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                                                                     EXHIBIT 4.5


       PROFIT-SHARING RETIREMENT PLAN OF KASH 'N' KARRY FOOD STORES, INC.
           (AS AMENDED AND RESTATED EFFECTIVE AS OF DECEMBER 20, 1998)

                  THIS AMENDMENT AND RESTATEMENT is adopted effective as of the
20th day of December, 1998 by KASH 'N' KARRY FOOD STORES, INC., a North Carolina
corporation (referred to herein as the "Company").

                                   WITNESSETH:

                  WHEREAS, the Company adopted, effective as of December 12,
1988, the Kash 'n' Karry Retirement Estates (the "Plan") and Trust Agreement
(the "Trust"); and

                  WHEREAS, the Plan has been restated and amended from time to
time in accordance with the power of amendment therein contained; and

                  WHEREAS, the Company desires to amend and restate the Plan for
recent changes in the law affecting the Plan, and to provide the cessation of
401(k), matching and voluntary after-tax contributions;

                  NOW, THEREFORE, the Plan is restated effective as of December
20, 1998 as follows:



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                                    ARTICLE I
                                   DEFINITIONS

                  The following words and phrases when used herein shall have
the meaning set forth below unless a different meaning is plainly required by
the context:

                  1.1 Account - The account which includes the following
sub-accounts:

                  (a) Before-Tax Account - An account created to hold Before-Tax
Contributions.

                  (b) After-Tax Account - An account created to hold After-Tax
Contributions.

                  (c) Rollover Account - The account maintained for a
Participant to record Rollover Contributions.

                  (d) Matching Account - An account created to hold Matching
Contributions.

                  (e) Employer Contribution Account - The account maintained for
a Participant to record his share of the Employer Contributions (contributions
made with respect to the Plan Year beginning on or after December 20, 1998) to
the Plan.

                  (f) Profit-Sharing Account - The account maintained for a
Participant to record his share of Profit-Sharing Contributions (contributions
made with respect to all Plan Years beginning before December 20, 1998) to the
Plan.

                  1.2 ACP or Average Contribution Percentage - The percentage
calculated in accordance with Section 7.1.

                  1.3 Administrative Committee or Committee - The body, which,
if appointed by the Company, shall be the plan administrator and shall have the
responsibility of the administrative management of the Plan, as provided in
Article XII. In each instance where the Plan shall refer to the Committee, the
reference shall mean the Company for any period during which the Company has not
appointed a Committee.

                  1.4 ADP or Average Deferral Percentage - The percentage
calculated in accordance with Section 7.1.

                  1.5 Affiliated Employer - The Employer and any other company
which is a member of a controlled group of corporations that includes the
Employer within the meaning of section 414(b) of the Code, or related Employers
under common control within the meaning of section 414(c) of the Code, or
related employers which constitute an affiliated service group under section
414(m) of the Code, or employers related through the leasing of employees under
section 414(n) of the Code, or any other entity required to be aggregated with
the Employer pursuant to regulations under section 414(o) of the Code.

                  1.6 Annual Compensation - A Participant's compensation for the
Plan Year, including wages, salary, overtime pay, bonuses, commissions of all
kinds, and lump sum



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amounts paid for accrued unused vacation, but excluding indirect payments such
as non-taxable amounts paid to an Employee as an allowance or reimbursement for
travel expenses, amounts paid or reimbursed by the Company for the Employee's
moving expenses, payments of deferred compensation, income from the exercise of
stock options, the value of job perquisites treated as income to the Employee,
contributions to this or any other profit sharing plan or pension plan, welfare
plans, group insurance plans, and any other payments or benefits not customarily
regarded by the Employer as being current remuneration for services except
contributions paid in cash to certain highly compensated participants in excess
of the limits under Code section 415. As permitted under the Code, "Annual
Compensation" shall also include salary reduction contributions made by the
Employer on behalf of the Employee under Code sections 125, 402(a)(8), 402(h) or
403(b); provided, however, that, for Plan Years beginning on or after January 1,
1994, Annual Compensation shall not include any amount in excess of $150,000, as
adjusted pursuant to section 401(a)(17) of the Code. For the Plan Year that
begins on the Effective Date, Annual Compensation in excess of $200,000, as
adjusted pursuant to section 401(a)(17) of the Code, shall not be included. For
purposes of determining a Participant's Annual Compensation, the "family
aggregation" rules of section 414(q)(6) of the Code shall apply, except that in
applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendant of the Participant who has not attained
age 19 before the close of the Plan Year; provided, however, that commencing
with the Plan Year that begins in 1997, the family aggregation rules shall no
longer be in effect in determining a Participant's Annual Compensation.

                  1.7 Authorized Leaves of Absence - Any absence authorized by
the Employer under the Employer's standard personnel practices, provided that
all persons under similar circumstances must be treated alike in the granting of
such Authorized Leaves of Absence, and provided further that the Employee
returns to Employment within the period of authorized absence. An absence due to
service in the Armed Forces of the United States shall be considered an
Authorized Leave of Absence, provided that the Employee returns to Employment
with the Employer within the period during which his right to Reemployment is
preserved by law.

                  1.8 Beneficiary - Any person or persons (natural or otherwise)
that a Participant designates in accordance with Article VI to receive benefits
payable in the event of the death of the Participant, or in the absence of any
such designated person, such other person determined to be a beneficiary under
Article X hereof.

                  1.9 Board - The Board of Directors of the Company.

                  1.10 Break in Service - A Plan Year in which the subject
individual completes no more than 500 Hours of Service, but not including a Plan
Year the last day of which the individual is on an Authorized Leave of Absence.

                  1.11 Code - The Internal Revenue Code of 1986, as amended from
time to time. All references herein to the Code shall be deemed to refer to the
Internal Revenue Code of 1986, and the regulations established pursuant thereto,
as they now exist or as they may hereafter be amended or modified. Any reference
to a specific section or subsection of the Code shall be deemed to refer to such
section or subsection and the regulations established thereto, as they now exist
or as they may hereafter be amended.



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                  1.12 Company - Kash 'n' Karry Food Stores, Inc., a Delaware
corporation, and a wholly-owned subsidiary of Food Lion, Inc.

                  1.13 Company Stock - The class A common stock of Food Lion,
Inc., par value $.50 per share, and any securities substituted for such stock by
way of recapitalization, reorganization, merger or consolidation.

                  1.14 Contribution - An amount contributed to the Plan by the
Employer or an Eligible Employee, and allocated by contribution type to
Participants' Accounts as specific types of contribution include:

                  (a) Before-Tax Contribution - An amount contributed with
respect to Plan Years that commenced prior to December 20, 1998 on a pre-tax
basis in conjunction with a Participant's Code section 401(k) salary deferral
election.

                  (b) After-Tax Contribution - An amount contributed with
respect to Plan Years that commenced prior to December 20, 1998 by a Participant
on an after-tax basis.

                  (c) Matching Contribution - An amount contributed with respect
to Plan Years that commenced prior to December 20, 1998 by the Employer based
upon the amount contributed by the eligible Participant.

                  (d) Employer Contribution - An amount contributed with respect
to Plan Years commencing on or after December 20, 1998 pursuant to Section 3.1

                  (e) Rollover Contribution - An amount transferred to the Plan
on behalf of the Participant from another qualified retirement plan (within the
meaning of section 401(a) of the Code), or from an individual retirement account
(within the meaning of section 408 of the Code) which contained only amounts
rolled into such account from a qualified retirement plan.

                  (f) Profit-Sharing Contribution - An amount contributed with
respect to Plan Years that commenced prior to December 20, 1998 by the Employer
on an eligible Participant's behalf and allocated on an equal dollar amount
basis to the Participant's Profit-Sharing Account.

                  1.15 Contribution Dollar Limit - The annual limit placed on
each Participant's Before-Tax Contributions, which shall be $7,000 per calendar
year (as indexed for the cost of living pursuant to Code sections 402(g)(5) and
415(d)). For purposes of this Section, a Participant's Before-Tax Contributions
shall include (i) any Employer contribution made under any qualified cash or
deferred arrangement as defined in Code section 401(k) to the extent not
includible in gross income for the taxable year under Code section 402(e)(3) or
402(h)(1)(B) (determined without regard to Code section 402(g)), and (ii) any
Employer contribution to purchase an annuity contract under Code section 403(b)
under a salary reduction agreement (within the meaning of Code section
3121(a)(5)(D)).

                  1.16 Effective Date - The date upon which this amendment and
restatement of Plan is effective, namely December 20, 1998.



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                  1.17 Employee - Any person who is an employee (such term
having its customary meaning) of the Employer receiving remuneration for
personal services rendered to the Employer (other than as an independent
contractor), or who is on an Authorized Leave of Absence, or who is a leased
employee within the meaning of section 414(n)(2) of the Code. Notwithstanding
the foregoing, if such leased employees constitute less than 20% of the
Employer's non-highly compensated work force within the meaning of section
414(n)(5)(C)(ii) of the Code, the term Employee shall not include those leased
employees covered by a plan described in section 414(n)(5)(B) of the Code.
Leased employees shall not be eligible to participate in this Plan.

                  1.18 Employer - Kash 'n' Karry Food Stores, Inc. and every
business enterprise which is authorized by the Board to adopt this Plan and
which duly adopts this Plan, for the exclusive benefit of its eligible employees
(and their beneficiaries), in accordance with the provisions hereof.

                  1.19 Employment - Service as an Employee of the Employer or
any Affiliated Employer. The term "Reemployment" shall mean Employment following
a Break in Service. The terms "Employed" and "Reemployed" shall be used in the
same sense as the terms Employment and Reemployment, respectively.

                  1.20 Entry Date - The first day of each Plan Year.

                  1.21 ERISA - Public Law 93-406, the Employee Retirement Income
Security Act of 1974, as amended from time to time.

                  1.22 Fiduciaries - The named fiduciaries who shall be the
Employers who adopt the Plan, the Committee and the Trustee, and any other
parties designated as fiduciaries by such named fiduciaries in accordance with
the powers herein provided, but only with respect to the specific
responsibilities of each for Plan and Trust administration as set forth herein
and in the Trust Agreement.

                  1.23 Forfeiture - The portion of the Participant's Matching,
Profit-Sharing and Employer Contribution Accounts in which he is not vested at
the time of his termination of Employment and which shall be handled in
accordance with Section 5.4.

                  1.24 HCE or Highly Compensated Employee - An Employee
described as a Highly Compensated Employee in Section 7.1.

                  1.25 Hour of Service - Each Employee shall be credited with an
Hour of Service as follows:

                  (1) Each hour for which an Employee is paid, or entitled to
payment, by the Employer for the performance of duties. These hours shall be
credited to the Employee for the computation period in which the duties are
performed; and

                  (2) Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time during which no duties
are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity



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(including disability), jury duty, military duty or leave of absence, provided,
however, that under this paragraph (2):

                  (i) No more than 500 Hours of Service shall be credited for
         any single continuous period (whether or not such period occurs in a
         single computation period) during which the Employee performs no
         duties;

                  (ii) No hours shall be credited if such payment is made or due
         under a plan maintained by the Employer solely for purposes of
         complying with applicable worker's compensation, unemployment insurance
         or disability insurance laws; and

                  (iii) No hours shall be credited for a payment which
         reimburses an Employee for medical or medically related expenses
         incurred by the Employee; and

                  (3) Each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by the Employer. These hours shall be
credited to the Employee for the computation period to which the award or
agreement pertains rather than the period in which the award, agreement, or
payment is made. The same Hours of Service shall not be credited under
paragraphs (1) or (2), as the case may be, and this paragraph (3). Crediting of
hours for back pay awarded or agreed to with respect to periods described in
paragraph (2) shall be subject to the limitations of that paragraph.

                  (4) An Employee for whom the Employer or Affiliated Employer
maintains records of hours of which payment for the performance of duties is
made shall be credited with Hours of Service on the basis of such records. Any
other Employee shall be credited with Hours of Service on the basis of
forty-five hours for each week he is paid or entitled to payment for the
performance of duties for any part of such week. The provisions of this Section
1.25 shall apply in accordance with Department of Labor Regulations section
2530.200b-2(b), (c) and (f) which are incorporated herein by reference.

                  (5) For purposes of determining whether a Break in Service has
occurred for participation and vesting purposes, Hours of Service shall also
include hours for maternity or paternity absences in accordance with Section
2.2. During such absence, the Employee shall receive credit for Hours of Service
equal to the number of hours that normally would have been credited during the
absence, or if unknown, then eight hours per day of absence, provided that the
credit for Hours of Service on account of pregnancy or placement of a child with
the Employee by adoption shall not exceed 501 Hours of Service for each absence.
Hours of Service on account of pregnancy or adoption shall only be required to
be credited if in the Plan Year in which the maternity or paternity absence
begins, crediting of such hours is necessary to prevent a Break in Service in
that Plan Year; otherwise, such hours shall be credited in the following Plan
Year.

                  1.26 NHCE or Non-Highly Compensated Employee - An Employee
described as a Non-Highly Compensated Employee in Section 7.1.

                  1.27 Normal Retirement Age and Normal Retirement Date - The
Normal Retirement Age shall be the date a Participant attains age sixty (60).
The Normal Retirement



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Date shall be the first day of the month coincident with or next following the
attainment of his Normal Retirement Age. A Participant shall be fully vested in
his Matching, Profit-Sharing and Employer Contribution Accounts upon attaining
his Normal Retirement Age.

                  1.28 Participant - Any Employee who has qualified under the
terms of the Plan for participation therein and who remains so qualified;
provided, that an Employee who has made a Rollover Contribution to the Plan
pursuant to Section 3.8 shall be deemed to be a Participant solely with respect
to the terms of the Plan that apply to the Employee's Rollover Account, and such
Employee shall not otherwise be deemed to be a Participant until the Employee
has qualified under the terms of Article II of the Plan.

                  1.29 Permanent and Total Disability - The loss or loss of use
of a member or bodily function or any other physical or mental condition which,
in the judgment of the Committee, based upon medical reports and other evidence
satisfactory to the Committee, presumably permanently prevents an Employee from
performing his regular duties with the Employer or any other duties the Employer
may assign him, by reason of a medically determined physical or mental
impairment which can be expected to result in death or be of long continuous and
indefinite duration. In the event the Committee finds that a Permanent and Total
Disability does not exist, then it shall by certified mail so notify the
Participant who shall have the rights set forth in the claims procedure in
Section 11.3.

                  1.30 Plan - The profit sharing plan as set forth herein, as
amended and/or restated from time to time. The Plan shall be known as the
Profit-Sharing Retirement Plan of Kash 'n' Karry Food Stores, Inc..

                  1.31 Plan Administrator - The Committee or, in the absence of
a committee, the Company.

                  1.32 Plan Year - The annual payroll accounting period
established each year by the Company for purposes of reporting the annual
compensation of Employees on Treasury Form W-2.

                  1.33 Secretary - The Secretary of the Treasury.

                  1.34 Service - A Participant's period of Employment with the
Employer and any Affiliated Employer.

                  1.35 Spousal Consent - The written consent given by a spouse
to a Participant's Beneficiary designation. The spouse's consent must
acknowledge the effect on the spouse of the Participant's designation and be
duly witnessed by a Plan representative or notary public. Spousal Consent shall
be valid only with respect to the spouse who signs the Spousal Consent and only
for the particular choice made by the Participant which requires Spousal
Consent. A Participant may revoke (without Spousal Consent) a prior designation
that required Spousal Consent at any time before payments begin. Spousal Consent
also means a determination by the Administrator that there is no spouse, the
spouse cannot be located, or such other circumstances as may be established by
applicable law.



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                  1.36 Subsidiary - A company which is 50% or more owned,
directly or indirectly, by the Company.

                  1.37 Trust (or Trust Fund) - The fund maintained under the
Plan in accordance with the terms of the trust agreement, as amended from time
to time, which constitutes a part of the Plan.

                  1.38 Trust Agreement - The agreement between the Employer and
the Trustee which establishes the Trust and provides for the administration of
the Trust.

                  1.39 Trustee(s) - The trustee of the Plan, on the Effective
Date, is INVESCO Trust Company. The term Trustee shall also mean any successor
Trustee(s) designated in the manner provided in the Trust Agreement and
accepting such Trust as provided therein.

                  1.40 Valuation Date - Any periodic and regularly scheduled
date for valuation of the assets of the Trust Fund and of the respective
Accounts of Participants. The particular Valuation Dates will be established and
may be revised, from time to time, by mutual consent of the Employer and the
Trustee. The Annual Valuation Date shall be the last day of each Plan Year.

                  1.41 Vested Interest - The value of a Participant's interest
in his Account that is or has become nonforfeitable under the Plan and will be
paid to the Participant or his Beneficiary in accordance with the terms hereof.
Because of fluctuations in asset value, contribution and Forfeiture allocations,
and other changes in the value of a Participant's Account, the dollar value of a
Participant's Vested Interest is not fixed until it is actually paid under the
provisions hereof.

                  1.42 Year of Service - The applicable 12-month period during
which the Employee completes at least 1,000 Hours of Service. Year of Service
and Hour of Service shall include Service with any Employer or Affiliated
Employer, and Years of Service credited under the Plan prior to the Effective
Date of this amendment and restatement of the Plan.

                  1.43 Gender and Number - The masculine gender wherever used
herein shall be deemed to include the feminine. Words in the singular shall be
read and construed as though used in the plural in all cases where they would so
apply, and vice versa.



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                                   ARTICLE II
                            PARTICIPATION AND SERVICE

                  2.1 Eligibility for Participation -

                  (a) Each Employee of the Employer shall be eligible to
participate in the Plan except that the following Employees shall not be
eligible to participate:

                           (i) An Employee included in a unit of Employees
covered by a bona fide collective bargaining agreement with the Employer that
does not specifically provide for coverage of such Employee under this Plan;
provided that retirement benefits were the subject of good faith bargaining
between the Employer and Employee representatives;

                           (ii) An Employee who is a non-resident alien and
receives no earned income (within the meaning of section 911(d)(2) of the Code)
from the Employer constituting income from sources within the United States
(within the meaning of section 861(a)(3) of the Code);

                           (iii) An individual who is deemed to be an Employee
because he is a leased employee;

                           (iv) An Employee who is employed by an Affiliated
Employer which is not an adopting employer of the Plan;

                           (v) An individual who has signed an employment
agreement, independent contractor agreement, or other personal services contract
with the Employer stating that he or she is not eligible to participate in the
Plan; and

                           (vi) An individual during the period when he or she
is not designated as an "employee" in the Employer's employment records.
Individuals excluded from being eligible Employees by this provision shall
include, but not be limited to, individuals who are engaged by the Employer to
perform services for the Employer in a relationship that the Employer
characterizes as other than an employment relationship. For example, individuals
engaged to perform services in a relationship which the Employer characterizes
as that of an "independent contractor" with respect to the Employer shall not be
eligible Employees. Likewise, individuals whose services the Employer leases
from a third party shall not be eligible Employees. Individuals described in
this provision shall not be eligible Employees during that period, even if a
determination is made by the Internal Revenue Service, the United States
Department of Labor, another governmental agency, a court or other tribunal that
the individual is an "employee" of the Employer during that period, for purposes
of pertinent sections of the Code or for any other purpose. An individual who
has not been an eligible Employee on account of this provision shall become an
eligible Employee effective on the date as of which the Employer characterizes
the individual as an "employee" in the Employer's employment records, if, on
that date, the individual also meets the other requirements of this Article II.



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                  (b) Any Employee of the Employer who was a Participant in the
Plan on the date immediately preceding the Effective Date shall automatically be
a Participant in the Plan. Any other Employee of the Employer shall become a
Participant as of the Entry Date which falls within the first computation period
during which he completes a Year of Service. For purposes of eligibility for
Plan participation, a Year of Service shall mean the first twelve-month period
during which an Employee has at least 1,000 Hours of Service. The computation
period initially to be taken into account for purposes of eligibility shall be
the twelve-month period commencing with the date of the Employee's Employment,
whether such Employment commenced prior or subsequent to the Effective Date. In
the event that the Employee fails to have at least 1,000 Hours of Service during
this initial computation period, the eligibility computation period shall be the
first Plan Year commencing after the date of Employment and, if necessary,
succeeding Plan Years.

                  (c) A Participant's continued eligibility to participate under
the Plan shall be determined on a Plan Year basis. A Participant shall remain a
Participant until his Employment terminates or he incurs a Break in Service,
whichever first occurs. Upon the occurrence of either such event, his
participation shall cease.

                  2.2 Effect of Break in Service on Participation and Vesting -

                  (a) If an Employee has a Break in Service, and if he had not
previously satisfied the eligibility requirements of Section 2.1, then he must
satisfy the eligibility requirements of Section 2.1 as if he were a new Employee
whose Employment commenced on the first date that he completes an Hour of
Service after his Break in Service.

                  (b) In the case of an Employee who was a Participant in the
Plan when he incurred a Break in Service, he will again be considered a
Participant on the first date on which he completes an Hour of Service after the
Break in Service.

                  (c) In the case of an Employee who, at the time of a Break in
Service, does not have any Vested Interest in his Employer Contribution Account,
his Years of Service prior to any period of consecutive one (1) year Breaks in
Service shall not be taken into account for purposes of eligibility and
determining his Vested Interest in Employer contributions after a Break in
Service if the number of consecutive one (1) year Breaks in Service within such
period equals or exceeds five (5) years.

                  (d) In the case of an Employee who, at the time of a Break in
Service, has a Vested Interest in his Employer Contribution Account, his Years
of Service before such Break in Service shall be counted for purposes of
eligibility and determining his Vested Interest in Employer contributions after
his Break in Service.

                  (e) A Participant (whether or not he had a Vested Interest in
his Employer Contribution Account at the time of his Break in Service) who
returns to Employment with the Employer after a Break in Service shall not have
his Years of Service after the Break in Service counted to determine his Vested
Interest in his Employer Contribution Account at the time he



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incurred a Break in Service if the number of consecutive years constituting the
Break in Service equals or exceeds five (5) years at the time of his
Reemployment.

                  (f) The Plan Year shall be the computation period for purposes
of determining whether a Break in Service has occurred. The first Plan Year
computation period for this purpose shall be, in the case of Employees who were
Participants on the Effective Date, the Plan Year commencing on said date, and
shall be, in the case of Employees who thereafter become Participants, the Plan
Year which includes the last day of the computation period during which the
Participant satisfies the requirements for participation as set forth in Section
2.1 above.

                  (g) Maternity or Paternity Leave - In the case of an Employee
who is absent from the employ of the Employer on account of (i) the Employee's
pregnancy, (ii) the birth of a child of the Employee, (iii) the placement of a
child with the Employee in connection with the adoption of the child by the
Employee or (iv) an absence due to the need for caring for such child for a
period beginning immediately following such birth or placement, the Plan shall
treat as Hours of Service, solely for purposes of determining whether a Break in
Service has occurred, the following hours:

                           (i) the Hours of Service which otherwise would
normally have been credited to such Employee but for such absence; or

                           (ii) if the Hours of Service in (i) cannot be
determined, then eight (8) Hours of Service for each day of such absence;

provided that, such Hours of Service credited under this Section 2.2(g) shall
not exceed 501 Hours of Service for each absence.

                  The Hours of Service credited under this Section 2.2(g) shall
be credited in the Plan Year the absence begins only if an Employee would be
prevented from incurring a Break in Service in such Plan Year. In any other
case, such hours shall be credited in the immediately following Plan Year. The
Employee shall not be entitled to receive credit for maternity or paternity
leave under this Section 2.2(g) unless such Employee furnishes to the Plan
Administrator within such reasonable time period as the Plan Administrator may
establish evidence that the absence is on account of one of the four (4) reasons
specified in the first paragraph of this Section 2.2(g) and evidence of the
duration of such absence.

                  2.3 Inactive Account Status - In the event that any
Participant (excluding an Employee whose Employment is terminated) completes
more than 500 Hours of Service but less than 1,000 Hours of Service in any Plan
Year of his participation, or if during a Plan Year a Participant has no more
than 500 Hours of Service but is on an Authorized Leave of Absence, his Employer
Contribution Account shall be placed on inactive status until he incurs a Break
in Service or if on an Authorized Leave of Absence, until his Employment
terminates. Such Participant shall not share in the Employer's contribution made
pursuant to Section 4.1 or the allocations made pursuant to Section 5.3 for any
such Plan Year, but he shall continue to receive allocations in accordance with
Section 5.2. In the event such Participant has 1,000 Hours of Service in a
subsequent Plan Year, his Employer Contribution Account shall revert to active
status for such Plan Year with full rights and privileges under this Plan
restored.



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                  2.4 Transfers of Employment Among Employers - In computing
Service hereunder, the period of an Employee's Employment with any Affiliated
Employer shall be counted for participation and vesting purposes, and a transfer
of an Employee from the employ of one such member to the employ of another
member shall not interrupt Employment. In the event any Participant during the
course of any Plan Year is employed simultaneously by more than one Employer, he
shall be entitled to an allocation under Section 5.3 hereof by taking into
account his aggregate Annual Compensation from such Employer.





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                                  ARTICLE III
                            PARTICIPANT CONTRIBUTIONS

                  3.1 Before-Tax Contribution Election - Immediately preceding
or anytime after meeting the eligibility requirements, an eligible Employee may
elect to reduce his or her Annual Compensation by an amount which does not
exceed the Contribution Dollar Limit, within the limits described in the
Contribution Percentage Limits paragraph of this Article 3, and have such amount
contributed to the Plan by the Employer as a Before-Tax Contribution. The
election shall be made in advance as a whole percentage of Annual Compensation
on such form and with such advance notice as may be prescribed by the Plan
Administrator. In no event shall an Employee's Before-Tax Contributions under
the Plan and all other plans, contracts or arrangements of all Related Companies
exceed the Contribution Dollar Limit for the Employee's taxable year beginning
in the Plan Year.

                  3.2 After-Tax Contribution Election - Immediately preceding or
anytime after meeting the eligibility requirements, an eligible Employee may
elect to make After-Tax Contributions to the Plan in an amount which does not
exceed the limits described in the Contribution Percentage Limits paragraph of
this Article 3. The election shall be made in advance as a whole percentage of
Annual Compensation on such form and with such advance notice as may be
prescribed by the Plan Administrator.

                  3.3 Changes - A Participant who is an eligible Employee may
change his or her Before-Tax and/or After-Tax Contribution election as of any
month by giving the Plan Administrator such advance notice as it requires. The
changed percentage shall become effective with the first payroll paid after
receipt of the notice. Participants' Contribution election percentages shall
automatically apply to Annual Compensation increases or decreases.

                  3.4 Stopping Contribution - A Participant may revoke his or
her Contribution election at any time by giving notice to the Administrator
according to such procedures as to the Administrator shall from time-to-time
establish, and such election shall be effective as soon as administratively
feasible after notice is received by the Administrator. A Participant may
contribute again by making a new Contribution election at the same time and in
the same manner in which a Participant may change his or her election.

                  3.5 Contribution Percentage Limits - The Plan Administrator
may establish (and subsequently change) the maximum Before-Tax and After-Tax
Contribution percentages, and/or a maximum combined Before-Tax and After-Tax
Contribution percentage prospectively or retrospectively (for the current Plan
Year), for all Participants. In addition, the Administrator may establish any
lower percentage limits for Highly Compensated Employees as it deems necessary.
As of the Effective Date, the maximum Contribution percentages are:



                                       13
<PAGE>   14

<TABLE>
<CAPTION>
                                                  Highly
            Contribution                        Compensated                         All Other
                Type                             Employees                        Participants
            ------------                        -----------                       ------------
<S>                                             <C>                               <C>

             Before-Tax                             15%                                15%
              After-Tax                             15%                                15%
             Sum of Both                            15%                                15%
</TABLE>

Irrespective of the limits that may be established by the Plan Administrator in
accordance with this paragraph, in no event shall the contributions made by or
on behalf of a Participant for a Plan Year exceed the maximum allowable under
Code section 415.

                  3.6 Refunds When Contribution Dollar Limit Exceeded - A
Participant who makes Before-Tax Contributions for a calendar year to this and
any other qualified defined contribution plan in excess of the Contribution
Dollar Limit may notify the Administrator in writing by the following March 1
(or as late as April 14 if allowed by the Administrator) that an excess has
occurred. In this event, the amount of the excess specified by the Participant,
adjusted for investment gain or less, shall be refunded to him or her by April
15 and shall not be included as an Annual Addition under Code section 415 for
the year contributed. Refunds shall not include investment gain or loss for the
period between the end of the applicable Plan Year and the date of distribution.
However, for Plan Years ending before December 31, 1993, refunds shall include
investment gain or loss for the period between the end of the applicable Plan
Year and the date of distribution.

                  3.7 No Future Participant Contributions - Effective with
respect to Plan Years commencing on or after December 20, 1998, Participants may
no longer make Before-Tax and After-Tax Contributions to the Plan.

                  3.8 Rollovers - An Employee who receives a distribution of his
entire interest from another retirement plan that is qualified under section
401(a) of the Code on the date of distribution may, with the written consent of
the Plan Administrator and in accordance with procedures adopted by the Plan
Administrator, transfer all or a part of such distribution to the Trustee under
the Plan. The amount so transferred may only include cash. In applying the
provisions of this Section 3.8, the following provisions shall apply:

                  3.8.1 Employees Eligible: An Employee shall be eligible to
         roll an amount into the Plan pursuant to this Section 3.8 only if the
         Employee is otherwise eligible to participate in the Plan under Section
         2.1(a) (without regard to the service conditions contained in Section
         2.1(b)). If an Employee who makes such a transfer has not completed the
         service requirements of Section 2.1(b), his Rollover Account shall
         represent his sole interest in the Plan until he becomes a Participant.

                  3.8.2 Timing: the transfer to the Trustee must occur on or
         before 60 days following receipt by the Employee of such distribution.
         If such distribution was previously deposited in an individual
         retirement account or individual



                                       14
<PAGE>   15

         retirement annuity as defined in section 408 of the Code, the transfer
         must occur on or before 60 days following receipt by the Employee of
         all or any portion of the balance to his credit under such individual
         retirement account or individual retirement annuity.

                  3.8.3 Distributions Eligible for Rollover: The distribution
         made to the Participant must be an "Eligible Rollover Distribution" as
         defined in Section 6.13(iii) of the Plan. The amount transferred to the
         Trustee shall be limited to the maximum rollover amount as provided in
         section 402(c)(2) of the Code.

                  3.8.4 Accounting: The amount transferred to the Trustee shall
         be credited to the Participant's Rollover Account. The assets in the
         Rollover Account shall be administered by the Trustee in the same
         manner as other trust assets. The other provisions of this Plan
         notwithstanding, however, no part of the Participant's Rollover Account
         may, within the meaning of any state or federal securities law, be
         invested or deemed invested, whether at the direction of the
         Participant or any other person, in stock or securities issued by the
         Employer or any of its affiliates.

                  3.8.5 Distributions: There shall be no withdrawals of any
         portion of any Rollover Account by any Participant until such time as
         he is otherwise eligible to receive the amount credited to his Employer
         Contribution Account under this Plan (or would have been eligible, had
         he been vested in any part of his Employer Contribution Account);
         provided, however, that in the event of the termination of a
         Participant's Employment with the Employer, as contemplated under
         Section 6.5 of the Plan, for any reason prior to retirement or death,
         such terminated Participant shall have the right to receive all, but
         not less than all, of the amount standing to his credit in his Rollover
         Account, upon written request submitted to the Plan Administrator at
         any time after such termination. Upon receipt of any such request, the
         amount in such Rollover Account shall be distributed as directed by the
         terminated Participant as promptly as practicable thereafter.



                                       15
<PAGE>   16

                                   ARTICLE IV
                             EMPLOYER CONTRIBUTIONS

                  4.1 Employer Contributions - For so long as the Plan continues
in effect, the Employer may make a contribution annually to the Trust under the
Plan for the accounts of all Participants who are actively Employed on the last
day of the Plan Year and who have a Year of Service for such Plan Year. The
amount of each such contribution (if any) shall be determined annually by the
Board, taking into consideration the then prevailing financial conditions and
fiscal requirements of the Employer and such other factors as the Board may deem
pertinent and applicable under the circumstances; notwithstanding the above, the
Employer may make contributions to the Plan without regard to current or
accumulated profits. The contributions by the Employer shall be credited to the
Employer Contribution Accounts of Participants in accordance with Article V. The
Employer shall pay to the Trustee its contribution for each fiscal year before
the close of such fiscal year or within such other period thereafter as is
described in section 404(a)(6) of the Code.

                  In no event shall the contribution by the Employer be greater
than the amount deductible by the Employer for federal income tax purposes for
the taxable year with respect to which the same is made, plus such additional
amount as may be deductible by reason of a deduction carryforward from a prior
year or years when less than the maximum deductible amount was actually
contributed, except in anticipation of a future contribution of less than the
maximum amount deductible with respect to such future year and the carry-forward
to such future year of the current excess contribution for deduction purposes
under applicable statutes and regulations.

                  4.2 Matching Contributions Prior to December 20, 1998 - For
each period for which Participants' Contributions are made with respect to Plan
Years that commenced prior to December 20, 1998, the Employer shall make basic
Matching Contributions on behalf of each Participant who contributed during the
period. For each Plan Year, the Employer may make supplemental Matching
Contributions on behalf of each Participant who contributed during the period
and: (a) was an Eligible Employee on the last day of the Plan Year, and (b) was
credited with at least 1,000 Hours of Service for the Plan Year. In addition,
such Contributions shall be made on behalf of each Participant who ceased being
an Employee during the period after having attained age 65 or by reason of his
or her Permanent and Total Disability or death.

                  The basic Matching Contributions (including any Forfeiture
Account amounts applied as Matching Contributions in accordance with Section 5.4
for each period shall total 25% of each eligible Participant's Before-Tax
Contributions for the period, provided that no basic Matching Contributions (and
Forfeiture amounts) shall be made based upon a Participant's Contributions in
excess of 3% of his or her Annual Compensation. The Employer may change the 25%
matching rate or the 3% of considered Annual Compensation to any other
percentages, including 0%, generally by notifying eligible Participants in
sufficient time to adjust their Contribution elections prior to the start of the
period for which the new percentages apply. Where the Employer elects, after the
end of a Plan Year, to make supplemental Matching Contributions for the Plan
Year (including any Forfeiture amounts applied as Matching Contributions in
accordance with Section 5.4) the supplemental Matching Contributions shall be
allocated among eligible Participants' Employer Matching Accounts in direct
proportion to each



                                       16
<PAGE>   17

eligible Participant's Before-Tax Contributions for the Plan Year to the total
Before-Tax Contributions for the Plan Year for all such eligible Participants.

                  4.3 Fund for Exclusive Benefit of Participants - The assets of
the Trust Fund shall be held hereunder for the exclusive benefit of the
Participants and their Beneficiaries for the purpose of distributing to such
Participants and Beneficiaries both the corpus and income of the Trust Fund in
accordance with the provisions hereof, provided, however, the assets of the
Trust Fund may be used for the payment of taxes, Trustee and investment
management fees and other administration expenses, including, but not limited
to, fees for services rendered to the Plan or Trust by attorneys, accountants
and consultants which shall be paid from the Trust Fund except in those cases
where the Company elects to pay such expenses. No part of the Trust Fund corpus
or income shall be used for or diverted to purposes other than for the exclusive
benefit of Participants and beneficiaries under the Plan, whether by operation
of law or natural termination of contracts, by power of revocation or amendment,
by the happening of a contingency, by collateral arrangement or by any other
means; provided that the Employer hereby reserves the right to amend or revoke
the Plan at any time as provided in Articles XII and XIII hereof.

                  To the extent permitted by the Code and notwithstanding
anything herein to the contrary, upon the Employer's request, a contribution by
the Employer which was made by a mistake of fact, or conditioned upon the
deductibility of the contribution under section 404 of the Code, shall be
returned to the Employer within one year after the payment of the contributions
or the disallowance of the deduction for such contribution (to the extent
disallowed), whichever is applicable.

                  4.4 Military Service - Notwithstanding any provision of the
Plan to the contrary, contributions, benefits and service credit with respect to
qualified military service shall be provided in accordance with Code section
414(u).



                                       17
<PAGE>   18

                                   ARTICLE V
                            INTEREST OF PARTICIPANTS

                  5.1 Accounts of Participants - The Trustee shall, as
applicable, maintain an individual set of Accounts on its books for each
Participant, for record keeping purposes only: (i) Before-Tax Account, (ii)
After-Tax Account, (iii) Rollover Account, (iv) Matching Account, (v)
Profit-Sharing Account and (vi) Employer Contribution Account. The maintenance
of individual Accounts is primarily for accounting purposes, and a segregation
of the assets of the Trust Fund to each account shall not be required.
Distributions and withdrawals made from Accounts shall be charged to the
Accounts as of the date paid. The Trustee may create subaccounts for any
Account, including subaccounts to reflect the investment directions of
Participants in accordance with Section 9.2.

                  5.2 Allocation of Income, Expense, Fluctuations in Asset
Value, Etc. - As of the close of business on each Valuation Date, the Trustee
shall:

                  (a) Determine, in such reasonable ways and from such
information as the Trustee may deem appropriate the fair market value of the
Trust Fund, including the fair market value of the separate investment funds of
the Trust Fund in accordance with Section 9.2, but excluding any contributions
to the Plan since the next preceding Valuation Date.

                  (b) Make appropriate adjustments in the Accounts of all
Participants, former Participants and Beneficiaries who have unpaid balances in
their Accounts at such time, by allocating pro rata among such Accounts based on
the respective balances thereof as of the next preceding Valuation Date (but
after first reducing each such Account balance by any distribution from the
Account since the next preceding Valuation Date), any increases and decreases in
the value of the assets of the Trust Fund (or the separate investment funds in
which the Participant has directed an investment in accordance with Section 9.2)
and any income (other than contributions), expenses, and realized gains and
losses of the Trust Fund (or the separate investment funds) since such preceding
Valuation Date.

                  5.3 Allocation of Contributions and Forfeitures - For Plan
Years commencing prior to December 20, 1998, as of each Annual Valuation Date,
and after the allocation provided in Section 5.2 above, all Forfeitures
available for allocation pursuant to Section 5.4 shall be allocated to the Plan
Administrator to offset expenses of the Trust Fund. For Plan Years following the
Plan Year ending on December 19, 1998, as of each Annual Valuation Date, and
after the allocation provided in Section 5.2 above, the current contribution of
the Employer, together with all Forfeitures available for allocation pursuant to
Section 5.4, shall be allocated to the respective Employer Contribution Accounts
of all Participants who are employed by the Employer on the last day of such
Plan Year and who have a Year of Service for such Plan Year in the same
proportion as the Annual Compensation of each such Participant for such year
bears to the aggregate Annual Compensation of all such Participants for such
year.

                  5.4 Disposition of Forfeitures -

                  (a) Participants Who Terminate Employment - In the case of an
Employee who has terminated Employment and who was a Participant except for such
termination of his



                                       18
<PAGE>   19

Employment, the amount standing to his credit in his Employer Contribution
Account in which he has no Vested Interest shall be forfeited and allocated as
provided in Section 5.3 as of the Annual Valuation Date for the Plan Year in
which the Participant terminates Employment. After termination of his
Employment, a former Employee's Vested Interest shall be distributed or held for
distribution in accordance with Sections 6.6 and 6.7 hereof.

                  (b) Reinstatement of Accounts - If a Participant who has no
Vested Interest in his Matching Contribution Account, Profit-Sharing Account or
Employer Contribution Account incurs a Break in Service, and if the Participant
is Reemployed by the Employer prior to incurring five (5) consecutive one (1)
year Breaks in Service, upon such Reemployment, the amount in such accounts at
the time he terminated Employment shall be restored, either out of Forfeitures
or Trust Fund earnings attributable to the Plan Year in which he is Reemployed,
or by an additional contribution made by the Employer.

                  5.5 Maximum Additions - Notwithstanding anything contained
herein to the contrary, the annual addition made to the accounts of a
Participant for any Plan Year shall not exceed the lesser of $30,000 (or, if
greater, 1/4 of the dollar limitation in effect under section 415(b)(1)(A) of
the Code) or 25% of the Participant's Annual Compensation for such Plan Year.
Such annual additions shall include the sum of Employer Contributions,
Forfeitures, and Employee Contributions (if permitted), but shall not include
any Rollover Contributions.

                  If such annual additions with respect to any Participant for
any Plan Year would exceed the limitation set forth in the immediately preceding
paragraph, the excess amounts shall be treated in accordance with the following
in the order indicated:

                  (a) Any excess shall be reallocated to the other Participants
in accordance with the method of allocation under Section 5.3 hereof to the
extent that such allocations do not cause the annual additions to any such other
Participant's account to exceed the limitations set forth in the first paragraph
of this Section 5.5.

                  (b) To the extent that such allocation or reallocation of
excess amounts causes the limitations set forth in the first paragraph of this
Section 5.5 to be exceeded with respect to each Participant for the Plan Year,
then such amounts will be held unallocated in a suspense account, to be
allocated in the next Plan Year(s) in accordance with Section 5.3 hereof. If
such a suspense account is in existence at any time in accordance with this
provision, all amounts in such suspense account must be allocated before any
Employer Contributions which would constitute such annual additions may be made
to the Plan. Investment gains and losses and other income shall not be allocated
to such suspense account. Upon termination of the Plan, any amount remaining in
such suspense account which is unallocable shall revert to the Employer.

                  Notwithstanding the foregoing, for Plan Years which commence
prior to January 1, 2000, the otherwise permissible annual additions for any
Participant under this Plan shall be further reduced to the extent necessary, as
determined by the Plan Administrator, to prevent disqualification of the Plan
under section 415(e) of the Code, which imposes additional limitations on the
benefits payable to Participants who also may be participating in another tax
qualified pension, profit sharing, savings or stock bonus plan of the Employer.
The Plan



                                       19
<PAGE>   20

Administrator shall advise affected Participants of any additional limitation on
their annual additions required by the preceding sentence.

                  For purposes of applying the limitations imposed in this
Section 5.5, all defined contribution plans (as defined under ERISA) maintained
by the Employer or otherwise required to be aggregated under section 414 of the
Code will be considered to be a single defined contribution plan.



                                       20
<PAGE>   21

                                   ARTICLE VI
                                    BENEFITS

                  6.1 Normal Retirement Benefits - A Participant retiring under
the Plan at his Normal Retirement Date shall be entitled to receive the entire
amount of his Vested Interest in the Plan, computed as of the Valuation Date
coincident with or next preceding his Normal Retirement Date, the manner of
payment of such benefits to be determined under the provisions of Section 6.6
hereof. A Participant's interest in his Matching Contribution, Profit-Sharing
and Employer Contribution Accounts shall become nonforfeitable upon attainment
of his Normal Retirement Age.

                  6.2 Disability Benefits - In the event a Participant shall
suffer a Permanent and Total Disability, he shall be entitled to retire under
the Plan for disability and to receive the entire amount of his interest in the
Plan, computed as of the Valuation Date coincident with or next preceding the
date of his actual retirement for disability, the manner of the payment of such
benefits to him to be determined as provided in Section 6.6 hereof.

                  6.3 Postponed Retirement - Except as otherwise required by
law, a Participant may continue to be Employed by the Employer after his Normal
Retirement Date. In the event a Participant remains Employed after his Normal
Retirement Date, he shall continue to be a Participant just as if he had not yet
attained his Normal Retirement Date. When such a Participant actually retires,
he shall be entitled to receive the entire amount of his interest in the Plan
computed as of the date of his actual retirement if such date is a Valuation
Date, or if not a Valuation Date, then as of the Valuation Date next preceding
the date of his actual retirement, the manner of payment of such benefits to him
to be determined as provided in Section 6.6 hereof.

                  6.4 Death Benefits - In the event of the death of a
Participant, before or after his retirement hereunder, there shall be payable to
the Beneficiary or Beneficiaries designated by him (or, in accordance with
Article X, to the Beneficiaries therein specified if no then-living Beneficiary
or Beneficiaries have been designated by such Participant) in accordance with
the provisions for payment of benefits under Section 6.6 hereof:

                  (a) If death precedes the commencement of payments to an
Employee of his Vested Interest in the Plan, the entire interest of the Employee
in the Plan, computed as of the Valuation Date coincident with or next preceding
his death shall be distributed within five (5) years after the death of such
Employee, the payment of such benefits to be made in such manner as may be
determined under the provisions of Section 6.6.

                  (b) If death occurs after distribution to the Employee of his
Vested Interest in the Plan has commenced, the undistributed balance of the
Vested Interest of such Employee shall be distributed in a lump sum to his
designated Beneficiary on or before the last day of the Plan Year in which the
Participant dies.



                                       21
<PAGE>   22

                  (c) For purposes of Section 6.4(a), a distribution to a child
shall be treated as if it had been paid to the surviving spouse of the Employee
if such amount will become payable to the surviving spouse upon such child's
reaching majority (or such other event designated and permitted under the
regulations.)

                  6.5 Termination Benefits -

                  (a) Vested Interest - If prior to retirement (including
retirement due to a Permanent and Total Disability) or death, the Participant's
Employment with the Employer (or former Participant who is still an Employee of
the Employer and who has not been paid his entire interest in the Plan) is
terminated for any reason whatsoever, such terminated Participant shall be
entitled to receive, in lieu of all other benefits and rights under this Plan,
the entire percentage of the amounts standing to his credit in his Matching
Contribution, Profit-Sharing and Employer Contribution Accounts determined as of
the Valuation Date coincident with or next preceding such termination of his
Employment:

<TABLE>
<CAPTION>
                                                                                        PERCENTAGE SUBJECT
          YEARS OF SERVICE                   VESTED PERCENTAGE                             TO FORFEITURE
          ----------------                   -----------------                          ------------------
<S>                                          <C>                                        <C>

             Less than 5                             0%                                        100%
              5 or more                            100%                                          0%
</TABLE>

                  Notwithstanding the foregoing vesting schedule, for
participants who have at least three (3) Years of Service but less than five (5)
Years of Service upon the Effective Date, the following vesting schedule will
apply to amounts in the Matching Contribution and Profit-Sharing Accounts.

<TABLE>
<CAPTION>
                                                                                        PERCENTAGE SUBJECT
          VESTED PERCENTAGE                  YEARS OF SERVICE                              TO FORFEITURE
          -----------------                  ----------------                           ------------------

<S>                                        <C>                                         <C>
          3 but less than 4                         30%                                         70%
          4 but less than 5                         40%                                         60%
              5 or more                            100%                                          0%
</TABLE>

                  (b) For vesting purposes, Years of Service shall be calculated
on the basis of the Plan Year, and shall include all Plan Years in which an
Employee completes 1,000 or more Hours of Service, whether or not the Employee
receives an Employer contribution for such Plan Year.

                  (c) Time of Payment - If a Participant terminates employment
after attaining age 60, or on account of death or if a Participant consents to
immediate distribution of his benefit in accordance with Section 6.5(e), then
subject to the payment of small benefits under Section 6.5(d), if the
Participant's Employment termination date occurs between the first day of the
Plan Year and September 30 of such Plan Year, distribution of his Vested
Interest shall be made no later than December 31 immediately following such
September 30. If his date of termination of



                                       22
<PAGE>   23

Employment date occurs between October 1 and the last day of the Plan Year,
distribution of his vested Interest shall be made no later than February 28
immediately following the last day of such Plan Year. Notwithstanding the
foregoing, if the Participant terminates Employment on the last day of the Plan
Year, distribution of his Vested Interest shall be made as soon as practicable
following the date that Employer Contributions for such Plan Year are made to
the Participant's Account.

                  If the Participant's Vested Interest is not distributed within
the foregoing period, it shall be held in the Plan until the earlier of the date
such Participant attains age sixty (60) or the date of his death, whereupon it
shall be paid to him or his Beneficiary. Benefits shall be payable in accordance
with Section 6.6. Pending commencement of payment thereof, the amount so payable
shall be maintained as provided in Section 6.7 hereof. Such payment shall be
made to and accepted by the Participant in full and final satisfaction and
settlement of any and all of his claims and rights under the Plan and in the
Trust Fund.

                  In the event a former Participant entitled to benefits under
this Section 6.5 dies before such benefits shall have been paid in full, then
the balance of such interest standing to his credit in his Account as of the
date of his death shall be payable to the Beneficiary or Beneficiaries
designated by him, or to those specified in Article X, in accordance with the
provisions hereof applicable to the payment of death benefits after retirement.

                  (d) Lump Sum Payment of Value of Small Benefits -
Notwithstanding any other provision of the Plan, if upon termination of
Employment, a Participant's Vested Interest in his Account is not in excess of
$3,500 ($5,000 for Plan Year 1998 and every Plan Year thereafter) then the Plan
Administrator shall direct the payment of such interest in a lump sum to such
Participant or his designated Beneficiary and such distribution shall not
require the consent of the Participant or his Beneficiary.

                  (e) If upon termination of Employment, a Participant's Vested
Interest in his Account exceeds $3,500 ($5,000 for Plan Year 1998 and every Plan
Year thereafter) and such termination is prior to age 60 and is not on account
of death, the Participant shall be given an opportunity to elect to receive an
immediate lump sum distribution of the Vested Interest in his Account or to
defer such distribution until the earlier of his death or his attainment of age
60. No more than 90 days and no less than 30 days before the date as of which
the Participant would receive a distribution of his Account (if he consented),
the Participant shall be provided with a notice explaining his right to receive
either an immediate or a deferred lump sum distribution of his Account. No
consent by a Participant to an immediate distribution shall be valid unless it
is received after the Participant receives the notice described in the preceding
sentence and not more than 90 days before the date as of which the Participant
receives the distribution.

                  6.6 Payment of Benefits - All benefits that have accrued after
the Effective Date to which a retiring, disabled, or otherwise terminated
Participant is entitled upon his retirement, disability or other termination of
Employment, as the case may be, shall be paid in a lump sum. Death benefits that
have accrued after the Effective Date shall be payable to the Beneficiary in the
form of a lump sum. Subject to approval by the Internal Revenue Service, all
benefits that have accrued prior to the Effective Date and that have not begun
to be paid out in an optional form, to which a retiring, disabled, or otherwise
terminated Participant is entitled upon



                                       23
<PAGE>   24

his retirement, disability or other termination of Employment, as the case may
be, shall be paid in a lump sum. Subject to approval by the Internal Revenue
Service, death benefits that have accrued prior to the Effective Date shall be
payable to the Beneficiary in the form of a lump sum unless benefit payments in
an optional form had begun to be made to the Participant prior to his death, in
which case the Participant's payment election shall govern the form of death
benefits.

                  The foregoing notwithstanding, the following paragraphs shall
apply to: (i) to all Participants and Beneficiaries who have begun receiving
benefits prior to the Effective Date, and (ii) if approval of the Internal
Revenue Service is not obtained for the elimination of this form of benefit, to
any benefits that have accrued prior to the Plan Year beginning on or after
December 20, 1998.

                  The Participant may elect to be paid in either of the
following forms: (a) a lump sum, or (b) periodic installments over a period not
to exceed the life expectancy of the Participant and his or her spouse. Life
expectancies may be recomputed annually. The Participant's payment election must
be consistent with the requirement that, if the Participant's spouse is not his
or her sole primary Beneficiary, the minimum annual distribution for each
calendar year, beginning with the year in which he or she attains age 70 1/2,
shall not be less than as determined under the incidental benefit requirements
of Code section 401(a)(9).

                  Payment to a Beneficiary must either: (1) be completed within
five years of the Participant's death or (2) begin within one year of his or her
death and be completed within the period of the Beneficiary's life or life
expectancy (which may be recomputed annually), except that:

                  o        If the Participant dies after the April 1 immediately
                           following the end of the calendar year in which he or
                           she attains age 70 1/2, payment to his or her
                           Beneficiary must be made at least as rapidly as
                           provided in the Participant's distribution election;

                  o        If the surviving spouse is the Beneficiary, payments
                           need not begin until the date on which the
                           Participant would have attained age 70 1/2 and must
                           be completed within the spouse's life or life
                           expectancy; and

                  o        If the Participant and the surviving spouse who is
                           the Beneficiary die (1) before the April immediately
                           following the end of the calendar year in which the
                           Participant would have attained age 70 1/2 and (2)
                           before payments have begun to the spouse, the spouse
                           will be treated as the Participant in applying these
                           rules.

                  6.7 Maintenance of Accounts Prior to Payout - After a
Participant's Employment terminates and prior to the distribution of all of his
benefits to him or to his Beneficiary(ies), as the case may be, the balance of
his Account, as it may exist from time to time, shall be maintained in the
following manner:

                  (a) Those amounts in his Matching Contribution, Profit-Sharing
and Employer Contribution Accounts which were not vested upon termination of his
Employment, if any, shall be maintained or applied in accordance with Section
5.4.



                                       24
<PAGE>   25

                  (b) The Trustee shall segregate the former Participant's
Account as of the date his Employment terminated, and such segregated Account
shall not thereafter share in any allocations pursuant to Section 5.3. The
balance in such segregated Account shall remain invested as a part of the Trust
Fund pending distribution, sharing in the net income, net loss, net appreciation
and net depreciation of the Trust Fund in accordance with Section 5.2 and
Article VII to the same extent as if such Account had not been segregated, with
the Trustee (and former Participant as of May 1, 1994) having the same powers of
investment, reinvestment and commingling as for all other assets of the Trust
Fund. In the event the balance of a former Participant's Vested Interest is
distributed on a date other than a Valuation Date, the amount of such
distribution shall be the former Participant's Account balance as determined on
the Valuation Date next preceding the date of such distribution.

                  6.8 Present Value of Payments - No method of payment of
benefits shall result in the present value of payments to be paid to the
Participant being less than fifty percent (50%) of the present value of the
total benefits to be paid to the Participant and his Beneficiary.

                  6.9 Commencement of Payments -

                  (a) Notwithstanding anything herein to the contrary, benefit
payments hereunder shall commence not later than sixty (60) days after the later
of (i) the date on which a Participant reaches his Normal Retirement Date, (ii)
the Plan Year in which occurs the tenth anniversary of the year in which such
Participant commenced participation, or (iii) the Plan Year in which such
Participant's Employment with the Employer and any Affiliated Employer
terminates.

                  (b) Required Commencement Date - Payment of any Participant's
Vested Interest shall be made in a lump sum by April 1 of the calendar year
following the year in which the Participant attains age 70-1/2, whether or not
such Participant has retired or otherwise separated from Employment, unless the
Participant attained age 70-1/2 prior to January 1, 1988, and has not been a 5%
owner at any time during or after the calendar year in which he attained age
66-1/2; provided, however, that for Plan Years beginning after December 31,
1996, payment shall be made in a lump sum by the April 1 following the later of:
the calendar year in which the Participant attains age 70-1/2, and the calendar
year in which the Participant retires, except that in the case of a Participant
who is a 5% owner at any time during the five Plan Years ending in the calendar
year in which the Participant attains age 70-1/2, payment shall be made by the
April 1 following the calendar year in which the Participant attains such age.

                  6.10 Errors in Participant's Account - When an error or
omission is discovered in the Account of a Participant, the Trustee shall be
authorized to make such equitable adjustments as may be appropriate as of the
Plan Year in which the error or omission is discovered.

                  6.11 Loans to Participants - The Plan Administrator shall
administer the loan program. Upon written application of the Participant in such
form as may be specified by the Plan Administrator, the Plan Administrator may
direct the Trustee to make a loan to the Participant. The Plan Administrator
shall specify in a separate written document, which shall form, a part of the
Plan, the basis on which loans shall be approved or denied and the limitations



                                       25
<PAGE>   26

(if any) on the types of loans available. The application and the resulting loan
must meet the terms and conditions specified in the following provisions of this
Section 6.11.

                  (a) A Participant may not have more than one (1) loan
outstanding at the same time.

                  (b) No loan shall be granted for less than one thousand
dollars ($1,000).

                  (c) The maximum permissible loan available to a Participant
shall not exceed the lesser of:

                           (i) fifty thousand dollars ($50,000) reduced by the
excess (if any) of:

                                    (A) the highest outstanding balance of a
                           loan from the Plan during the one (1) year period
                           ending on the day before the date on which the loan
                           was made, over

                                    (B) the outstanding balance of a loan from
                           the Plan on the date on which such loan was made; or

                           (ii) one-half (1/2) of the present value of the
Participant's Vested Interest under the Plan;

provided however, the amount available to be loaned to the Participant shall be
further limited by the requirement that based on the loan's interest rate,
amount of the requested loan and the repayment period, the projected biweekly
payroll deduction for repayment of principal and interest may not exceed thirty
percent (30%) of the Participant's biweekly regular wages (excluding overtime
pay, bonuses, and commissions of all kinds), which shall for these purposes be
the average biweekly regular wages for the Participant in the immediately
preceding Plan Year quarter.

                  (d) The initial repayment period may not exceed forty-eight
(48) months.

                  (e) Loans made pursuant to this Section 6.11 shall be
available only to Participants who are actively Employed by the Employer at the
time the loan is made, former Participants and Beneficiaries who are parties-in
interest.

                  (f) The loan amount shall be withdrawn pro rata from the
Participant's Accounts, excluding any amounts in the Participant's After-Tax
Account. Any such loan withdrawals will be prorated among the Investment Funds
in which the Participant's Accounts, excluding any amounts in the Participant's
After-Tax Account, are invested.

                  (g) Interest on any loan hereunder shall be based on a
reasonable rate of interest as determined by the Plan Administrator. The
interest rate shall provide the Plan with a return commensurate with the
interest rates charged by persons in the business of lending money for loans
which would be made in similar circumstances. The Plan Administrator shall
specify, in a separate written document forming part of the Plan, a procedure
for determining a



                                       26
<PAGE>   27

reasonable interest rate. The interest rate, once fixed, shall remain in effect
for the duration of the loan.

                  (h) Notwithstanding the initial loan term provided in Section
6.11(d), all loans must have a minimum repayment period of twelve (12) months.
No loan from the Plan which is initially required to be repaid within such
48-month period may be subsequently renewed or extended for payment beyond such
48-month period. The repayment schedule of any loan hereunder shall be
determined at the time any such loan is made and a copy shall be furnished the
Trustee. Repayment of any loan shall be by payroll deduction (or with Plan
Administrator consent by' a lump sum payment for final loan payments). Except as
may be provided in regulations, each loan to which this Section 6.11 applies
must provide for a substantially level amortization of the loan, with payments
being made not less frequent than quarterly.

                  (i) The loan shall be collateralized by a portion of the
borrowing Participant's Account, equal to the lesser of: (i) the amount of the
loan, or (ii) fifty percent (50%) of the Participant's Account. Notwithstanding
the preceding, if the loan is for the purpose of purchasing the Participant's
primary residence, then the Plan Administrator may also require such residence
to collateralize the loan.

                  (j) A loan shall be in default if the Participant fails to
make any payment when due or if there occurs such other circumstances as may be
prescribed by the Plan Administrator in a separate written document which shall
form a part of the Plan. If a loan is in default, execution on the defaulting
Participant's Account shall be accomplished when and to the extent the Account
is distributed to the Participant, or at such other time deemed necessary by the
Plan Administrator to prevent a loss to the Plan and which is consistent with
the Code and applicable regulations.

                  (k) If a Participant terminates Employment, any loan
outstanding to the Participant shall become immediately due and payable to the
Plan. If the portion of a Participant's Account securing his loan otherwise
becomes payable to the Participant hereunder, the amount of the loan that is due
shall be satisfied by applying against it the portion of the Participant's
Account that secures the loan. The Participant's Account shall be
correspondingly reduced prior to making the distribution to or on behalf of the
Participant.

                  (l) Loans shall be held by the Trustee as a segregated
investment of the borrowing Participant's Account and any loan principal and
interest payments thereon shall be credited solely to such borrowing
Participant's Account and be invested in accordance with the Participant's then
current investment election.

                  (m) Participants' requests for loans shall be processed as
soon as practical after a fully completed loan request is filed with the Plan
Administrator. In accordance with rules established by the Plan Administrator,
loan initiation charges and annual loan maintenance fees will be charged against
the Participant's Account.

                  6.12 No Other Benefits or Withdrawals - Except as expressly
provided for in this Article VI, for so long as this Plan continues in effect,
no individual, whether a Participant, former Participant, Beneficiary or
otherwise, shall be entitled to any payment or withdrawal of



                                       27
<PAGE>   28

funds from the Trust Fund. This prohibition applies to Trust Funds attributable
to individual contributions as well as those attributable to other sources.

                  6.13 Direct Transfer of Eligible Rollover Distributions -

                           (i) Notwithstanding any provision of the Plan to the
contrary, with respect to any distribution made on or after January 1, 1993, a
Distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover.

                           (ii) For the purposes of this Section 6.13, the
following definitions shall apply:

                           (iii) "Eligible Rollover Distribution" shall mean any
distribution of all or any portion of the balance to the credit of the
Distributee in this Trust or in any other qualified trust described in section
401(a) of the Code which is exempt from tax under section 501(a) of the Code,
except that an Eligible Rollover Distribution shall 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 Company Stock).

                           (iv) "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 which is exempt from tax under section
501(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 shall mean only an individual
retirement account or individual retirement annuity.

                           (v) "Distributee" shall mean an Employee or former
Employee. In addition, the Employee's or former Employee's surviving spouse and
the Employee's or former Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in section 414(p)
of the Code, are Distributees with regard to the interest of the spouse or
former spouse.

                           (vi) "Direct Rollover" shall mean a payment to the
Eligible Retirement Plan specified by the Distributee either by direct transfer
from the Plan, or by delivery of the distribution check by the Distributee,
provided such check is made out in a manner to ensure that it is negotiable only
by the trustee of the Eligible Retirement Plan.

                           (vii) The Employer will provide the Participant a
written notice as required by Code section 402(f) which provides a general
description of the Distributee's distribution options and notice of the
Distributee's other rights, if any, to defer receipt of the



                                       28
<PAGE>   29

distribution. Such notice will be given within the time period specified in Reg.
Section l.411(a)-11(c); provided, however, that if the distribution is one to
which Code sections 401(a)(11) and 417 do not apply, such distribution may
commence less than 30 days after the required notice is given, provided that

                           (A) the Committee clearly informs the Participant
                           that the Participant has a right to a period of at
                           least 30 days after receiving the notice to consider
                           the decision of whether or not to elect a
                           distribution (and, if applicable, a Participant
                           distribution option), and

                           (B) the Participant, after receiving the notice,
                           affirmatively elects a distribution.

                  6.14 In-Service Withdrawals

                  (a) No in-service withdrawals are permitted from a
Participant's Account because of hardship.

                  (b) Withdrawals from After-Tax Accounts are permitted as
follows, but only with respect to amounts accrued prior to December 20, 1998.

                           (i) Amount Permitted. A Participant who is an
Employee may withdraw up to the entire balance from his or her After-Tax
Account.

                           (ii) Permitted Frequency. The maximum number of
withdrawals from this account which are permitted in any 12-month period is one.

                  (c) (i) A Participant who is an Employee and over 59 1/2 may
withdraw benefits accrued prior to December 20, 1998 from the Contribution
Accounts listed in paragraph (ii) below.

                           (ii) The withdrawal amount shall come only from the
Participant's fully vested Accounts, in the following priority order with the
exception that Participation may instead choose to have amounts taken from his
or her After-Tax Account first:

                                    Rollover Account
                                    Before-Tax Account
                                    Employer Matching Account
                                    Profit-Sharing Account
                                    Employer Contribution Account
                                    After-Tax Account

                           (iii) The maximum number of withdrawals permitted
from these Accounts after age 59 1/2 in any 12-month period is one.

                           (iv) A withdrawal from a Participant's Account after
age 59 1/2 shall not affect his or her ability to make further Contributions.



                                       29
<PAGE>   30

                  (d) The following rules govern in-service withdrawals:

                           (i) The minimum amount for any type of withdrawal is
$1,000.

                           (ii) A Participant must submit a completed withdrawal
request form to the Administrator to apply for any type of withdrawal.

                           (iii) The Administrator is responsible for
determining that a withdrawal request conforms to the requirements described in
this Section and notifying the Trustee of any payments to be made in a timely
manner.

                           (iv) With respect to distributions made on or after
January 1, 1993, notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Distributee's election under this Section, a Distributee
may elect, at the time and in the manner prescribed by the Plan Administrator,
to have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Distributee in a Direct Rollover.



                                       30
<PAGE>   31

                                   ARTICLE VII
                                ADP AND ACP TESTS

                  7.1 Contribution Limitation Definitions - The following
definitions are applicable to this Article VII (where a definition is contained
in both Articles I and VII, for purposes of Article VII the Article VII
definition shall be controlling):

                  (a) "ACP" or Contribution Percentage." The Average Percentage
calculated using Contributions allocated to Participants as of a date within the
Plan Year.

                  (b) "ACP Test." The determination of whether the ACP has
complied with the Basic or Alternative Limitation for a Plan Year (as defined in
Section 7.2)

                  (c) "ADP" or "Average Deferral Percentage." The Average
Percentage calculated using Deferrals allocated to Participants as of a date
within the Plan Year.

                  (d) "ADP Test." The determination of whether the ADP has
complied with the Basic or Alternative Limitation for a Plan Year (as defined in
Section 7.2).

                  (e) "Average Percentage." The average of the calculated
percentages for Participants within the specified group. The calculated
percentage refers to either the "Deferrals" or "Contributions" (as defined in
this Section) made on each Participant's behalf for the Plan Year, divided by
his or her Compensation for the portion of the Plan Year in which he or she was
a Participant. (Before-Tax Contributions which will be refunded solely because
they exceed the Contribution Dollar Limit are included in the percentage for the
HCE Group but not for the NHCE Group if such excess Before-Tax Contributions
were made to plans of Related Companies.)

                  (f) "Contributions" shall include Employer Matching and
After-Tax Contributions. In addition, Contributions may include Before-Tax
Contributions, but only to the extent that (1) the Employer elects to use them,
(2) they are not used or counted in the ADP Test, and (3) they are necessary to
meet the ACP Test Alternative Limitation (defined in Section 7.2 (b)) or the
Multiple Use Test.

                  (g) "Deferrals" shall include Before-Tax Contributions.

                  (h) "Family Member." An Employee who is, at any time-during
the Plan Year or Lookback Year, a spouse, lineal ascendant or descendant, or
spouse of a lineal ascendant or descendant of (1) an active or former Employee
who at any time during Plan Year or Lookback Year is a more than 5% Owner
(within the meaning of Code section 414(q)(3)), or (2) an HCE who is among the
10 Employees with the highest Compensation for such Year.

                  (i) "HCE" or "Highly Compensated Employee." With respect to
each Employer and its Related Companies, an Employee during the Plan Year or
Lookback Year who (in accordance with Code section 414(q)):



                                       31
<PAGE>   32

                           (i) Was a more than 5% Owner at any time during the
Lookback Year or Plan Year;

                           (ii) Received Compensation during the Lookback Year
(or in the Plan Year if among the 100 Employees with the highest Compensation
for such Year) in excess of (i) $75,000 (as adjusted for such Year pursuant to
Code sections 414(q)(1) and 415(d)), or (ii) $50,000 (as adjusted for such Year
pursuant to Code sections 414(q)(1). and 415(d)) in the case of a member of the
"top-paid group" (within the meaning of Code section 414(q)(4)) for such Year),
provided, however, that if the conditions of Code section 414(q)(12)(B)(ii) are
met, the Company may elect for any Plan Year to apply clause (i) by substituting
$50,000 for $75,000 and not to apply clause (ii);

                           (iii) Was an officer of a Related Company and
received Compensation during the Lookback Year (or in the Plan Year if among the
100 Employees with the highest Compensation for such Year) that is greater than
50% of the dollar limitation in effect under Code section 415(b)(1)(A) and (d)
for such Year (or if no officer has Compensation in excess of the threshold, the
officer with the highest Compensation), provided that the number of officers
shall be limited to 50 Employees (or, if less, the greater of three Employees or
10% of the Employees); or

                           (iv) Was a Family Member at any time during the
Lookback Year or Plan Year, in which case the Contributions, as defined in
Section 1, and Compensation of the HCE and his or her Family Members shall be
aggregated and they shall be treated as a single HCE.

                  A former Employee shall be treated as an HCE if (1) such
former Employee was an HCE when he separated from service, or (2) such former
Employee was an HCE in service at any time after attaining age 55.

                  The determination of who is an HCE, including the
determinations of the number and identity of Employees in the top-paid group,
the top 100 Employees and the number of Employees treated as officers shall be
made in accordance with Code section 414(q).

                  (j) "HCE Group" and "NHCE Group." With respect to each
Employer and its Related Companies, the respective group of HCEs and NHCEs who
are eligible to have amounts contributed on their behalf for the Plan Year,
including Employees who would be eligible but for their election not to
participate or to contribute, or because their Annual Compensation is greater
than zero but does not exceed a stated minimum.

                           (i) If the Related Companies maintain two or more
plans which are subject to the ADP or ACP Test, and are considered as one plan
for purposes of Code sections 401(a)(4) or 410(b), all such plans shall be
aggregated and treated as one plan for purposes of meeting the ADP and ACP
Tests, provided that, for Plan Years beginning after December 31, 1989, plans
may only be aggregated if they have the same Plan Year.

                           (ii) If an HCE, who is one of the top 10 paid
Employees or a more than 5% Owner, has any Family Members, the Deferrals,
Contributions and Compensation of such HCE and his or her Family Members shall
be combined and treated as a single HCE. Such



                                       32
<PAGE>   33

amounts for all other Family Members shall be removed from the NHCE Group
percentage calculation and be combined with the HCE's.

                           (iii) If an HCE is covered by more than one cash or
deferred arrangement maintained by the Related Companies, all such plans shall
be aggregated and treated as one plan for purposes of calculating the separate
percentage for the HCE which is used in the determination of the Average
Percentage.

                           (iv) Employees who are eligible to participate in the
Plan as a result of a collective bargaining agreement shall be excluded from
both the HCE and NHCE Groups for Plan Years beginning before 1993. For Plan
Years beginning after 1992, each unit, any combination of units determined to be
reasonable and consistent, or all units of collective bargaining employees may
be treated and tested as a separate plan.

                  (k) "Lookback Year." Pursuant to Code section 414(q), the
Company elects as the Lookback Year the current calendar year (ending with the
Plan Year).

                  (l) "Multiple Use Test." The test described in Section 7.4
which a Plan must meet where the Alternative Limitation (described in Section
7.2(b)) is used to meet both the ADP and ACP Tests.

                  (m) "NHCE" or "Non-Highly Compensated Employee." An Employee
who is not an HCE.

                  7.2 ADP and ACP Tests - For each Plan Year, the ADP and ACP
for the HCE Group must meet either the Basic or Alternative Limitation when
compared to the respective ADP and ACP for the NHCE Group, defined as follows:

                  (a) Basic Limitation. The HCE Group Average Percentage may not
exceed 1.25 times the NHCE Group Average Percentage.


                  (b) Alternative Limitation. The HCE Group Average Percentage
is limited by reference to the NHCE Group Average Percentage as follows:

<TABLE>
<CAPTION>
               IF THE NHCE GROUP AVERAGE                                   THEN THE MAXIMUM HCE GROUP
                    PERCENTAGE IS:                                           AVERAGE PERCENTAGE IS:

<S>                                                                   <C>
                     Less than 2%                                         2 times NHCE Group Average %
                       2% to 8%                                           NHCE Group Average % plus 2%
                     More than 8%                                         NA - Basic Limitation applies
</TABLE>

                  7.3 Correction of ADP and ACP Tests - If the ADP or ACP Tests
are not met, the Administrator shall determine, no later than the end of the
next Plan Year, a maximum percentage to be used in place of the calculated
percentage for all HCEs that would reduce the ADP and/or ACP for the HCE group
by a sufficient amount to meet the ADP and ACP Tests. ADP and/or ACP corrections
shall be made in accordance with the leveling method as described below.



                                       33
<PAGE>   34

                  (a) ADP Correction. The HCE with the highest Deferral
percentage shall have his or her Deferral percentage reduced to the lesser of
the extent required to meet the ADP Test or to cause his or her Deferral
percentage to equal that of the HCE with the next highest Deferral percentage.
The process shall be repeated until the ADP Test is met.

                  To the extent an HCE's Deferrals were determined to be reduced
as described in the paragraph above, Before-Tax Contributions shall, by the end
of the next Plan Year, be refunded to the HCE in an amount equal to the actual
Deferrals minus the product of the maximum percentage and the NHCE's
Compensation, except that such amount to be refunded shall be reduced by
Before-Tax Contributions previously refunded because they exceeded the
Contribution Dollar Limit. Excess amounts shall first be taken from unmatched
Before-Tax Contributions and then from matched Before-Tax Contributions. Any
Matching Contributions attributable to refunded excess Before-Tax Contributions
as described in this Section shall be forfeited and used as described in Section
5.4.

                  (b) ACP Correction. The HCE with the highest Contribution
percentage shall have his or her Contribution percentage reduced to the lesser
of the extent required to meet the ACP Test or to cause his or her Contribution
percentage to equal that of the HCE with the next highest Contribution
percentage. The process shall be repeated until the ACP Test is met.

                  To the extent an HCE's Contributions were determined to be
reduced as described in the paragraph above, Matching Contributions shall, by
the end of the next Plan Year, be refunded to the HCE to the extent vested, and
forfeited to the extent such amounts were not vested, as of the end of the Plan
Year being tested, in an amount equal to the actual Contributions minus the
product of the maximum percentage and the HCE's Compensation. The excess amounts
shall first be taken from After-Tax Contributions and then from Matching
Contributions.

                  7.4 Multiple Use Test - If the Alternative Limitation (defined
in Section 7.2) is used to meet both the ADP and ACP Tests, the ADP and ACP for
the HCE Group must also comply with the requirements of Code section 401 (m)(9).
Such Code section requires that the sum of the ADP and ACP for the HCE Group (as
determined after any corrections needed to meet the ADP and ACP Tests have been
made) not exceed the sum (which produces the most favorable result) of:

                  (a) the Basic Limitation (defined in Section 7.2) applied to
either the ADP or ACP for the NHCE Group, and

                  (b) the Alternative Limitation applied to the other NHCE Group
percentage.

                  If the multiple use limit is exceeded, the Administrator shall
determine a maximum percentage to be used in place of the calculated percentage
for all HCEs that would reduce either or both the ADP or ACP for the HCE Group
by a sufficient amount to meet the multiple use limit. Any excess shall be
handled in the same manner that the distribution of excess Deferrals or
Contributions are handled.

                  7.5 Adjustment for Investment Gain or Loss - Any excess
Deferrals or Contributions to be refunded to a Participant in accordance with
Section 7.3 or 7.4 shall be



                                       34
<PAGE>   35

adjusted for investment gain or loss. Refunds or forfeitures shall include
investment gain or loss for the period between the end of the applicable Plan
Year and the date of distribution. However, for Plan Years ending before
December 31, 1993, refunds or forfeitures shall not include investment gain or
loss for the period between the end of the applicable Plan Year and the date of
distribution.

                  7.6 Testing Responsibilities and Required Records - The
Administrator shall be responsible for ensuring that the Plan meets the ADP, ACP
and Multiple Use Tests and that the Contribution Dollar Limit is not exceeded.
In carrying out its responsibilities, the Administrator shall have sole
discretion to limit or reduce Deferrals or Contributions at any time. The
Administrator shall maintain records which are sufficient to demonstrate that
the ADP, ACP and Multiple Use Tests have been met for each Plan Year for at
least as long as the Employer's corresponding tax year is open to audit.

                  7.7 Separate Testing for Multiple Employers - The
determination of Highly Compensated Employees and the ADP, ACP and Multiple Use
Tests and any corrective action resulting therefrom shall be applied separately
to the Employees of each Employer (and its Related Companies) that is not a
Related Company with the other Employer(s). In addition, separate testing may be
applied, at the discretion of the Administrator and to the extent permitted
under Treasury regulations, to any group of Employees for whom separate testing
is permissible.



                                       35
<PAGE>   36

                                  ARTICLE VIII
                  MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS

                  8.1 "Annual Addition" Defined - The sum of all amounts
allocated to the Participant's Account for a Plan Year. Amounts include
contributions (except for rollovers or transfers from another qualified plan),
forfeitures and, if the Participant is a Key Employee (pursuant to Article XV)
for the applicable or any prior Plan Year, medical benefits provided pursuant to
Code section 419A(d)(1). For purposes of this Section 8.1, "Account" also
includes a Participant's account in all other defined contribution plans
currently or previously maintained by any Related Company. The Plan Year refers
to the year to which the allocation pertains, regardless of when it was
allocated. The Plan Year shall be the Code section 415 limitation year.

                  8.2 Maximum Annual Addition - The Annual Addition to a
Participant's accounts under this Plan and any other defined contribution plan
maintained by any Related Company for any Plan Year shall not exceed the lesser
of (1) 25% of his or her Taxable Income or (2) the greater of $30,000 or
one-quarter of the dollar limitation in effect under Code section 415(b)(1)(A).

                  8.3 Avoiding an Excess Annual Addition - If, at any time
during a Plan Year, the allocation of any additional Contributions would produce
an excess Annual Addition for such year, Contributions to be made for the
remainder of the Plan Year shall be limited to the amount needed for each
affected Participant to receive the maximum Annual Addition.

                  8.4 Correcting an Excess Annual Addition - Upon the discovery
of an excess Annual Addition to a Participant's Account (resulting from
forfeitures, allocations, reasonable error in determining Participant
compensation or the amount of elective contributions, or other facts and
circumstances acceptable to the Internal Revenue Service) the excess amount
(adjusted to reflect investment gains) shall first be returned to the
Participant to the extent of his or her After-Tax Contributions, and then to the
extent of his or her Before-Tax Contributions (however to the extent Before-Tax
Contributions were matched, the applicable Matching Contributions shall be
forfeited in proportion to the returned matched Before-Tax Contributions) and
the remaining excess, if any, plus returned Matching Contributions, shall be
forfeited by the Participant and used to reduce subsequent Contributions as soon
as is administratively feasible.

                  8.5 Correcting a Multiple Plan Excess - If a Participant,
whose Account is credited with an excess Annual Addition, received allocations
to more than one defined contribution plan, the excess shall be corrected by
reducing the Annual Addition to this Plan only after all possible reductions
have been made to the other defined contribution plans.

                  8.6 Defined Benefit Fraction Defined - The fraction, for any
Plan Year, where the numerator is the "projected annual benefit" and the
denominator is the greater of 125% of the "protected current accrued benefit" or
the normal limit which is the lesser of (1) 125% of the maximum dollar
limitation provided under Code section 415(b)(1)(A) for the Plan Year or (2)
140% of the amount which may be taken into account under Code section
415(b)(1)(B) for the Plan Year, where a Participant's:



                                       36
<PAGE>   37

                  (a) "projected annual benefit" is the annual benefit provided
by the Plan determined pursuant to Code section 415(e)(2)(A), and

                  (b) "protected current accrued benefit" in a defined benefit
plan in existence on (1) July 1, 1982, shall be the accrued annual benefit
provided for under Public Law 97-248, section 235(g)(4), as amended, or (2) on
May 6, 1986, shall be the accrued annual benefit provided for under Public Law
99-514, section 1106(i)(3).

                  8.7 "Defined Contribution Fraction" Defined - The fraction
where the numerator is the sum of the Participant's Annual Addition for each
Plan Year to date and the denominator is the sum of the "annual amounts" for
each year in which the Participant has performed service with a Related Company.
The "annual amount" for any Plan Year is the lesser of (1) 125% of the Code
section 415(c)(1)(A) dollar limitation (determined without regard to Subsection
(c)(6)) in effect for the Plan Year and (2) 140% of the Code section
415(c)(1)(B) amount in effect for the Plan Year, where:

                  (a) each Annual Addition is determined pursuant to the Code
section 415(c) rules in effect for such Plan Year, and

                  (b) the numerator is adjusted pursuant to Public Law 97-248,
section 235(g)(3), as amended, or Public Law 99-514, section 1106(i)(4).

                  8.8 Combined Plan Limits and Correction - If a Participant has
also participated in a defined benefit plan maintained by a Related Company, the
sum of the Defined Benefit Fraction and the Defined Contribution Fraction for
any Plan Year may not exceed 1.0. If the combined fraction exceeds 1.0 for any
Plan Year, the Participant's benefit under any defined benefit plan (to the
extent it has not been distributed or used to purchase an annuity contract)
shall be limited so that the combined fraction does not exceed 1.0 before any
defined contribution limits will be enforced.




                                       37
<PAGE>   38

                                   ARTICLE IX
                   INVESTMENT OF CONTRIBUTIONS; COMPANY STOCK

                  9.1 Trust - All assets of and contributions to the Plan shall
be held in Trust by the Trustee, pursuant to the terms of the Trust Agreement
entered into between the Company and the Trustee, the terms of which are
specifically incorporated by reference into this Plan document. The Trustee
shall hold and manage the assets of the Plan, subject to the right of the
Company to appoint an Investment Manager for all or any portion of the Trust
Fund and to the right of Participants to direct the investment of their Accounts
in accordance with Section 9.2 below. It is expressly permissible under the Plan
for Trust assets to be invested in qualifying employer securities, as that term
is defined in section 407(d)(5) of ERISA, up to and including sixty percent
(60%) of total Trust Fund assets. If Company Stock is purchased other than on
the open market, it will be valued in good faith and based on all relevant
factors including current market value.

                  9.2 Participant Directed Investments - A Participant shall
have the exclusive right to direct the investment of amounts credited to his
Account in accordance with this Section 9.2.

                  (a) In General - A Participant shall direct the investment, or
change the direction of the investment, of the amounts credited to his Account
by communicating such direction to the Plan Administrator (or its agent) in
writing on forms provided by the Plan Administrator or through a telephone
enrollment system provided for such purpose (or through any other method made
available by the Plan Administrator), in accordance with such rules as may be
established by the Plan Administrator.

                  Any investment direction submitted by a Participant must
specify, in 1.0% increments, the percentage of his Account and ongoing
contributions to be invested in one or more of the separate investment funds
(the "Investment Funds") selected by the Committee from time to time pursuant to
Section 9.2(b) and must specify whether such investment instructions apply to
existing Account balances, future contributions, or both. To the extent
permitted by applicable law and regulations, if a Participant fails to submit a
statement of direction properly directing the investment of 100% of his Account,
any portion not properly directed shall be invested in the Stable Value Fund.

                  A Participant will be able to change his investment election
daily. A Participant's investment instruction shall take effect by the first
business day immediately following the day on which the Participant gives such
instruction.

                  (b) Investment Options - The separate Investment Funds made
available under the Plan from time to time shall be selected by the Committee,
and the Committee shall have the authority and discretion to add, remove or
substitute Investment Funds from time to time as it deems appropriate in
accordance with the procedures specified in Section 11.7.

                  (c) The Participant will have the sole responsibility for the
investment of his Account among the available Investment Funds, and no fiduciary
or other person will have any



                                       38
<PAGE>   39

liability for any loss or diminution in value resulting from a Participant's
exercise of such investment responsibility. It is intended that section 404(c)
of ERISA will apply to a Participant's exercise of investment responsibilities
under this Plan and that the Plan Administrator will take all actions required
to comply with the provisions of section 404(c) of ERISA.

                  (d) As of each Valuation Date, the Plan Administrator and the
Trustee shall determine the fair market value of the Investment Funds, and shall
determine the gain or loss experienced by each such Investment Fund since the
immediately preceding Valuation Date. Each Participant's Account shall be
credited with a percentage of such gain or debited with a percentage of such
loss by multiplying the aggregate gain or loss of the Investment Fund by a
fraction, the. numerator of which for each Participant is the value of the
Participant's interest in the Investment Fund as of the immediately preceding
Valuation Date, increased by any contributions by or on behalf of the
Participant since the last Valuation Date and reduced by any distribution made
to the Participant that was not taken into account in determining the
Participant's interest in the Investment Fund as of the immediately preceding
Valuation Date, and the denominator of which is the sum of the numerator amounts
for all Participants.

                  (e) The Plan Administrator shall provide each Participant with
a statement of the value of his Account as invested in the various Investment
Funds maintained under this Plan. In no event shall such statements be furnished
less frequently than once each Plan Year.

                  9.3 Voting and Tender Offer Related to Company Stock

                  (a) Voting as Directed by Participants - Notwithstanding
anything in the Plan or Trust Agreement to the contrary, each Participant who
timely provides instructions to the Trustee shall be entitled to direct the
Trustee how to vote on any shares of Company Stock allocated to his Account (the
"Allocated Shares") with respect to any matter for which shareholder approval is
required. The voting instructions of the Participant shall be transmitted to the
Trustee by the Participant, either directly or through an entity providing
services to the Plan. Reasonable means shall be employed to provide
confidentiality with respect to the directions by such Participant and such
directions shall be held in confidence and shall not be divulged or released to
any person including the Company or any director, officer, employee or agent of
the Company, it being the intent of this provision to ensure that the Company
(and its directors, officers, employees and agents) cannot determine the
direction given by any Participant. Such instructions shall be in such form and
shall be filed in such manner and at such time as the Trustee and the Plan
Administrator may prescribe. The Trustee shall not vote any. Allocated Shares
for which it does not receive timely instructions from Participants.

                  (b) Voting by Plan Administrator - The Plan Administrator
shall be entitled to direct the Trustee to vote on any matter for which
shareholder approval is required with respect to shares of Company Stock held by
the Trustee and not allocated to Participants' Accounts (the "Unallocated
Shares").

                  (c) Tender or Exchange Directed by Participant - The
provisions of this Section 9.3 shall also apply in the event any person, either
alone or in conjunction with others, makes a tender offer, or exchange offer, or
otherwise offers to purchase or solicits an offer to sell



                                       39
<PAGE>   40

to such person one percent or more of the outstanding shares of Food Lion, Inc.
Company Stock (herein referred to as a "Tender Offer"). The Trustee may not take
any action in response to a Tender Offer except as otherwise provided in this
Section 9.3. Each Participant shall have the right to direct the Trustee to
sell, offer to sell, exchange or otherwise dispose of the Allocated Shares in
accordance with the provisions, conditions and terms of such Tender Offer and
the provisions of this Section 9.3. The tender directions of the Participants
shall be transmitted to the Trustee by the Participants, either directly or
through an entity providing services to the Plan. Reasonable means shall be
employed to provide confidentiality with respect to the tendering direction by
such Participant and such directions shall be held in confidence and shall not
be divulged or released to any person including the Company or any director,
officer, employee or agent of the Company, it being the intent of this provision
to ensure that the Company (and its directors, officers, employees and agents)
cannot determine the tendering direction given by any Participant. Such
instructions shall be in such form and shall be filed in such manner and at such
time as the Trustee and the Plan Administrator may prescribe. A Participant who
has directed the Trustee to tender or exchange the Allocated Shares in his
Account may, at any time prior to the tender or exchange offer withdrawal date,
or such earlier date as established by the Trustee and the Plan Administrator,
instruct the Trustee to withdraw, and the Trustee shall withdraw, such Allocated
Shares from the tender or exchange offer prior to the withdrawal deadline. The
Trustee and the Plan Administrator may impose reasonable limits on the number of
instructions to tender or exchange or withdraw which a Participant may give to
the Trustee. The Trustee shall sell, offer to sell, exchange or otherwise
dispose of the Allocated Shares with respect to which it has received directions
to do so under this Section 9.3 and which have not been withdrawn. The proceeds
of a disposition directed by a Participant shall be allocated to such
Participant's Account. To the extent to which Participants do not instruct the
Trustee or do not issue valid directions to the Trustee to sell, offer to sell,
exchange or otherwise dispose of the Allocated Shares, such Participants shall
be deemed to have directed the Trustee that such Allocated Shares remain in the
Participant's Account subject to all provisions of the Plan.

                  The Plan Administrator shall make the determination whether to
sell, offer to sell, exchange or otherwise dispose of the Unallocated Shares and
direct the Trustee with respect to the disposition of such Unallocated Shares.
The proceeds of a disposition of Unallocated Shares shall be held by the Trustee
in the Food Lion Stock Fund maintained as part of the Trust Fund.

                  (d) Obligations of the Company - The Company shall use its
reasonable best efforts, in conjunction with the Plan Administrator and the
Trustee, to cause to be delivered to each Participant on a timely basis all
proxy materials, tender or exchange materials, notices and information as are
furnished to the Company's stockholders in respect of the exercise of voting
rights, and tender or exchange rights associated with Company Stock, together
with forms by which the Participant may confidentially instruct the Trustee, or
revoke such instruction, with respect to the Allocated Shares. Any Trustee shall
prominently note that a failure to return a form to direct the tender or
exchange of Allocated Shares within a specified reasonable period of time shall
be deemed to be a direction to the Trustee not to tender or exchange such
Allocated Shares.

                  (e) Compliance with Court Order - Notwithstanding the
foregoing provisions of this Section 9.3, the Trustee, after consultation with
the Plan Administrator, shall have the



                                       40
<PAGE>   41

right to change or modify its actions hereunder to the extent such change or
modification is mandated by the terms of any valid order of a court of competent
jurisdiction.



                                       41
<PAGE>   42

                                   ARTICLE X
                           DESIGNATION OF BENEFICIARY

                  The Participant's entire interest in the Plan at his death, if
any, shall be paid to such Participant's surviving spouse (if such spouse is
then living) unless prior to the Participant's death, the spouse consents in a
writing witnessed by a Plan representative or a notary public to permit the
Participant to designate a person other than the spouse as the Participant's
Beneficiary. This provision shall not apply where it is established to the
satisfaction of the Plan Administrator that such consent cannot be obtained
because there is no spouse, because the spouse cannot be located, or because of
such other circumstances as may be permitted by the regulations. The Plan
Administrator shall provide to each Participant a written explanation of the
Participant's spouse's right to waive the surviving spouse benefits described in
this Article X.

                  Subject to the foregoing, each Employee becoming a Participant
hereunder shall designate in writing, in such form and manner as shall be
prescribed by such rules and regulations as the Plan Administrator may
promulgate in this connection, a Beneficiary or Beneficiaries of any interest
under this Trust which may be payable with respect to such Participant in the
event of his death before or after retirement, or otherwise after termination of
Employment, which designation may include the designation of an alternate
Beneficiary or Beneficiaries. Subject to the spousal consent requirements above
and also to such rules and regulations as the Plan Administrator may promulgate,
a Participant may from time to time change such designation of Beneficiary or
Beneficiaries (or alternate Beneficiary or Beneficiaries). In the event benefits
become payable upon the death of a Participant and no Beneficiary has been
properly designated as above provided, or if the designated Beneficiary or
Beneficiaries shall have predeceased him, such benefits shall be payable in full
to the surviving spouse of the Participant, and if he has no surviving spouse,
to the Participant's estate.



                                       42
<PAGE>   43

                                   ARTICLE XI
                                 ADMINISTRATION

                  11.1 Allocation of Responsibility Among Fiduciaries for Plan
and Trust Administration - The Fiduciaries shall have only those specified
powers, duties, responsibilities and obligations as are specifically given them
under this Plan and the Trust Agreement. In general, the Employer shall have the
sole responsibility for making the contributions provided for under Articles III
and V, and the Company shall have the sole authority to appoint and remove the
Trustee, the Committee and any Investment Manager or Managers which it may
select to provide for managing all or any portion of the Trust, and to amend or
terminate, in whole or in part, this Plan and Trust. The Plan Administrator
shall have the sole responsibility for the administration of the Plan and the
Trustee shall have the sole responsibility for management of the assets held
under the Trust (except where an Investment Manager has been appointed and
subject to the right of Participants to direct the investment of their
Accounts), all as more specifically provided hereinafter and in the Trust
Agreement. Each Fiduciary may rely upon any direction, information or action of
another Fiduciary in the exercise of the latter's respective powers, duties,
responsibilities and obligations hereunder, as being proper under this Plan and
the Trust Agreement, and shall not be required under this Plan and the Trust
Agreement to inquire into the propriety of any such direction, information or
action. It is intended under this Plan and the Trust Agreement that each
Fiduciary shall be responsible for the proper exercise of its own powers,
duties, responsibilities and obligations under this Plan and the Trust Agreement
and shall not be responsible for any act or failure to act of another Fiduciary.
No Fiduciary guarantees the Trust Fund in any manner against investment loss or
depreciation in asset value.

                  11.2 Appointment of Administrative Committee - The Plan shall
be administered by the Company, or if the Board so elects, an Administrative
Committee consisting of at least three but not more than five persons appointed
by the Board. In the event a Committee is appointed to administer the Plan, the
following rules shall apply. Any member of such Committee may be removed at any
time by action of the Board and resign at any time by giving notice in writing
to the Board of his resignation. In the event of the removal or resignation of a
member of the Committee, a new member thereof shall be designated by the Board.
All usual and reasonable expenses of the Committee may be paid in whole or in
part by the Company, and any expenses not paid by the Company shall be paid by
the Trustee out of the principal or income of the Trust Fund. Any members of the
Committee who are Employees shall not receive compensation with respect to their
service for the Committee. The President of the Company (or in the event of the
President's inability or failure to act, any Vice President) shall certify in
writing to the Trustee, as promptly as practicable after any change of the
Committee the names of the persons then serving as the Committee. The Trustee
shall be entitled to rely on the names so certified as being the authorized and
acting Committee until notified of any change by subsequent certification.

                  11.3 Claims Procedure - The Plan Administrator shall have the
exclusive discretionary power to construe and interpret the Plan and the power
to determine all questions that may arise thereunder including, but not limited
to, (i) the eligibility of individuals to participate in the Plan, including
factual determinations regarding an individual's status as an Employee, which
determinations shall be reviewed under an arbitrary and capricious standard,



                                       43
<PAGE>   44

(ii) the amount of benefits to which any Participant or Beneficiary may become
entitled hereunder, and (iii) any situation not specifically covered by the
provisions of the Plan, and the Plan Administrator's decisions on such matters
shall be final and binding on all parties. If a request for a Plan distribution
by a Participant or Beneficiary is wholly or partially denied, the Plan
Administrator, or the designated party, will provide such claimant a
comprehensive written notice setting forth:

                  (a) The specific reason or reasons for such denial;

                  (b) Specific reference to pertinent Plan provisions on which
the denial is based;

                  (c) A description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and

                  (d) A description of the Plan's claim review procedure. The
review procedure is available upon written request by the claimant to the Plan
Administrator within 60 days after receipt by the claimant of written notice of
the denial of the claim and includes the right to examine pertinent documents
and submit issues and comments in writing to the Plan Administrator. The
decision on review will be made within 60 days after receipt of the request for
review unless circumstances warrant an extension of time not to exceed an
additional 60 days and shall be in writing and drafted in a manner calculated to
be understood by the claimant, and include specific reasons for the decision
with references to the specific Plan provisions on which the decision is based.

                  11.4 Records and Reports - The Plan Administrator shall
exercise such authority and responsibility as it deems appropriate in order to
comply with ERISA and governmental regulations issued thereunder relating to
records of Participants, service, Account balances and the percentage of such
Account balances which are nonforfeitable under the Plan; notifications to
Participants; annual registration with the Internal Revenue Service; annual
reports to the Department of Labor; and such other documents or reports as may
be required by ERISA. The Employer shall from time to time make available to the
Plan Administrator such information with respect to the Employees, their dates
of employment, their compensation, and other matters as may be necessary or
desirable in connection with the performance by the Plan Administrator of its
duties with respect to the Plan. The Plan Administrator shall, in turn, furnish
to the Trustee such information and such rulings and decisions as the Trustee
may require or may request in connection with its performance of its duties as
Trustee of the Trust Fund hereby created.

                  11.5 Other Plan Administrator Powers and Duties - The Plan
Administrator shall have such duties and powers as may be necessary to discharge
its duties hereunder, including, but not by way of limitation, the following:

                  (a) the discretionary power to construe and interpret the
Plan, decide all questions of eligibility and determine the amount, manner and
time of payment of any benefits



                                       44
<PAGE>   45

hereunder and any such construction, interpretation or decision shall be final,
binding, and conclusive on all persons;

                  (b) to prescribe procedures to be followed by Participants or
Beneficiaries filing applications for benefits;

                  (c) to prepare and distribute, in such manner as the Plan
Administrator determines to be appropriate, information explaining the Plan;

                  (d) to receive from the Employer and from Participants such
information as shall be necessary for the proper administration of the Plan;

                  (e) to furnish the Employer, upon request, such annual reports
with respect to the administration of the Plan as are reasonable and
appropriate;

                  (f) to receive, review and keep on file (as it deems
convenient or proper) reports of the financial condition, and of the receipts
and disbursements, of the Trust Fund from the Trustee (or any Investment
Manager), and to make such recommendations to the Trustee and take such actions
as allowed in the Trust Agreement as it deems advisable;

                  (g) to appoint or employ individuals or other parties to
assist in the administration of the Plan and any other agents it deems
advisable, including accountants and legal and actuarial counsel;

                  (h) to designate or employ persons to carry out any of the
Plan Administrator's fiduciary duties or responsibilities under the Plan; and

                  (i) subject to the provisions of Section 9.3, to direct the
Trustee as to the voting of stock held in the Trust Fund established hereby, or
as to any other actions that may be appropriate with respect thereto (such as
participation in reorganizations, etc.); provided that in the absence of any
such direction, the Trustee shall have the right to vote such stock and take
such other actions in its sole discretion.

                  The Plan Administrator shall have no power to add to, subtract
from or modify any of the terms of the Plan, or to change or add to any benefits
provided by the Plan, or to waive or fail to apply any requirements of
eligibility for a benefit under the Plan.

                  11.6 Rules and Decisions - The Plan Administrator may adopt
such by-laws, rules and regulations as it deems necessary, desirable, or
appropriate, provided that same shall not be inconsistent with or contrary to
the express terms of this agreement. All such by-laws, rules, regulations and
decisions of the Plan Administrator shall be uniformly and consistently applied
to all Participants in similar circumstances. When making a determination or
calculation, the Plan Administrator shall be entitled to rely upon information
furnished by a Participant or Beneficiary, the Employer, the legal or actuarial
counsel of the Employer, or the Trustee.

                  11.7 Committee Procedures - The Committee may act at a meeting
or by unanimous written consent without a meeting. The Committee shall elect one
of its members as



                                       45
<PAGE>   46

Chairman, appoint a Secretary, who may or may not be a Committee Member, and
advise the Trustee of such actions in writing. The Secretary shall keep a record
of all meetings and forward all necessary communications to the Employer or the
Trustee. A quorum of the Committee shall consist of not less than two-thirds
(2/3) of the members thereof and a majority vote of those present shall control
all matters acted upon at a meeting of the Committee. A dissenting Committee
Member, who, within a reasonable amount of time after he has knowledge of any
action or failure to act by the majority, registers his dissent in writing and
delivers such writing to the other Committee Members, the Employer and the
Trustee, shall not be responsible for any such action or failure to act.

                  11.8 Authorization of Benefit Payments - The Plan
Administrator shall issue directions to the Trustee concerning all benefits
which are to be paid from the Trust Fund pursuant to the provisions of the Plan.

                  11.9 Application and Forms for Benefits - The Plan
Administrator may require a Participant or Beneficiary to complete and file with
the Plan Administrator an application for a benefit and all other forms approved
by the Plan Administrator, and to furnish all pertinent information requested by
the Plan Administrator. The Plan Administrator may rely upon all such
information so furnished it, including but not limited to, the Participant's
current mailing address. To the extent the Plan Administrator uses electronic
mechanisms to implement "paperless administration" with respect to notices,
consents, voluntary tax withholding, enrollment, contribution elections,
beneficiary designations, and rollover elections, such paperless administration
shall be implemented in accordance with regulations and other guidance
promulgated by the Internal Revenue Service and the Department of Labor.

                  11.10 Payment for Benefit of Disabled or Incapacitated
Person - Whenever, in the Plan Administrator's opinion, a person entitled to
receive any payment of a benefit or installment thereof hereunder is under a
legal disability or is incapacitated in any way so as to be unable to manage his
financial affairs, the Plan Administrator may direct the Trustee to make
payments to such person or to his legal representative or to a relative or
friend of such person for his benefit, or the Plan Administrator may direct the
Trustee to apply the payment for the benefit of such person in such manner as
the Plan Administrator considers advisable. Any payment of a benefit or
installment thereof in accordance with the provisions of this Section shall be a
complete discharge of any liability for the making of such payment under the of
the Plan.

                  11.11 Notices to Trustee - All notices from the Plan
Administrator or any Investment Manager to the Trustee shall be in writing, and
the Trustee may rely thereon in carrying out its duties and responsibilities
hereunder.

                  11.12 Indemnification - The Employer shall indemnify each
member of the Committee for any liability, assessment, loss, expense or other
cost, of any kind or description whatsoever, including legal fees and expenses,
actually incurred by a member an account of any action or proceeding, actual or
threatened, which arises as a result of being a member of the Committee provided
such action or allegation does not arise as a result of the member's own
negligence, willful misconduct or lack of good faith.



                                       46
<PAGE>   47

                                  ARTICLE XII
                              AMENDMENT OF THE PLAN

                  The Company, through resolutions adopted by the Board, shall
have the right at any time by an instrument in writing, duly executed and
acknowledged and delivered to the Trustee, to modify, alter or amend this Plan
in whole or in part, provided, however, that the duties, powers and liability of
the Trustee hereunder shall not be substantially modified without its written
consent and provided further that any benefits which have actually accrued and
become payable hereunder shall not be affected thereby. No amendment shall be
made which shall cause or authorize any part of the Trust Fund to revert or be
refunded to the Employer or to be used for or diverted to purposes other than
the exclusive and sole benefit of the Participants or their Beneficiaries (other
than such part as is required to pay taxes and expenses of administration). The
Company, through resolutions adopted by the Board, shall have the limited right
to amend this Agreement at any time, retroactively or otherwise, in such
respects and to such extent as may be necessary to qualify it under existing and
applicable laws and regulations so as to permit the full deduction for tax
purposes of the Employer's contributions made hereunder, and if and to the
extent necessary to accomplish such purpose may by such amendment, to the extent
permitted by ERISA and the Code, decrease or otherwise affect the rights of
Participants to benefits which have actually accrued and become payable
hereunder, any provision herein to the contrary notwithstanding.

                  No amendment to the Plan shall reduce a Participant's Account
balance or eliminate an optional form of distribution except to the extent
permissible under ERISA and Code sections 411, 412, or any other relevant Code
section, or regulations issued under ERISA or the Code. No amendment to the Plan
shall have the effect of decreasing a Participant's Account or Vested Interest
determined without regard to such amendment as of the later of the date such
amendment is adopted or the date it becomes effective.



                                       47
<PAGE>   48

                                  ARTICLE XIII
             DISCONTINUANCE OF CONTRIBUTIONS AND TERMINATION OF PLAN

                  13.1 Intention to Continue Plan - The Plan herein provided for
has been established by the Employer with the bona fide intention that it shall
be continued in operation. However, the Employer, through resolutions adopted by
its Board of Directors, reserves the right at any time to discontinue
contributions or to terminate the Plan.

                  13.2 Termination or Partial Termination of Plan - Should the
Employer, through resolutions adopted by its Board of Directors, decide to
terminate or partially terminate the Plan, the accounts of all Participants
affected thereby, shall become fully vested and nonforfeitable. The Trustee
shall be notified of any termination or partial termination in writing and shall
proceed at the direction of the Plan Administrator to liquidate the assets of
the Trust Fund. Upon termination of the Plan by an Employer, the Employer shall
not thereafter make any further' contributions under the Plan, and no amount
shall thereafter be payable under the Plan to or in respect of any Participants
then employed by such Employer, except as provided in this Article XIII or
except as amounts may become payable under the Plan as a result of such
Participants continuing their' participation in the Plan as a result of being
employed by other participating Employers. To the maximum extent permitted by
ERISA, transfers, distributions or other dispositions of assets of the Plan as
provided in this Article XIII shall constitute a complete discharge of all
liabilities under the Plan. Promptly upon any such termination the Trustee shall
(i) pay any due and accrued expenses and liabilities of the Trust and any
expenses involved in the termination of the Plan and appropriately adjust, as
may be required, all Accounts of Participants for such expenses and charges;
(ii) appropriately adjust, as of the date of such termination, the Employer
Contribution Accounts of Participants who are then Employed by the Employer to
which the termination applies, (treating, for this purpose, any Participant
whose Employment had previously terminated, but who had not yet incurred a Break
in Service prior to such date, as having incurred a Break in Service immediately
prior to such date); and (iii) adjust for income, gains and losses in the Trust
Fund to such termination date in the manner described in Section 5.2 hereof as
if such termination date was an Annual Valuation Date. The interest of each such
Participant who is then Employed by such Employer in the adjusted `amount then
credited to his Employer Contribution Account shall be nonforfeitable as of such
date. The full current value of each adjusted Account shall be paid from the
Trust Fund to the Participant for whom such Account is maintained in such manner
of distribution specified in Section 6.6 hereof and at such time or times as the
Plan Administrator shall in its sole discretion determine.

                  In the event of a partial termination of the Plan, the
payments, adjustments and distributions described above shall also be made, but
only with respect to the portion of the Plan being terminated.

                  Termination or partial termination of the Plan shall not
affect the payment of benefits, in accordance with Article VI hereof, from the
Trust Fund except as specifically provided herein, nor shall such funds
thereafter be divested by reason of any provision. hereof.

                  13.3 Discontinuance of Contributions - In the event of a
complete discontinuance by the Employer of the contributions to be made by it
hereunder, the Accounts of Participants shall be treated, and the rights of
Participants shall be, as if the Plan was terminated



                                       48
<PAGE>   49

as contemplated under Section 13.2 immediately above on the effective date of
such discontinuance or the date such discontinuance is deemed to have been
effective, including, but not limited to, nonforfeitability of all amounts
credited to the Employer Contribution Accounts of Participants who are then
Employed by such Employer.

                  The mere suspension of a contribution for a year or years
during which the Employer earns profits shall not in itself be deemed a
discontinuance within the meaning of this Section 13.3, unless such suspension
shall be deemed to have ripened into a discontinuance under the applicable
provisions of the Code, any valid regulations promulgated thereunder or any
rulings properly interpreting and applying same.

                  13.4 Internal Revenue Service Approval - Notwithstanding the
foregoing, the Trustee shall not be required to make any distribution from the
Trust in the event the Plan is terminated or contributions are completely
discontinued until such time as the Internal Revenue Service shall have
determined in writing that such termination or discontinuance will not adversely
affect the prior qualification of the Plan.



                                       49
<PAGE>   50

                                  ARTICLE XIV
                                  MISCELLANEOUS

                  14.1 Participants' Rights; Acquittance - Except to the extent
required by law as in effect and applicable hereto from time to time, neither
the establishment of the Trust hereby created, nor any modification thereof, nor
the creation of any fund or account, nor the payment of any benefits, shall be
construed as giving to any Participant or other person any legal or equitable
right against the Employer, or any officer or Employee thereof, or the Trustee
or the Committee except as herein provided; nor shall any Participant have any
legal right, title or interest in this Trust or any of its assets, except in the
event and to the extent that benefits may actually accrue to him hereunder, and
the same limitations shall be applicable with respect to death benefits which
may be payable to the Beneficiaries of the Participant. Under no circumstances
shall the terms of Employment of any Participant be modified or in any way
affected hereby. This Plan and the Trust Agreement shall not constitute a
contract of Employment nor afford any individual any right to be retained in the
employ of the Employer.

                  14.2 Spendthrift Clause - To the extent permitted by law,
Participants are prohibited from anticipating, encumbering, alienating or
assigning any of their rights, claims or interest in this Trust or in any of the
assets thereof, and no undertaking or attempt to do so shall in any way bind the
Plan Administrator or the Trustee or be of any force or effect whatsoever.
Furthermore, to the extent permitted by law, no such rights, claims or interest
of a Participant in this Trust or in any of the assets thereof shall in any way
be subject to such Participant's debts, contracts or engagements, nor to
attachment, garnishment, levy or other legal or equitable process. Provided,
however, anything to the contrary herein notwithstanding, to the extent
permissible under applicable law, a Participant's interest hereunder is subject
to all bona fide and existing debts owed by such Participant to the Plan and
Trust, if any, and upon such Participant or the Beneficiary of such Participant
becoming entitled to receive payment of any benefit hereunder, the Trustee, if
it shall, prior to disbursement have received certified notice or confirmation
from the Plan Administrator in such form as it may reasonably require of the
fact and amount of such indebtedness, shall pay first from the benefits so
payable the amount of such indebtedness to the Plan and Trust with the
remainder, if any, being payable as otherwise provided herein.

                  In any action or proceeding involving the Trust Fund, or any
property constituting part or all thereof, or the administration thereof, the
Employer, the Plan Administrator, and the Trustee shall be the only necessary
parties and no Employees or former Employees of the Employer or their
Beneficiaries can any other person having or claiming to have an interest in the
Trust Fund or under the Plan shall be entitled to any notice or service of
process.

                  Any final judgment which is not appealed or appealable that
may be entered in any such action or proceeding shall be binding and conclusive
on the parties hereto, the Plan Administrator and all persons having or claiming
to have any interest in the Trust Fund or under the Plan.

                  The foregoing provision against the assignment of a
Participant's right in the Plan shall not apply in the case of a qualified
domestic relations order which is determined by the Plan Administrator to meet
the requirements of section 414(p) of the Code.



                                       50
<PAGE>   51

                  14.3 Participation of Affiliated Employers and Their
Employees - With the written consent of the Company, an Affiliated Employer may
become a party to this Plan and become an adopting Employer pursuant to
authorization by its Board of Directors. In the event an adopting Employer does
so become a party, it shall contribute to the Plan, and its Employees shall be
entitled to benefits thereunder, in accordance with its terms, subject to the
following special provisions:

                  (a) The contribution of each adopting Employer shall be
determined separately by its Board of Directors under Section 4.1 hereof.

                  (b) In computing the Service of a person who is in the employ
of more than one of the adopting Employers at the same time, the period of
Service of such person with any of the adopting Employers shall be counted, and
a transfer of an Employee from the Employment of one adopting Employer to the
Employment of another shall not interrupt his Service, nor shall such a transfer
constitute a termination of Employment under the terms of this Plan.

                  (c) The contribution of each adopting Employer shall be
allocated among its Employees separately from the contributions of the others in
accordance with the provisions of Section 5.3. Net increases and decreases in
the value of the Trust Fund resulting from increases or decreases in the value
of the assets of the Trust and earnings and losses shall be allocated among all
Participants under the Plan as a group in accordance with the provisions of
Section 5.2. Participants who are Employees of one or more adopting Employers
shall have separate accounts with respect to their participation as an Employee
of each such adopting Employer.

                  (d) In the event of a transfer of any Participant from the
Employment of one adopting Employer to the Employment of another, his Account
shall be considered and treated thereafter as the Account of a Participant who
is an Employee of the adopting Employer to which he is transferred.

                  In the event of such a transfer, the Participant transferred
shall share in the next annual contribution of each of such adopting Employers
on a pro rata basis, based upon the amount of wages or salary earned with each
such Employer during its fiscal year in which the transfer takes place.

                  14.4 Successor Employer - In the event of the dissolution,
merger, consolidation or reorganization of the Employer, provision may be made
by which the Plan and Trust will be continued by the successor; and, in that
event, such successor shall be substituted for the Employer under the Plan. The
substitution of the successor shall constitute an assumption of Plan liabilities
by the successor and the successor shall have all the powers, duties and
responsibilities of the Employer under the Plan.

                  14.5 Transfer of Plan Assets - In the event of any merger or
consolidation of the Plan with, or transfer in whole or in part of the assets
and liabilities of the Trust Fund to, another trust fund held under any other
plan of deferred compensation maintained or to be established for the benefit of
all or some of the Participants of this Plan, the assets of the Trust Fund
applicable to such Participants shall be transferred to the other trust fund
only if:



                                       51
<PAGE>   52

                  (a) Each Participant would, if either this Plan or the other
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;

                  (b) Resolutions of the Board of Directors of the Employer of
the affected Participants, shall authorize such. transfer of assets, and, in the
case of the new or successor Employer of the affected Participants, its
resolutions shall include an assumption of liabilities with -respect to such
Participant's inclusion in the new Employer's plan; and

                  (c) Such other plan and trust are qualified under sections
401(a) and 501(a) of the Code.

                  14.6 Delegation of Authority by Employer - Whenever the
Employer under the terms of this Plan is permitted or required to do or perform
any act or matter or thing it shall be done and performed by any officer
thereunto duly authorized by the Board.

                  14.7 Construction of Agreement - This Plan and the Trust
Agreement shall be construed according to the laws of the State of North
Carolina, and all provisions hereof shall be administered according to, and its
validity and enforceability shall be determined under the laws of such state,
except where pre-empted by ERISA.

                  14.8 Headings - The headings of Articles, Sections and
Subsections are for ease of reference only and shall in no wise be construed to
limit or modify the detailed provisions hereof.

                  14.9 Compliance With Distribution Method and Timing
Regulations - Notwithstanding any other provision of this Plan, if, and solely
to the extent that, any provision of the Plan becomes a material violation of
Code sections 401 or 411 as an impermissible restriction on an individual's
rights with respect to the timing or method of any alternative form of benefit,
then such Plan provision(s) shall thereafter be construed and administered in a
manner which grants to each Participant or his Beneficiary(ies), as applicable,
such additional rights, and only such additional rights, as will satisfy such
Code sections.

                  14.10 Qualification of Plan as Condition - This Plan is based
upon the condition subsequent that it shall be approved and qualified by the
Internal Revenue Service as meeting the requirements of the Federal Internal
Revenue Code and regulations issued thereunder with respect to employees' profit
sharing plans and trusts so as to permit, among other incidents to such
qualified plans, the Employer to deduct for income tax purposes the amount of
its contributions to the Plan as set forth herein, and so that such
contributions will not be taxable at the time of contribution to the
Participants as income. Therefore, if, when this Plan is submitted for
qualification and approval by the Internal Revenue Service, the Internal Revenue
Service rules that the Plan does not meet the requirements of the Internal
Revenue Code for qualification for the purposes specified in the preceding
sentence and the deficiencies precluding qualification may not be corrected by
amendment effective as of the Effective Date of this Plan, then regardless of
any other provision herein contained, this agreement shall be and become null
and void ab initio.



                                       52
<PAGE>   53

                                   ARTICLE XV
                            TOP-HEAVY PLAN PROVISIONS

                  15.1 Application - In the event that the Plan is determined to
be a Top-Heavy Plan as hereinafter defined, this Article XV shall become
effective as of the first day of the Plan Year in which the Plan is a Top-Heavy
Plan.

                  15.2 Definitions -

                  (a) Annual Compensation - Compensation as determined according
to section 414(q)(7) of the Code.

                  (b) Key Employee - During any year that the Plan is a
Top-Heavy Plan, a Participant who is a Key Employee within the meaning of
section 416 of the Code, including any Employee, former Employee or Beneficiary
of an Employee or former Employee who at any time during the Plan Year or any of
the four (4) preceding Plan Years is:

                           (i) an officer of the Employer whose Annual
Compensation is greater than 50% of the amount in effect under section
415(b)(1)(A) of the Code for any Plan Year, provided that Employees described in
section 414(q)(8) of the Code shall be excluded;

                           (ii) 1 of the 10 employees having Annual Compensation
of more than the dollar limitation in section 415(c)(1)(A) of the Code and
owning (or considered as owning within the meaning of section 318 of the Code)
the largest interest in the Employer;

                           (iii) a one percent (1%) owner of the Employer having
Annual Compensation from the Employer of more than $150,000; or

                           (iv) a five percent (5%) owner of the Employer.

                  Ownership shall be determined according to section
416(i)(1)(B) of the Code. For purposes of (i) above, no more than fifty (50)
Employees (or if less, the greater of three (3) or ten percent (10%) of the
Employees) shall be treated as officers. For purposes of (ii) above, if two
Employees have the same ownership interest, the Employee with the higher Annual
Compensation shall be treated as having the larger interest. An Employee who is
not a Key Employee shall be a non-Key Employee.

                  (c) Minimum Contribution - For a Plan Year, the lesser of
three percent (3%) of a Participant's compensation (within the meaning of
section 415 of the Code) or a percentage of a Participant's compensation equal
to the percentage at which contributions are made (or required to be made) under
the Plan and all other plans required to be aggregated under section 416(g)(2)
of the Code, (i.e., each plan maintained by the Employer in which a Key Employee
is a Participant and all other plans maintained by the Employer which enable the
plans in which a Key Employee is a Participant to meet the requirements of
section 401(a)(4) and section 410) for the Key Employee for whom such percentage
is highest. The percentage of a Key Employee's compensation at which
contributions are made shall be determined by dividing the contributions for
each such employee by so much of his compensation for the Plan Year as does not
exceed the Annual Compensation Limit then in effect.



                                       53
<PAGE>   54

                  (d) Top-Heavy Plan - A plan that is required in such year to
satisfy the requirements of section 416 of the Code because the aggregate of the
accounts of all Key Employees in the Plan exceeds sixty percent (60%) of the
aggregate of the accounts of all Participants in the Plan, such determination to
be made in accordance with the procedures described in section 416(g) of the
Code and the regulations thereunder as of the Annual Valuation Date immediately
preceding such Plan Year (or in the case of the first Plan Year, as of the last
day of such Plan Year) (the "determination" and "valuation" date) and shall
include distributions made in the last five years. The account balance of any
Participant who has not performed any services for the Employer in the last five
years shall not be taken into account. For purposes of determining whether the
Plan is a Top-Heavy Plan, the Plan shall be aggregated with all other plans
maintained by the Employer which are required to be aggregated with the Plan in
order for the Plan to meet the requirements of sections 401(a)(4) and 410 of the
Code, and all other plans maintained by the Employer in which a Key Employee is
a Participant (the "Required Aggregation Group"). In addition, the Plan may also
be aggregated with any other plans maintained by the Employer (the "Permissive
Aggregation Group"), so long as such aggregation would not prevent the
aggregated group from satisfying the requirements of Code sections 401(a)(4) and
410.

                  15.3 Allocation of Minimum Contribution - For any year in
which the Plan is a Top-Heavy Plan, the Minimum Contribution as defined in
Section 15.2(c) hereof shall be made to the account of each Participant who is a
non-Key Employee, unless the Minimum Contribution for the Participant is made
under another defined contribution plan maintained by the Employer. Such Minimum
Contribution shall be made to the Employer Contribution Account of each non-Key
Employee Participant who has not separated from service on the last day of such
Plan Year without regard to such Participant's Hours of Service during such Plan
Year and without regard to such Participant's Annual Compensation for such Plan
Year. Such Minimum Contribution shall be made without consideration of the
Employer's contributions under section 3111 of the Code.- The Employer and
Committee shall determine under which plan a Participant shall receive the
Minimum Contribution if the Employee is a Participant in more than one plan
maintained by the Employer.

                  15.4 Vesting - If for any Plan Year or Years the Plan is a
Top-Heavy Plan, the schedule in Section 6.5 shall be replaced with the following
vesting schedule in accordance with section 416(b) of the Code:

<TABLE>
<CAPTION>
                   YEARS OF SERVICE
                      PERCENTAGE                    VESTED PERCENTAGE               FORFEITED
                   ----------------                 -----------------               ---------

<S>                                                <C>                        <C>
                      Less than 3                           0%                         100%
                       3 or more                          100%                           0%
</TABLE>

                  If the Plan ceases to be a Top-Heavy Plan, the vesting
schedule in this Section 15.4 shall revert to the schedule contained in Section
6.5; provided that any portion of the accrued benefit that was nonforfeitable
before the Plan ceases to be a Top-Heavy Plan shall remain nonforfeitable, and
further provided that if any Participant who has three (3) or more Years of
Service at the time the Plan ceases to be a Top-Heavy Plan shall have the right
to elect



                                       54
<PAGE>   55

during the Election Period (as hereinafter defined) to continue to have his
Vested Interest determined in accordance with the vesting schedule contained in
this Section 15.4.

                  For the purposes of this Section 15.4, Years of Service shall
include service prior to the Effective Date, and shall include service during
the Election Period. The Election Period shall be the period during which such
Participants may make such vesting schedule election and shall begin on the date
of the adoption of the amendment which changes the vesting schedule and shall
end on the later of:

                           (i) The date which is 60 days after the adoption of
the amendment which changes the vesting schedule;

                           (ii) The date which is 60 days after the effective
date of the amendment which changes the vesting schedule; or

                           (iii) The date which is 60 days after the date, such
Participant is notified in writing of the amendment which changes the vesting
schedule.



                                       55
<PAGE>   56

                  IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized corporate officers and its corporate seal to
be hereunto affixed as of the day and year first above written.


(CORPORATE SEAL)                        KASH 'N' KARRY FOOD STORES, INC.

ATTEST:

By: /s/ G. LINN EVANS                   By: /s/ DARRELL JOHNSON
   -----------------------------           ---------------------------
   Title: Assistant Secretary              Title: Vice President Human Resources
         ------------------------                -------------------------------


                                       56

<PAGE>   57
                             FIRST AMENDMENT TO THE
        PROFIT-SHARING RETIREMENT PLAN OF KASH N' KARRY FOOD STORES, INC.

                                       I.

         Section 1.30 of the Profit-Sharing Retirement Plan of Kash n' Karry
Food Stores, Inc. (the "PLAN") is hereby amended by inserting the word "and"
between "Profit-Sharing" and "Retirement" so that Section 1.30 reads as follows:

         "1.30 Plan - The profit sharing plan as set forth herein, as amended
and/or restated from time to time. The Plan shall be known as the Profit-Sharing
and Retirement Plan of Kash n' Karry Food Stores, Inc."

                                       II.

         Article III of the Plan is hereby amended by adding the following as
Section 3.9:

         "3.9 Trust to Trust Transfers - The Plan, subject to the approval of
the Committee, may accept a transfer of assets from another qualified retirement
plan sponsored by an Affiliated Employer for the benefit of a former employee of
such Affiliated Employer who becomes an employee of the Company. The Plan shall
not accept any direct or indirect transfers from a plan which is subject to
Section 401(a)(11) of the Code.

         The Committee may direct the Trustee to transfer the assets credited to
the Account of a Participant or Former Participant to another employer's
retirement plan, provided immediately prior to the transfer, the transferee plan
contains a provision permitting such transfer and is qualified under Section
401(a) of the Code and the related trust is exempt under Section 501(a) of the
Code."

                                      III.

         Section 5.4 of the Plan is hereby amended by adding the following as
subsection (c):

         "(c) Payment of Plan Expenses - Forfeitures may be used, at the Plan's
discretion, to reduce the Plan's ordinary and necessary administrative expenses
for the Plan Year prior to becoming available for allocation pursuant to Section
5.3."

<PAGE>   58

                                       IV.

         Section 6.5(c) of the Plan is hereby amended to read as follows:

         "(c) Time of Payment - Except as provided in Section 6.5(d), if a
Participant terminates employment after attaining age 60 or due to his death, or
terminates employment for any reason and consents to immediate distribution of
his benefit in accordance with Section 6.5(e), distribution of his Vested
Interest shall be made as soon as administratively feasible following the
Participant's termination of service and, if applicable, consent to
distribution.

         Benefits shall be payable in accordance with Section 6.6. Pending
commencement of payment therefor, the amount so payable shall be maintained as
provided in Section 6.7 hereof. Such payment shall be made to and accepted by
the Participant in full and final satisfaction and settlement of any and all of
his claims and rights under the Plan and in the Trust Fund.

         In the event a former Participant entitled to benefits under this
Section 6.5 dies before such benefits shall have been paid in full, then the
balance of such interest standing to his credit in his Account as of the date of
his death shall be payable to the Beneficiary or Beneficiaries designated by him
or to those specified in Article X, in accordance with the provisions hereof
applicable to the payment of death benefits after retirement."

                                       V.

         Section 6.5(e) of the Plan is hereby amended to read as follows:

         "(e) If upon termination of Employment, a Participant's Vested Interest
in his Account exceeds $5,000 and such termination is prior to age 60 and is not
on account of death, no distribution shall be made to the Participant until such
time as the Participant consents to such distribution, attains age 60, or dies.
No more than 90 days and no less than 30 days before the date as of which the
Participant would be entitled to receive a distribution of his Account, the
Participant shall be provided with a notice explaining his rights with regard to
such distribution of his Account. No consent by a Participant to a distribution
shall be valid unless it is received after the Participant receives the notice
described in the preceding sentence and not more than 90 days before the date as
of which the Participant receives the distribution."

<PAGE>   59

                                       VI.

         Section 6.14(c) is hereby amended to read as follows:

         "(c) (i) A Participant who is an Employee and has attained age 59 1/2
may make withdrawals from the Contribution Accounts listed in paragraph (ii)
below.

              (ii) The withdrawal amount shall come only from the Vested
Interest of the Participant's Accounts, in the following priority order with the
exception that the Participant may instead choose to have amounts taken from his
or her After-Tax Account first:

                   Rollover Account
                   Before-Tax Account
                   Employer Matching Account
                   Profit Sharing Account
                   Employer Contribution Account
                   After-Tax Account

              (iii) The maximum number of withdrawals permitted from these
Accounts after age 59 1/2 in any 12-month period is one.

              (iv) A withdrawal from a Participant's Account after age 59 1/2
shall not affect his or her ability to make further Contributions."
<PAGE>   60
                            SECOND AMENDMENT TO THE
      PROFIT-SHARING AND RETIREMENT PLAN OF KASH N' KARRY FOOD STORES, INC.

         Section 9.3(c) of the Plan is amended so that the last sentence of the
first paragraph of Section 9.3(c) is deleted and replaced with the following
sentence:

         The Administrative Committee shall provide direction to the Trustee
with respect to any Allocated Shares for which the Trustee has not otherwise
received instructions or valid directions from Participants.