code  Section  414(b)) or a group of trades or  businesses
under  common  control  (under Code Section  414(c)),  of which the Company is a
member.
 .........2.30.    "Insurance Company" means New England Mutual Life Insurance 
Company of Boston,  Massachusetts or such other life insurance company as may be
designated from time to time by the Trustees.
 .........2.31.    "Limitation Year" means the Plan Year.
 .........2.32.    "Matching Contribution" means a contribution made for the 
benefit of a Participant under Section 4.2.
 .........2.33.    "Matching Contribution Account" means, for any Participant,
the account  described in Section 5.1 to which Matching  Contributions  made for
the Participant's benefit are credited.
 .........2.34.    "Merger" shall mean the merger of the ESOP into the Plan 
effective as of the ESOP Merger Date (January 1, 1994).
 .........2.35.    "Normal Retirement Date" means the date the Participant
attains  age 65 or the  fifth  anniversary  of the first day of the Plan Year in
which he first became a Participant, whichever is later.
 .........2.36.    "Participant" means each Employee who participates in the Plan
in accordance with Article 3 of the Plan.
 .........2.37.    "Plan" means the Copley Pharmaceutical, Inc. Retirement Plan, 
as set forth herein, together with any and all
amendments and supplements.
 .........2.38.    "Plan Year" means the 12-month period ending each December 31.
February 1, 1993 through December 31, 1993 was a short Plan Year. Prior to 1993,
the Plan Year was the period February 1 through January 1.
 .........2.39.    "Profit Sharing Contribution" means a Company Retirement 
Savings Contribution.
 .........2.40.    "Profit Sharing Contribution Account"  means the Company 
Retirement Savings Contribution Account.
 .........2.41.    "Qualified Domestic Relations Order" means any judgment, 
decree or order (including  approval of a property  settlement  agreement) which
constitutes a "qualified  domestic  relations  order" within the meaning of Code
Section 414(p). A judgment,  decree or order shall not be considered not to be a
Qualified  Domestic Relations Order merely because it requires a distribution to
an alternate  payee (or the segregation of accounts  pending  distribution to an
alternate  payee) before the  Participant's  retirement,  death,  termination of
employment, attainment of age 59-1/2, or suffering of a financial hardship.
 .........2.42.    "Rollover Account" means the Account, if any, established
under Section 4.15(a) for the purpose of crediting a rollover  contribution made
to the Plan by an Employee under Article 4.
 .........2.43.    "Trust" means the Copley Pharmaceutical, Inc. Retirement Plan
hereunder, together with any and all amendments.
 .........2.44.    "Trust Fund" means the property held in Trust by the Trustees
for the benefit of Participants, former Participants and their Beneficiaries.
 .........2.45     "Trustees" mean the person or persons who are at any time the
acting Trustee under the Trust.
 .........2.46.    "Valuation Date" means the last business day of each month and
such other day or days as specified by the Committee.
 .........2.47.    "Year of Service" means the sum of 12-consecutive month 
computation  periods,  beginning  with  the  date on which  the  Employee  first
performs an Hour of Service,  during which the Employee completes at least 1,000
Hours of Service.
 .........(a)      For Vesting purposes only, the following additional rules 
shall apply in the case of a Participant  who has a Break in Service of at least
5  consecutive  years and who later  returns to the employ of the  Company or an
Affiliated Company:
 .........         (i)      For purposes of determining the nonforfeitable
percentage of his Company  Contribution  Account that accrued before such Break,
all vesting  service earned after such Break and the  individual's  reemployment
will not be considered.
 .........         (ii)     (A)      If a Participant either had some vested 
interest in his Company  Contribution Account balance earned before his Break or
made  Elective  Contributions  before that Break,  both Years of Service  earned
before the Break and after the Break shall be counted for purpose of determining
the nonforfeitable  percentage of his Company  Contribution Account balance that
accrues after such break;
 .........                  (B)      If such Participant had no vested interest 
in his Company Contribution Account and has not made any Elective  Contributions
before his Break, his Years of Services prior to such Break shall be disregarded
for  purpose  of  computing  the  non-forfeitable   percentage  of  his  Company
Contribution  Account  accrued  after  the Break if the  number  of  consecutive
One-Year  Breaks in Service equals or exceeds the number of his Years of Service
before such Break, (not including in such number of Years of Service any Year of
Service previously excluded because of an earlier Five-Year or One-Year Break in
Service).


<PAGE>


                                    ARTICLE 3
                                  PARTICIPATION
 .........3.1.     Date of Participation.
 .........(a)      Each individual who is a Participant on the Effective Date 
                  shall continue to be a Participant of the Plan.
 .........(b)      Effective January 30, 1996, each other Employee shall become a
                  Participant in the Plan:

                  (i)  for  purposes  of  making  Elective   Contributions   and
                  receiving  allocations  of  Matching  Contributions,   on  the
                  earliest  Entry Date on which he has both (A)  attained age 21
                  and (B) completed one month of service; and

                  (ii) for purposes of  eligibility  to receive  allocations  of
                  Company Retirement Savings Contributions,  on the later of (A)
                  the first day of the Plan Year  following the date on which he
                  became a regular Employee and (B) the date he attained age 21.
         3.2.  Cessation  of  Participation.  A  Participant  will cease to be a
Participant  as of the  date  on  which  he  dies or  otherwise  terminates  his
employment  with  the  Company  or,  if  earlier,  the  date on  which  the Plan
terminates.
         3.3.  Rehired  Former  Employee.  If the  employment  of an Employee is
terminated before he became a Participant and he is subsequently reemployed, all
his Years of Service before such reemployment shall be recognized in determining
his  eligibility  to  participate,  and he shall become a  Participant  upon his
reemployment provided (1) he then meets the eligibility  requirements in Section
3.1(b)(i) and (ii) and (2) his  reemployment  date is coincident with or follows
the date on which he would have first become a  Participant  had his  employment
with the Company continued.
         3.4.     Rehired Former Participant.  If the employment of a 
Participant is terminated and he is subsequently reemployed, he shall resume his
participation in the Plan upon reemployment.


<PAGE>


                                    ARTICLE 4
                                  CONTRIBUTIONS

         4.1. Elective Contributions. (a) Each Participant may make an election,
pursuant  to which  from one  percent  (1%) up to fifteen  percent  (15%) of his
Compensation  for that portion of a Plan Year during  which he is a  Participant
will be contributed by the Company to the Trust as an Elective  Contribution and
allocated to such Participant's  Elective  Contribution Account in lieu of being
paid to the Participant in cash. Elective  Contributions made for the benefit of
any Participant for a Plan Year, however, shall not exceed the applicable dollar
limitation in Code Section  402(g)(1) (as increased from time to time under Code
Section 402(g)(5)),  reduced by any other elective deferrals (as defined in Code
Section  402(g)(3))  of the  Participant  through the Company or any  Affiliated
Company for the year.
         (b) Each election shall be made on a form prescribed or approved by the
Committee, and such election shall remain in effect for the duration of the Plan
Year unless terminated or modified by a Participant.
         (c) A Participant  may terminate his election at any time by delivering
his written  termination to the Company at least 30 days (or such shorter period
as may be prescribed  by the Plan  Administrator)  before the effective  date of
such termination.  If a Participant terminates his election, he may enter into a
new election,  as of any  subsequent  Entry Date by filing the new election with
the company at least 30 days (or such shorter period as may be prescribed by the
Plan Administrator) before the effective date of the new election. A Participant
who  terminates his election shall not enter into a new election until after the
waiting period of six months.
         (d) A  Participant  may, at least once each  calendar  year and at such
other time as may be prescribed by the Plan Administrator  pursuant to a uniform
non-discriminatory  policy,  increase or decrease the percentage of his election
by entering into a new election at least 30 days (or such shorter  period as may
be  prescribed  by the Plan  Administrator)  before the  effective  date of such
increase or decrease.
         (e) To the extent permitted by the Company,  a Participant may base his
Elective Contributions on cash bonuses that, at the Participant's  election, may
be contributed to the Plan or received by the Participant in cash.
         4.2. Matching Contributions. The Company shall contribute an amount (if
any) equal to a percentage of each Participant's  Elective Contributions for the
Plan Year as specified by resolution of the Board each Plan Year.  The amount of
Matching  Contributions  may be subject to a maximum as  specified by the Board.
The  matching  percentage  and any  maximum  shall be applied  uniformly  to all
Participants.  Matching Contributions shall be allocated during the Plan Year on
a monthly, quarterly, or semi-annual basis to all Participants who made Elective
Contributions during the period for which Matching Contributions are being made.
         4.3. Company  Retirement Savings  Contributions.  Effective January 30,
1996, for each Plan Year the Company may in its discretion  contribute an amount
as Company Retirement Savings Contributions to the Trust for the benefit of each
Participant who has completed at least 501 hours of Service during the Plan Year
or who is employed  by the  Company on the last day of the Plan Year.  Provided,
effective  January 1, 1996, and for each Plan Year thereafter,  the Company will
contribute  a minimum of 2% of each  Participant's  earnings as set forth in the
Participant's Form W-2 for the Plan year. Provided further, effective January 1,
1996,  such  allocation  shall be made  only to  Participants  who both (a) have
completed  at least  1,000  Hours of  Service  during  the Plan Year and (b) are
employed by the Company on the last day of the Plan Year. The Company Retirement
Savings  Contributions  shall be made without  regard to current or  accumulated
profits  of the  Company.  Company  Retirement  Savings  Contributions  shall be
allocated  among and  credited to the  Company  Retirement  Savings  Accounts of
Participants entitled to share in the Company Retirement Savings Contribution in
proportion to their respective  amounts of Compensation,  no later than 120 days
following the last day of the Plan Year for which they are made.
         4.4.  Time for Making and  Crediting  of  Contributions.  (a)  Elective
Contributions will be paid in cash to the Trust as soon as practicable after the
date the  Compensation  to which they relate is paid,  but in any event no later
than the 15th business day following the month in which such contributions would
have otherwise been paid to the Participant in cash. Elective Contributions will
be allocated and credited to the Participants' Elective Contribution Accounts as
of the date no later than the earlier of:
                  (i)  the date such Contributions are received by the Trust and
                  (ii) the last day of the Plan Year in which  the  Compensation
is paid. Any Matching  Contributions and any Profit-Sharing  Contributions for a
Plan Year will be  contributed to the Trust on any date or dates the Company may
select, subject to the consent of the Trustee, but all events not later than the
time prescribed by law (including  extensions  thereof) for filing the Company's
federal  income tax return for its taxable  year in or with which such Plan Year
ends.
         4.5.     Return of Contributions.  If an Elective Contribution,
Matching Contribution or Profit-Sharing Contribution to the Trust is :
         (a)      made by reason of a good faith mistake of fact, or
         (b) believed by the Company in good faith to be  deductible  under Code
Section 404, but the deduction is disallowed, the Trustee shall, upon request by
the Company, return to the Company the excess of the amount contributed over the
amount,  if any,  that  would  have been  contributed  had there not  occurred a
mistake of fact or a mistake in determining the deduction.  For purposes of this
Section, all contributions made to the Plan by the Employer are made conditioned
upon their  deductibility under Code Section 404 unless the Company specifies to
the contrary in a Board of Directors  Resolution (or document of similar import)
prior to making  the  contribution.  Such  excess  shall be  reduced  by amounts
attributable  thereto which have been  credited to the Accounts of  Participants
who have since received  distributions from the Trust, except to the extent such
amounts continue to be credited to such  Participants'  Accounts at the time the
excess is returned  to the  Company.  Such  excess  shall also be reduced by the
losses of the Trust  attributable  thereto,  if and to the  extent  such  losses
exceed the gains and income  attributable  thereto. In no event shall the return
of a contribution  hereunder cause any  Participants'  Accounts to be reduced to
less than they would have been had the mistaken or nondeductible amount not been
contributed.  No return of a contribution  hereunder shall be made more than one
year after the mistaken  payment of the  contributions,  or  disallowance of the
deduction, as the case may be.
         4.6.     Nondiscrimination Requirements.
         (a)      Effective January 1, 1997, Elective Contributions for any Plan
                  Year must satisfy at least one of the following tests: (i) The
                  average  of the  Deferral  Ratios  for the  Plan  Year for all
                  Highly Compensated Participants does not
exceed            125  percent  of the  average of the  Deferral  Ratios for the
                  preceding  Plan Year for all other  Participants;  or (ii) The
                  excess of the  average of the  Deferral  Ratios for all Highly
                  Compensated Participants for the Plan Year
over that for all other Participants for the preceding Plan Year does not exceed
two  percentage  points,  and the average of the Deferral  Ratios for all Highly
Compensated  Participants for the Plan Year does not exceed twice the average of
the Deferral Ratios for all other Participants for the preceding Plan Year.
         (b) Matching  Contributions for any Plan Year must satisfy at least one
of the following tests:
                  (i) the average of the  Contribution  Ratios for the Plan Year
for all Highly  Compensated  Participants  for the Plan Year does not exceed 125
percent of the average of the Contribution Ratios for all other Participants for
the preceding Plan Year; or
                  (ii) The excess of the average of the Contribution  Ratios for
all Highly  Compensated  Participants  for the Plan Year over that for all other
Participants for the preceding Plan Year does not exceed two percentage  points,
and  the  average  of  the  Contributions  Ratios  for  all  Highly  Compensated
Participants  for the Plan  Year  does  not  exceed  twice  the  average  of the
Contribution  Ratios  for all other  Participants  for the  preceding  Plan Year
(except  that this clause (ii) shall not apply if and to the extent  regulations
provide that it cannot apply).
         (c)  Sections  4.6(a) and 4.6(b)  above shall be applied in  accordance
with, and interpreted in a manner  consistent with, Code Sections  401(k)(3) and
401(m)(2), respectively, and the regulations under each, all of which are hereby
incorporated by reference into this Plan.
         The tests  described in those sections shall be performed in compliance
with the  multiple use  limitation  as set forth in  401(m)(9)  and  regulations
thereunder.
         4.7.     Adjustments by Committee.
         (a) The Committee may, in its sole  discretion,  decrease the amount of
the Elective  Contributions to be made for the benefit of any  Participant,  and
pay the amount of the  decrease to the  Participant  in cash,  if the  Committee
deems such a decrease  to be  necessary  in order to satisfy  one or more of the
following:
                  (i)      the applicable dollar limitation in Code Section 402
(g)(1) (as increased from time to time under Code Section 402(g)(5));
                  (ii)     the nondiscrimination requirement of Section 4.6; or
                  (iii)  the  limitations  described  in  Section  4.10.  If the
Committee   decreases   any  Elective   Contributions   in  order  to  meet  the
nondiscrimination  requirement of Section 4.6, subject to applicable regulations
such decrease shall be made first in the Elective  Contributions  for the Highly
Compensated  Participants  whose  Elective  Contributions  represent the highest
dollar  amount for the Plan Year,  so that no  reduction is made in the Elective
Contributions for any Highly Compensated Participant as long as any other Highly
Compensated  Participant has a higher dollar amount of Elective  Contribution to
Compensation for the Plan Year.
         (b) The Committee may, in its sole  discretion,  decrease the amount of
Matching  Contributions  to be  made  for  the  benefit  of  Highly  Compensated
Participants  if the  Committee  deems such decrease to be necessary in order to
satisfy the  nondiscrimination  requirement of Section 4.6(b). Any such decrease
shall be made only after any adjustments under Sections 4.7(a) or 4.11 have been
made. Any decrease in Matching  Contributions in order to satisfy Section 4.6(b)
shall be made first in the  Matching  Contributions  for the Highly  Compensated
Participants  whose Matching  Contributions  represent the highest dollar amount
for the Plan Year, so that no reduction is made in the Matching Contribution for
any  Highly  Compensated  Participant  as long as any other  Highly  Compensated
Participant has a higher dollar amount of Matching  Contribution to Compensation
for the Plan  Year.  If  Elective  Contributions  are taken into  account  under
Section 4.6(b) in order to satisfy either Sections 4.6(b)(i) or 4.6(b)(ii), then
such  Elective  Contributions  shall be  proportionately  reduced along with the
Matching  Contributions  to the extent the Committee deems necessary in order to
satisfy Section 4.6(b).
         4.8.   Distribution  of  Excess   Contributions  and  Excess  Aggregate
Contributions.  If after all  contributions  for a Plan Year have been made, the
nondiscrimination  requirements  of Section 4.6 have not been  satisfied for the
Plan Year, the Committee  shall,  as soon as practicable  (but in no event later
than the close of the following Plan Year),  distribute the excess contributions
and excess  aggregate  contributions  (and income  allocable  to such excess) to
Highly Compensated Participants,  in accordance with Code Sections 401(k)(8) and
401(m)(6) and regulations thereunder, to the extent necessary to satisfy Section
4.6. If there has been a net investment loss instead of income  allocable to the
excess contributions or excess aggregate contributions,  the amount of excess to
be distributed  hereunder shall not be reduced by such loss except to the extent
permitted by Code Sections 401(k)(8) or 401(m)(6) or regulations thereunder.
         4.9. Distribution of Excess Deferrals.  If, on or before March 1 of any
year, a Participant  notifies the  Committee,  in  accordance  with Code Section
402(g)(2)(A)  and  regulations  thereunder,  that all or a specified  part of an
Elective  Contribution  made or to be made for his benefit  represents an excess
deferral for the preceding taxable year of the Participant,  the Committee shall
make every reasonable effort to cause such excess deferral to be distributed (in
accordance with Code Section  402(g)(2)(A)  and  regulations  thereunder) to the
Participant  no later than the April 15 following such  notification.  Except to
the extent otherwise  provided in regulations,  any amount paid to the Trust and
distributed  under this  Section 4.9 shall be taken into account in applying the
nondiscrimination  tests in Section 4.6, the adjustments  under Section 4.7, and
the distributions  under Section 4.8 as if it had not been  distributed,  except
that any decrease in the Elective  Contribution for a Participant  under Section
4.7 or distribution of an excess  Elective  Contribution to a Participant  under
Section  4.8  shall  be  reduced  by  the  amount  of  any  distribution  to the
Participant under this Section 4.9.
        4.10.Other Limitations.Notwithstanding any other provisions of the Plan,
         (a) the total contributions to be made under the Plan for any Plan Year
shall not exceed the maximum amount  deductible under the applicable  provisions
of  the  Code  (all  such  contributions   being  hereby  conditioned  on  their
deductibility under Code Section 404), and
         (b) the Annual Addition to a Participant's  Accounts under the Plan for
any Limitation Year, when added to the annual additions to his accounts for such
Year under all other defined contribution plans maintained by the Company or any
Affiliated Company, shall not exceed the lesser of
                  (i)      $30,000 (or, if greater, one-fourth of the limitation
in effect for the Limitation Year under Code Section 415(b)(1)(A)), or
                  (ii)   twenty-five   percent   (25%)   of  the   Participant's
Compensation  for such  Limitation  Year. In the case of a Participant  who also
participates  in a  defined  benefit  plan  maintained  by  the  Company  or any
Affiliated  Company,  the  Annual  Addition  for  a  Limitation  Year  will,  if
necessary,  be  further  limited so that the sum of the  Participant's  "defined
contribution  fraction"  (as  determined  under  Code  Section  415(e)  and  the
regulations thereunder, including any special transition rules) and his "defined
benefit  plan  fraction"  (as  determined  under  Code  Section  415(e)  and the
regulations thereunder) for such Limitation Year does not exceed 1.0.
         4.11.  Order of  Adjustments  to  Satisfy  Limitations.  To the  extent
necessary to satisfy the  limitations of Section 4.10 for any  Participant,  the
Participant's  Annual  Addition  under  this Plan  shall be  reduced  before any
reduction in his annual  addition under any other defined  contribution  plan or
his benefit under any defined  benefit plan. The  Participant's  Annual Addition
under this Plan shall be disposed of as follows:
         (a)  If the  Participant  is  covered  by the  Plan  at the  end of the
Limitation Year, the excess amount in the Participant's Accounts will be used to
reduce Matching  Contributions and Profit-Sharing  Contributions  (including any
allocation of forfeitures) for such Participant in the next Limitation Year, and
each succeeding Limitation Year if necessary.
         (b) If the  Participant  is not  covered  by the Plan at the end of the
Limitation  Year,  the  excess  amount  will be held  unallocated  in a suspense
account.  The  suspense  account  will be  applied  to  reduce  future  Matching
Contributions  and  Profit-Sharing  Contributions  (including  allocation of any
forfeitures)  for all remaining  Participants in the next  Limitation  Year, and
each  succeeding  Limitation  Year if  necessary.  If a  suspense  account is in
existence  at any time  during the  Limitation  Year  pursuant  to this  Section
4.11(b),  it will not  participate in the  allocation of the Trust's  investment
gains and losses.
         4.12.  Rollover of Amount  Distributed From Another  Qualified Plan. An
Employee  who was  formerly a  participant  in a plan  described in Code Section
401(a) (the  "distributing  plan") and who has  received  an  eligible  rollover
distribution  (as defined in Section  7.12(b)) from the  distributing  plan (the
"distribution") may contribute to the Trust an amount determined under (c) below
(the  "rollover  amount")  provided the conditions set forth in (a) or (b) below
are satisfied.
         (a) The  distribution is a direct transfer from another  qualified plan
         to this  Plan;  or (b) The  distribution  must be made to the  Employee
         either:
                  (i) within one taxable year of the Employee, and on account of
a termination of the distributing  plan or, in the case of a  profit-sharing  or
stock bonus plan, a complete discontinuance of contributions under the plan, or
                  (ii) in one or more distributions  which constitute a lump sum
distribution within the meaning of Code Section 402(e)(4).
                  And, the rollover  amount must be  contributed to the Trust on
or before the 60th day following the Employee's receipt of the distribution from
the distributing plan.
         (c)      The rollover amount:
                  (i) must not exceed the fair market value of the distribution,
reduced by the amount  contributed to the distributing plan by the Employee,  as
determined  in accordance  with Code Section 72(f) and the Treasury  regulations
thereunder,  such amount to be reduced by any amounts theretofore distributed to
the Employee  which were not  includible in his gross income for Federal  income
tax purposes, and
                  (ii) must include no property other than (A) money received in
the distribution,  and (B) money  attributable to other property received in the
distribution which is sold and the proceeds of which are rolled over pursuant to
Code Section 402(a)(6)(D).
         4.13.    Transfer of Amount Distributed From a Rollover IRA.
         (a)  An  Employee   who  has  received  a   distribution   meeting  the
requirements  of  Section   4.12(a),   and  who   subsequently   deposited  such
distribution  in an individual  retirement  account,  as defined in Code Section
408,  in  accordance  with  Code  Section  408(d)(3)(A)(ii),  may  contribute  a
distribution from such account (the "rollover amount") to the Trust provided the
conditions set forth in (b) and (c) are satisfied.
         (b) The rollover  amount must be  contributed to the Trust on or before
the 60th day following the Employee's  receipt of the amount from the individual
retirement account.
         (c) The  distribution  from  the  individual  retirement  account  must
consist  of the  entire  amount  in the  account,  and must  include  no  amount
attributable to any source other than a qualified plan described in Code Section
401(a).
         4.14.  Monitoring of  Rollovers.  The Committee  shall  establish  such
procedures and require such  information from employees as it deems necessary to
insure  that  amounts  rolled  over  under  Sections  4.12 or 4.13  satisfy  the
requirements for tax-free  rollovers  established by conditions of such Sections
and the Code and  Treasury  regulations.  No  amount  may be rolled  over  under
Sections 4.12 or 4.13 until approved by the Committee.
         4.15.    Treatment of Rollover Amount Under the Plan.
         (a)      The Committee will establish a Rollover Account for each 
Employee making a contribution described in Section 4.12 or 4.13 above.
         (b)  The   Employee   will  at  all  times  have  a  fully  vested  and
nonforfeitable interest in the amount credited to his Rollover Account.
         (c)  Distributions  will be made to the  Employee  in  accordance  with
Articles 6 and 7.
         (d) An Employee  who  contributes  an amount to the Plan in  accordance
with Section 4.12 or 4.13 will not become a  Participant  until he has satisfied
the  requirements  of  Article 3.  However,  effective  August 1, 1995,  such an
Employee will be treated as a  Participant,  with respect to his interest in his
Rollover Account, for purposes of Articles 6, 7, 8, 9, 10, 12 and 13.
         4.16.  Military Service.  Effective December 12, 1994,  notwithstanding
any provision in this Plan to the contrary, contributions,  benefits and service
will be provided in accordance with Section 414(u) of the Code.



<PAGE>


                                    ARTICLE 5
                              PARTICIPANT ACCOUNTS
         5.1. Accounts.  The Committee will establish and maintain (or cause the
Trustee to establish and maintain) for each Participant an Elective Contribution
Account, a Matching Contribution Account, a Profit-Sharing Contribution Account,
a Rollover  Account (if  applicable)  and such other accounts and subaccounts as
the  Committee or the  Trustees,  as the case may be, in their  discretion  deem
appropriate.
         The Plan  Administrator  shall  establish an ESOP Cash Account and ESOP
Stock Account with respect to each  participant in the ESOP  immediately  before
the Merger.  The sum of a Participant's ESOP Cash Account and ESOP Stock Account
immediately after the merger shall not be less than such  Participant's  account
under the ESOP immediately  preceding the Merger. The Plan  Administrator  shall
maintain a record of the balance in each such account as of the Merger Date.
         5.2.     Adjustment of Accounts.  With respect to the Accounts
established  under Section 5.1, the  Committee or Trustees,  as the case may be,
shall, as of each Valuation Date,
         (a) First,  reduce the  balance of each such  Account by the  aggregate
amount of all distributions or withdrawals made from each such Account since the
preceding Valuation Date;
         (b)  Second,  adjust the  balance of each such  Account to reflect  the
current fair market value of the assets in which such Accounts are invested; and
         (c)  Third,   allocate  to  and  credit  each  Participant's   Elective
Contribution  Account  with  any  Elective  Contributions,   each  Participant's
Matching  Contribution  Account  with  any  Matching  Contributions,   and  each
Participant's   Profit-Sharing  Contribution  Account  with  any  Profit-Sharing
Contributions  which are to be credited as of such Valuation  Date. Any Matching
Contributions shall be allocated among and credited to the Matching Contribution
Accounts of Participants entitled to share in the Matching Contribution pursuant
to the Matching Contribution  percentage formula determined by the Company under
Section  4.2. Any  Profit-Sharing  Contributions  shall be  allocated  among and
credited to the Profit-Sharing Contribution Accounts of Participants entitled to
share in the  Profit-Sharing  Contribution  in  proportion  to their  respective
amounts of Compensation for that portion of the Plan Year during which they were
Participants.
         5.3.     Vesting of Accounts.
         (a) A Participant will at all times have a  nonforfeitable  interest in
100% of his Elective  Contribution  Account,  and, if  applicable,  his Rollover
Account.
                  At any  point in time  (but  subject  to any  acceleration  of
vesting under  Sections  7.1, 7.3, 7.4, 10.3 or 11.3) a Participant  will have a
nonforfeitable  interest in a  percentage  of his Company  Contribution  Account
determined in accordance with the following  schedule and based on his completed
Years of Service:

                                                   Applicable Vesting
                       Years of Service                Percentage

                               1                          20%
                               2                          40%
                               3                          60%
                               4                          80%
                               5                          100%

         Notwithstanding the preceding sentences, a Participant's nonforfeitable
percentage in his ESOP Cash Account and ESOP Stock Account as of the Merger Date
shall not be less than the Participant's  nonforfeitable  percentage interest in
his account under the ESOP immediately preceding the Merger Date.
         5.4. Election of Former Vesting Schedule. If the Plan is amended at any
time and such  amendment  directly or indirectly  affects the  computation  of a
Participant's  rights to his Accounts,  each Participant who has completed three
Years  of  Vesting  Service  prior  to the  expiration  of the  election  period
described  below and whose  nonforfeitable  percentage  at any time  after  such
amendment could be less than such percentage  determined  without regard to such
amendment  may elect  during  the  election  period  to have the  nonforfeitable
percentage of his Accounts  determined  without  regard to such  amendment.  The
election period referred to in the preceding sentence will begin on the date the
amendment  of the  vesting  schedule  is adopted  and will end 60 days after the
latest of the following dates:
         (a)      the date on which such amendment is adopted;
         (b)      the date on which such amendment becomes effective; and
         (c) the date on which the  Participant is issued written notice of such
amendment by the Committee.  An election under this Section 5.4 may be made only
by an individual who is a Participant at the time such election is made and once
made shall be irrevocable.


<PAGE>


                                    ARTICLE 6
                             IN-SERVICE WITHDRAWALS
         6.1. General Limit. The minimum withdrawal amount shall be $1000.
         6.2.  Withdrawals After Age 59-1/2.  any Participant who is an Employee
and has attained age 59-1/2 or his Normal  Retirement Date may withdraw all or a
part of his Accounts by written  notice to the  Committee.  Such notice shall be
made at least 30 days (or such  shorter  period  established  by the  Committee)
before the proposed  withdrawal date.  Distribution to the Participant  shall be
made from the Trust as soon as reasonably  practicable  after,  and based on the
value of Accounts  determined as of the Valuation Date  coinciding  with or next
following the receipt of such notice.
         6.3.  Hardship  Withdrawals  from  Company  Contribution   Accounts.  A
Participant's Company Contribution  Account,  other than the ESOP Stock Account,
shall be eligible for hardship withdrawals under this Section. [Prior to January
1, 1995, accounts eligible for hardship  withdrawals under this Section included
a Participant's  Matching  Contribution  Account and Profit Sharing Contribution
Account.]  A  Participant  who is in the employ of the Company  may,  subject to
Section  6.1,  withdraw  all or a part of the  vested  portion  of his  eligible
Accounts,  by filing a written request with the Plan  Administrator  at least 30
days (or such shorter  period as may be  prescribed  by the Plan  Administrator)
before the proposed withdrawal date, provided the Plan Administrator  determines
that such withdrawal is being made for one of the following reasons:
         (a)      To pay all or a portion of the cost of purchase, construction,
improvement  or  preservation  of a  house  occupied  or to be  occupied  by the
Participant;
         (b) To pay all or a portion of the cost of education of the Participant
         or any of his  dependents;  (c) To pay all or a portion of any  unusual
         expense incurred by the Participant because of illness, accident or
disability of the Participant or any of his dependents; or
         (d)      To meet any severe and undue financial hardship of the 
Participant or any of his dependents.
         6.4. Hardship Withdrawals From Salary Reduction Accounts. A Participant
who is in the employ of the Company may,  subject to Section 6. 1,  withdraw all
or a part of his Elective  Contribution  Account  (excluding  any income accrued
after 1988) by filing a written request with the Plan  Administrator at least 30
days (or such shorter  period as may be  prescribed  by the Plan  Administrator)
before the proposed withdrawal date, provided the Plan Administrator  determines
that such  withdrawal  is being made due to a hardship of the  Participant.  For
purposes  of this  Section,  hardship  is  defined  as an  immediate  and  heavy
financial need of the Participant  where the  Participant  lacks other available
recourse. Hardship distributions are subject to the Spousal consent requirements
contained in Section  401(a)(11) and 417 of the Code. The following are the only
financial needs considered  immediate and heavy: (1) deductible medical expenses
(within  the  meaning of  Section  213(d) of the Code) of the  Participant,  the
Participant's  Spouse's,  children,  or dependents;  (2) the purchase (excluding
mortgage payments) of a principal residence for the Participant;  (3) payment of
tuition for the next  quarter or semester of  post-secondary  education  for the
Participant,  the Participant's Spouse, children or dependents;  or (4) the need
to prevent the  revocation of the  Participant  from,  or a  foreclosure  on the
mortgage of, the  Participant's  principal  residence.  A distribution  shall be
considered as necessary to satisfy an immediate and heavy  financial need of the
Participant only if:
         (a) The Participant has obtained all distributions, other than hardship
distributions,  and all  nontaxable  loans  under  all plans  maintained  by the
Company;
         (b) All plans  maintained  by the Company  provide that the  employee's
Elective Deferrals (and Employee Contributions) shall be suspended for 12 months
after the receipt of the hardship distribution;
         (c) The distribution is not in excess of the amount of an immediate and
         heavy  financial  need;  and (d) All plans  maintained  by the  Company
         provide that the  participant may not make elective  Contributions  for
         the
participant's  taxable  year  immediately  following  the  taxable  year  of the
hardship distribution in excess of the applicable limit, under Section 402(g) of
the Code for such  taxable year less the amount of such  Participant's  Elective
Contributions for the taxable year of the hardship distribution.
         6.5. Withdrawals From Rollover Contribution Accounts. A Participant who
is in the employ of the Company may,  subject to Section 6. 1, withdraw all or a
part of his Rollover  contribution  Account by filing a written request with the
Plan Administrator at least 30 days (or such shorter period as may be prescribed
by the Plan Administrator) before the proposed withdrawal date.
         6.6. Procedure for Making Withdrawals. Any request for withdrawal under
this  Article  shall be filed with the Plan  Administrator  on such forms as the
Plan  Administrator  may provide and shall  specify the account  from which such
withdrawal is being made (other than the ESOP Stock Account) and the value to be
withdrawn  in  terms  of  dollars  or  percentage  of  account  value.   If  the
Participant's  accounts  are  invested  in more than one  investment  fund,  the
Participant shall also specify on such request what portion of his withdrawal is
to be charged  against  each such  investment  fund.  Each  withdrawal  shall be
charged against the applicable account as of the date such withdrawals made. Any
withdrawal  with  respect to assets held under a Group  Annuity  Policy shall be
subject to such  restrictions  as may be contained  under the terms of the Group
Annuity Policy with respect to the withdrawal of funds thereunder.
         6.7. Non-forfeiture Provision. In no event shall any withdrawal made by
a  Participant  pursuant  to  the  provisions  of  this  Article  result  in the
forfeiture of such Participant's vested interest under the Plan.
         6.8.  Special Vesting  Provision.  If a Participant  makes a withdrawal
under this  Article from his Company  Contribution  Account at a time when he is
less than  fully  vested in such  account,  the  nonforfeitable  portion of such
account  following such withdrawal  shall be calculated by first adding back the
amount of such  withdrawals to the balance of such account  before  applying the
Participant's  vested  percentage  and then  deducting  the  amount  of all such
withdrawal from the product of such application.
         6.9.  Frequency of Withdrawal.  Hardship  withdrawals  may be made on a
monthly basis. The frequency of other withdrawals under this Article shall be as
prescribed by the Plan Administrator  pursuant to a uniform,  non-discriminatory
policy.
         6.10.  Restriction for Loans. The portion of the Participant's accounts
available for  withdrawal  under this Article shall be reduced by the portion of
his accounts  assigned as collateral to secure any loan to the Participant under
Article 6.
         6.11.  Required  Distributions  After Age 70-1/2.  Effective January 1,
1997,  notwithstanding any provision of this Plan to the contrary, a Participant
who is a 5-percent owner (as defined in Code Section 416(i)(1), who has attained
age 70-1/2 and is an Employee on the last  business day of a calendar  year will
be deemed to request a  withdrawal  of, and will  receive from the Trust on such
day, an amount which is necessary to satisfy the minimum  required  distribution
rules under Code Section  401(a)(9) and the regulations  thereunder with respect
to the Participant for that year.
         6.12.  Distributions  Required by a Qualified Domestic Relations Order.
To the extent required by a Qualified  Domestic  Relations  Order,  the Trustees
shall make  distributions  from a  Participant's  Accounts  in a single sum cash
payment to  alternate  payees  named in such  Order,  regardless  of whether the
Participant is otherwise entitled to a distribution at such time under the Plan.


<PAGE>


                                    ARTICLE 7
                                  DISTRIBUTIONS
         7.1.  Normal  Retirement.  A  Participant  who leaves the employ of the
Company  on his  Normal  Retirement  Date  will be  considered  to have  retired
normally  from the  Company  under  the Plan and will  receive  the value of his
Accounts  determined as of the Valuation  Date  coinciding  with or  immediately
following his Normal  Retirement  Date.  Distribution  to the  Participant  will
commence no later than sixty (60) days  following  the close of the Plan Year in
which the retirement occurred.
         7.2. Other  Termination of Employment.  If a  Participant's  employment
with the Company is  terminated  for any reason  other than  normal  retirement,
Total and Permanent Disability (as defined in Section 7.3) or death, he shall be
entitled  to  receive  the  value  of the  vested  portion  of his  Accounts  as
determined  under  Section  5.3, as of the  Valuation  Date  coinciding  with or
immediately following the date of his termination of employment. Distribution to
the Participant  will commence as soon as reasonably  practicable  following his
termination of employment,  but in no event later than sixty (60) days following
the close of the Plan Year in which such  termination  of  employment  occurred,
except that in the case of a Participant entitled to a distribution in excess of
$5,000,  distribution will not be made prior to the date the Participant attains
age 65 without his written consent.  The Accounts of any such former Participant
who withholds his consent shall, until  distributed,  continue to be adjusted as
of each  Valuation  Date under Section 5.2(b) to reflect the income and expenses
and investment  gains or losses  attributable  to such Accounts,  and the former
Participant will be entitled to the value of such Accounts,  as of the Valuation
Date coinciding with or immediately following the earlier of:
         (a) the date the Participant consents in writing to a distribution, and
         (b) the date the Participant attains age 65.
         7.3. Disability  Benefits.  If a Participant  terminates his employment
with the Company  before his Normal  Retirement  Date  because of his "Total and
Permanent  Disability," he shall be entitled to receive the total amount held in
all his Accounts  under the Plan. The Trustee shall  distribute  such amounts to
the  Participant in accordance  with the provisions of Section 7.6. For purposes
of this  Article 7, "Total and  Permanent  Disability"  shall mean a physical or
mental  disorder  or disease  which (1)  renders the  Participant  incapable  of
performing  his usual duties for the Company,  and (2) can be expected to result
in death or to last for a continuous period of not less than twelve months.  The
Total and  Permanent  Disability  of a  Participant  and the  cessation  of such
disability  shall be determined  by the Plan  Administrator  in accordance  with
uniform principles consistently applied, upon the basis of such medical evidence
as the Plan Administrator deems necessary and desirable.
         7.4.  Death. If a Participant or a former  Participant  dies before the
distribution  of his  Accounts  has been made on account of his  termination  of
employment,  his designated Beneficiary will be entitled to receive the value of
his Accounts,  as of the Valuation Date coinciding with or immediately following
his death.  Distribution  to a  Beneficiary  will commence as soon as reasonably
practicable following the applicable Valuation Date, subject to Sections 7.9 and
7.10 below.
         A Participant may designate a Beneficiary or change a prior designation
of a  Beneficiary  by giving  notice to the  Committee on a form approved by the
Committee;  provided  however,  that if a Participant was married at the time of
his death,  he shall be deemed to have  designated  his surviving  spouse as his
beneficiary unless;
         (a) his surviving spouse,  witnessed by a Plan representative or notary
public,  consented  to and  acknowledged  the effect of the  designation  of the
specific  non-spouse  Beneficiary  (including any class of  Beneficiaries or any
contingent Beneficiaries) in a written form approved by the Committee;
         (b) his surviving spouse, in a written consent and acknowledgment  form
described in (a) above,  had  expressly  permitted  future  designations  by the
Participant without any requirement of future consent; or
         (c) it is  established  to the  satisfaction  of the Committee that the
consent required under (a) above may not be obtained because there is no spouse,
because the spouse cannot be located,  or because of such other circumstances as
the Secretary of the Treasury may prescribe.
         Any consent and  acknowledgment  by a spouse  described  above,  or the
establishment that the consent and acknowledgment  cannot be obtained,  shall be
effective only with respect to such spouse, but shall be irrevocable once made.
         If a Participant dies without a surviving Beneficiary,  his Beneficiary
shall be deemed to be his surviving spouse or, if none, his estate.
         7.5. Latest Payment of Certain  Benefits.  In no event will the payment
of benefits to a Participant  commence  later than the 60th day after the latest
of the following:
         (a) the close of the Plan Year in which the Participant attains age 65;
         (b) the close of the Plan Year in which occurs the tenth anniversary of
the year in which the Participant commenced participation in the Plan, and
         (c) the close of the Plan Year in which  the  Participant's  employment
with the Company  terminates.  In addition and  notwithstanding  anything in the
Plan to the contrary,  any  distribution to a former  Participant who terminates
his  employment  after  attaining  age 70-1/2  shall also  satisfy  the  minimum
required  distribution  rules,  under Code Section 401(a)(9) and the regulations
thereunder with respect to the former Participant for the year of termination.
         7.6.  Method  of  Payment.  Any  benefits  payable  under the Plan to a
Participant  who has retired or terminated  employment for any reason other than
death shall be  distributed to the  Participant as follows:  (1) if the value of
his Vested Account Balance does not exceed $5,000,  the distribution shall be in
a lump sum  payment;  (2) if the value of his  Vested  Account  Balance  exceeds
$5,000,  the  distribution  shall,  at the election of the  Participant and with
Spousal consent, where applicable, be in any one or a combination of the methods
of payment set forth below:
         (a) By lump sum payment;
         (b) By the purchase of a non-transferable annuity payable over the life
of the  Participant  or the  joint  lives of the  Participant  and a  designated
individual.  The terms of any such annuity contract purchased and distributed by
the Plan to a Participant  or Spouse shall comply with the  requirements  of the
Plan;
         (c) By the payment of installments  over a period certain not extending
beyond the life  expectancy of the  Participant or the joint life  expectancy of
the Participant and a designated  individual;  such payments to be made directly
from the Plan or by the purchase of a  non-transferable  period certain annuity.
The terms of such annuity  contract  purchased and  distributed by the Plan to a
Participant or Spouse shall comply with the requirements of the Plan.
         (d) By the transfer to the Participant of any Policy on his life; or
         (e) By the  surrender of any Policy on the  Participant's  life for its
cash value and the distribution of such cash value in accordance with (a) or (c)
above.
         A Participant shall have the right to demand a distribution in the form
of Company Stock with respect to the  Participant's (i) shares in his ESOP Stock
Account and (ii) the lesser of the current value of his ESOP Cash Account or the
portion of his ESOP Cash Account  equal to the value of his ESOP Cash Account as
of the Merger Date.
         7.7.     Forfeitures.
         (a) General.  If the  employment of a Participant  is terminated  for a
reason  other than normal or  disability  retirement,  at a time when he is less
than  fully  vested in his  Company  Contribution  Account  and has not made any
Elective  Contributions,  the  non-vested  portion  of such  accounts  shall  be
forfeited as follows:
                  (i) If the  Participant  receives a distribution of his entire
vested benefit, the non-vested portion shall be forfeited as of the date of such
distribution.
                  (ii) If the Participant  receives a distribution which is less
than  his  entire  vested  benefit,  part of the  non-vested  portion  shall  be
forfeited as of the date of such distribution;  the amount of such forfeiture as
of the date of such distribution; the amount of such forfeiture to be based on a
fraction the numerator of which is the amount of the  distribution  attributable
to Company  Contributions,  the  denominator of which is the total amount of his
vested Company derived account balances.  The remaining non-vested portion shall
be  forfeited  as of the  last day of the Plan  Year in  which  the  Participant
sustains a five-year Break in Service.
                  (iii) If the Participant has no vested interest in his Company
Contribution  Account,  he shall be deemed to have  received  his entire  vested
benefit  and  the  entire  account  shall  be  forfeited  as of the  date of his
termination of employment with the Company.
                  (iv) If the distribution of the  Participant's  vested benefit
is deferred, the non-vested portion shall be forfeited as of the last day of the
Plan Year in which he sustains a five-year Break in Service, or if earlier, when
he receives a distribution as prescribed in (i) or (ii) above.
         If a  Participant  forfeits  a portion  of his  accounts  derived  from
Employer  Contribution  Accounts,  the ESOP Cash Account and ESOP Stock  Account
shall be treated as a single account and any  forfeiture  shall first be charged
against the ESOP Cash Account and then the ESOP Stock Account.
         (b)  Restoration  of  Account.  If a  Participant  who has  received  a
distribution  of  all  or a  portion  of  his  vested  benefit  is  subsequently
reemployed, he may at any time following his reemployment but before the earlier
of (1) 5 years  after his date of  reemployment  or (2) the date he  sustains  a
five-year Break in Service  following the date of  distribution,  repay the full
amount of his distribution  attributable to Company  Contributions and thereupon
have his Company  derived  Account  balance fully  restored to the amount on the
date of his  distribution.  Such  restoration  shall  be made as of the  date of
repayment by the  Participant,  but assets for the restored account balance need
not be provided  until the last day of the Plan Year  following the Plan Year in
which the repayment  occurs.  Such  restoration  shall,  at the  Company's  sole
discretion,  be made  from the  income  or gain of the Plan for the Plan Year in
which the  restoration is to be made or forfeiture  occurring in such Plan Year,
or  by  a  special  Company  contribution.   If  forfeitures  are  allocated  to
Participants,  any such restoration from forfeitures shall be made prior to such
allocation.  If a Participant who is deemed to have received his vested interest
in  his  Company   Contribution   Account  when  he  terminated   employment  is
subsequently  reemployed  before he sustains a five-year  Break in Service,  his
Company  Contribution  Account shall be fully restored to the amount on the date
of the deemed distribution.
         (c)  Separate  Accounts.  If  a  Participant  who  has  terminated  his
employment  at a  time  when  he is  less  than  fully  vested  in  his  Company
Contribution  Account  sustains  a  five-year  Break  in  Service,  and  his  is
subsequently  reemployed by the Company without  receiving payment of the entire
nonforfeitable  portion of such  account,  a separate  Company  Account shall be
established to receive his share of Company  Contributions  and forfeitures,  if
applicable,  allocated to him following such  reemployment.  Upon his subsequent
termination  of  employment,  his  nonforfeitable  portion  shall be  determined
separately with respect to such account.
         (d) Forfeitures.  Any forfeitures under this Section 7.7 occurring in a
Plan Year
                  (i) first will be applied to the  restoration  of any Accounts
                  as required for such Plan Year in this  Section  7.7;  (ii) to
                  the extent amounts remain after the  application of (a) above,
                  will be applied against Matching
Contributions for the Plan Year in which the forfeitures occurred;
                  (iii) to the extent  amounts  remain after the  application of
(a) and (b) above,  will be credited as a  Profit-Sharing  Contribution  for all
Participants.
         7.8.  Commencement of Benefits.  Any benefits  payable to a Participant
pursuant to this Article shall commence as soon as administratively  practicable
following his retirement or termination of employment.
         7.9.  Restriction  of Early  Distributions.  Notwithstanding  any other
provision  of the  Plan  to the  contrary,  Elective  contributions  and  income
attributable  thereto,  shall  not  be  distributed  to  Participants  or  their
Beneficiaries unless one of the following events occurs:
         (a) Termination of the Plan without the establishment of another
             defined contribution plan;
         (b) The  disposition  by a corporation  to an unrelated  corporation of
substantially  all of the assets (within the meaning of Section 409(d)(2) of the
Code)  used in a trade  or  business  of such  corporation  if such  corporation
continues to maintain this Plan after the disposition,  but only with respect to
Employees who continue employment with the corporation acquiring such assets;
         (c) The  disposition  by a corporation  to an unrelated  entity of such
corporation's  interest in a subsidiary (within the meaning of Section 409(d)(3)
of the Code) if such corporation  continues to maintain this Plan, but only with
respect to Employees who continue employment with such subsidiary;
         (d)      The participant's attainment of age 59-1/2;
         (e) The hardship of the  Participant in accordance  with Article VI and
         applicable  Regulations;  or (f) The separation from service,  death or
         total  and  permanent  disability  of the  Participant.  7.10.  Minimum
         Distribution  Requirements.  The  provisions  contained in this Article
         shall apply to any distribution of a
Participant's   interest  and  shall  take  precedence  over  any   inconsistent
provisions of this Plan. Definitions of terms for this Section appear in Section
7.10(e).
         (a)  General  Rules and  Required  Beginning  Date.  All  distributions
required under this Article shall be determined and made in accordance  with the
Income  Tax  Regulations   under  Section   401(a)(9),   including  the  minimum
distribution  incidental  benefit  requirement of Section  1.401(a)(9)-2  of the
Regulations.  The entire interest of a Participant shall be distributed or begin
to be distributed no later than the Participant's Required Beginning Date.
         (b)  Limits  on  Distribution  Periods.  As of the  first  Distribution
Calendar Year, distributions, if not made in a single-sum, may only be made over
one of the following periods (or a combination thereof):
                  (i)  The life of the Participant;
                  (ii) The life of the Participant and a designated Beneficiary;
                  (iii) A  period   certain  not  extending   beyond  the  life
expectancy of the Participant; or
                  (iv) A period certain not extending  beyond the joint and last
survivor expectancy of the Participant and a designated Beneficiary.
         (c)  Determination  of  Amount  to be  Distributed  Each  Year.  If the
Participant's  interest is to be  distributed  in other than a single  sum,  the
following  minimum  distribution  rules  shall  apply on or after  the  Required
Beginning Date:
                  (i) If a Participant's benefit is to be distributed over (1) a
period not extending  beyond the life expectancy of the Participant or the joint
life and last  survivor  expectancy  of the  Participant  and the  Participant's
designated  Beneficiary or (2) a period not extending beyond the life expectancy
of the designated  Beneficiary,  the amount  required to be distributed for each
calendar year, beginning with distributions for the first Distribution  Calendar
Year,  must at least equal the quotient  obtained by dividing the  Participant's
benefit by the applicable life expectancy.
                  (ii) For calendar years  beginning  before January 1, 1989, if
the  Participant's  Spouse  is not the  designated  Beneficiary,  the  method of
distribution  selected must assure that at least 50% of the present value of the
amount  available  for  distribution  is paid within the life  expectancy of the
Participant.
                  (iii) For calendar  years  beginning  after December 31, 1988,
the amount to be distributed  each year,  beginning with  distributions  for the
first Distribution Calendar Year shall not be less than the quotient obtained by
dividing  the  Participant's  benefit by the lesser of (1) the  applicable  life
expectancy or (2) if the Participant's Spouse is not the designated beneficiary,
the applicable  divisor  determined from the table set forth in Q&A-4 of Section
1.401(a)(9)-2  of the Income Tax Regulations.  Distributions  after the death of
the  Participant  shall be distributed  using the applicable  life expectancy in
subsection  (a) above as the  relevant  divisor  without  regard to  regulations
Section 1.301(a)(9)-2.
                  (iv) The minimum  distribution  required for the Participant's
first  Distribution  Calendar  Year must be made on or before the  Participant's
Required  Beginning  Date. The minimum  distribution  for other calendar  years,
including the minimum  distribution for the Distribution  Calendar Year in which
the  Employee's  Required  Beginning  Date  occurs,  must be  made on or  before
December 31 of that Distribution Calendar Year.
                  (v) If the Participant's benefit is distributed in the form of
an annuity purchased from an insurance company,  distributions  thereunder shall
be made in accordance with the  requirements of Section 401(a(9) of the Code and
the Regulations thereunder.
         (d)  Death  Distribution  Provision.  If  the  Participant  dies  after
distribution of his interest has begun,  the remaining  portion of such interest
shall  continue  to be  distributed  at least as  rapidly as under the method of
distribution  being used prior to the  Participant's  death.  If the Participant
dies  before   distribution  of  his  interest   begins,   distribution  of  the
Participant's  entire interest shall be completed by December 31 of the calendar
year containing the fifth anniversary of the  Participant's  death except to the
extent that an election is made to receive  distributions in accordance with (i)
or (ii) below:
                  (i) If any portion of the Participant's interest is payable to
a  designated  Beneficiary,  distributions  may be made  over the life or over a
period  certain  not  greater  than  the  life   expectancy  of  the  designated
Beneficiary commencing on or before December 31 of the calendar year immediately
following the calendar year in which the Participant died;
                  (ii)  If  the  designated  Beneficiary  is  the  Participant's
Surviving  Spouse,  the date  distributions  are required to begin in accordance
with (a) above  shall not be earlier  than the later of (1)  December  31 of the
calendar year  immediately  following the calendar year in which the Participant
died and (2) December 31 of the  calendar  year in which the  participant  would
have attained age 70-1/2.  If the Participant has not made an election  pursuant
to this  Section  by the  time of the  Participant's  death,  the  Participant's
designated  Beneficiary  must elect the method of Distribution no later than the
earlier of (1) December 31 of the calendar year in which  distributions would be
required to begin under this  Section,  or (2) December 31 of the calendar  year
which contains the 5th anniversary of the date of death of the  Participant.  If
the Participant has no designated Beneficiary,  or if the Designated Beneficiary
does not  elect a method  of  distribution,  distribution  of the  Participant's
entire interest must be completed by December 31 of the calendar year containing
the 5th anniversary of the Participant's death. For purposes of this Section, if
the Surviving  Spouse dies after the  Participant,  but before  payments to such
Spouse begin, the provisions contained in this Section 7.10(d), except paragraph
(b) above and the third  sentence  above,  shall be applied as if the  Surviving
Spouse were the Participant.  For purposes of this Section, any amount paid to a
child  of the  Participant  shall  be  treated  as if it had  been  paid  to the
Surviving  Spouse if the amount becomes payable to the Surviving Spouse when the
child reaches the age of majority. For purposes of this Section, distribution of
a Participant's  interest is considered to begin on the  Participant's  Required
Beginning  Date (or,  if the  surviving  spouse dies after the  Participant  but
before payments to the Spouse begin, the date  distribution is required to begin
to the Surviving  Spouse as provided  above).  If distribution in the form of an
annuity  irrevocably  commences to the Participant before the Required Beginning
Date,  the date  distribution  is considered  to begin is the date  distribution
actually commences.
         (e)      Definitions. For purposes of this Section 7.10., the following
                  terms  shall be  defined  as  follows:  (i)  "Applicable  Life
                  Expectancy"  shall mean the life expectancy (or joint and last
                  survivor expectancy)
calculated using the attained age of the Participant (or designated Beneficiary)
as of the Participant's (or designated Beneficiary's) birthday in the applicable
calendar  year reduced by one for each calendar year which has elapsed since the
date  life  expectancy  was  first  calculated.  If  life  expectancy  is  being
recalculated,  the Applicable Life Expectancy shall be the life expectancy as so
recalculated.  The  applicable  calendar  year  shall be the first  Distribution
Calendar Year, and if life  expectancy is being  recalculated,  such  succeeding
calendar year.
                  (ii) "Designated Beneficiary" shall mean the individual who is
designated  as the  Beneficiary  under  the  Plan  in  accordance  with  Section
401(a)(9) and the Regulations thereunder.
                  (iii) "Distribution  Calendar Year" shall mean a calendar year
for which a minimum distribution is required. For distributions beginning before
the Participant's  death, the first  Distribution  Calendar Year is the calendar
year  immediately  preceding the calendar year which contains the  Participant's
Required  Beginning Date. For  distribution  beginning  after the  Participant's
death,  the  first  Distribution  Calendar  Year is the  calendar  year in which
distributions are required to begin pursuant to Section 7.10(d).
                  (iv) "Life  Expectancy".  Life  expectancy  and joint and last
survivor  expectancy  are  computed by use of the expected  return  multiples in
Tables  V and VI of  Section  1.72-99  of the  Income  Tax  Regulations.  Unless
otherwise  elected by the Participant (or Spouse,  in the case of  distributions
described in Section  7.10(d)(ii)),  by the time  distributions  are required to
begin, life expectancies shall be recalculated annually.  Such election shall be
irrevocable as to the  Participant (or Spouse) and shall apply to all subsequent
years. The life expectancy of a nonspouse Beneficiary may not be recalculated.
                  (v) "Participant's  Benefit" shall mean the account balance as
of the last  Valuation  Date in the  calendar  year  immediately  preceding  the
Distribution Calendar Year (Valuation Calendar Year), increased by the amount of
any contributions or forfeitures allocated to the account balance as of dates in
the Valuation Calendar Year after the Valuation Date, decreased by distributions
made in the valuation  calendar year after the Valuation  Date.  For purposes of
this  paragraph,  if any  portion  of the  minimum  distribution  for the  first
Distribution  Calendar Year is made in the second Distribution  Calendar Year on
or before the Required  Beginning  Date, the amount of the minimum  distribution
made in the second Distribution Calendar Year shall be treated as if it had been
made in the immediately preceding Distribution Calendar Year.
                  (vi) "Required  Beginning Date".  That the required  beginning
date of a Participant who attains age 70-1/2 on or after January 1, 1998,  shall
be determined in accordance with (A) or (B) below:
                           (A)      The Required Beginning Date of a Participant
who is not a 5% owner  shall be the  first  day of  April of the  calendar  year
following  the calendar  year in which the later of  retirement or attainment of
age 70-1/2 occurs.
                           (B)      The Required Beginning Date of a Participant
who is a 5% owner shall be the first day of April following the calendar year in
which the Participant attains age 70-1/2.
                           A  Participant  shall be  treated  as a 5% owner  for
purposes of this Section if he is a 5% owner as defined in Section 416(i) of the
Code  (determined  in accordance  with Section 416 but without regard to whether
the Plan is  Top-Heavy)  at any time  during the Plan Year ending with or within
the calendar  year in which he attains age 66-1/2 or any  subsequent  Plan Year.
Once  distributions  have  begun to a 5% owner  under this  Section,  they shall
continue to be distributed, even if the Participant ceases to be a 5% owner in a
subsequent year.
         (f)  Transitional  Rule for 5% Owners.  Notwithstanding  the  foregoing
provisions of this Article, distribution on behalf of any Participant, including
a "5% owner," may be made in accordance  with all of the following  requirements
(regardless of when distribution commences):
                  (i) the  distribution  by the Plan is one which would not have
disqualified the Plan under Section  401(a)(9) of the Code as in effect prior to
amendment by the Deficit Reduction Act of 1984;
                  (ii)  The  distribution  is in  accordance  with a  method  of
distribution  designated by the Participant  whose interest in the Plan is being
distributed  or,  if the  Participant  is  deceased,  by a  Beneficiary  of such
Employee.
                  (iii)  Such  designation  was in  writing,  was  signed by the
Participant or the Beneficiary, and was made before January 1, 1984.
                  (iv) The  Participant  had accrued a benefit under the Plan as
of December 31, 1983.
                  (v) The method of  distribution  designated by the Participant
or the Beneficiary  specifies the time at which distribution will commence,  the
period  over  which  distributions  will  be  made,  and  in  the  case  of  any
distribution upon the Participant's  death, the Beneficiaries of the Participant
listed  in order  of  priority.  If a  designation  is  revoked  any  subsequent
distribution  must satisfy the requirements of Section 401(a)(9) of the Code and
the Proposed Regulations thereunder.
                  (vi) A  distribution  upon  death  will not be covered by this
transitional  rule  unless  the  information  in the  designation  contains  the
required  information  described above with respect to the  distributions  to be
made upon the death of the Employee.
                  (vii) For any  distribution  which commences before January 1,
1984, but continues after December 31, 1983, the Employee,  or the  Beneficiary,
to whom such  distribution  is being made,  shall be presumed to have designated
the method of  distribution  under which the  distribution  is being made if the
method of distribution was specified in writing and the  distribution  satisfies
the requirements in subsections (a) and (e) above.
                  (viii) If a  designation  is  revoked  subsequent  to the date
distributions are required to begin, the Trust must distribute by the end of the
calendar year  following the calendar  year in which the  revocation  occurs the
total amount not yet  distributed to satisfy  Section  401(a)(9) of the Code and
the Proposed Regulations thereunder, but for the Section 242(b)(2) election. For
calendar years beginning after December 31, 1988, such  distributions  must meet
the   minimum   distribution   incidental   benefit   requirements   in  Section
1.401(a)(9)-2 of the Proposed Regulations.  Any changes in the designation shall
be  considered  to  be a  revocation  of  the  designation.  However,  the  mere
substitution  or  addition  of  another   beneficiary  (one  not  named  in  the
designation) under the designation shall not be considered to be a revocation of
the  designation,  so long as such  substitution  or addition does not alter the
period over which  distributions are to be made under the designation,  directly
or indirectly  (for example,  by altering the relevant  measuring  life). In the
case in which an amount is  transferred  or rolled over from one plan to another
plan, the rules in Q&A J-2 and Q&A J-3 of the Proposed Regulations shall apply.
         (g)  Transitional  Rule for  Participants  Who Are Not 5%  Owners.  Any
Participant,  other than one who was or is a 5% owner, who is receiving  minimum
distributions  and has not yet had an event  specified  in Section  7.5,  may by
written request to the Committee discontinue further minimum distributions.  The
Committee shall have sixty (60) days after receipt to act upon any such request.
         7.11.  Benefit Payment  Elections.  Between 90 days and 30 days, before
the  Participant's  Normal Retirement Date, the Committee must provide a benefit
notice to a Participant  who is eligible to make an election under this Section.
The benefit  notice  must  explain  the  optional  forms of benefit in the Plan,
including the material  features and relative  values of those options,  and the
Participant's  rights to defer  distribution  until he attains Normal Retirement
Age.
         If a Participant  or beneficiary  makes an election  prescribed by this
Section,  the Committee will direct the Trustee to distribute the  Participant's
Account  balance in  accordance  with that  election.  Any  election  under this
Section 7.11 is subject to the  requirements  of Section 7.8, 7.9, and 7.10. The
Participant  or  Beneficiary  must make an election  under this  Section 7.11 by
filing his election with the Committee at any time before the Trustee  otherwise
would commence payment of a Participant's Account balance in accordance with the
requirements of this Article 7.
         7.12.    Direct Transfer of Eligible Rollover Distributions.
         (a)  Notwithstanding  any  provision of the Plan to the  contrary  that
would  otherwise  limit a  distributee's  election  under  this  Article  VII, a
distributee  may  elect,  at  the  time  and  in the  manner  prescribed  by the
Committee,  to have any  portion of an  "eligible  rollover  distribution"  paid
directly to an "eligible  retirement  plan"  specified by the  distributee  in a
"direct rollover".
         (b) An "eligible rollover  distribution" shall mean any distribution of
all or any portion of the balance to the credit of the distributee,  except that
an eligible rollover distribution does not include: any distribution that is one
of a series of substantially  equal periodic  payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life  expectancies)  of the  distributee  and the  distributee's
designated  beneficiary,  or for a  specified  period of ten years or more;  any
distribution to the extent such distribution is required under Section 401(a)(9)
of the Code; and the portion of any distribution that is not includible in gross
income   (determined   without  regard  to  the  exclusion  for  net  unrealized
appreciation with respect to employer securities).
         (c) An "eligible  retirement plan" shall mean an individual  retirement
account  described  in  Section  408(a) of the Code,  an  individual  retirement
annuity  described in Section  408(b) of the Code, an annuity plan  described in
Section 403(a) of the Code, or a qualified  trust described in Section 401(a) of
the  Code,  that  accepts  the  distributee's  eligible  rollover  distribution.
However,  in the case of an  eligible  rollover  distribution  to the  surviving
spouse,  an eligible  retirement  plan is an  individual  retirement  account or
individual retirement annuity.
         (d) A "distributee" shall mean a Participant or former Participant.  In
addition,  the  Participant's or former  Participant's  surviving spouse and the
Participant's  or  former  Participant's  spouse  or  former  spouse  who is the
alternate  payee  under a  qualified  domestic  relations  order,  as defined in
Section 414(p) of the Code, are distributees  with regard to the interest of the
spouse or former spouse.
         (e) A  "direct  rollover"  shall  mean a  payment  by the  Plan  to the
eligible retirement plan specified by the distributee.


<PAGE>


                                    ARTICLE 8
                                 ADMINISTRATION
         This Article 8 shall be effective as of January 30, 1996.
         8.1. Plan  Administrator and Committee.  The Company shall be the "Plan
Administrator"  and will be a "named  fiduciary"  for purposes of ERISA  Section
402(a)(1) with authority to control and manage the operation and  administration
of the Plan, and will be responsible for complying with all of the reporting and
disclosure  requirements  of Part 1 of Subtitle B of Title I of ERISA.  However,
the  Board  of  Directors   of  the  Company  may  appoint  a  Retirement   Plan
Administration  Committee (the  "Committee")  consisting of as many Employees as
the Board may select and shall  delegate to the  Committee  all of the Company's
powers and  responsibilities as Plan Administrator and named fiduciary under the
Plan.  Accordingly,  for all purposes  under this Plan "Plan  Administrator"  or
"named fiduciary" shall mean the Company or, if appointed, the Committee.
         No person  serving on the Committee will receive any  compensation  for
his services as a Committee member.  The Committee will act by majority vote. An
individual serving on the Committee who is a Participant will not vote or act on
any matter relating solely to himself.
         8.2. Powers of Plan  Administrator.  The Company and the Committee,  if
appointed,  will have full power and  discretionary  authority to administer the
Plan in all of its details,  subject, however, to the requirements of ERISA. For
this purpose,  the  Company's,  and if  appointed,  the  Committee's  power will
include, but will not be limited to, the following discretionary authority:
         (a) to  make  and  enforce  such  rules  and  regulations  as it  deems
necessary or proper for the efficient  administration of the Plan or required to
comply with applicable law;
         (b) to interpret the Plan, its interpretation  thereof in good faith to
be final and conclusive on any Employee,  former Employee,  Participant,  former
Participant and Beneficiary;
         (c) to decide all questions  concerning the Plan and the eligibility of
any person to participate in the Plan;
         (d) to compute the amounts to be distributed to any  Participant,  
former Participant or Beneficiary in accordance with the provisions of the Plan,
and to determine the person or persons to whom such amounts will be distributed;
         (e)to  authorize the payment of distributions;
         (f) to keep  such  records  and  submit such  filings, elections,
applications,  returns or other  documents or forms as may be required under the
Code and applicable regulations,  or under other federal, state or local law and
regulations;
         (g) to allocate  and delegate its ministerial  duties and
responsibilities and to appoint such agents, counsel,accountants and consultants
as may be required or desired to assist in administering the Plan; and
         (h)      by written instrument, to allocate and delegate its fiduciary
 responsibilities in accordance with ERISA Section 405.
         (i)      to employ and retain such attorneys, accountants, investment
advisors,  consultants,  specialists  and  other  persons  or forms to advise or
assist in the performance of its duties.
         (j) to select,  make  available,  review and change  from time to time,
investment  funds in which  Participant's  can  direct the  investment  of their
Accounts, pursuant to Section 9.2.
         8.3.  Nondiscriminatory   Exercise  of  Authority.   Whenever,  in  the
administration of the Plan, any discretionary  action by the Plan  Administrator
is  required,   the  Plan  Administrator  shall  exercise  its  authority  in  a
nondiscriminatory  manner so that all persons  similarly  situated  will receive
substantially  the same treatment.  The Plan  Administrator  shall apply uniform
administrative rules of general application in order to assure similar treatment
to all persons in similar circumstances.
         8.4.  Reliance on Tables,  etc.  In  administering  the Plan,  the Plan
Administrator  will  be  entitled,  to the  extent  permitted  by  law,  to rely
conclusively on all tables, valuations, certificates, opinions and reports which
are  furnished  by any  accountant,  trustee,  counsel  or other  expert  who is
employed  or engaged  by the Plan  Administrator  or by the  Company on the Plan
Administrator's behalf.
         8.5. Claims and Review Procedures. Any person who thinks he is entitled
to a  benefit  under  the  Plan  shall  have  the  right  to file  with the Plan
Administrator   a  written   notice  of  claim  for  such   benefit.   the  Plan
Administrator,  in its  discretion,  may request a meeting  with the claimant to
clarify any  matters it deems  pertinent.  Within 90 days after  receipt of such
written notice of claim, the Plan Administrator  shall either grant or deny such
claim.  If  there  are  special  circumstances  , a  notice  may be given to the
claimant that up to 90 additional  days will be needed.  In the event such claim
is a denied,  the Plan  Administrator  shall give written notice to the claimant
that describes:
         (a) The specific reasons for the denial;
         (b) Specific reference to the pertinent Plan provisions on which the
             denial is based;
         (c) A description of any additional  material or information that could
be  presented  in order to  review  the  claim  and an  explanation  of why such
material or information is necessary;
         (d) An  explanation  of the Plan's  procedure to appeal the denial of a
claim.
Each claimant shall have the right to appeal the denial of his claim to the Plan
Administrator  for a full and far  review at any time  within 60 days  after the
claimant's  receipt of the written notice of such denial. The Plan Administrator
shall  thereby  afford the claimant or his duly  authorized  representative  the
opportunity  (1) to review  documents  pertinent  to the claim and (2) to submit
issues and  comments in writing.  The final  decision of the Plan  Administrator
shall be made  promptly,  and no later than 60 days after its  receipt  from the
claimant of such  request for review.  An  additional  60 days is  permitted  in
special circumstances after notice to the claimant. Such final decision shall be
made in writing and shall include specific reasons for the decisions, written in
a manner calculated to be understood by the claimant, and specific references to
pertinent Plan provisions on which the decision is based.
         8.6.  Indemnification  of  Committee  Members.  The  Company  agrees to
indemnify  and defend to the  fullest  extent of the law any  Employee or former
Employee  who serves or has served as a member of the  Committee or who has been
appointed to assist the  Committee in  administering  the Plan or to whoever the
Committee  has  delegated  any of its  dates  or  responsibilities  against  any
liabilities,  damages, costs and expenses (including attorneys' fees and amounts
paid in settlement of any claims approved by the Company)  occasioned by any act
or omission to act in  connection  with the Plan, if such act or omission to act
is in good faith.
         8.7. Delegation of Duties. The plan administrator at its discretion may
delegate specific fiduciary  responsibilities  (other than those of the trustee)
or ministerial duties to employees of the Company or other  individuals,  all of
whom shall serve at the  pleasure of the plan  administrator  and, if  full-time
employees of the Company,  without  compensation.  any such person may resign by
delivering  written  notice  of  such  resignation  to the  plan  administrator.
vacancies  created by  resignation,  death or other  causes may be filled by the
plan administrator or reabsorbed or redelegated by the plan  administrator.  Any
delegation  hereunder  shall be  communicated  in  writing to the  Company,  the
trustee and, if applicable, any insurance Company or investment manager.
         8.8. Investment Manager.  The Company, or the Committee,  if appointed,
as named  fiduciary,  may, in its discretion,  appoint an investment  manager to
manage  all or a portion of the assets of the  Trust.  Such  manager  shall be a
registered  investment advisor,  bank or insurance company within the meaning of
Section 3(3)) of ERISA and shall  acknowledge  in writing that he is a fiduciary
with respect to the Trust. The Company or Committee shall notify the Trustee and
the Plan  Administrator  (if other than the Company) of any such appointment and
shall  designate  in writing  the  portion of the Trust  assets  which  shall be
subject to the management of such investment manager.
         8.9. Records and  Recordkeeping.  The Plan  Administrator  shall keep a
record of all  proceedings  and acts,  and shall keep all such books of account,
records and other data as may be necessary for the proper  administration of the
Plan, which, if the Company is not the Plan  Administrator,  shall be subject to
inspection  or audit by the Company at any  reasonable  time.  The Company shall
supply  all  Employee   data  and  other   information   required  by  the  Plan
Administrator to administer the Plan, and the Plan  Administrator  may rely upon
the accuracy of such information.  The Plan Administrator shall file or cause to
be filed such annual reports,  financial and other statements, and shall furnish
such  reports,   statements  and  their  documents  to  such   Participants  and
Beneficiaries  under the Plan as may be required by any federal or state statute
or  regulation  within  the time  prescribed  for  filing  and  furnishing  such
documents.
         8.10. Notice to Trustee.  The Plan Administrator  shall promptly notify
the Trustee and, if applicable,  the insurance  Company in writing of the death,
retirement or termination of a Participant  and shall execute and deliver to the
Trustee such forms as may be required to carry out the  provisions  of the Plan.
All notices,  instructions and  certifications  by the Company to effectuate the
administration of the Plan shall be in writing signed by the Plan  Administrator
or its duly authorized representative.
         8.11.  Compensation and Expenses. The expenses properly incurred by the
Plan Administrator in the performance of its duties,  shall be paid by the Trust
fund except to the extent paid by the Company. However, no compensation shall be
paid to the Plan  Administrator if he receives  full-time  compensation from the
Company.
         8.12.    Service of Legal Process.  The Plan Administrator shall be the
agent for serve of legal process.
         8.13.    Person Authorized to Act for the Company.  Whenever under the
terms of the Plan the Company is permitted or required to take some action, such
action may be taken by any officer of an incorporated  Company who has been duly
authorized  by the  Board  of  Directors  of the  Company,  or in the case of an
unincorporated  Company by any  individual  employed by the Company who has been
duly authorized by its legally constituted authority.



<PAGE>


                                    ARTICLE 9
                           THE TRUST AND THE TRUSTEES
         This Article 9 shall be effective January 30, 1996.
         9.1.  Trust Fund.  The Trustees  will accept and hold in the Trust Fund
contributions made by or on behalf of Participants.  The Trust Fund will consist
of all such contributions and the investments and reinvestments  thereof without
distinction between principal and income.
         9.2.  Investment of Trust Fund. (a) General.  All  contributions to the
Trust for a  Participant's  benefit  shall be held by the  Trustees in the Trust
Fund,  and except as provided in (d) below,  invested  solely  according  to the
Participant's  directions,  among the investment funds chosen and made available
under the Plan by the Plan Administrator.  Such investment direction shall be in
accordance with the provisions  contained in this Article. The Participant shall
provide such direction to the Plan Administrator,  using such method as the Plan
Administrator may require,  which shall specify how such  contribution  shall be
allocated among such investment  funds. The percentage of all such action may be
in multiples of 1% and shall apply uniformly to all contributions.
         (b) Changes.  A  Participant  may, at least  annually and at such other
times as may be  prescribed  by the Plan  Administrator  pursuant  to a uniform,
nondiscriminatory policy, change his investment direction with respect to future
contributions by providing a new direction to the Plan Administrator at least 30
days (or such shorter  period as may be  prescribed  by the Plan  Administrator)
prior to the  effective  date of such  change,  using  such  method  as the Plan
Administrator may require.  Such new direction shall apply only to contributions
made by or on behalf of the Participant on or after such date.
         (c) Investment of ESOP Cash Account.  A Participant's ESOP Cash Account
shall be invested pursuant to Section 9.2(a) hereof. The ESOP Cash Account shall
not be invested in Company Stock.
         (d) Investment of ESOP Stock Account.  Notwithstanding  anything to the
contrary  in this  Article  9, the  assets of the ESOP  Stock  Account  shall be
invested  solely in shares of Company  Stock.  Cash dividends or other cash paid
with respect to shares in a  Participant's  ESOP Stock Account shall be credited
to such  Participant's  ESOP Cash  Account  and  reinvested  pursuant to Section
9.2(a).  Dividends  distributed  in the form of stock,  stock  splits  and other
adjustments made in the form of stock with respect to a Participant's ESOP Stock
Account shall be credited to such Participant's ESOP Stock Account.
         9.3.  Powers of the  Trustees.  In addition to and not in limitation of
such  powers  granted  to them by law or  under  any  other  provisions  of this
Agreement, the Trustees will have the following powers:
         (a)      to deal with all or any part of the Trust Fund;
         (b) to  enforce  by suit or  otherwise,  or to waive,  their  rights on
behalf of the Trust Fund,  and to defend  claims  asserted  against  them or the
Trust Fund,  provided that the Trustees are  indemnified  to their  satisfaction
against liability and expenses;
         (c) to  compromise,  adjust or settle any and all claims  against or in
         favor of them or the Trust  Fund;  (d) to vote or give  proxies to vote
         any securities  held in the Trust Fund; (e) to oppose or participate in
         and consent to the organization,  merger, consolidation or readjustment
         of the finances
of       any   enterprise,   to  pay  assessments  and  expenses  in  connection
         therewith, and to deposit securities under any agreements;  (f) to open
         such  bank  accounts  as they deem  appropriate;  (g) to  purchase,  or
         subscribe  for, any securities or other property and to retain the same
         in trust; (h) to sell,  exchange,  convey,  transfer,  grant options to
         purchase, or otherwise dispose of any securities or other
property held by the Trustees;
         (i) to acquire  real estate by  purchase,  exchange or as the result of
any foreclosure,  liquidation or other salvage; to hold such real estate in such
manner and upon such terms as the  Trustees may deem  advisable;  and to manage,
operate,  repair,  develop,  partition,  mortgage or lease any such real estate,
upon such terms and  conditions as the Trustees  deem proper,  using other trust
assets for any of such purposes if deemed advisable;
         (j) to invest in Treasury Bills and other forms of United States
             government obligations;
         (k) to employ such agents and  counsel as may be  reasonably  necessary
from time to time and to pay them reasonable  expenses and compensation (and the
Trustees will not be  responsible  for any loss  occasioned by any such agent or
counsel selected with reasonable care);
         (l) to hold securities  unregistered,  or to register them in their own
         name or in the name of nominees; (m) to make, execute,  acknowledge and
         deliver any and all  instruments  which may be necessary or appropriate
         to carry out
the powers herein granted;
         (n) generally to exercise any of the powers of an owner with respect to
         all or any part of the Trust Fund; (o) in accordance with ERISA Section
         405(b)(1)(B),   to   allocate,   by   written   instrument,    specific
         responsibilities,
obligations and duties among themselves; and
         (p) if so  directed  by the  Committee,  to  withhold  any and all such
amounts  from  distributions  from the Trust Fund as are required to be withheld
under the Code and applicable regulations.
         9.4. Reliance by Trustees on Other Persons.  To the extent permitted by
law,  the  Trustees  may rely  upon and act upon  any  writing  from any  person
authorized by the Plan  Administrator to give  instructions  concerning the Plan
and may conclusively rely upon and be protected in acting upon any written order
from  the  Plan  Administrator  or upon  any  other  notice,  request,  consent,
certificate or other  instructions or paper reasonably  believed by them to have
been executed by a duly authorized  person, so long as they act in good faith in
taking or omitting to take any such action.  The Trustees need not inquire as to
the  basis  in  fact  of  any  statement  in  writing  received  from  the  Plan
Administrator, except as may otherwise be required by law.
         9.5.  Consultation  by Trustees With Counsel.  The Trustees may consult
with  legal  counsel  (who may be  counsel  for the  Company  or the  Committee)
concerning  any question which may arise with respect to their rights and duties
under the Plan, and the opinion of such counsel will, to the extent permitted by
law, be full and complete  protection  in respect of any action taken or omitted
by the Trustees  hereunder in good faith and in  accordance  with the opinion of
such counsel.
         9.6. Accounts.  The Trustee will keep full accounts of all receipts and
disbursements and other transactions  hereunder.  Within 90 days after the close
of each Plan Year, upon termination of the Trust, and at such other times as may
be appropriate, the Trustees will determine the then net worth of the Trust Fund
and will render to the Company an account of their  administration  of the Trust
during the period since the last such accounting, including all allocations made
by them during such period.
         9.7. Approval of Accounts.  To the extent permitted by law, the written
approval  of any  account by the Company  will be final and  binding,  as to all
matters  and  transactions  stated  or  shown  therein,  upon the  Company,  the
Committee,  Participants  and all  persons  who  then are or  thereafter  become
interested  in the  Trust.  The  failure of the  Company to notify the  Trustees
within sixty (60) days after the receipt of any account of its  objection to the
account will be the  equivalent  of written  approval.  If the Company files any
objections  within  such sixty (60) day period  with  respect to any  matters or
transactions  stated or shown in the  account,  and the Company and the Trustees
cannot amicably settle the question raised by such objections, the Trustees will
have the right to have such question  settled by judicial  proceedings.  Nothing
herein contained will be construed so as to deprive the Trustees of the right to
have a judicial  settlement of their accounts.  In any proceeding for a judicial
settlement of any accounts or for instructions,  the only necessary parties will
be the Trustees and the Company.
         9.8. Procedure for Trustee Action. If the Trustees consist of more than
one party,  the Trustees shall act by agreement of a majority of the Trustees at
a meeting, or by unanimous consent in writing without a meeting. In the event of
a deadlock or other  situation  which  prevents  agreement  of a majority of the
Trustees,  the matter shall be decided by the Board of Directors.  Further,  the
Trustees  may  authorize  one or more of the  Trustees  to sign all  checks  and
execute all  instruments or memoranda  necessary or appropriate to carry out the
actions and decisions of the Trustees, or to act on behalf of the Trustees.
         9.9.  Allocation of Responsibility.  If there is more than one Trustee,
the Trustees shall jointly manage and control the assets of the Trust unless the
Company chooses to allocate  specific  responsibilities,  obligations and duties
among the  Trustees.  If the Company  shall make such an  allocation,  then each
Trustee shall be responsible for the duties  allocated to such Trustee and other
Trustees shall not be liable for any breach of such fiduciary responsibility for
the duties allocated except as provided by ERISA.
         9.10. Resignation. Any of the Trustees may resign at any time by filing
with the Company his written resignation,  which will be effective 60 days after
receipt  thereof by the  Company or upon the prior  appointment  of a  successor
Trustee.
         9.11.  Removal of Trustees.  The Company may remove any of the Trustees
at any time by notice in writing  forwarded to such Trustees by registered  mail
or delivered to such Trustee.  Such removal will be effective at the  expiration
of 5 business  days from the date of mailing or the date of delivery as the case
may be.
         9.12.  Appointment  of  Successor  Trustee.  The  Company may appoint a
successor Trustee to replace any Trustee who has died, resigned or been removed,
and may appoint an  additional  Trustee or  additional  Trustees at any time and
from time to time. Any such successor  Trustee or additional  Trustee will, upon
written  acceptance of his appointment,  become vested with the rights,  powers,
discretion,  duties and  obligations  of a Trustee  hereunder  as if he had been
originally named as Trustee in this Agreement.
         9.13.  Compensation of Trustees and Expenses of Trust. Trustees who are
also  Employees will serve without  compensation  from the Plan. If a Trustee is
not an Employee, the Trustee shall be paid such compensation for its services as
shall from time to time be agreed to by the Company and the Trustee. Unless paid
by the  Company,  all  expenses  of the Trust,  including,  without  limitation,
Trustee  compensation,  reasonable  legal  fees,  and all  taxes  of any  nature
whatsoever  including  interest and penalties,  assessed against or imposed upon
the  Trustees or the Trust Fund or the income  thereof,  will be paid out of the
Trust Fund.  Any amount so paid out of the Trust Fund,  unless  allocable to the
account of a particular  distributee,  will be apportioned  among the individual
accounts of Participants as the Plan Administrator may direct, or in the absence
of such direction as the Trustees may determine.
         9.14. Disputes as to Persons Entitled to Payment. If any dispute arises
as to the persons to whom payment or delivery of funds or property is to be made
by the Trustees, the Trustees may retain such payment and postpone such delivery
until  adjudication  of such  dispute  has  been  made by a court  of  competent
jurisdiction,  or until the Trustees have been indemnified to their satisfaction
against loss, or until such dispute has been settled by the persons concerned.
         9.15.  Action by Majority  Vote. A majority of the Trustees at the time
in office may do any action  which this  Agreement  authorizes  or requires  the
Trustees to do; and the action of such majority  expressed  from time to time by
vote at a meeting or in writing  without a meeting will constitute the action of
the Trustees and will have the same effect for all purposes as if assented to by
all of the Trustees at the time in office.
         9.16.  Liability of Trustees.  The Trustees shall be fully protected in
acting upon any instrument,  certificate, or paper, believed by it to be genuine
and to be signed or presented by the proper person or persons,  and the Trustees
shall be under no duty to make any  investigation or inquiry as to any statement
contained in any such writing but may accept the same as conclusive  evidence of
truth and  accuracy of the  statements  therein  contained.  Except as otherwise
provided in Section 405 of the Employee  Retirement Income Security Act of 1974,
the Trustees shall not be liable for any act or omission of any other  fiduciary
under the Plan,  or otherwise  for any loss,  damage or  depreciation  which may
result in connection with the exercise of its duties or with the exercise of its
discretion or upon any other act or omission  hereunder except when due to their
own  negligence.  No bond,  surety or other  security  shall be  required of the
Trustees unless specifically  required by the Company or unless required by law,
in which case the cost of such bond,  surety or the security shall be an expense
chargeable in accordance with Section 9.13.
         9.17.  Indemnification of Trustees. The Company agrees to indemnify and
defend to the fullest  extent of the law any Employee or former  Employee who in
good  faith  serves  or has  served  in the  capacity  of  Trustee  against  any
liability,  damage,  costs and  expenses  occasioned  by his  having  occupied a
fiduciary  position in  connection  with the Plan.  The Company may, by separate
agreement  and to the  extent  permitted  by law and its  charter  and  by-laws,
indemnify any individual  Trustee,  whether or not such person continues to hold
such office,  for any  liability  incurred in the  administration  of the Trust,
except such liability as may arise from his own personal and willful neglect and
misconduct.  Any amounts paid pursuant to such indemnification shall not relieve
such individual Trustee from any liability,  responsibility,  obligation or duty
that he may have under ERISA.
         9.18.    Insurance Policies.
         (a) Purchase of Insurance Policies. The Trustees may apply a portion of
contributions  made by or on behalf of the  Participant  toward the  purchase of
policies  issued  by the  Insurance  Company  ("Policies")  on the  life  of the
Participants.  The Trustees shall be designated the sole owner of such Policies,
but all  benefits,  rights,  privileges  and options under such Policies and all
dividends  payable or refunds  made by the  Insurance  Company on such  Policies
shall be exercised  and dealt with for the sole benefit of the  Participant  (or
his  Beneficiary)  on  whose  behalf  such  Policies  were  purchased.  Employee
contributions   may  be  used  to  pay  premiums  on  Policies  or  supplemental
agreements,  but such  contributions  shall not be  subject  to the  limitations
contained in Subsection (b) of this Section.
         (b) General Rules and  Limitations.  All policies  shall be issued on a
uniform and  nondiscriminatory  basis as such date(s) as shall be  prescribed by
the Plan  Administrator.  Any  adjustment  to an existing  Policy to increase or
decrease  the face amount and premium may be made as of an  anniversary  of such
date(s),  or as of another date during the calendar  year.  Payments made to the
Insurance  Company  with  respect  to  any  Policy  purchased  on  behalf  of  a
Participant   shall   constitute  an  investment  of  funds   credited  to  such
Participant's account, and his accounts shall accordingly be reduced by any such
payments. The purchase of Policies shall be limited as follows:
                  (i) Ordinary  Life.  If ordinary life  insurance  Policies are
purchased, less than 1/2 of the aggregate Employer contributions and forfeitures
allocated to any Participant  shall be used to pay the premiums  attributable to
them.  For  purposes of this  Section,  ordinary  life  insurance  Policies  are
Policies with both nondecreasing death benefits and nonincreasing premiums.
                  (ii) Term and Universal Life. If term life insurance Policies,
universal life insurance  Policies,  or any other life insurance  Policies which
are  not  ordinary  life  are  purchased,  or  if  supplemental  agreements  are
purchased,  no  more  than  1/4  of the  aggregate  Employer  contributions  and
forfeitures  allocated  to any  Participant  will be  used  to pay the  premiums
attributable to them.
                  (iii)  Combination.  The  sum  of 1/2  of  the  ordinary  life
insurance  premiums  and all other  life  insurance  premiums  and  supplemental
agreement premiums shall not exceed 1/4 of the aggregate Employer  contributions
and forfeitures allocated to any Participant.
         (c) Dividends.  Any dividends  payable on a Policy while premium paying
shall be applied in any manner  permitted by the insurer and shall  increase the
Participant's  accounts  on whose  life the  Policy was  issued.  Any  dividends
payable upon the surrender of a Policy shall increase the Participant's accounts
on whose life the Policy was  issued.  Any  dividends  payable on a Policy  upon
death of a  Participant  shall be paid with the Policy  proceeds to increase the
death benefit of the Participant.
         (d) Premium Refund.  Any refund of premiums  payable upon the surrender
of a Policy shall  increase the  Participant's  account on whose life the Policy
was issued.  Any refund of premiums  on a Policy  payable  upon the death of the
Participant,  for the  pro-rata  portion of the premium  paid beyond the date of
death,  shall be paid with the Policy  proceeds to increase the death benefit of
the Participant.
         (e)  Conversion  of  Policies.  Notwithstanding  any  other  provisions
herein,  in the event any  Policy is  converted  to an annuity  pursuant  to the
provisions of this Article, such annuity shall be endorsed as nontransferable.
         (f) Supplemental Agreements. The cost of any agreement for supplemental
benefits,  waiver of premium, waiver of side fund or any other optional coverage
available from the insurer shall be paid from the Participant's account.
         (g)  Conflict  Between  Terms.  In the  event of any  conflict  between
provisions  of the Plan and the  terms of any  policy,  the  Trustee  shall  not
exercise any Policy rights which would be in conflict with the provisions of the
Plan.
         9.19.    Group Annuity Policies.
         (a) Purchase.  The Trustee may, but is not required to, obtain from the
Insurance  Company a Group  Annuity  Policy to  provide  all or a portion of the
benefits  of  the  Plan.   The  Group  Annuity  Policy  shall  provide  for  the
establishment  and  maintenance of an investment  fund or funds by the Insurance
Company to which  contributions  made hereunder shall be credited and from which
amounts shall be withdrawn to pay retirement benefits and such other benefits as
may be provided by the Plan.
         (b)  Separate  Investment  Accounts.  To  the  extent  permitted  under
applicable  law and  regulations,  the Group  Annuity  Policy may  provide  that
contributions  made hereunder may be deposited in the general investment account
of the Insurance Company,  with interest guaranteed on such deposits,  or in one
or more  separate  investment  accounts  of the  Insurance  Company  without any
guarantees  as to  principal  or  interest  thereon.  Such  separate  investment
accounts may be invested  primarily  in  equities,  bonds and other fixed income
securities.  The  value of the  general  investment  account  and such  separate
investment accounts shall be determined at least once during each policy year.
         (c)  Conflicting  Provisions.  The  terms and  provisions  of the Group
Annuity  Policy  shall be as agreed upon  between the Trustee and the  Insurance
Company and shall, to the extent possible,  be consistent with the provisions of
the Plan.  In the  event of any  conflict  between  the  provision  of the Group
Annuity Policy, the provisions of the Plan shall control.



<PAGE>


                                   ARTICLE 10
                            AMENDMENT AND TERMINATION
         10.1.  Amendment.  The  Company  may at any  time or  times  amend  the
provisions  of the Plan and Trust to any extent  and in any  manner  that it may
deem advisable by a written  instrument signed by the Company providing for such
amendment. However, that the Company will not have the power:
         (a) to amend the Plan or Trust in such  manner as would cause or permit
any part of the assets of the Trust to be diverted  to  purposes  other than for
the  exclusive  benefit  of each  Participant  and his  Beneficiary  (except  as
permitted  by Sections  4.5,  9.14,  13.3 and 13.4),  unless such  amendment  is
required or permitted by law, governmental regulation or ruling;
         (b) to amend the Plan or Trust  retroactively in such a manner as would
deprive any  Participant  of any benefit to which he was entitled under the Plan
by reason of contributions made prior to the amendment, unless such amendment is
necessary  to conform  the Plan or Trust to, or satisfy the  conditions  of, any
law,  governmental  regulation or ruling, or to permit the Trust and the Plan to
meet the requirements of Code Sections 401(a) and 501(a); or
         (c) to amend  the Plan or Trust in such  manner as would  increase  the
duties or liabilities of the Trustees,  unless the Trustees  consent  thereto in
writing.
         10.2. Termination.  The Company has established the Plan and authorized
the establishment of the Trust with the bona fide intention and expectation that
contributions  will be  continued  indefinitely,  but the  Company  will have no
obligation or liability  whatsoever to maintain the Plan for any given length of
time and may discontinue  contributions  under the Plan or terminate the Plan at
any  time  by  written  notice  delivered  to  the  Trustees  without  liability
whatsoever for any such  discontinuance or termination.  The Plan will be deemed
terminated:
                  (a) if and when the Company is judicially declared bankrupt,
                  (b) if and when the Company is a party to a merger in which it
is not the  surviving  corporation  or  sells  all or  substantially  all of its
assets,  unless the surviving corporation or the purchaser adopts the Plan by an
instrument in writing  delivered to the Trustees within 60 days after the merger
or sale, or (c) upon dissolution of the Company.
         10.3.  Distributions  Upon Termination of the Plan. Upon termination or
partial  termination  of the Plan or complete  discontinuance  of  contributions
thereunder, each Participant will have a nonforfeitable interest in 100% of each
of his Accounts.  Upon  termination of the Plan, the Trustees will distribute to
each  Participant  (or other person entitled to  distribution)  the value of the
Participant's  Accounts  in a  single  sum  cash  payment,  in the form of cash.
However,  if a successor plan is established  within the meaning of Code Section
401(k)(2)(B)(i)(II),  Accounts shall be distributed  to  Participants  and their
beneficiaries  only in accordance  with Articles 6 and 7. Upon the completion of
distributions to all Participants,  the Trust will terminate,  the Trustees will
be relieved  from all liability  under the Trust,  and no  Participant  or other
person will have any claims thereunder, except as required by applicable law.
         10.4. Merger or Consolidation of Plan; Transfer of Plan Assets. In case
of any merger or  consolidation  of the Plan  with,  or  transfer  of assets and
liabilities of the Plan to, any other Plan,  provision must be made so that each
Participant  would, if the Plan then terminated,  receive a benefit  immediately
after the merger,  consolidation  or transfer  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.


<PAGE>


                                   ARTICLE 11
                              TOP HEAVY PROVISIONS
         11.1.  General  Rule.  For any year that is a "top-heavy  plan year" as
defined in  subsection  11.3  below,  and other  provisions  of this Plan to the
contrary notwithstanding, this Plan shall be subject to the minimum contribution
provisions of this Section 11.1. Each  Participant who is (a) a non-key employee
and (b)  employed on the last day of the Plan Year  (regardless  of whether such
Participant  has completed  1,000 hours of service)  shall be entitled to have a
contribution  made on his or her  behalf  by the  Company  of not less  than the
lesser of:
                  (x) three percent (3%) (the "minimum contribution percentage")
of the Participant's Compensation (as defined in Section 2.15(c)) or
                  (y) the highest  percentage  obtained  by  dividing  the total
Elective  Contributions  and  Company  Contributions  made on behalf of each key
employee by the key employee's compensation (as defined in Section 2.15(c)).
         Such contribution  shall be made on behalf of each Participant who is a
non key employee.
         Contributions  taken  into  account  under  the  immediately  preceding
sentence shall include contributions under this Plan and under all other defined
contribution plans required to be included in an aggregation group but shall not
include any plan required to be included in such aggregation  group if such plan
enables a defined benefit plan required to be included in such group to meet the
prohibition  against  discriminations  in benefits or  contributions  under Code
Section  401(a)(4) or the requirements with respect to participation or coverage
under Code Section 410.
         Contributions  taken into  account  under this  Section  11.1 shall not
include any contributions  under the Federal Insurance  Contributions Act or any
other  Federal  or  State  law.  Neither  Elective  Contributions  nor  Matching
Contributions shall be taken into account for purposes of satisfying the minimum
allocation requirements of subsection (a) above.
         11.2.  Adjustment  to  Limitation  on  Benefits.  For  purposes  of the
limitation  set forth in Section 4.10 of the Plan,  the  definitions of "defined
contribution  plan  fraction"  and  "defined  benefit plan  fraction"  contained
therein shall be modified,  for any Plan Year which is a top heavy plan year, by
applying the special rule set forth in Code Section  416(h)  unless (a) the Plan
and each plan with which the Plan is required  to be  aggregated  satisfies  the
requirements of Code Section 416(h)(2)(A), and (b) such Plan Year would not be a
top heavy plan year if "90  percent"  were  substituted  for "60 percent" in the
first paragraph of Section 11.4(b).
         11.3. Minimum Vesting Schedule.  For any Plan Year in which the Plan is
in Top-Heavy  Status,  the minimum  vesting  under the Plan shall be 20% after 2
Years  of  Service,  increased  by 20%  for  each  additional  Year  of  Service
thereafter,  but not to  exceed  100%  after 6 Years of  Service.  Such  minimum
vesting  schedule  shall  apply to all  benefits  within the  meaning of Section
411(a)(7) of the Code except those attributable to Elective  Contributions , and
those  amounts  subject to a more rapid  vesting  schedule,  including  benefits
accrued  before  the  effective  date of  Section  416 of the Code and  benefits
accrued before the Plan was in Top-Heavy Status.  Notwithstanding the foregoing,
this  Section  shall not apply to the account  balances of any Employee who does
not have an Hour of Service after the Plan initially  entered  Top-Heavy  Status
and such Employee's Account balances  attributable to Company  Contributions and
forfeitures  shall be determined  without  regard to this Section.  Further,  no
decrease in a Participant's nonforfeitable percentage may occur in the event the
Plan's  Top-Heavy  Status changes for any Plan Year.  The above minimum  vesting
schedule  shall  continue to apply for  subsequent  Plan Years  irrespective  of
whether the Plan remains in Top-Heavy Status.
         11.4.    Definitions.  As used in this Article 11, the following terms 
         have the following meanings:
         (a) "key  employee"  means a key  employee  described  in Code  Section
         416(i)(1),  determined on the basis of Compensation; and (b) "Top-Heavy
         Status" means:
                  (i) If the Top-Heavy  Ratio for this Plan exceeds 60% and this
Plan is not part of any Required  Aggregation  Group or  Permissive  Aggregation
Group of plans.
                  (ii) If this Plan is a part of a Required Aggregation Group of
plans  (but  which  is not  part  of a  Permissive  Aggregation  Group)  and the
Top-Heavy Ratio for the group of plans exceeds 60%, or
                  (iii) If this Plan is a part of a Required  Aggregation  Group
of plans and part of a Permissive  Aggregation Group and the Top-Heavy Ratio for
the Permissive Aggregation Group exceeds 60%.
         (c)      "Top-Heavy Ratio":
                  (i) If the Company maintains one or more defined  contribution
plans and the Company has not maintained  any defined  benefit plan which during
the 5-year  period  ending on the  Determination  Date(s) has or has had accrued
benefits,  the  Top-Heavy  Ratio  for this  plan  alone or for the  Required  or
Permissive  Aggregation  Group as  appropriate  is a fraction,  the numerator of
which  is the  sum of the  account  balances  of  all  Key  Employees  as of the
Determination  Date(s) (including any part of any account balance distributed in
the 5-year period ending on the Determination  Date(s)),  and the denominator of
which is the sum of all  account  balances  (including  any part of any  account
balance  distributed in the 5-year period ending on the Determination  Date(s)),
both  computed in  accordance  with Section 416 of the Code and the  regulations
thereunder.  Both the  numerator  and  denominator  of the  Top-Heavy  Ratio are
increased to reflect any contribution not actually made as of the  Determination
Date,  but which is required to be taken into account on that date under Section
416 of the Code and the regulations thereunder.
                  (ii) If the Company maintains one or more defined contribution
plans and the Company  maintains or has maintained  one or more defined  benefit
plans which during the 5-year period ending on the Determination  Date(s) 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 the account balances under the aggregated  defined  contribution  plan or
plans for all Key Employees,  determined in accordance  with (i) above,  and the
Present Value of accrued  benefits under the aggregated  defined benefit plan or
plans for all Key Employees as of the Determination Date(s), and the denominator
of  which  is the sum of the  account  balances  under  the  aggregated  defined
contribution plan or plans for all  Participants,  determined in accordance with
(i) above,  and the Present Value of accrued  benefits under the defined benefit
plan  or  plans  for  all  Participants  as of the  Determination  Date(s),  all
determined  in  accordance  with  Section  416 of the Code  and the  regulations
thereunder.  The  accrued  benefits  under a  defined  benefit  plan in both the
numerator  and  denominator  of  the  Top-Heavy  Ratio  are  increased  for  any
distribution  of an  accrued  benefit  made in the 5-year  period  ending on the
Determination Date.
                  (iii) For purposes of (i) and (ii) above, the value of account
balances and the Present Value of accrued benefits shall be determined as of the
most recent  Valuation  Date that falls within or ends with the 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 (i) who
is not a Key Employee  but who was a Key  Employee in a prior year,  or (ii) who
has not completed an Hour of Service at any time during the 5-year period ending
on the Determination Date shall be disregarded. The calculation of the Top-Heavy
Ratio, and the extent to which distributions, rollovers, and transfers are taken
into account  shall be made in  accordance  with Section 416 of the Code and the
regulations  thereunder.  Deductible  employee  contributions shall not be taken
into account for purposes of computing the  Top-Heavy  Ratio.  When  aggregating
plans the value of account  balances and accrued  benefits  shall be  calculated
with  reference to the  Determination  Dates that fall within the same  calendar
year.  The accrued  benefit of a Participant  other than a Key Employee shall be
determined  under (A) the method,  if any,  that  uniformly  applies for accrual
purposes under all defined benefit plans  maintained by the Employer,  or (B) if
there is no such method,  as if such  benefit  accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Section 411(b)(1) of
the Code.
         (d) "Permissive  Aggregation Group": The Required  Aggregation Group of
plans plus any other plan or plans of the Company  which,  when  considered as a
group  with the  Required  Aggregation  Group  would  continue  to  satisfy  the
requirements of Sections 401(a)(4) and 410 of the Code.
         (e)  "Required  Aggregation  Group":  (1)  Each  qualified  plan of the
Company 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 (2) any other  qualified  plan of the Company  which enables a
plan described in (1) to meet the  requirements of Sections  401(a)(4) or 410 of
the Code.
         (f)  "Determination  Date":  For any Plan Year  subsequent to the first
Plan year,  the last day of the preceding  Plan Year. For the first Plan Year of
the Plan, the last day of that year.
         (g) "Valuation Date": The last day of each Plan Year.
         (h) "Present Value":  Present Value shall be based only on the interest
and mortality rates specified in the Adoption Agreement.


<PAGE>


                                   ARTICLE 12
                              LOANS TO PARTICIPANTS
         12.1. In General. Upon the written request of an Eligible Borrower on a
form approved or prescribed by the  Committee,  and subject to the conditions of
this Article,  the  Committee  shall direct the Trustees to make a loan from the
Trust to such Eligible  Borrower.  For purposes of this Article 12, an "Eligible
Borrower" shall mean:
                  (i)      a Participant in the Plan who is an Employee, or
                  (ii) a former Employee,  or a Beneficiary of a deceased former
Employee,  for whom an account is  maintained  under the Plan who is a "party in
interest" with respect to the Plan within the meaning of ERISA Section 3(14).
         12.2.  Rules and Procedures.  The Committee shall promulgate such rules
and procedures,  consistent with the express  provisions of this Article,  as it
deems  necessary to carry out the purposes of this  Article.  All such rules and
procedures  shall be deemed a part of the Plan for  purposes  of  Department  of
Labor's Regulations Section 2550.408b-1(d).
         12.3. Maximum Amount of Loan. The following  limitations shall apply in
determining the amount of any loan to an Eligible Borrower hereunder:
         (a)  The  amount  of  the  loan,  together  with  all  loans  (if  any)
outstanding under other qualified  retirement plans of the Company or Affiliated
Companies, shall not exceed $50,000 reduced by the excess of
                  (1) the  highest  outstanding  loan  balance  of the  Eligible
Borrower  from such plans during the one-year  period ending on the day prior to
the date on which the loan is made, over;
                  (2) the Eligible Borrower's outstanding loan balance from such
         plans  immediately  prior to the loan;  and (b) The  amount of the loan
         shall not exceed 50% of the Eligible  Borrower's vested interest in the
         Eligible Borrower's
Accounts,  determined as of the Valuation Date immediately preceding the date of
the loan.
         12.4.  Other  Limitations.  The minimum amount of any single loan under
this Plan shall be $1,000. Loans may be granted to any Participant no more often
than  once in any  twelve  (12)  month  period  and only  one  loan  may  remain
outstanding at any time.
         12.5. Note; Security;  Interest. Each loan shall be evidenced by a note
signed by the  Eligible  Borrower.  The note  evidencing  a loan to an  Eligible
Borrower under this Article shall be an asset of the Trust which is allocated to
the Accounts of such  Eligible  Borrower,  and shall for purposes of the Plan be
deemed to have a value at any given time equal to the unpaid  principal  balance
of the note plus the amount of any accrued but unpaid interest.  Each loan shall
be secured by that portion of the Eligible  Borrower's  Accounts  represented by
the note. The loan shall bear interest at an annual percentage  interest rate to
be determined by the Committee.  In determining the interest rate, the Committee
shall take into consideration  interest rates currently being charged by persons
in the  business  of  lending  money  with  respect  to  loans  made in  similar
circumstances.  The Committee shall make such determination through consultation
with one or more lending institutions, as the Committee deems appropriate.
         12.6.  Liability.  The  Trustee  shall  not  be  liable  for  any  loss
occasioned  to the  Participant's  Account  under  the Trust  Fund  should it be
determined that any loan does not meet the "prudent man" standards of ERISA.
         12.7.  Repayment.  Each  loan  made  to an  Eligible  Borrower  who  is
receiving compensation from the Company shall be repayable by payroll deduction.
Loans made to other Eligible  Borrowers  (where  payroll  deduction is no longer
practicable) shall be repayable in such manner as the Committee may from time to
time  determine.  In each case payments shall be made not less  frequently  than
quarterly,  over a specified term (as determined by the Committee) not to exceed
five  years  (or a  longer  period  where  the loan  proceeds  are to be used to
purchase the Eligible Borrower's principal residence),  with substantially level
amortization  (as that term is used in Code  Section  72(p)(2)(C)).  An Eligible
Borrower may prepay all of his loan at any time, without penalty,  by paying the
loan principal then outstanding together with interest accrued and unpaid to the
date of payment.  The terms and  conditions  of each loan shall be arrived at by
mutual agreement between the Trustee and the Participant  pursuant to a uniform,
nondiscriminatory  policy.  All loan  repayments and interest earned on any loan
shall be  credited to the  Participant's  accounts in  accordance  with  current
investment  directions,  and in  proportion  to amounts that were drawn from the
accounts  to make the loan.  the Plan  Administrator  shall  take all  necessary
action to ensure that each loan is repaid on schedule by its maturity date.
         12.8.  Repayment Upon Distribution.  If, at the time benefits are to be
distributed  to an  Eligible  Borrower  or his  Beneficiary  with  respect  to a
termination  of  employment,   there  remains  any  unpaid  balance  of  a  loan
thereunder,  such unpaid balance shall, to the extent consistent with Department
of Labor  regulations,  become  immediately due and payable in full. Such unpaid
balance,  together  with any accrued but unpaid  interest on the loan,  shall be
deducted  from  the  Eligible  Borrower's  Accounts,   subject  to  the  default
provisions below,  before any distribution of benefits is made. Except as may be
required in order to comply (in a manner consistent with continued qualification
of the Plan under Code Section 401(a)) with Department of Labor regulations,  no
loan shall be made to an Eligible  Borrower  under this  Article  after the time
distributions  to  the  Eligible  Borrower  with  respect  to a  termination  of
employment are to be paid or commence.
         12.9.  Default.  In the event of a default  in making  any  payment  of
principal  or interest  when due under the note  evidencing  any loan under this
Article, if such default continues for more than 14 days after written notice of
the  default by the  Trustees,  the unpaid  principal  balance of the note shall
immediately become due and payable in full. Such unpaid principal, together with
any  accrued  but  unpaid  interest,   shall  thereupon  be  deducted  from  the
Participant's  Accounts,  subject to the further provisions of this Section. The
amount so deducted shall be treated as distributed to the Eligible  Borrower and
applied  by the  Eligible  Borrower  as a payment  of the  unpaid  interest  and
principal (in that order) under the note evidencing such loan. In no event shall
the   Committee   apply  the  Eligible   Borrower's   Accounts  to  satisfy  the
Participant's  repayment  obligation,  whether  or  not  the  Participant  is in
default,  unless  the  amount  so  applied  otherwise  could be  distributed  in
accordance with this Plan.
         Effective January 1, 1995, in the event that a Participant  defaults on
any loan under this  Article and such  default is not  corrected  within 90 days
(the "Suspension  Date"),  the Participant's  Elective  Deferrals under the Plan
shall be  suspended  until the next Entry  Date  following  the 12 month  period
following such default.
         12.10.  Nondiscrimination.  Loans  shall be made  available  under this
Article to all Eligible Borrowers on a reasonably  equivalent basis, except that
the Committee may make reasonable distinctions based on creditworthiness.


<PAGE>


                                   ARTICLE 13
                            MISCELLANEOUS PROVISIONS
         13.1.  Communication to Participants.  The Plan will be communicated to
all Participants by the Company promptly after the Plan is adopted.
         13.2.  Limitation of Rights.  Neither the  establishment of the Plan or
the Trust, nor any amendment  thereof,  nor the creation of any fund or account,
nor the payment of any benefits,  will be construed as giving to any Participant
or other person any legal or equitable  right against the Company,  Committee or
Trustees,  except  as  provided  herein,  and in no  event  will  the  terms  of
employment or service of any  Participant  be modified or in any way be affected
hereby. It is a condition of the Plan, and each Participant  expressly agrees by
his participation  herein,  that each Participant will look solely to the assets
held in the Trust for the payment of any  benefit to which he is entitled  under
the Plan.
         13.3. Nonalienability of Benefits. The benefits provided hereunder will
not be subject to alienation, assignment, garnishment,  attachment, execution or
levy of any kind, and any attempt to cause such benefits to be so subjected will
not  be  recognized,   except  to  such  extent  as  may  be  required  by  law.
Notwithstanding  any  provisions of the Plan to the  contrary,  if the Committee
receives any  Qualified  Domestic  Relations  Order that requires the payment of
benefits  hereunder or the  segregation  of any Account,  such benefits shall be
paid,  and  such  Account   segregated,   in  accordance   with  the  applicable
requirements of such Order.
         13.4. Failure to Qualify  Initially.  If it is determined that the Plan
or the Trust does not  initially  qualify  under Code  Sections  401 or 501, but
subject to ERISA Section 403(c)(2)(B),  all assets then held under the Plan will
be returned to the Company within one year after such  determination  or refusal
to issue a determination.  Upon such distribution the Plan will be considered to
be rescinded and to be of no force or effect.
         13.5. Governing Law. The Plan and Trust will be construed, administered
and enforced  according to the laws of Massachusetts to the extent such laws are
not inconsistent with and pre-empted by ERISA or other Federal law.


<PAGE>


                                   ARTICLE 14
                            COMPANY STOCK PROVISIONS
         The  purpose  of this  Article  14 is to  preserve  certain  rights and
features  attributable  to  Participant's  interests in their accounts under the
ESOP prior to the Merger,  as defined  below,  and as required by Section 9.2 of
the ESOP. The Plan,  however,  is not intended to be an employee stock ownership
plan, as defined in Code Section 4975(e)(7).
         14.1.  Pre-Retirement  Diversification Rights. If a Participant attains
age 55 and has 10  years  of  participation  in the  Plan,  including  years  of
Participation  in the ESOP,  (so that he is "Qualified  Participant"),  the Plan
Administrator  shall offer such Participant the opportunity to invest,  pursuant
to Section 9.01, or to receive a distribution of the value (determined as of the
last  preceding  Valuation  Date) of at least  25% of the  number  of  shares of
Company Stock  credited to his ESOP Stock Account in the first five years of his
Qualified Election Period (as defined below), and 50% of the number of shares of
Company  Stock  credited  to his ESOP  Stock  Account  in the  last  year of the
Qualified  Election  Period in  accordance  with the  provisions of this Section
14.1.  The  Participant  must elect to  diversify  his ESOP Stock  Account or to
receive such a distribution within 90 days after the end of each of the six Plan
Years  during the  Qualified  Election  Period  (the  "Diversification  Election
Period"),  and the  diversification  or the distribution  will be made within 90
days after  each  election  made by  Participation  during  the  Diversification
Election  Period.  Amounts for which the Participant  requested  diversification
shall be  transferred  to the  Participant's  ESOP Cash Account.  The "Qualified
Election  Period" means the six Plan Years  beginning  with the Plan Year during
which a  Participant  becomes a Qualified  Participant.  The amount which may be
diversified or distributed to a Participant during the Qualified Election Period
shall be  determined  by  multiplying  the  number of shares  of  Company  Stock
credited to the  Participant's  ESOP Stock Account  (including shares of Company
Stock the value of which has been  previously  distributed or transferred to the
Participant's  ESOP Cash Account  pursuant to this  subsection)  by 25% or, with
respect to a  Participant's  final election,  50%,  reduced by the amount of any
prior  transfers  to the ESOP Cash  Account and  distributions  received by such
Participant pursuant to this Section 14.1. Notwithstanding the foregoing, if the
fair market value of the Company Stock  allocated to the ESOP Stock Account of a
Qualified  Participant  is $500 or less  as of the  Valuation  Date  immediately
preceding  the  first  day of any  Diversification  Election  Period,  then such
Qualified  Participant  shall not be entitled to an election  under this Section
14.1 for that Diversification Election Period.
         14.2.    Voting and Tendering of Company Stock.
         (a)  The  Trustee  shall  vote  Company  Stock   attributable   to  the
proportionate  value of each Participant's ESOP Stock Account in accordance with
directions of each  Participant  to whose Account such  proportionate  value has
been  allocated  to the  extent  of his  share  interest  (which  shall  include
fractional as well as whole shares)  therein.  For purposes of  determining  the
number  of  shares to be voted the  Trustee  shall use the  nearest  practicable
valuation date as determined by the Plan  Administrator  in conjunction with the
record date for proxy solicitation by the Employer.
         (b) It is intended  that the Trustee's  functions and  responsibilities
with respect to Company Stock with respect to voting and tender exchange offers,
shall be exercised as follows:
                  (i) Each  Participant  (and  each  beneficiary  of a  deceased
Participant):  (1) is hereby designated as a Named Fiduciary with respect to the
Company Stock allocated to his ESOP Stock Account,  and (2) shall have the right
to direct the Trustee  with  respect to the voting of such shares on each matter
brought before any meeting of the stockholders of the Company.
                  (ii) Before  each such  meeting of  stockholders,  the Company
shall cause to be furnished to each  Participant  and  beneficiary a copy of the
proxy solicitation materials,  together with a form requesting directions to the
Trustee  on how the whole and  fractional  shares  which are  allocated  to such
Participant's or beneficiary's account, shall be voted on each such matter. Upon
timely  receipt of such  directions,  the Trustee shall each such matter vote as
directed the number of shares  (including  fractional  shares) allocated to such
Participant's or beneficiary's ESOP Stock Account, and the Trustee shall have no
discretion.
                  (iii) The Trustee shall, separately, in the case of the shares
held by the Plan,  vote the whole and fractional  allocated  shares for which it
has not received direction in the same proportion as the directed shares of such
allocated shares are voted. The Trustee shall have no discretion in such matter.
                  (iv) The provisions of this paragraph shall apply in the event
a tender offer or exchange  offer for Company  Stock is commenced by a person or
persons (hereinafter, a "tender offer"), including, but not limited to, a tender
offer within the meaning of the Securities Exchange Act of 1934, as from time to
time amended and in effect. The Trustee shall have no discretion or authority to
sell,  exchange or transfer  any shares  pursuant to such tender offer except to
the extent, and only to the extent, provided in this Plan.
                           (A)      Each Participant, and each beneficiary of a
deceased Participant,  is hereby designated as a Named Fiduciary with respect to
the decision whether to tender or exchange certain shares, as follows. Each such
named  fiduciary shall have the right to direct the Trustee in writing as to the
manner in which to  respond  to a tender  offer,  to the extent of the number of
shares  (including  fractional  shares)  which are  allocated  to his ESOP Stock
Account. The Company shall use its best efforts to timely distribute or cause to
be distributed to each Participant (or beneficiary)  such information as will be
distributed to  stockholders  of the Company in connection  with any such tender
offer.
                           (B) Upon timely receipt of such  directions  from the
Named Fiduciaries, the Trustee shall respond as
instructed with respect to such shares of Company Stock.
                           (C)  If  the   Trustee   does  not   receive   timely
instruction from a Named Fiduciary as to the manner in
which to  respond  to such a tender  offer,  the  Trustee  shall  not  tender or
exchange  any of the  Company  Stock  (including  fractional  shares)  which are
allocated to such Named  Fiduciary's  ESOP Stock Account,  and the Trustee shall
have no discretion in such matter.
                           (D) The Plan  Administrator  shall  solicit from each
Participant and beneficiary the directions
described  in this  paragraph  as to whether  shares of Company  Stock are to be
tendered,  and  shall  instruct  the  Trustee  as to the  amount of shares to be
tendered, in accordance with the above provisions.
         14.3. Share Legend.  Shares of Company Stock held or distributed by the
Trustee may include such legal  restrictions on  transferability  as the Company
may reasonably require in order to assure compliance with applicable federal and
state securities laws.

                     [REMAINDER OF PAGE INTENTIONALLY BLANK]


<PAGE>





         IN WITNESS WHEREOF, the Company has caused this instrument to be signed
in its name and on its  behalf by its duly  authorized  officer,  as of the date
first above written.
                                            COPLEY PHARMACEUTICAL, INC.

                                            By:  __________________________


<PAGE>


         RECEIVED  and  AGREED  to  by  the  Trustees,  this  _________  day  of
_______________________, 1998.


                                                     Gene Bauer, Trustee



                                                     Daniel Caron, Trustee



                                                     Russell French, Trustee



                                                     Daniel Hellerman, Trustee



                                                     Barbara Morse, Trustee