SALARIED PENSION PLAN OF
                            ELJER MANUFACTURING, INC.


                             As Amended and Restated
                          Effective as of April 1, 1989


<PAGE>



                                    PREAMBLE

         The Salaried Pension Plan of Eljer Manufacturing, Inc. (the "Plan") was
established,  effective  as  of  April  1,  1989,  for  the purpose of providing
retirement   income   security   to   eligible  salaried   employees  of   Eljer
Manufacturing, Inc. (the "Company") and certain related entities.

         Prior to April 1, 1989, the salaried employees of the Employer eligible
to participate in this Plan were  participants  in the Salaried  Pension Plan of
Household Manufacturing, Inc. (the "Prior Plan"). As of April l, 1989, Household
International,  Inc. ("HI") spun off portions of Household  Manufacturing,  Inc.
("HMI") and, in connection therewith,  merged, effective March 31, 1989, certain
defined  benefit  pension  plans  maintained  by HMI  and its  subsidiaries  and
divisions into the Household  International,  Inc. Retirement Income Plan, which
plan shall provide benefits  accrued by such eligible  employees under the Prior
Plan as of March 31,  1989.  This Plan  provides  benefits  based on all service
taken into account under the Prior Plan and this Plan,  which  benefits shall be
offset by amounts payable from the Prior Plan.

         By this instrument,  effective April 1, 1989, the Company hereby amends
and  restates  the Plan to comply with the  applicable  requirements  of the Tax
Reform  Act of  1986,  as  amended,  related  legislation,  and the  regulations
promulgated thereunder.

         Retirement  benefits  payable  to  employees  under  this Plan shall be
determined  solely by the  provisions  of the Plan in effect on the date of such
employees' retirement or termination,  except as otherwise specifically provided
in the Plan.


<PAGE>



                                TABLE OF CONTENTS

<TABLE>
         <S>                                                                                                     <C>
         ARTICLE l - DEFINITIONS
                  Section 1.01.  "Affiliated Company"...........................................................  1
                  Section 1.02.  "Alternate Payee"..............................................................  1
                  Section 1.03.  "Authorized Leave of Absence"..................................................  1
                  Section 1.04.  "Average Final Compensation"...................................................  1
                  Section 1.05.  "Beneficiary"..................................................................  2
                  Section 1.06.  "Benefit Commencement Date" or "Annuity Starting Date".........................  2
                  Section 1.07.  "Board of Directors"...........................................................  2
                  Section 1.08.  "Break-in-Service".............................................................  2
                  Section 1.09.  "Code".........................................................................  2
                  Section 1.10.  "Committee"....................................................................  2
                  Section 1.11.  "Company"......................................................................  2
                  Section 1.12.  "Compensation".................................................................  2
                  Section 1.13.  "Covered Compensation".........................................................  3
                  Section 1.14.  "Credited Service".............................................................  4
                  Section 1.15.  "Deferred Vested Pension"......................................................  4
                  Section 1.16.  "Disability Benefit"...........................................................  4
                  Section 1.17.  "Early Retirement Pension".....................................................  4
                  Section 1.18.  "Effective Date"...............................................................  4
                  Section 1.19.  "Eligible Retirement Plan".....................................................  4
                  Section 1.20.  "Employee".....................................................................  4
                  Section 1.21.  "Employer".....................................................................  4
                  Section 1.22.  "Equivalent Actuarial Value"...................................................  5
                  Section 1.23.  "ERISA"........................................................................  5
                  Section 1.24.  "Executive Bonus Program"......................................................  5
                  Section 1.25.  "Final Average Compensation"...................................................  5
                  Section 1.26.  "Insurance Company"............................................................  5
                  Section 1.27.  "Member".......................................................................  5
                  Section 1.28.  "Normal Retirement Age"........................................................  5
                  Section 1.29.  "Normal Retirement Date".......................................................  5
                  Section 1.30.  "Normal Retirement Pension"....................................................  6
                  Section 1.31.  "Pension.......................................................................  6
                  Section 1.32.  "Plan".........................................................................  6
                  Section 1.33.  "Plan Year"....................................................................  6
                  Section 1.34.  "Prior Plan"...................................................................  6
                  Section 1.35.  "Qualified Domestic Relations Order"...........................................  6
                  Section 1.36.  "Required Commencement Date"...................................................  6
                  Section 1.37.  "Retired Member"...............................................................  7
                  Section 1.38.  "Retirement"...................................................................  7
                  Section 1.39.  "Severance from Service Date"..................................................  7
                  Section 1.40.  "Social Security Retirement Age"...............................................  7
                  Section 1.41.  "Spouse".......................................................................  7
</TABLE>

                                       -i-

<PAGE>



<TABLE>
<S>      <C>                                                                                                     <C>
                  Section 1.42.  "Spousal Consent"..............................................................  7
                  Section 1.43.  "Spouse's Pension".............................................................  8
                  Section 1.44.  "Taxable Wage Base"............................................................  8
                  Section 1.45.  "Trust Agreement"..............................................................  8
                  Section 1.46.  "Trust Fund"...................................................................  8
                  Section 1.47.  "Trustee"......................................................................  8
                  Section 1.48.  "Vesting Service"..............................................................  8

         ARTICLE 2 - MEMBERSHIP
                  Section 2.01.  Eligibility....................................................................  9
                  Section 2.02.  Periods of Membership..........................................................  9
                  Section 2.03.  Leased Employees...............................................................  9

         ARTICLE 3 - SERVICE
                  Section 3.01.  Determination of Vesting Service............................................... 10
                  Section 3.02.  Credited Service............................................................... 11
                  Section 3.03.  Calculation of Vesting Service and Credited Service............................ 12
                  Section 3.04.  Corporate Transactions......................................................... 12

         ARTICLE 4 - BENEFITS
                  Section 4.01.  Normal Retirement Pension...................................................... 13
                  Section 4.02.  Early Retirement Pension....................................................... 14
                  Section 4.03.  Deferred Vested Pension........................................................ 14
                  Section 4.04.  Normal Form of Pension......................................................... 15
                  Section 4.05.  Member Pension Elections....................................................... 16
                  Section 4.06      Optional Forms of Payment................................................... 17
                  Section 4.07.  Lump-Sum Cashout Distribution When Vested
                                    Pension not in Excess of $3,500............................................. 19
                  Section 4.08.  Deemed Distribution to Non-vested Member....................................... 20
                  Section 4.09.  Spouse's Pension............................................................... 20
                  Section 4.10.  Death of Member................................................................ 21
                  Section 4.11.  Qualified Domestic Relations Orders............................................ 21
                  Section 4.12.  Basis of Payment............................................................... 22
                  Section 4.13.  Maximum Benefit Limitation..................................................... 22
                  Section 4.14.  Limitation on Time of Payment.................................................. 26
                  Section 4.15.  Restoration of Retired Member or
                                    Other Former Employee to Service............................................ 27
                  Section 4.16.  Transfers...................................................................... 29
                  Section 4.17.  Special Provisions Applicable to Certain
                                    Former Members in the Prior Plan............................................ 30
                  Section 4.18.  Disability Benefit............................................................. 30
</TABLE>


                                      -ii-

<PAGE>



<TABLE>
         <S>                                                                                                     <C>
         ARTICLE 5 - CONTRIBUTIONS
                  Section 5.01.  Employer Contributions......................................................... 32
                  Section 5.02.  No Participant Contributions................................................... 33

         ARTICLE 6 - ADMINISTRATION OF PLAN
                  Section 6.01.  Appointment of Committee....................................................... 34
                  Section 6.02.  Meetings....................................................................... 34
                  Section 6.03.  Action of Committee............................................................ 34
                  Section 6.04.  Powers and Duties.............................................................. 34
                  Section 6.05.  Expenses....................................................................... 36
                  Section 6.06.  Funding Policy................................................................. 36
                  Section 6.07.  Liability of Committee Members................................................. 36
                  Section 6.08.  Reliance on Reports and Certificates;
                                    Actions Taken in Good Faith................................................. 36
                  Section 6.09.  Member's Own Benefits.......................................................... 37

         ARTICLE 7 - MEMBER ADMINISTRATIVE PROVISIONS
                  Section 7.01.  Personal Data to Committee..................................................... 38
                  Section 7.02.  Address for Notification....................................................... 38
                  Section 7.03.  Inalienability of Benefits..................................................... 38
                  Section 7.04.  Litigation Against the Trust................................................... 38
                  Section 7.05.  Information Available.......................................................... 39
                  Section 7.06.  Beneficiary's Right to Information............................................. 39
                  Section 7.07.  Claims Procedure............................................................... 39
                  Section 7.08.  Claims for Benefits............................................................ 39
                  Section 7.09.  Appeal and Review.............................................................. 40
                  Section 7.10.     Service of Legal Process.................................................... 40
                  Section 7.11.     Place of Payment and Proof of Continued Eligibility......................... 40
                  Section 7.12.  No Rights Implied.............................................................. 40

         ARTICLE 8 - TRUST FUND
                  Section 8.01.  Purpose and Establishment of Trust Fund........................................ 42
                  Section 8.02.  Exclusive Benefit of Members................................................... 42
                  Section 8.03.  Benefits Supported Only By the Trust Fund
                                    and Insurance Contracts..................................................... 42

         ARTICLE 9 - GENERAL PROVISIONS
                  Section 9.01.  No Rights of Employment........................................................ 43
                  Section 9.02.  Certain Pension Reductions..................................................... 43
                  Section 9.03.  Payments in the Event of Death, Illness and Legal Disability................... 43
                  Section 9.04.  Certain Credited Service....................................................... 43
                  Section 9.05.  Merger or Consolidation of Plan................................................ 44
                  Section 9.06.  Merged Plan Pension............................................................ 44
                  Section 9.07.  Payments Only from Trust Fund.................................................. 45
</TABLE>

                                      -iii-

<PAGE>



<TABLE>
         <S>                                                                                                     <C>
                  Section 9.08.  Unclaimed Benefits............................................................. 45

         ARTICLE 10 - AMENDMENT OR TERMINATION
                  Section 10.01.  Amendment and Duration of the Plan............................................ 46
                  Section 10.02.  Procedure for Amendment....................................................... 47
                  Section 10.03.  Termination of the Plan....................................................... 47
                  Section 10.04.  Corporate Transactions........................................................ 47
                  Section 10.05.  Certain Restrictions on Distributions......................................... 47

         ARTICLE 11 - TOP HEAVY PROVISIONS
                  Section 11.01.  Top Heavy Rules Applied....................................................... 49
                  Section 11.02.  Minimum Benefits.............................................................. 49
                  Section 11.03.  Adjustment to Limitation on Benefits.......................................... 50
                  Section 11.04.  Vesting Schedule.............................................................. 51
                  Section 11.05.  Additional Definitions........................................................ 52

         ARTICLE 12 - MISCELLANEOUS
                  Section 12.01.  Execution of Receipts and Releases............................................ 55
                  Section 12.02.  No Guarantee of Interests..................................................... 55
                  Section 12.03.  Employer Records.............................................................. 55
                  Section 12.04.  Interpretations and Adjustments............................................... 55
                  Section 12.05.  Errors in Payment: Misstatements.............................................. 55
                  Section 12.06.  Uniform Rules................................................................. 55
                  Section 12.07.  Evidence...................................................................... 55
                  Section 12.08.  Severability.................................................................. 56
                  Section 12.09.  Notice........................................................................ 56
                  Section 12.10.  Waiver of Notice.............................................................. 56
                  Section 12.11.  Successors.................................................................... 56
                  Section 12.12.  Obligations of the Company.................................................... 56
                  Section 12.13.  Headings...................................................................... 56
                  Section 12.14.  Governing Law................................................................. 56
</TABLE>

                                      -iv-

<PAGE>



                                    ARTICLE l

                                   DEFINITIONS

         The  following  words and phrases when used in this Plan shall have the
respective  meanings  set forth  below  unless  the  context  clearly  indicates
otherwise:

         Section 1.01.  "Affiliated  Company"  shall mean any company which is a
component member with the Employer of a controlled group of corporations  within
the meaning of Section  414(b) of the Internal  Revenue  Code, a member with the
Employer of a group of trades or businesses  (whether or not incorporated) under
common  control as determined in accordance  with Section 414(c) of the Internal
Revenue  Code,  a member with the  Employer of an  affiliated  service  group as
determined in accordance  with Section  414(m) of the Internal  Revenue Code, or
any other entity  required to be aggregated with the Employer in accordance with
Section 414(o) of the Internal Revenue Code.

         Section 1.02.  "Alternate Payee" shall mean any spouse,  former spouse,
child, or other dependent of a Member who is recognized by a Qualified  Domestic
Relations  Order as having a right to receive all, or a portion of, the benefits
payable under the Plan with respect to such Member.

         Section  1.03.  "Authorized  Leave of  Absence"  shall mean any absence
authorized by an Employer. An Authorized Leave of Absence shall be granted by an
Employer for mandatory service in the Armed Forces of the United States and jury
duty,  or to comply with the Family and Medical Leave Act of 1993 or the Uniform
Services  Employment and Reemployment Rights Act of 1994. An Authorized Leave of
Absence may be granted by an  Employer  for  sickness,  accident,  vacation,  or
disability,  or for other  reasons under rules  established  by the Employer and
uniformly applied to all individuals similarly situated.

         Section  1.04.  "Average  Final  Compensation"  shall mean the  average
annual Compensation of a Member during the 60 consecutive months in the last 120
months of his Credited Service affording the highest such average, or during all
the months of his Credited  Service if less than 60. In computing  Average Final
Compensation,  any bonus payment shall be included in the  Compensation  for the
period in which the payment  was  received  and not the period  with  respect to
which it was  accrued,  and any accrued  bonus paid after the  Member's  date of
Retirement or  termination  of service shall be  disregarded.  If more than five
bonus  payments  have been made to a Member under the  Executive  Bonus  Program
during the period  included in the  computation  of such Member's  Average Final
Compensation, only the five highest such bonus payments shall be included in the
Member's  Compensation  for the  purpose of such  computation.  In the case of a
Member who is entitled to Credited  Service  hereunder  with respect to a period
during  which he is on an  Authorized  Leave of  Absence  or during  which he is
entitled to a Disability  Benefit  pursuant to Section  4.18,  his Average Final
Compensation  shall be equal to the  greater of his Average  Final  Compensation
determined as of the date of commencement of the Authorized  Leave of Absence or
Disability  Benefit,  as the  case may be,  or his  Average  Final  Compensation
determined  as if,  during  his  Credited  Service  while on leave of absence or
entitled to a Disability


<PAGE>



Benefit,  he had received  Compensation at his last rate of base salary prior to
the commencement of the leave or disability.

         Section  1.05.   "Beneficiary"  shall  mean  any  person  or  fiduciary
designated  pursuant  to the  terms  hereof  by a  Member  who is or may  become
entitled to receive benefits under the Plan following the death of such Member.

         Section 1.06.  "Benefit  Commencement  Date" or "Annuity Starting Date"
shall mean the first day of the first  month for which an amount is payable to a
Member as an annuity.  In the event that an amount is not payable in the form of
an annuity,  the Benefit Commencement Date shall mean the first day on which all
events  (including  the passing of the day on which  benefits  are  scheduled to
commence)  have occurred  which entitle the Member to his first benefit  payment
from the Plan.

         Section 1.07. "Board of Directors" shall mean the Board of Directors of
the Company as constituted from time to time, or any committee appointed by, and
serving at the pleasure  of, the Board of  Directors to exercise  some or all of
the powers of the Board of Directors with respect to the Plan.

         Section 1.08.  "Break-in-Service" shall mean a period which constitutes
a break in an Employee's Credited Service, as provided in Section 3.01.

         Section 1.09.  "Code" shall mean the Internal  Revenue Code of 1986, as
amended, and any regulations and rulings issued thereunder.

         Section 1.10.  "Committee"  shall mean the Eljer  Pension  Committee as
constituted from time to time whose members are appointed  pursuant to, and have
the responsibilities specified in, Article 6.

         Section 1.11.  "Company"  shall  mean  Eljer Manufacturing, Inc. or any
successor by merger, purchase or otherwise. Notwithstanding the foregoing, prior
to the Effective Date of the Plan, the terms Employer and Company shall have the
meaning of Company set forth in the Prior Plan.

         Section 1.12.  "Compensation" shall mean the total remuneration paid to
an Employee  for  services  rendered to the  Employer,  determined  prior to any
reduction  pursuant  to a  Member's  election  to defer  amounts  pursuant  to a
cafeteria plan as defined in Section 125 of the Code  maintained by the Employer
or pursuant to a salary  reduction  agreement  under any other plan described in
Sections 401(k),  403(b) and 408(k) of the Code maintained by the Employer,  but
excluding  awards under the Long Term  Performance  Bonus Plan,  severance  pay,
contributions  under this Plan and any other  qualified  employee  benefit plan,
reimbursements or other expense allowances, fringe benefits (cash and non-cash),
moving expenses, deferred compensation,  welfare benefits, amounts realized from
the exercise of a non-qualified  stock option,  amounts  realized from the sale,
exchange or other disposition of stock acquired under a qualified stock option,

                                       -2-

<PAGE>



amounts  realized when  restricted  stock becomes freely  transferable  or is no
longer subject to a substantial risk of forfeiture,  and any premiums paid under
any group health, life, accident or other insurance plan.

         For (i) any Plan Year (A) beginning on and after the Effective Date and
before January 1, 1994, only the first $200,000 of  Compensation  shall be taken
into  account  (or such  other  amount  as the  Secretary  of the  Treasury  may
prescribe  at the same time and in the same  manner as  provided  under  Section
415(d) of the Code for adjusting  the dollar  limitation in effect under Section
415(b)(1)(A)  of  the  Code)  (hereinafter  referred  to as  the  "Pre-OBRA  `93
Compensation  Limitation")  and (ii) any Plan Year beginning  after December 31,
1993, only the first $150,000 of  Compensation  shall be taken into account (or,
beginning  January 1, 1995, such other amount as may be determined under Section
401(a)(17)(B)  of  the  Code)   (hereinafter   referred  to  as  the  "OBRA  `93
Compensation Limitation"). The Pre-OBRA `93 Compensation Limitation and the OBRA
`93 Compensation  Limitation are hereinafter sometimes  collectively referred to
as the "Compensation Limitation".

         In determining  the  Compensation of each Member who is (i) a more than
five percent owner of the Employer or (ii) a highly compensated employee (within
the meaning of Section  414(q) of the Code) in the group  consisting  of the ten
highly compensated employees paid the greatest Compensation during the Plan Year
(without  regard to this  sentence),  for  purposes of applying  the  applicable
Compensation Limitation for a Plan Year, the spouse of each such Member and each
of his lineal  descendants  who have not attained age 19 before the close of the
Plan Year shall not be treated as a separate Employee for that Plan Year and the
Compensation   of  each  such  family  member  shall  be  aggregated   with  the
Compensation of the Member as if it were paid to the Member.  If, as a result of
the  application  of  the  preceding  sentence,   the  applicable   Compensation
Limitation (as it may be adjusted) is exceeded, then the applicable Compensation
Limitation  shall be prorated  among the affected  individuals  in proportion to
each such individual's  Compensation as determined under this Section 1.12 prior
to the application of this limitation.

         Notwithstanding  the  limitations  of this  Section  1.12  required  by
Section  401(a)(17) of the Code, the Pension of a Member shall be the greater of
(i)  the  Member's  Pension  determined  by  using  the  OBRA  `93  Compensation
Limitation for all of the Member's years of Credited  Service or (ii) the sum of
(A) the  Member's  Pension as of December  31, 1993  determined  by applying the
Pre-OBRA `93 Compensation Limitation and (B) the Member's Pension for Plan Years
commencing  on and after  January 1, 1994  determined  by applying  the OBRA `93
Compensation  Limitation.  In addition,  in accordance with Treasury  Regulation
Section  1.401(a)(4)-13(c)(5)(i),  the  Pension of a Member  who is an  eligible
Employee and, thus, an active Member shall be increased to reflect  increases in
the limitation prescribed by Section 415 of the Code.

         Section 1.13. "Covered  Compensation" shall mean for any Plan Year, the
average  without  indexing of the taxable wage bases in effect for each calendar
year during the 35-year  period ending with the last day of the calendar year in
which the Member  attains  Social  Security  Retirement  Age. In  determining  a
Member's Covered Compensation, the Taxable Wage Base

                                       -3-

<PAGE>



for the current  Plan Year and any  subsequent  Plan Year shall be assumed to be
the same as the Taxable Wage Base in effect as of the beginning of the Plan Year
for which the determination is being made.

         Section  1.14.  "Credited  Service"  shall mean service for purposes of
determining  the amount of a Pension  payable  hereunder,  recognized  under the
Plan, for purposes of  determining  the amount of a Pension  payable  hereunder,
determined as provided in Section 3.02.

         Section 1.15. "Deferred Vested Pension" shall mean a Pension payable to
a Member who satisfies the requirements of Section 4.03.

         Section  1.16.  "Disability  Benefit"  shall  mean a benefit to which a
Member who satisfies the requirements of Section 4.18 is entitled.

         Section 1.17. "Early  Retirement  Pension" shall mean a Pension payable
to a Member who satisfies the requirements of Section 4.02.

         Section 1.18.  "Effective Date"  shall  mean  April  l, 1989, except as
otherwise provided herein.

         Section 1.19.  "Eligible  Retirement  Plan" shall mean, for a Member or
for an  Alternate  Payee who is the  former  Spouse of a Member,  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  plan  described  in
Section  401(a)  of the Code that  accepts  direct  transfers.  In the case of a
distribution to the Member's surviving Spouse, an Eligible Retirement Plan shall
mean an individual retirement account or individual retirement annuity.

         Section 1.20.  "Employee" shall mean any person  regularly  employed by
the Employer,  classified as a salaried  employee by the Employer,  who receives
regular stated  Compensation  other than  severance  pay,  retainer or fee under
contract,  or who is not  currently  covered  under  any other  retirement  plan
maintained by the Employer,  as  determined  by the Employer.  "Employee"  shall
include a citizen or  resident  of the  United  States  who is  employed  by the
Employer  outside the United  States,  but shall not  include  any other  person
employed  by the  Employer  outside  the United  States.  "Employee"  shall also
include a citizen or resident of the United  States who is employed by a foreign
affiliate of the  Employer,  with respect to which the Employer has entered into
an agreement  pursuant to Section  3121(1) of the Internal  Revenue Code to have
the service of any such person  with such  affiliate  covered by Title II of the
Social Security Act.  "Employee"  shall include a "leased  employee"  within the
meaning of Section 414(n)(2) of the Code.

         Section  1.21.   "Employer"  shall  mean  the  Company  and  any  other
Affiliated  Company  which  adopts the Plan by action of its board of  directors
with the approval of the Board of Directors.

                                       -4-

<PAGE>




         Section 1.22.  "Equivalent  Actuarial  Value" shall mean the equivalent
value, as of the date of commencement of the benefit,  of a benefit differing in
time,  period or manner of payment from a specified  benefit  provided under the
Plan.  Such value  shall be  determined  using the 1984 Unisex  Pension  Annuity
Mortality Table and an interest rate of 7%,  compounded  annually.  In no event,
however,  shall a single sum payment  described  in Section 4.06 or Section 4.07
have a lesser value than that produced by using the interest rate structure that
would be used by the Pension Benefit Guaranty Corporation as of the first day of
the Plan Year in which such  payment is made for  purposes  of  determining  the
present value of a Member's benefit, assuming that the Plan had terminated as of
such date. In the event of any Plan amendment that changes actuarial assumptions
(which, for this purpose,  includes a change in the interest rate from 6% to 7%,
adopted by the Committee on September 27, 1990 effective as of October 1, 1990),
the Equivalent  Actuarial  Value of a Member's total accrued benefit on or after
the date of the change is the greater of (i) the Equivalent  Actuarial  Value of
the Member's accrued benefit as of the date of the change, computed on the basis
of the  assumptions  in  effect  immediately  prior to the  change,  or (ii) the
Equivalent  Actuarial Value of the Member's total accrued  benefit,  computed on
the basis of the assumptions as in effect immediately subsequent to the change.

         Section  1.23.  "ERISA"  shall  mean  the  Employee  Retirement  Income
Security  Act of  1974,  as  amended,  and any  regulations  or  rulings  issued
thereunder.

         Section 1.24.  "Executive  Bonus  Program"   shall   mean   the   Eljer
Industries,  Inc. Long-Term Executive Compensation Plan, as amended from time to
time.

         Section  1.25.  "Final  Average  Compensation"  shall mean the  average
annual Compensation based on the 3 consecutive-calendar  year period preceding a
Member's  termination  of employment  with the Employer.  In  determining  Final
Average  Compensation,  Compensation  for any  calendar  year in  excess  of the
Taxable  Wage Base in effect at the  beginning  of such year  shall not be taken
into  account.  "Final  Average  Compensation"  shall not exceed  Average  Final
Compensation.

         Section 1.26.  "Insurance  Company" shall mean the insurance company or
companies by whom the funds of the Plan may be held as provided in Article 8.

         Section 1.27.  "Member"  shall   mean  any   person  included   in  the
membership of the Plan as provided in Article 2.

         Section 1.28.  "Normal  Retirement Age" shall mean the later of (i) the
65th anniversary of the Employee's  birth, or (ii) the fifth  anniversary of his
commencement of participation in the Plan.

         Section 1.29.  "Normal Retirement Date" shall mean the first day of the
calendar  month  coincident  with  or  next  following  the  Employee's   Normal
Retirement Age.


                                       -5-

<PAGE>



         Section  1.30.  "Normal  Retirement  Pension"  shall  mean the  Pension
payable to a Member who satisfies the requirements of Section 4.01.

         Section 1.31.  "Pension"  shall  mean  the  amount  of benefits payable
under the Plan as provided in Article 4.

         Section  1.32.  "Plan"  shall mean the  Salaried  Pension Plan of Eljer
Manufacturing, Inc., as described herein or as hereafter amended.

         Section 1.33. "Plan Year" shall mean the twelve-month period commencing
on any January 1; provided,  however, that the first Plan Year shall commence on
April l, 1989 and end on December 31, 1989.

         Section  1.34.  "Prior  Plan" shall mean the  Salaried  Pension Plan of
Household Manufacturing, Inc., as in effect on March 31, 1989.

         Section  1.35.  "Qualified  Domestic  Relations  Order"  shall mean any
judgment,  decree,  or  order  (including  approval  of  a  property  settlement
agreement)  which  (i)  relates  to the  provision  of  child  support,  alimony
payments,  or marital property rights to a spouse, former spouse, child or other
dependent of a Member,  (ii) is made pursuant to a state domestic relations law,
(iii) creates or recognizes  the existence of an Alternate  Payee's right to, or
assigns  to an  Alternate  Payee the right to,  receive  all or a portion of the
benefits  payable with respect to a Member under the Plan and (iv) complies with
the  requirements  of  Section  414(p) of the Code.  In the case of any  payment
before a Member has terminated his Employment,  a domestic  relations order will
not be treated as failing to be a  Qualified  Domestic  Relations  Order  solely
because  such order  requires  the payment of  benefits be made to an  Alternate
Payee (a) on or after  the date on which  the  Member  attains  (or  would  have
attained)   his  earliest   retirement   age  (within  the  meaning  of  Section
414(p)(4)(B)  of the Code)  under the Plan,  (b) as if the Member had retired on
the date on which  payment is to commence  under such order (taking into account
only the  present  value of  benefits  actually  accrued as of such date and not
taking  into  account  the  present  value of any  Employer  subsidy  for  early
retirement),  and (c) in any form in which such  benefits  may be paid under the
Plan to the Member (other than in the form of a joint and survivor  annuity with
respect to the Alternate Payee and his subsequent spouse).

         Section 1.36.  "Required  Commencement  Date" shall mean April 1 of the
calendar year following the calendar year in which the Member attains the age of
seventy and  one-half  (70-1/2).  Notwithstanding  the  foregoing,  the Required
Commencement  Date for a Member who is not a five  percent (5%) owner within the
meaning of Section  416(i)(1)(B)(i)  of the Code,  who  attained age seventy and
one-half  (70-1/2)  during 1988, and had not retired by the Effective Date, will
be April 1, 1990. In addition,  the Required  Commencement Date for a Member who
attained age seventy and one-half  (70-1/2)  before January 1, 1988, and who was
not a five percent (5%) owner within the meaning of Section  416(i)(1)(B)(i)  of
the Code  during any Plan Year  ending  with or within the Plan Year in which he
reached age sixty-six and one-half (66-1/2) or any subsequent year, is the April
1 following the later of the calendar year in which the Member

                                       -6-

<PAGE>



reaches age seventy and  one-half  (70-1/2)  or retires.  Lastly,  the  Required
Commencement  Date for a Member who filed a written election pursuant to section
242(b) of the Tax Equity and Fiscal  Responsibility  Act of 1982 before December
31, 1983,  electing to defer the  commencement of his benefits shall be the date
specified  in such  election if the  election  satisfies  all of the  applicable
requirements  specified by the Internal  Revenue  Service,  as determined by the
Committee.

         Section 1.37.  "Retired  Member" shall mean any retired Employee who is
receiving a Pension except a former  Employee who is receiving a Deferred Vested
Pension.

         Section 1.38.  "Retirement"  shall mean the  termination  of a Member's
employment  with the  Employer  for reasons  other than death after a Member has
fulfilled  the  requirements  for  a  Normal  Retirement  Pension  or  an  Early
Retirement  Pension.  Retirement  shall be considered as commencing on the first
day immediately following a Member's last day of employment with the Employer.

         Section 1.39.  "Severance  from Service Date" shall mean the earlier of
an  Employee's  actual  date  of  Retirement,  death  or  other  termination  of
employment with the Employer or an Affiliated  Company, or the first anniversary
of the first day of a period in which he remains  absent from  service,  with or
without pay,  with the Employer or an Affiliated  Company,  for any reason other
than Retirement, death or other termination of employment.

         Section 1.40.  "Social  Security  Retirement Age" shall mean age 65 for
Members  whose date of birth is prior to 1938;  age 66 for Members whose date of
birth  occurred  during or after 1938 but prior to 1955;  or, age 67 for Members
whose date of birth is after 1954.

         Section 1.41.  "Spouse" shall mean a Member's spouse to whom the Member
has been married throughout the one year period ending on the earlier of (i) the
Member's  Benefit  Commencement  Date or (ii)  the date of the  Member's  death;
provided,  however,  that if a Member marries within one year before the Benefit
Commencement  Date and the Member and the Member's  spouse in such marriage have
been  married for at least the one year  period  ending on or before the date of
the Member's death,  such Member and such spouse shall be treated as having been
married   throughout  the  one  year  period  ending  on  the  Member's  Benefit
Commencement Date.

         Section 1.42.  "Spousal  Consent" shall mean written consent given by a
Member's Spouse to an election made by the Member of a specified form of Pension
or a designation of a specified  nonspouse  Beneficiary which may not be changed
without  Spousal  Consent  (or  the  consent  of the  Spouse  expressly  permits
designations by the Member without any requirements of further Spousal Consent).
Such consent shall be duly witnessed by a Plan  representative  or notary public
and shall  acknowledge  the effect on the Spouse of the Member's  election.  The
requirement  for Spousal  Consent may be waived by the  Committee  to the extent
permitted under applicable law.


                                       -7-

<PAGE>



         Section 1.43.  "Spouse's  Pension" shall mean a benefit  payable to the
surviving  Spouse of a Member who satisfied the requirements of Section 4.09 and
who had not commenced his Pension prior to his death.

         Section 1.44.  "Taxable Wage Base" shall mean, with respect to any Plan
Year, the maximum amount of Compensation  which may be considered wages for such
Plan Year under Section  3121(a)(1) of the Code, as amended  throughout the date
of determination and determined as of the first day of such Plan Year.

         Section 1.45.  "Trust  Agreement" shall mean the agreement  between the
Company and the Trustee or any successor Trustee establishing the Trust Fund and
specifying the duties of the Trustee with respect to the assets of the Plan.

         Section  1.46.  "Trust  Fund" means all  property of every kind held or
acquired by the Trustee under the Trust Agreement.

         Section 1.47. "Trustee" shall mean the persons or entities from time to
time  appointed by the Board of Directors  to act in the  fiduciary  capacity of
trustee under the Trust Agreement and hold all or a portion of the Trust Fund as
provided in Article 7.

         Section  1.48.  "Vesting  Service"  shall mean service  recognized  for
purpose  of  determining  eligibility  for  membership  in and  eligibility  for
benefits under the Plan, determined as provided in Section 3.01.

         Word  Usage  Except  when  otherwise  indicated  by  the  context,  any
masculine  terminology  used herein also  includes the feminine and neuter,  and
vice versa,  and the  definition  of any term herein in the singular  shall also
include the plural, and vice versa. The words "hereof",  "herein",  "hereunder",
and other  similar  compounds  of the word  "here"  shall  mean and refer to the
entire Plan and not to any  particular  provision or section.  All references to
Sections and Articles shall mean and refer to Sections and Articles contained in
this Plan unless otherwise indicated.

         Construction  It is the intention of the Employers (i) that the Plan be
qualified under the provisions of Sections 401(a) and 501(a) of the Code and all
provisions  hereof  shall  be  construed  to that  result,  and  (ii)  that  the
provisions  of the Plan, as amended and restated  hereby,  shall apply only to a
Member who effectively terminates employment on or after the Effective Date.


End of Article 1

                                       -8-

<PAGE>



                                    ARTICLE 2

                                   MEMBERSHIP


         Section 2.01.  Eligibility.  Every person who becomes an Employee on or
after April 1, 1989 shall become a Member of the Plan on the date he becomes an
Employee.

         Section 2.02.  Periods of Membership.  An Employee's  membership in the
Plan shall terminate upon  termination of his employment with the Employer or an
Affiliated  Company if he is not  entitled to either an  immediate or a deferred
Pension under the Plan.  Membership shall be continued during a period for which
he is accruing  Credited  Service in accordance with Section 4.18 while entitled
to a  Disability  Benefit,  or during a period while on an  Authorized  Leave of
Absence  from  service  approved by the Employer or an  Affiliated  Company,  or
during a period while he is not an  "Employee"  as herein  defined but is in the
employ of the Employer or an Affiliated Company, but in the latter two instances
Credited  Service for purposes of benefit  computation  shall be recognized  for
such period only as  specifically  provided in Section 3.02.  If any  Employee's
membership in the Plan terminates and he again becomes an Employee,  he shall be
considered a new  Employee  for all purposes of the Plan,  except as provided in
Section 4.15.

         Section 2.03.  Leased Employees.  Notwithstanding anything in the Plan
to the contrary, "leased employees" within the meaning of Section 414(n) of the
Code shall not be eligible for membership in the Plan.





End of Article 2

                                       -9-

<PAGE>



                                    ARTICLE 3

                                     SERVICE


         Section 3.01.  Determination of Vesting Service.

         (a) Except as hereinafter  provided, an Employee's period of employment
with the Employer or an Affiliated  Company,  whether or not as an "Employee" as
herein defined,  shall be Vesting Service for the purposes of the Plan.  Vesting
Service shall  commence on the date on which the Employee first performs an hour
of service and shall terminate on such  Employee's  Severance from Service Date.
For purposes of this Section 3.01, an hour of service shall be an hour for which
an Employee is paid, or entitled to payment,  for the  performance of duties for
the  Employer or an  Affiliated  Company.  Except as  hereinafter  provided,  an
Employee's  Break-in- Service commences on the Employee's Severance from Service
Date.  If  an  Employee's  employment  is  terminated  and  he  is  subsequently
reemployed within 12 months,  the period between his Severance from Service Date
and the date of his  reemployment  shall be  included  in his  Vesting  Service,
except that if his  employment  is  terminated  during a period of absence  from
service for reasons other than Retirement,  death, or termination of employment,
Vesting  Service  shall be  recognized  for the period from his  Severance  from
Service Date to the date of his reemployment  only if he is reemployed within 12
months of the first day of such absence.  A  Break-in-Service  shall occur if an
Employee is not reemployed  within one year after a Severance from Service Date,
provided,  however,  that if an  Employee's  employment  is terminated or if the
Employee is otherwise absent from work because of the pregnancy of the Employee,
the  birth of a child  of the  employee  or the  placement  of a child  with the
Employee in  connection  with the adoption of such child by such Employee or for
purposes of caring for such child for a period beginning  immediately  following
such birth or  placement,  his  Severance  from Service Date shall be the second
anniversary of the first date of such absence.  The period between the first and
second  anniversaries  of the first  date of such  absence  shall not be Vesting
Service  and  shall  not  constitute  a  Break-in-Service.  In  the  event  of a
Break-in-Service,  any period prior to the Break- in-Service shall thereafter be
excluded from an Employee's Vesting Service, except as provided in Section 4.15.

         (b) With  respect  to any  Employee  who was an  active  or  terminated
participant  in the Prior Plan on March 31, 1989 and who  becomes a  participant
under  this  Plan as of  April  1,  1989 or at a later  date,  for  purposes  of
determining  such Employee's  eligibility for benefits under this Plan,  Vesting
Service  for  service  rendered  prior to April  1,  1989  shall be equal to the
service recognized for that purpose under the Prior Plan as of March 31, 1989.

         (c) If an  Employee  shall  have been  absent  from the  service of the
Employer or an Affiliated  Company (i) because of service in the Armed Forces of
the United States for which his reemployment rights are protected by the laws of
the United  States and if he shall have  returned to the service of the Employer
or such  Affiliated  Company,  having  applied to return within 90 days (or such
other period as may be required under the Uniform Services Employment

                                      -10-

<PAGE>



and Reemployment Act of 1994) either (A) after having become entitled to release
from active  duty in the Armed  Forces or (B) after  hospitalization  continuing
after  discharge  for a period of not more than one year,  (ii) on an Authorized
Leave of Absence  under the Family and Medical  Leave Act of 1993,  or, (iii) on
any other Authorized Leave of Absence with pay (for this purpose, if an Employee
is receiving  short-term  disability  benefits  from the Employer or from a plan
maintained  by the  Employer,  such  Employee  will be considered as being on an
Authorized  Leave of  Absence  with  pay),  such  absence  shall  not count as a
Break-in-Service and shall be considered as Vesting Service.

         (d) A period  during  which an  Employee is on an  Authorized  Leave of
Absence shall not be considered as a Break-in-Service and, under rules uniformly
applicable to all Employees similarly situated,  the Committee may authorize the
inclusion in Vesting Service of any portion of such period of leave which is not
included in Vesting  Service  under  Section  3.01(a) or 3.01(c) for purposes of
determining eligibility for benefits under the Plan.

         Section 3.02.  Credited Service.

         (a) Except as otherwise herein  provided,  all Vesting Service rendered
as an Employee while a Member or participant shall be Credited Service under the
Plan. Any period  between a Severance from Service Date and a reemployment  date
which is recognized as Vesting  Service under Section  3.01(a) and any period of
absence  without pay  included in Vesting  Service  pursuant to Section  3.01(d)
shall be excluded from his Credited Service.

         (b) Credited  Service  shall include any period of service in the Armed
Forces of the United  States and any period of service  during which a Member is
on an Authorized Leave of Absence under the Family and Medical Leave Act of 1933
or any  other  Authorized  Leave of  Absence  with pay  which is  included  in a
Member's Vesting Service  pursuant to Section 3.01(c).  The Compensation for any
such period of absence without pay include in Credited  Service pursuant to this
paragraph (b) shall be at the Member's rate of  Compensation  in effect prior to
the commencement of such period.

         (c) Except as otherwise  provided in Sections  3.02(b),  4.15, 4.16 and
4.18, the following periods of Vesting Service shall be excluded for the purpose
of computing a Member's Credited Service under the Plan:

                  (i)     Vesting Service during any leave of absence, including
                          an  Authorized  Leave  of  Absence, from an Affiliated
                          Company.

                  (ii)    Vesting  Service  in  the  employ  of  an   Affiliated
                          Company, unless recognized pursuant to Section 3.04.

                  (iii)   Vesting  Service with the  Employer  other than as an
                          "Employee" as herein defined.


                                      -11-

<PAGE>



                  (iv)    Any period between a Member's  Severance from Service
                          Date and his date of  reemployment  which is included
                          in his Vesting Service pursuant to Section 3.01(a).

         Section  3.03.  Calculation  of Vesting  Service and Credited  Service.
Vesting  Service and Credited  Service  shall be  determined  based on years and
fractional  years of Vesting Service and Credited  Service with one-twelfth of a
year counted for:

         (a) Each month in which an Employee  receives  Compensation  for active
employment during such month.

         (b) Each month in which an Employee  is on leave of absence  because of
occupational  injury or disease  and on account  of which he  receives  Workers'
Compensation for at least one payroll period.

         (c) Each month included in Vesting Service, other than a month included
in (b) above, in which the Employee does not receive Compensation.

         (d)      Each month during which a disabled Member is entitled to
Credited Service under Section 4.18.

         No Vesting  Service  shall be  granted  after  Retirement  because of a
compensable Authorized Leave of Absence.

         Section 3.04. Corporate Transactions. In the discretion of the Board of
Directors,  under rules uniformly  applicable to all persons similarly  situated
and in accordance  with  regulations  issued by the Secretary of Treasury  under
Section  401(a)(4) of the Code,  Vesting  Service for the purpose of determining
eligibility  for  benefits  and  Credited  Service for the purpose of  computing
benefits  under the Plan may be granted  for  periods of  continuous  employment
immediately  preceding  employment by the Employer with an Affiliated Company or
an associated,  subsidiary, or predecessor corporation,  including a corporation
substantially all of whose assets have been absorbed by the Employer by purchase
of assets, consolidation, merger or otherwise.





End of Article 3

                                      -12-

<PAGE>



                                    ARTICLE 4

                                    BENEFITS


         Section 4.01.  Normal Retirement Pension.

         (a) The right of a Member to his  Normal  Retirement  Pension  shall be
nonforfeitable upon his attainment of Normal Retirement Age. A Member may retire
from  service on a Normal  Retirement  Pension on the first day of any  calendar
month on or after his Normal  Retirement Date;  however,  a Member may defer his
Retirement  and remain in service  with the  Employer  after his  attainment  of
Normal  Retirement  Age and  continue  to accrue  benefits  under the Plan until
actual Retirement.

         (b) Except as provided in paragraphs (c), (d) and (e) below, the annual
Normal  Retirement  Pension  payable to a Member upon retirement on or after his
Normal  Retirement  Date shall be equal to the  difference  between (i) and (ii)
where:  (i) is the amount  determined under (A), offset by the lesser of (B) and
(C),  and (ii) is the  amount  equal to the  benefit  payable  as a single  life
annuity at Normal Retirement Age under the Prior Plan.

         (A) An  amount  equal  to one  and  one-half  percent  (1-1/2%)  of the
         Member's Average Final Compensation,  multiplied by the number of years
         of his Credited Service.

         (B) An amount  equal to three  quarters  of one  percent  (3/4%) of the
         smaller  of  Average  Final   Compensation  or  Covered   Compensation,
         multiplied  by the total  number of years of  Credited  Service  not to
         exceed 35 years.

         (C) An amount  equal to (i) 0.555% (if the Social  Security  Retirement
         Age is 65),  0.525% (if the Social  Security  Retirement Age is 66), or
         0.485% (if the Social  Security  Retirement  Age is 67),  multiplied by
         (ii) the lesser of Final Average Compensation or Covered  Compensation,
         multiplied  by (iii) the total number of years of Credited  Service not
         to exceed 35 years.

         (c) In no event shall the amount of benefit  determined  in  accordance
with Section  4.01(b) above be less than the benefit  accrued as of December 31,
1993.

         (d) If a Member remains in service after his Normal Retirement Date, no
Retirement  Pension shall be payable during such  continuance  of service.  Upon
Retirement,  the Normal  Retirement  Pension  payable to the Member shall be the
greater of (i) and (ii) where (i) the  amount of his Normal  Retirement  Pension
payable  upon  actual  Retirement  taking  into  account  Credited  Service  and
Compensation  through such actual Retirement Date and (ii) the amount of Pension
payable as of the Member's  Late  Retirement  Date by the  Equivalent  Actuarial
Value of the amount of his Normal Retirement Pension determined as of his Normal
Retirement Date.


                                      -13-

<PAGE>



         (e)  Notwithstanding  any other  provision of the Plan to the contrary,
distribution  of any Pension to any Member shall  commence,  in accordance  with
regulations  issued by the Secretary of the Treasury under Section  401(a)(9) of
the Code, not later than the Member's Required Commencement Date.

         Section 4.02.  Early Retirement Pension.

         (a) A Member  in  active  service  may  retire  on an Early  Retirement
Pension  on the first  day of any  month  prior to his  Normal  Retirement  Date
coinciding with or following his attainment of age 55 and completion of 10 years
of Vesting Service. Notwithstanding the foregoing, if a Member was a participant
in the Prior Plan,  and was  eligible to retire on a date which is earlier  than
the date described in the preceding sentence, such a Member shall be entitled to
retire on an Early Retirement Pension on the first day of any month prior to his
Normal  Retirement  Date on which he would have been able to so retire under the
Prior Plan.

         (b)  (i) If the  Member  retires  after  his  attainment  of age 62 and
completion of 10 years of Vesting Service, his Early Retirement Pension shall be
equal to a Normal Retirement Pension computed in accordance with Section 4.01 on
the basis of his Average Final  Compensation and Credited Service at the time of
early Retirement.

                  (ii) If the Member has  completed 10 years of Vesting  Service
and retires  prior to his  attainment  of age 62, his Early  Retirement  Pension
shall be a deferred  Pension  commencing on the first day of the calendar  month
coincident with or next following the 62nd anniversary of the Member's birth and
shall be computed as a Normal  Retirement  Pension  computed in accordance  with
Section 4.01 on the basis of his Average Final Compensation and Credited Service
at the time of early  Retirement and the Plan provisions in effect at that time.
The Member may, however,  elect to have the Early Retirement Pension commence on
the first day of any calendar  month prior to his attainment of age 62 following
receipt by the Committee of his written election  thereof,  in a reduced amount.
Such amount shall be equal to the deferred pension  commencing at age 62 reduced
by  five-twelfths  of one  per  cent  for  each  month  by  which  the  date  of
commencement  of the  Member's  Pension  precedes  the first day of the calendar
month coincident with or next following the 62nd anniversary of his birth.

         Section 4.03.  Deferred Vested Pension.

         (a) A Member who, for reasons other than retirement or death, ceases to
be employed by the Employer or an  Affiliated  Company,  shall be eligible for a
Deferred Vested Pension on application  therefor,  provided that at the time his
service is terminated be has completed 5 years of Vesting Service.

         (b)  The  Deferred  Vested  Pension  shall  be  computed  as  a  Normal
Retirement  Pension in accordance  with Section 4.01 on the basis of his Average
Final  Compensation and Credited Service at his date of termination and the Plan
provisions in effect on that date.


                                      -14-

<PAGE>



         (c) The Deferred  Vested Pension  payable under this Section 4.03 shall
commence on the later of (i) the  Member's  Normal  Retirement  Date or (ii) the
first day of the calendar month next  following  receipt by the Committee of the
Member's written  application for such Pension.  If such application is received
after his Normal  Retirement  Date, the Pension shall be actuarily  increased in
the same manner as for late retirements in accordance with Section 4.01(d).

         (d) Upon  attainment  of age 55, a Member who had completed 10 years of
Vesting  Service as of his  termination  of service (or had been  provided  with
special  deferred  vested pension  benefits  under Section  4.03(e) of the Prior
Plan) shall be  eligible  to  receive,  upon  written  application  therefor,  a
Deferred  Vested  Pension  commencing  on the  first day of any  calendar  month
following such Member's attainment of age 55, in a reduced amount which shall be
equal to the  Deferred  Vested  Pension  commencing  at Normal  Retirement  Date
reduced  by  five-twelfths  of one per cent for each  month by which the date of
commencement of such Pension precedes his Normal Retirement Date.

         (e)  Notwithstanding  the foregoing  provisions of this Section 4.03, a
Member  whose  employment  with  the  Employer  terminates  as a  result  of the
cessation  of the business  operations  of (i) the Eljer  Plumbingware  Atlanta,
Georgia plant, (ii) the GlasTec  Middlebury,  Valdosta and Gainsville plants and
the Wilson  plant and (iii)  Design Plus York,  Pennsylvania  location  shall be
deemed to be 100%  vested in a Pension  based on the  number of actual  years of
Credited Service performed by such Member.

         Section 4.04.  Normal Form of Pension.

         (a) Qualified  Joint and Survivor  Annuity.  The normal form of Pension
for a Member who is married to a Spouse on his Benefit Commencement Date will be
a qualified joint and survivor annuity. The qualified joint and survivor annuity
shall provide the Member with an annuity based on the Member's Normal,  Early or
Deferred Vested Pension,  as the case may be, payable for the Member's life, and
upon his death fifty percent of such amount shall be paid to the Member's Spouse
for his  life.  The  annuity  payable  to the  Member  shall be  reduced  to the
Equivalent  Actuarial  Value of the single  life  annuity  described  in Section
4.04(b).

         (b) Single Life Annuity. The normal form of Pension for a Member who is
unmarried  on the  Member's  Benefit  Commencement  Date  will be a single  life
annuity.  The single life annuity  will provide a monthly  annuity to the Member
for life, in an amount based on the Member's  Normal,  Early or Deferred  Vested
Pension, as the case may be, with no further payment after his death.

         (c) Marital  Status.  The Committee will request each Member to confirm
his marital  status,  or to indicate  any change  therein,  prior to his Benefit
Commencement  Date, and the form of such Member's Pension shall be determined by
his marital  status as so stated,  in the absence of the election of an optional
form of benefit in accordance with the provisions of Sections 4.05 and 4.06.


                                      -15-

<PAGE>



         Section 4.05.  Member Pension Elections.

         (a) Election Not to Take Qualified Joint and Survivor Annuity or Single
Life  Annuity.  A Member who  qualifies  for the  qualified  joint and  survivor
annuity or single life  annuity  described  in Section 4.04 may elect to receive
his Pension in one of the optional forms of benefit described in Section 4.06 or
revoke such an election,  provided  that the Member  notifies  the  Committee in
writing of such  election  or  revocation  of election  on an  appropriate  form
supplied by the Committee for this purpose.  No election made under this Section
4.05(a) shall be effective  without  Spousal Consent unless it is established to
the  satisfaction  of the  Committee  that the  consent  of a Spouse  cannot  be
obtained because the Spouse cannot be located or such other circumstances as the
Secretary of the Treasury may prescribe by regulation exist.

         The  Committee  shall furnish to each Member who is eligible to make an
election  under  this  Section  4.05(a) a written  explanation  in  nontechnical
language of (i) the terms and  conditions  of the  qualified  joint and survivor
annuity or single life annuity,  (ii) the Member's right to make, and the effect
of, an election to waive the qualified joint and survivor annuity or single life
annuity  form of benefit,  (iii) the rights of the  Member's  Spouse  under this
Section  4.05(a) with respect to such waiver  election,  (iv) the right to make,
and the effect of, a revocation of an election to waive the qualified  joint and
survivor  annuity or single life  annuity  form of benefit and (v) a special tax
notice  issued  by the  Internal  Revenue  Service  regarding  the  general  tax
consequences of a distribution,  including the Member's right, if applicable, to
roll  over all or a  portion  of his  Pension  to an  Eligible  Retirement  Plan
pursuant to Section 401(a)(31) of the Code.

         If such notification is made by mail or personal delivery,  it shall be
made by such time as to reasonably assure that it will be received by the Member
at least  thirty (30) days and not more than ninety (90) days before the Benefit
Commencement  Date.  Notice of the election may be given by  alternative  means,
which must be  reasonably  calculated to reach the attention of the Member on or
about the time period specified in the preceding  sentence and continue to reach
the  attention of the Member during the period in which he may make the election
(as,  for  example,  by posting or repeated  publication).  A Member may make an
election  not to take a  qualified  joint and  survivor  annuity or single  life
annuity in favor of his Pension  payable in a form  prescribed  by Section  4.06
hereof at any time  during the  ninety  (90) day period  preceding  the  Benefit
Commencement  Date.  Furthermore,  a Member may request  additional  information
regarding the qualified joint and survivor annuity or single life annuity during
the sixty (60) day period following the date the above  explanation is mailed or
personally  delivered or otherwise  communicated  to such Member.  If the Member
requests additional  information,  the Member may make an election not to take a
qualified joint and survivor  annuity or single life annuity any time during the
sixty (60) day period following the date the original  requested  information is
mailed or personally delivered to such Member.

         Notwithstanding the preceding provisions,  in no event shall the period
during  which a Member  may elect  not to take a  qualified  joint and  survivor
annuity or single life annuity in favor of a Pension payable in an optional form
of benefit  specified in Section 4.06 hereof or to revoke such  election  expire
earlier than the Benefit Commencement Date.

                                      -16-

<PAGE>




         A Member may revoke an election made  pursuant to this Section  4.05(a)
during the ninety (90) day period ending on the Benefit  Commencement  Date, and
the Member may make a new election thereafter if it otherwise complies with this
Section 4.05(a).  A Member's election not to take a qualified joint and survivor
annuity or single life  annuity,  if timely  made,  is effective on the date the
Member's  payment  of his  Pension  is to  commence  under the Plan.  A Member's
revocation of an election not to take a qualified joint and survivor  annuity or
single life annuity is effective on the date the Member  notifies the  Committee
thereof in  accordance  with this  Section  4.05(a).  Any such new  election  or
revocation of any election  previously made shall be made in accordance with the
provisions of this Section 4.05(a).

         (b)  Conditions of Election of Optional Form. The Member shall not make
any election for an optional  form of Pension,  under which the present value of
the Pension  payable solely to the Member will not be greater than fifty percent
of the  present  value  of the  total  Pension  payable  to the  Member  and his
Beneficiaries; provided, however, that if the Member receives his Pension in the
form a qualified joint and survivor annuity described in Section 4.04(a) hereof,
the preceding limitation shall not apply. The Committee shall determine "present
value" as of the date the Trustee is to  commence  payment of the Pension to the
Member. If the Committee  determines to disallow a Member's  election,  it shall
direct the Trustee in writing to commence payment of the Member's Pension to him
in the normal form  specified in Section  4.04.  The  Committee  shall apply the
provisions of this Section 4.05(b) in a nondiscriminatory and uniform manner. If
the Member or, in the case of Options 2, 3 or 4 set forth in Section  4.06,  the
Beneficiary  designated  under the option,  dies prior to the  Member's  Benefit
Commencement Date, the Member's election of the option thereby shall be revoked.

         Section  4.06  Optional  Forms  of  Payment.  By  making  the  election
described  in Section  4.05(a)  and by giving  written  notice to the  Committee
during the election period specified in Section  4.05(a),  a Member may elect to
receive his Pension,  in one of the following  optional forms of benefit in lieu
of the normal form  provided for in Section 4.04,  subject to the  provisions of
Section  4.14.  The  amount of the  Member's  Pension  payable  under any of the
optional forms of benefit described in this Section 4.06 shall be the Equivalent
Actuarial Value of the Member's  normal form of benefit  provided for in Section
4.04.

         The optional forms of benefit that a Member may elect are as follows:

         Option 1. Single Life Annuity. A Member whose normal form of Pension is
a qualified joint and survivor  annuity,  as described in Section  4.04(a),  may
elect to  receive  his  Pension  in the form of a single  life  annuity  payable
monthly during the Member's life, with no Pension payable after his death.

         Option  2.  Joint  and 100%  Survivor  Annuity.  A Member  may elect to
receive a modified  Pension  payable to the Member  monthly  for life,  with one
hundred  percent (100%) of such modified  Pension payable monthly to and for the
life of his named Beneficiary, if such Beneficiary survives the Member.


                                      -17-

<PAGE>



         Option 3. Joint and 75% Survivor Annuity. A Member may elect to receive
a modified  Pension  payable to the Member monthly for life,  with  seventy-five
percent (75%) of such modified  Pension  payable  monthly to and for the life of
his named Beneficiary, if such Beneficiary survives the Member.

         Option 4. Joint and 50% Survivor Annuity. A Member may elect to receive
a modified  Pension  payable to the Member monthly for life,  with fifty percent
(50%) of such  modified  Pension  payable  monthly to and for the benefit of his
named Beneficiary, if such Beneficiary survives the Member.

         Option 5. Five Year  Certain  Option.  A Member  may elect to receive a
modified  Pension payable to the Member for life, with the provision that if the
Member dies before receiving a total of sixty (60) monthly payments,  payment of
such  modified  annuity  shall be  continued to a named  Beneficiary,  until the
number of payments  received by the Member and his Beneficiary  equal a total of
sixty (60) payments.  If the Beneficiary  predeceases the Member, the death of a
Beneficiary  shall not increase the amount the Member is entitled to receive but
the Member may designate a new Beneficiary  under this option. In the event that
the Beneficiary  dies before all of the monthly payments have been paid pursuant
to this option,  such  payments  shall  continue to be made to the estate of the
last to die of the Member or  Beneficiary  until a total of sixty  (60)  monthly
payments have been received by the Member and such estate.

         Option 6. Ten Year  Certain  Option.  A Member  may elect to  receive a
modified  Pension payable to the Member for life, with the provision that if the
Member  dies  before  receiving  a total of one  hundred  twenty  (120)  monthly
payments,  payment  of such  modified  annuity  shall  be  continued  to a named
Beneficiary,  until the  number  of  payments  received  by the  Member  and his
Beneficiary  equal  a  total  of  one  hundred  twenty  (120)  payments.  If the
Beneficiary  predeceases  the  Member,  the  death of a  Beneficiary  shall  not
increase  the  amount  the  Member is  entitled  to  receive  but the Member may
designate a new Beneficiary under this option. In the event that the Beneficiary
dies before all of the monthly  payments have been paid pursuant to this option,
such payments  shall continue to be made to the estate of the last to die of the
Member or Beneficiary until a total of one hundred twenty (120) monthly payments
have been received by the Member and such estate.

         Option 7. Direct Rollover.  Effective for  distributions  commencing on
and after January 1, 1993, a Member may elect to receive all or a portion of his
Pension  in the  form of a  direct  rollover  to an  Eligible  Retirement  Plan,
provided that such  distribution  otherwise  qualifies for direct rollover under
Section 401(a)(31) of the Code.

          Special Lump Sum Option.  In addition to the optional forms of benefit
set forth in this Section  4.06,  a Member who  terminates  employment  with the
Employer as a result of the  cessation  of the  business  operations  of (i) the
Eljer Plumbingware Atlanta, Georgia plan, (ii) the GlasTec Middlebury,  Valdosta
and  Gainsville  plants  and the  Wilson  plant  and  (iii)  Design  Plus  York,
Pennsylvania location may, by written notice received by the Committee, elect to
receive  his  Pension in a single sum  payment of  Equivalent  Actuarial  Value,
calculated in accordance with

                                      -18-

<PAGE>



the  provisions  of Section 4.04 hereof and payable as soon as  administratively
possible following the Member's  termination of employment;  provided,  however,
for any such Pension payable on and after January 1, 1993, such Member may elect
to  transfer  all or a portion of his Pension to an  Eligible  Retirement  Plan,
provided such Pension  exceeds $200 and otherwise  qualifies for direct rollover
pursuant to Section  401(a)(31) of the Code. The Committee  shall  prescribe the
procedures  a Member  must  follow to request a direct  rollover  of his Pension
pursuant to this Section 4.06.

         Section 4.07. Lump-Sum Cashout  Distribution When Vested Pension not in
Excess of $3,500.  If a Member terminates  employment for any reason,  including
Retirement, and the present value of such Member's vested Pension payable to him
at his Normal  Retirement  Date is not greater than $3,500,  or if a Member dies
and the present value of the Spouse's  Pension  payable to his surviving  Spouse
under Section 4.09 not greater than $3,500, or if the present value of a Pension
payable to a former Spouse who is an Alternate Payee under a Qualified  Domestic
Relations  Order is not greater than $3,500  (determined  without  regard to the
value of the Member's remaining  Pension),  unless the Member, or if applicable,
the  surviving  Spouse or former  Spouse  elects a direct  rollover  under  this
Section 4.07, the Committee  shall direct the Trustee to distribute the Member's
vested  Pension (or where the Member has died,  the Spouse's  Pension or, in the
case of a former  Spouse,  the  Pension  payable  under the  Qualified  Domestic
Relations Order) in a single sum payment as soon as administratively practicable
following the Member's  termination of employment (or where the Member has died,
the date on which the Committee receives notice of the Member's death or, in the
case of a Pension payable to a former Spouse, the date of entry of the Qualified
Domestic  Relations  Order).  No distribution may be made to a Member under this
Section 4.07 after the Member's  Benefit  Commencement  Date without the written
consent of the Member and, if he is married, his Spouse. For the purpose of this
Section 4.07,  present value will be the Equivalent  Actuarial Value  determined
under Section 1.22 of the Member's or, if applicable,  former  Spouse's  Pension
payable  in the  normal  form  of  payment  under  Section  4.04  at his  Normal
Retirement  Date (or where the  Member  has died,  the  Spouse's  Pension  under
Section 4.09). Alternatively, the Member or, if applicable, the surviving Spouse
or former  Spouse may elect to  transfer  all or a portion of his  Pension to an
Eligible  Retirement  Plan,  provided  that the  present  value of such  Pension
exceeds $200 and  otherwise  qualifies for direct  rollover  pursuant to Section
401(a)(31)  of the Code.  If a Member or a former or surviving  Spouse  elects a
direct  rollover  under this Section 4.07, the Committee will direct the Trustee
to roll over all or a portion of the  Pension to the  Eligible  Retirement  Plan
specified by the Member or a former or surviving  Spouse, as the case may be. If
a Member or a former or surviving  Spouse  elects to transfer  only a portion of
his  Pension  under  this  Section  4.07 to an  Eligible  Retirement  Plan,  the
remainder of his Pension  shall be  distributed  in a single sum. The  Committee
shall  prescribe  the  procedures a Member or a former or surviving  Spouse must
follow to request a direct  rollover  of his Pension  pursuant  to this  Section
4.07.

         A  Member's  Credited  Service  under  the Plan  shall  be  disregarded
following the single sum payment of the full present  value of Member's  Pension
under  this  Section  4.07 and under  Section  4.06 if the  Member  subsequently
returns to employment with the Employer and such Member shall not be entitled to
repay such single sum payment upon his reemployment.

                                      -19-

<PAGE>




         Section 4.08.  Deemed  Distribution to Non-vested  Member.  If a Member
terminates  employment  at a time when such  Member's  Deferred  Vested  Pension
equals Zero Dollars ($0),  the Member shall be deemed to receive a  distribution
of his entire  Pension  vested as of the day he terminates  employment.  If such
Member subsequently returns to employment with the Employer prior to the date on
which  the  Member  incurs  five  consecutive   Breaks  in  Service,   upon  his
reemployment,  the Member shall be credited  with his years of Credited  Service
credited prior to his  termination of employment  with the Employer for purposes
of determining any Pension to which he is entitled at any later date.

         Section 4.09.  Spouse's Pension.

         (a) In the  event  of the  death  of a  Member  (whether  as an  active
Employee  or a  former  Employee)  before  his  Benefit  Commencement  Date  who
satisfied the vesting requirements of Section 4.03 prior to his death and who is
survived  by a Spouse,  such Spouse  shall be  entitled  to a Spouse's  Pension,
determined in  accordance  with this Section  4.09.  The Spouse's  Pension shall
commence on the date the Member would have reached his Normal Retirement Date or
on the first day of the month next  following  the  Member's  date of death,  if
later.  However,  if the Member's  death  occurs prior to his Normal  Retirement
Date, the Member's Spouse may elect to receive the Spouse's  Pension  commencing
on the  first  day of the  month  immediately  following  the  later  of (i) the
Member's  date of death or (ii) the  earliest  date the  Member  would have been
eligible for benefit commencement under Section 4.03(d).

         (b) The Spouse's  Pension shall be equal to (i) in the case of a Member
or  former  Member  who  dies  after  he  has  completed  the  age  and  service
requirements for an Early or Normal Retirement Pension,  the Pension which would
have been payable to the Spouse under Section  4.04(a) if the Member had retired
on an Early or Normal Retirement Pension, whichever is applicable,  beginning on
the first  day of the  month in which he died as  provided  in  Section  4.01 or
Section 4.02(b),  and (ii) in the case of any other Member or former Member, the
Pension  which  would have been  payable to the  Spouse,  based on the  Member's
accrued Plan benefit as of the date of death,  if the Member had elected to have
his Pension begin on the earliest date provided in Section 4.03(d), and then had
died on the next following  day. In either case,  the Spouse's  Pension shall be
calculated as follows:

                  (i) a Pension  computed in accordance with Section 4.01 on the
basis of the Member's  Compensation  and Credited Service as of the first day of
the month preceding his date of death; reduced by

                  (ii) the appropriate  reduction factor for early Retirement as
provided  in Section  4.02(b)  or for early  commencement  of a Deferred  Vested
Pension as provided  in Section  4.03(d),  if either  reduction  is  applicable;
multiplied by

                  (iii) the actuarial  equivalent  factor for a qualified  joint
and survivor  annuity  Pension with fifty percent (50%) of the Member's  Pension
continued  after  his death to his  Spouse,  as  provided  in  Section  4.04(a);
multiplied by:

                                      -20-

<PAGE>




                  (iv) fifty percent (50%)

         (c) If a Member  dies  without  a  surviving  Spouse  or dies  prior to
satisfying the vesting requirements of Section 4.03, no Pension or other benefit
will be payable  from the Plan with respect to his  participation  herein to any
person, except as provided in Section 4.10(b).

         Section 4.10.  Death of Member.

         (a) If a Member  dies on or after his  Benefit  Commencement  Date,  no
further periodic payments will be made under the Plan to any person with respect
to the deceased Member's Pension, unless the Member had elected an optional form
of benefit  pursuant to Section  4.06 that  provides for payments to a surviving
co-annuitant or Beneficiary,  or an annuity is payable to the Member's surviving
Spouse in accordance with Section 4.09.

         (b) Upon receipt of proof,  satisfactory to the Committee, of the death
of a Member who retired on or after April 1, 1989 and on or after his attainment
of age 60 and who is not  covered  under  the  Company's  group  life  insurance
program at the time of his death,  a single sum benefit equal to $3,000 shall be
paid to the person nominated by him by written designation duly acknowledged and
filed with the Committee,  if such person  survives him,  otherwise to the legal
representatives of such deceased Member.

         Section 4.11. Qualified Domestic Relations Orders. During any period in
which the issue of whether a domestic  relations  order is a Qualified  Domestic
Relations Order is being  determined (by the Committee,  by a court of competent
jurisdiction, or otherwise), the Committee shall direct the Trustee to segregate
in a separate  account or in an escrow  account  the amount that would have been
payable to the  Alternate  Payee  during such period if the  domestic  relations
order is determined to be a Qualified Domestic Relations Order.

         If  within  eighteen  (18)  months  the  domestic  relations  order (or
modification  thereof) is determined to be a Qualified Domestic Relations Order,
the Committee  shall direct the Trustee to pay the  segregated  account (and any
earnings or interest  thereon) or the  balance  held in the escrow  account,  as
applicable,  to the person or persons entitled thereto.  If within eighteen (18)
months it is  determined  that the order is not a Qualified  Domestic  Relations
Order or the issue as to whether such  domestic  relations  order is a Qualified
Domestic Relations Order is not resolved, the Committee shall direct the Trustee
to pay the  segregated  account  (and any  earnings or interest  thereon) or the
balance of the escrow account, as applicable, to the person or persons who would
have been  entitled  to such  amounts  if there had been no  domestic  relations
order. Any determination that a domestic relations order is a Qualified Domestic
Relations  Order which is made after the close of the eighteen (18) month period
shall be applied prospectively only.

         The Committee  shall  establish  reasonable  procedures for determining
whether a domestic  relations order is a Qualified  Domestic Relations Order and
to administer  distributions under Qualified Domestic Relations Orders. When the
Plan receives a domestic  relations  order,  the Committee shall promptly notify
the appropriate Participant and any other Alternate Payee of the

                                      -21-

<PAGE>



receipt of such order and the  Committee's  procedures for  determining  whether
such  order  is a  Qualified  Domestic  Relations  Order.  The  Committee  shall
determine whether a domestic  relations order is a Qualified  Domestic Relations
Order within a reasonable period after receipt of such order, and shall within a
reasonable  time  after  such  determination  notify  the  Participant  and each
Alternate Payee of such determination.

         Payment  of  amounts  awarded to an  Alternate  Payee  shall be made in
accordance with the terms of the Qualified Domestic  Relations Order;  provided,
however,  that if the present  value of the Alternate  Payee's  Pension does not
exceed $3,500, such Pension shall be paid in accordance with Section 4.07.

         Section 4.12. Basis of Payment. Except as provided in Sections 4.06 and
4.07, all Pension  payments  under the Plan shall be paid monthly  commencing on
the first day of the month coinciding with or next following Member's Retirement
Date (or the first day of the month  designated in Section 4.09 in the case of a
Spouse's  Pension)  and will  continue  to be paid on the  first  of each  month
thereafter.  No Pension  payments  which are destined to end with the death of a
person shall be paid after the date on which the person last entitled to payment
dies.

         Section 4.13.  Maximum Benefit Limitation.  Notwithstanding any
provision contained herein to the contrary:

         (a) the amount of annual  Pension,  determined in accordance  with this
Section  4.13,  payable  with  respect to a Member under this Plan and any other
defined benefit plan (as described in Section 415(k) of the Code)  maintained by
the  Employer  for any  Limitation  Year shall not exceed an amount equal to the
lesser of:

                  (i)      $90,000 adjusted for increases in the cost of living
pursuant to Section 415(b)(1)(A) of the Code; or

                  (ii)     100% of the Member's Average Compensation.

                  The determination of whether a Member's Pension, payable under
                  the Plan exceeds the limitations of this Section 4.13 shall be
                  made by adjusting  such Pension,  so that it is the Equivalent
                  Actuarial  Value of a straight  life annuity with no ancillary
                  benefits  (such  adjustment  being  made  in  accordance  with
                  regulations  promulgated  by the  Secretary of the Treasury or
                  its delegate  pursuant to Section  415(b)(2)(B)  of the Code);
                  provided,  however,  that  any  portion  of  an  annuity  that
                  constitutes a qualified  joint and survivor  annuity shall not
                  be taken into account.

         (b) In the event a Member has been credited with less than ten years of
participation  in  the  Plan,  the  $90,000  dollar   limitation  under  Section
4.13(a)(i)  shall be  reduced  by  multiplying  such  limit by a  fraction,  the
numerator of which is the Member's years of participation  (or part thereof) and
the  denominator of which is ten. In the event the Member has been credited with
less  than ten  years  of  service  with the  Employer  (or part  thereof),  the
compensation limitation

                                      -22-

<PAGE>



under  Section  4.13(a)(ii)  shall be  reduced  by  multiplying  such limit by a
fraction,  the numerator of which is the number of years of service  credited to
the Member and the denominator of which is ten.

         (c) If any Member  begins to receive a Pension  under this Plan  before
such Member attains Social Security  Retirement Age, the maximum annual Pension,
that such  Member may  receive  hereunder  shall be  adjusted  so that it is the
Equivalent  Actuarial  Value of $90,000 per year  beginning  at Social  Security
Retirement  Age.  If a Member  begins to receive a Pension,  hereunder  after he
attains Social Security  Retirement  Age, the maximum annual Pension,  permitted
hereunder shall be the Equivalent  Actuarial Value of $90,000 per year beginning
at Social Security Retirement Age. Any adjustment made pursuant to the foregoing
shall be made in accordance with applicable rules prescribed by the Secretary of
the Treasury.  In making an actuarial  adjustment to any benefit pursuant to the
terms of this paragraph,  no cost of living adjustment to the $90,000 limitation
under Section  415(d)(1) of the Code shall be taken into account before the year
in which such cost of living adjustment is made.

         (d) If the benefit the Member  would  otherwise  accrue in a Limitation
Year would produce an annual Pension in excess of the  limitation  under Section
4.13(a),  the rate of accrual  will be reduced so that the annual  Pension  will
equal the limitation under Section 4.13(a).

         (e) The  limitations  in  Section  4.13(a)  shall not be  applied  with
respect to any Member whose annual Pension is not more than $1,000 multiplied by
the  Member's  number of years of service or parts  thereof  (not to exceed ten)
with  the  Employer,  and the  Member  has not at any time  participated  in any
defined  contribution plan (as defined in Section 415(k) of the Code) maintained
by the Employer.

         (f) If, in any  Limitation  Year a Member also  participates  in one or
more qualified defined  contribution plans (within the meaning of Section 414(i)
of the Code) maintained by the Employer  (whether or not  terminated),  then for
any  Limitation  Year,  the sum of the Defined  Benefit  Plan  Fraction for such
Limitation Year and the Defined  Contribution  Plan Fraction for such Limitation
Year shall not exceed 1.0.

         (g) If, in any  Limitation  Year,  the sum of the Defined  Benefit Plan
Fraction and Defined  Contribution  Plan  Fraction for a Member would exceed 1.0
without  adjustment of the amount of the maximum annual Pension that can be paid
to such Member under Section  4.13(a),  the sum of the fractions will be reduced
to 1.0 by first reducing any voluntary employee after-tax  contributions to this
Plan, then by reducing any voluntary  employee  after-tax  contributions  to the
defined  contribution  plans,  and then by  reducing  the amount of the  maximum
annual  Pension  that can be paid to such Member  under  Section  4.13(a) to the
extent  necessary  to reduce the sum of the Defined  Benefit  Plan  Fraction and
Defined  Contribution  Plan  Fraction  for  such  Member  to 1.0.  In  addition,
Committee may take such other action  consistent with section 415 of the Code to
cause the sum to equal 1.0 or less.


                                      -23-

<PAGE>



         (h)  Definitions:

                  (i) "Average  Compensation" means for purposes of this Section
                  4.13 the average  Annual  Compensation  during a Member's high
                  three years of service,  which period is the actual  number of
                  consecutive   calendar   years  (or,  the  actual   number  of
                  consecutive  years of employment  for those  Employees who are
                  employed  for  less  than  three  consecutive  years  with the
                  Employer) during which the Employee had the greatest aggregate
                  Annual Compensation from the Employer.

                  (ii)  "Employer"  means for purposes of this Section 4.13, the
                  Employer  and any  Affiliated  Company  that adopts this Plan;
                  provided,  however, the determination under Section 414(b) and
                  (c) of the Code shall be made as if the  phrase  "more than 50
                  percent" were substituted for the phrase "at least 80 percent"
                  each place it is  incorporated  into Section 414(b) and (c) of
                  the Code.

                  (iii) "Annual Compensation" means for purposes of this Section
                  4.13, a Member's  earned  income,  wages,  salaries,  fees for
                  professional  service  and  other  amounts  received  (without
                  regard to  whether  an  amount  is paid in cash) for  personal
                  services actually rendered in the course of employment with an
                  Employer  maintaining  the Plan to the extent that the amounts
                  are includable in gross income (including, but not limited to,
                  commissions  paid salesmen,  compensation  for services on the
                  basis of a  percentage  of profits,  commissions  on insurance
                  premiums, tips, bonuses, fringe benefits,  reimbursements, and
                  expense allowances) and excluding the following:

                           (A)  Employer  contributions  to a plan  of  deferred
                           compensation  to the  extent  contributions  are  not
                           included  in gross  income  of the  Employee  for the
                           taxable year in which contributed, or on behalf of an
                           Employee to a simplified employee pension plan to the
                           extent  such   contributions   are  deductible  under
                           Section  219(b)(2) of the Code, and any distributions
                           from a plan of deferred  compensation  whether or not
                           includable  in the gross income of the Employee  when
                           distributed;

                           (B)  amounts   realized   from  the   exercise  of  a
                           nonqualified  stock option,  or when restricted stock
                           (or  property)  held by an  Employee  becomes  freely
                           transferable or is no longer subject to a substantial
                           risk of forfeiture;

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

                           (D) other amounts which receive special tax benefits,
                           or contributions made by the Employer (whether or not
                           under  a  salary  reduction  agreement)  towards  the
                           purchase of a 403(b)  annuity  contract under Section
                           403(b) of the Code (whether or not the  contributions
                           are excludable from the gross

                                      -24-

<PAGE>



                           income of the  Employee),  contributions  made by the
                           Employer for medical  benefits (within the meaning of
                           Section  401(h) or  419A(f)(2)  of the Code) which is
                           otherwise  treated  as an  Annual  Addition,  or  any
                           amount otherwise  treated as an Annual Addition under
                           Section 415(l)(1) or 419A(d)(2) of the Code.

                  For Limitation Years beginning after December 31, 1991, Annual
                  Compensation   for  any   Limitation   Year   is  the   Annual
                  Compensation  actually  paid or  includable  in  gross  income
                  during such Limitation Year.

                  (iv) "Defined  Contribution  Plan Fraction" means for purposes
                  of this Section 4.13, for any Limitation Year a fraction:

                           (A) the  numerator  of which is the sum of the annual
                           additions  (as  defined in Section  415 (c)(2) of the
                           Code)  to the  Member's  account  under  the  defined
                           contribution  plans  maintained by the Employer as of
                           the close of the Limitation Year; and

                           (B) the denominator of which is the lesser of:

                                    (1) the product of 1.25,  multiplied  by the
                                    dollar limitation  determined under Sections
                                    415(b)  and (d) of the Code in effect  under
                                    Section  415(c)(1)(A)  of the  Code  for the
                                    Limitation Year  (determined  without regard
                                    to Section 415(c)(6) of the Code), or

                                    (2)   Thirty-five   percent   (35%)  of  the
                                    Member's   Annual   Compensation   for   the
                                    Limitation  Year  and  all  prior  years  of
                                    service for the Employer.

                  The Defined  Contribution Plan Fraction shall be calculated by
                  taking into account special  transition rules authorized under
                  Section 415 of the Code. In addition,  the annual addition (as
                  defined in Section  415(c)(2) of the Code) for any  Limitation
                  Year beginning before January 1, 1987, shall not be recomputed
                  to treat all Employee contributions as an annual addition.

                  (v) "Defined Benefit Plan Fraction" means for purposes of this
                  Section 4.13 for any Limitation Year a fraction:

                           (A) the projected  annual benefit of the Member under
                           this  Plan and any  other  defined  benefit  plan (as
                           defined in Section 415(k) of the Code)  maintained by
                           the  Employer  determined  as of  the  close  of  the
                           Limitation Year; and

                           (B) the denominator of which is lesser of:

                                      -25-

<PAGE>




                                    (1)  the product of 1.25, multiplied by  the
                                    dollar   limitation   in   effect   for  the
                                    Limitation  Year  under Section 415(b)(1)(A)
                                    of the Code; or

                                    (2) 1.4  multiplied  by 100% of the Member's
                                    Average    Compensation,    including    any
                                    adjustments  under  Section  415(b)  of  the
                                    Code.

                  (vi)  "Limitation Year" means the Plan Year.

                  (vii)  "Social  Security  Retirement  Age" means age 65 in the
                  case of a Member  attaining  age 62  before  January  1,  2000
                  (i.e.,  born  before  January  1,  1938),  age 66 for a Member
                  attaining age 62 after  December 31, 1999,  and before January
                  1, 2017  (i.e.,  born  after  December  31,  1937,  but before
                  January  1,1955),  and age 67 for a  Member  attaining  age 62
                  after December 31, 2016 (i.e., born after December 31, 1954).

         Section  4.14.  Limitation  on Time  of  Payment.  Notwithstanding  any
provision  in this  Plan  specifying  a date  for the  commencement  of  benefit
payments from the Plan,  distribution  of the Member's  Pension shall  commence,
unless the  Member  otherwise  elects,  not later than sixty (60) days after the
Plan Year in which the latest of the following events occurs:

         (a)  The date the Member attains Normal Retirement Age; or

         (b)  The date the Member terminates employment with the Employer; or

         (c) The tenth anniversary of the last day of the Plan Year in which the
Member commenced participation in the Plan.

         Notwithstanding  the foregoing,  distribution of each Member's  Pension
shall commence not later than the Member's  Required  Commencement  Date and the
entire vested Pension of each Member shall be distributed in full to such Member
not  later  than  the  Required  Commencement  Date  or  shall  be  distributed,
commencing  not later than the Required  Commencement  Date, in accordance  with
regulations  over the life of such  Member or over the lives of such  Member and
his  Beneficiary  (or over a period not extending  beyond the life expectancy of
such Member or the life expectancy of such Member and his Beneficiary).

         Further,  if a Member has commenced  receiving  distributions under the
Plan and the Member dies before his entire interest has been distributed to him,
the remaining portion, if any, of such interest that is distributable under this
Plan shall be  distributed  to the Member's  Beneficiary  at least as rapidly as
such interest would have been  distributed  to the Member,  commencing not later
than the Member's Required  Commencement  Date, under the method of distribution
in effect at the Member's death.  If the Member dies before the  distribution of
his  Pension  has  commenced,  the  entire  interest  of  the  Member  shall  be
distributed within five years after the death of the Member; provided,  however,
if any  portion of the  Member's  interest is payable to or for the benefit of a
Beneficiary and such portion of the Member's undistributed

                                      -26-

<PAGE>



interest will be distributed  in accordance  with  regulations  over the life of
such  Beneficiary or over a period not extending  beyond the life  expectancy of
such Beneficiary and such  distributions  commence not later than one year after
the date of the Member's  death (or such later date as the Secretary of Treasury
may  by  regulation   prescribe),   the  deceased  Member's  interest  shall  be
distributed  in  accordance  with the method of payment under which the interest
will be  distributed  over the  life of the  Beneficiary  or over a  period  not
extending beyond the life expectancy of the Beneficiary.

         Notwithstanding  the  foregoing,  if the  Beneficiary  is the surviving
Spouse of the Member,  the deceased  Member's  interest  shall be distributed to
such  surviving  Spouse on or before  the date on which the  Member  would  have
attained age 70-1/2; provided, further, that if the surviving Spouse dies before
the  distributions to such spouse commence,  the distribution of the interest of
the  deceased  Member  shall  begin  on or  before a date  determined  as if the
surviving  Spouse  were the  Member.  For  purposes of this  Section  4.14,  and
pursuant to regulations  prescribed by the Secretary of the Treasury, any amount
paid to a child of the  Member  shall be  treated  as if it had been paid to the
surviving  Spouse of the  Member  if such  amount  will  become  payable  to the
surviving  Spouse upon such child's  attainment of majority (or other designated
event permitted under regulations  prescribed by the Secretary of the Treasury).
For the purposes of this paragraph,  the term  "Beneficiary"  shall include only
individuals.

         Nothing in this Section 4.14 shall permit any Member or  Beneficiary to
elect any form of  distribution  not otherwise  expressly  permitted  under this
Plan; but rather,  the Committee may at any time modify any form of distribution
elected by a Member or Beneficiary to ensure compliance with this paragraph.  In
addition,  all distributions  from the Plan shall be made in accordance with the
requirements of Section 401(a)(9) of the Code,  including the incidental benefit
rules set forth in Prop. Treas. Reg. Section 1.401(a)(9)-2,  and any grandfather
or transitional rules issued thereunder.  Any distribution  provision  contained
herein which  conflicts  with Section  401(a)(9) of the Code will be disregarded
and the provisions of Section 401(a)(9) will govern.

         Section 4.15.  Restoration of Retired Member or Other Former Employee
to Service.

         (a) If any Member in receipt of a Pension is restored  to service  with
the Employer or an Affiliated  Company prior to his Normal  Retirement Date, his
Pension shall cease and any election of an optional benefit in effect thereunder
shall become void. Any Credited Service to which he was entitled when he retired
shall be restored to him, and upon  subsequent  Retirement  his Pension shall be
based on his  Compensation  and Credited  Service before and after the period of
prior  retirement,  provided  that,  if such  Member  was in receipt of an Early
Retirement  Pension or a Deferred  Vested Pension at the time of his restoration
to service, his Pension upon subsequent retirement shall be reduced by an amount
of  Equivalent  Actuarial  Value  to  the  benefits  he  received  prior  to his
restoration  to  service.  The  part of the  Member's  Pension  upon  subsequent
retirement  payable with respect to Credited  Service rendered before the period
of his  previous  retirement  shall in no event be less  than the  amount of his
previous  Pension  modified  to reflect  any option in effect on his  subsequent
retirement.

                                      -27-

<PAGE>




         (b) If any Member in receipt of a Pension is restored  to service  with
the Employer or an Affiliated Company on or after his Normal Retirement Date, or
any Member  remains  employed  beyond his Normal  Retirement  Date,  his Pension
payments  shall be suspended  for each month  during the period of  reemployment
which constitutes a month of "suspension  service" as hereinafter  provided.  In
the event of his death during such period,  the provisions of Section 4.09 shall
be  applicable.  For  purposes  of this  paragraph  (b), a month of  "suspension
service"  shall be a month in which the Member is  entitled  to receive  payment
from the  Employer or an  Affiliated  Company for at least eight days of service
during such month. Upon subsequent Retirement, his Pension shall be based on his
Compensation  and  Credited  Service  before  and  after  the  period  of  prior
retirement,  provided that, if such Member was in receipt of an Early Retirement
Pension or a Deferred  Vested Pension at the time of his restoration to service,
his  Pension  upon  subsequent  Retirement  shall be  reduced  by an  amount  of
Equivalent  Actuarial  Value to the  benefits  he  received  prior to his Normal
Retirement  Date. The part of the Member's  Pension upon  subsequent  Retirement
payable  with  respect to  Credited  Service  rendered  before the period of his
previous  Retirement  shall in no event be less than the amount of his  previous
Pension  modified to reflect any option in effect on his subsequent  Retirement.
Upon  subsequent  Retirement,  payment of the Member's  Pension  shall resume no
later than the first day of the third  month after the month in which the Member
ceases to be employed in such  suspension  service,  and shall be  adjusted,  if
necessary,  in compliance with Department of Labor Regulation Section 2530.203-3
in a consistent and nondiscriminatory manner.

         (c)  If  any  Member  or  former  participant  in the  Prior  Plan  who
terminated  his service  under this Plan or such Prior Plan, as the case may be,
was entitled to but not in receipt of a Pension at the date of such  termination
of service, or a former Member of this Plan or a former participant in the Prior
Plan had received a lump sum  settlement  in lieu of his Pension and is restored
to service prior to the commencement of his Pension,  he shall have the Credited
Service to which he was  previously  entitled  restored to him. In the case of a
former  participant  in the  Prior  Plan  who  terminated  service  prior to the
Effective  Date, his Credited  Service prior thereto for purposes of determining
his  eligibility  for benefits and the amount of such benefits shall be equal to
his  service  recognized  under the Prior  Plan for those  respective  purposes.
However,  if such Member received a lump sum settlement in lieu of said Pension,
the Credited  Service so restored  shall be  recognized  only for the purpose of
determining  eligibility  for benefits under the Plan and not for the purpose of
computing  the amount of any  benefit,  unless such Member  repays the amount of
such lump sum  settlement  together  with  interest  at the rate  determined  in
accordance  with Section  411(c)(2)(C) of the Code on such amount to the date of
repayment,  except  that,  if such  lump sum  settlement  was  equal to the full
present value of his accrued benefit at the time of such  termination,  he shall
not be permitted to repay such amount and such Credited  Service shall not again
be  recognized  for  purposes of  computing  the amount of any  benefit.  If any
Employee who was a participant in the Prior Plan terminated his service prior to
the first day of the applicable plan year commencing in 1976 and was entitled to
a deferred  vested  pension under a plan that was  subsequently  merged into the
Prior Plan as of December  31, 1983 at the date of such  termination  of service
and is restored to service, his Credited Service for purposes of determining his
eligibility  for benefits and the amount of such benefits  shall be equal to his
service  recognized for those purposes  through the date of such  termination of
service under the

                                      -28-

<PAGE>



Prior Plan, as in effect on the date of such  termination,  provided that he did
not receive a lump sum settlement in lieu of said deferred vested benefit.  Upon
the  Retirement  or  subsequent  termination  of a Member who was  entitled to a
Deferred Vested Pension at the time of his previous  termination of service, who
had his previous  Credited Service restored  pursuant to this paragraph (c), his
Pension  or  Deferred  Vested  Pension  shall be based on his  Compensation  and
Credited  Service  before and after the period when he was not in the service of
the Employer or an Affiliated Company.

         (d) If any former Member or any other former  participant  in the Prior
Plan  becomes an Employee  he shall  become a Member.  If he has not  incurred a
Break-in-Service  on the date he becomes a Member,  his  Credited  Service as of
such date shall be determined in accordance with Article 3. If he has incurred a
Break-in-Service  commencing  after  January  1,  1989,  and the  period of such
Break-in-Service did not exceed five years, the Credited Service to which he was
previously  entitled  shall be  restored  to him.  However,  if a  Member  had a
Break-in-Service  commencing on or before  January 1, 1989, the break in service
rules as in effect on such date under the Prior Plan shall apply in  determining
whether or not such prior  service  shall be  restored.  In the case of a former
participant  in the Prior Plan who  terminated  service  prior to the  Effective
Date,  his  Credited  Service  prior  thereto for  purposes of  determining  his
eligibility  for benefits and the amount of such benefits  shall be equal to his
service recognized under the Prior Plan for those respective purposes.  Upon the
Retirement  or  subsequent  termination  of service of a Member  whose  previous
Credited Service has been restored  pursuant to this paragraph (d), his Pension,
if any, shall be based on his Compensation and Credited Service before and after
the period  when he was not in the  service  of the  Employer  or an  Affiliated
Company.

         Section 4.16.  Transfers.

         (a) If,  prior to  becoming a Member of this Plan,  an  Employee  was a
participant  in any  other  retirement  plan of the  Employer  or an  Affiliated
Company,  other than the Prior Plan,  designated  by the Board of Directors  for
transfer of Credited  Service for purposes of this Section 4.16,  there shall be
included in his Credited  Service for  purposes of  computing  the amount of any
benefit payable to him or on his account all service which was recognized  under
such other  retirement  plan for  purposes  of  computing  the amount of benefit
thereunder at the time he was  transferred  from the  employment  classification
covered by such other plan.  Upon  Retirement  or  termination  of service,  his
Pension  payable  under this Plan  shall be  reduced by an amount of  Equivalent
Actuarial Value to the benefit payable under such other plan, but such reduction
shall not exceed the  portion of his Pension  attributable  to the period of his
Credited Service for benefit  computation  purposes  recognized under such other
plan. In determining such reduction,  in the case of a Member who has previously
been  transferred  one or more times between  plans before  becoming a Member of
this Plan, the periods of credited  service and amounts of benefit  payable from
all other  plans  shall be combined  and for this  purpose a previous  period of
Credited  Service as an Employee  recognized  for benefit  computation  purposes
under this Plan  shall be  treated  as if it were a  separate  period of service
rendered as a participant in another plan. In the case of an employee who, prior
to becoming a Member of the Plan,  was employed by the Employer or an Affiliated
Company in an employment classification not eligible for participation in a

                                      -29-

<PAGE>



retirement plan of the Employer or an Affiliated  Company,  the Committee shall,
under rules uniformly applicable to all Employees similarly situated,  determine
the extent, if any, to which Credited Service for benefit  computation  purposes
shall be granted for service in such ineligible classification. In the case of a
transfer  between  employment   classifications  which  occurred  prior  to  the
Effective  Date,  this paragraph (a) shall be applicable only in accordance with
the provisions of the Prior Plan except as otherwise specified above.

         (b) If a Member  of the  Plan  ceases  to be an  "Employee"  as  herein
defined,  but continues in the employ of the Employer or an Affiliated  Company,
he shall continue to accrue Credited Service only for the purpose of determining
eligibility  for benefits and upon  termination of employment  with the Employer
and its Affiliated  Companies his  eligibility for benefits under the Plan shall
be determined  on the basis of his age and Credited  Service to the date of such
termination  of  employment,  but the amount of benefit shall be computed on the
basis of his  Compensation  and Credited  service at the date he ceased to be an
"Employee" as herein defined. Eligibility for benefits and the amount of benefit
shall be determined on the basis of the  provisions of the Plan in effect on the
date he ceased to be an Employee as herein  defined,  except as may otherwise be
required  by  applicable  law.  An employee  who at the date of  termination  of
employment  is not an Employee as herein  defined  shall not be eligible  for an
Early Retirement  Pension pursuant to Section 4.02(b)(i) or (ii) or a Disability
Benefit.  The  provisions  of this  paragraph (b) shall not be applicable to any
Member referred to in the last sentence of Section 4.17 of the Prior Plan.

         Section 4.17. Special  Provisions  Applicable to Certain Former Members
in the Prior Plan. In the case of a Member referred to in Section 4.12(b) or (c)
of the Prior Plan (a former King- Seeley Plan  participant),  such provisions of
the Prior Plan  (including the reductions in benefits due to receipt of benefits
under a group annuity  contract and the entitlement  for certain  individuals to
retire  upon  attainment  of age 60 under a  Normal  Retirement  Pension)  shall
continue to be applied to such Member upon Retirement from the Plan.

         Section 4.18.  Disability Benefit.

         (a) A Member who has not reached his Normal Retirement Date, but who is
eligible for and in receipt of disability  insurance  benefits  under the Social
Security  Act and who, at the time of  discontinuance  of active  employment  on
account of disability had completed 5 years of Credited Service,  shall have the
period during which he is in receipt of the Social Security disability insurance
benefit included in his Credited Service,  provided that such Member applied for
a Social Security disability benefit within 12 months from the date he ceased to
be an active Employee due to his disability.

         (b) In the event a Member  described  in paragraph  (a)  recovers  from
disability  and returns to  employment  with the  Employer,  he will continue to
accrue Credited Service according to Section 3.02. In the event he recovers from
disability and he does not return to employment  with the Employer,  he will not
be entitled to any Credited Service for periods commencing on and after the date
of his recovery from disability.

                                      -30-

<PAGE>




         (c) Once each year,  the  Committee  may require  any Member  receiving
Credited  Service  under  this  Section  4.18  who has not  reached  his  Normal
Retirement Date to provide  satisfactory  evidence of his continued  eligibility
for disability insurance benefits under the Social Security Act. Should any such
Member  refuse  to  provide  such  evidence,  he  will  not be  entitled  to any
additional Credited Service until his withdrawal of such refusal and, should his
refusal  continue for a year,  all rights to additional  Credited  Service under
this Section 4.18 shall cease. If the Committee finds that the Member has ceased
to be eligible for disability  insurance benefits under the Social Security Act,
additional Credited Service under this Section 4.18 shall be discontinued.

         (d) Credited Service under this Section 4.18 shall  automatically cease
on the first day of the month preceding a Member's Normal Retirement Date.

         (e) When the disabled  Member  reaches his Normal  Retirement  Date, he
will be entitled to a Normal  Retirement  Pension  computed in  accordance  with
Section  4.01 on the  basis of his  Average  Final  Compensation  determined  in
accordance  with  Section  1.04,  his Final  Average  Compensation  and  Covered
Compensation  determined  as of the  date  of  commencement  of  his  Disability
Benefit, and his Credited Service at his Normal Retirement Date.





End of Article 4

                                      -31-

<PAGE>



                                    ARTICLE 5

                                  CONTRIBUTIONS


         Section 5.01.  Employer Contributions.

         (a) The Employer shall make regular contributions to the Trustee or the
Insurance  Company each year in such amounts and at such times as are  necessary
to maintain  the Plan on a sound  actuarial  basis and to meet  minimum  funding
standards as prescribed by any applicable law. The amount of such  contributions
shall  be  paid  by the  Employer  to one  or  more  Trustees,  to be  held  and
administered pursuant to Article 8.

         (b) Any  forfeitures  of  accrued  rights to a Pension  arising  from a
Member's termination of Employment or death or for any other reason prior to the
termination of the Plan will be used to reduce any  contribution  required to be
made by the Employer pursuant to Section 5.01(a) and will not increase the level
of any benefit otherwise payable under the Plan.

         (c) All  contributions of the Employer for a Plan Year shall be paid by
the Employer no later than the due date for filing its Federal income tax return
(plus  extensions) for its fiscal year. If the contribution is on account of the
Employer's  preceding fiscal year, the contribution  shall be accompanied by the
Employer's  notification to the Trustee that payment is on account of such prior
fiscal year. Each  contribution made after the end of the fiscal year on account
of the Employer's  prior Fiscal Year shall be deemed to have been paid as of the
last day of the Employer's fiscal year to which it relates, if such contribution
is made no later than the time  prescribed  by law for filing of the  Employer's
federal income tax return (including  extensions  thereof) for such fiscal year.
An Employer may make a contribution  to the Plan later than the date  prescribed
by law for filing its federal income tax return solely for purposes of complying
with the minimum funding requirements of Section 412 of the Code.

         (d)  Notwithstanding  Sections  5.01(a)  and (b),  contribution  of the
amounts called for thereunder is conditioned upon the continued qualification of
the Plan under Section 401 of the Code, and the continued  deductibility  of the
amount of such contributions under Section 404 of the Code (as such Sections may
be amended or reenacted). Each Employer intends, but does not guarantee, to make
contributions to the Plan in at least the amount required to satisfy the minimum
funding  requirements  of Section 412 of the Code, as specified in the valuation
reports  for  the  applicable  period  of time  issued  by the  Plan's  actuary.
Notwithstanding  the  foregoing,  each  Employer  reserves  the right to reduce,
suspend, or discontinue making contributions to the Plan at any time.

         (e) Return of Employer Contributions.  The Employer will have no right,
title or interest in the  contributions  made by it under Section 5.01(a) to any
Trustee or Insurance  Company,  and no monies will revert to the Employer except
that:


                                      -32-

<PAGE>



                  (i)      Any residual assets of the Plan may be returned to
                  the Employer in accordance with Section 10.03;

                  (ii)     Any contribution made by the Employer under a mistake
                  of  fact  may  be  returned  to  it  within one year after the
                  contribution is made;

                  (iii) The  portion of any  contribution  which is  conditioned
                  upon its  deductibility  under  Section 404 of the Code may be
                  returned to the Employer  within one year after the  deduction
                  is disallowed; and

                  (iv)     Any  amounts  otherwise permitted to be repaid to the
                  Employer by ERISA and the Code may be so repaid.

         Section 5.02.  No  Participant Contributions.  Participants will not be
required or permitted to make contributions to the Plan.





End of Article 5

                                      -33-

<PAGE>



                                    ARTICLE 6

                             ADMINISTRATION OF PLAN


         Section 6.01.  Appointment  of Committee.  A Committee of not less than
three  persons  shall be appointed  from time to time by, and shall serve at the
pleasure of, the Board of  Directors  or its  designee.  The  Committee  will be
charged with all phases of the  administration  of the Plan as set forth in this
Article  6 and  shall  be  the  Plan  Administrator  and  shall  carry  out  the
administrator's  duties as imposed under ERISA.  The Board of Directors,  or its
designee,  may appoint a chairman of the Committee and if it fails to do so, the
members of the Committee  shall elect a chairman.  The  Committee  shall elect a
secretary  who may,  but need not,  be one of the members of the  Committee  who
shall be  responsible  for  maintaining  minutes of the  Committee  meetings and
copies of any reports prepared by the Committee. No member of the Committee will
receive any  compensation  for his service as such. The members of the Committee
may or may not be participants in the Plan.

         Section 6.02.  Meetings.  The  Committee  shall hold meetings upon such
notice, at such place or places, and at such time or times as they may from time
to time determine.

         Section 6.03. Action of Committee. Any act which the Plan authorizes or
requires  the  Committee  to do may be done by a majority  of its  members.  The
action of such majority expressed from time to time by a vote at a meeting or in
writing  without a meeting  shall  constitute  the action of such  Committee and
shall have the same effect for all  purposes as if assented to by all members of
such Committee at the time in office.

         Section 6.04.  Powers and Duties. In addition to any implied powers and
duties  which  may be  needed  to carry  out the  provisions  of the  Plan,  the
Committee shall have the following specific powers and duties:

         (a)      To  make  and enforce such rules and regulations  as  it shall
                  deem  necessary  or proper for the efficient administration of
                  the Plan;

         (b)      To  interpret  and to construe  the Plan and to decide any and
                  all matters arising  hereunder,  including the right to remedy
                  possible ambiguities,  inconsistencies or omissions; provided,
                  however,  that all such interpretations and decisions shall be
                  applied  in a  uniform  and  non-discriminatory  manner to all
                  Employees  similarly  situated and shall be  determined in the
                  sole and absolute discretion of the Committee,  which shall be
                  final and binding on all interested parties;

         (c)      To compute the amount of any Pension which shall be payable to
                  any Member, Spouse or Beneficiary in accordance with the
                  provisions of the Plan;


                                      -34-

<PAGE>



         (d)      To review and render  decisions  respecting a claim (or denial
                  of a claim) for a benefit  under the Plan in  accordance  with
                  the claims procedure described in Article 7;

         (e)      To   authorize   disbursements   from  the  Trust   Fund  (any
                  instructions   of  the  Committee  to  the  Trustee  shall  be
                  evidenced  in writing and signed by a member of the  Committee
                  delegated  with such  authority by a majority of the Committee
                  members);

         (f)      To  employ  such  advisors  (including,  but  not  limited  to
                  attorneys,   independent   public   accountants,    investment
                  advisors,  and  actuaries),   and  such  other  technical  and
                  clerical  personnel  as may  be  required  in the  Committee's
                  discretion for the proper administration of the Plan;

         (g)      To designate by written instrument maintained in the Company's
                  files,   persons   to   carry   out   all  or   part   of  the
                  responsibilities of the Committee, and such persons shall have
                  the authority as may be delegated to them in such instrument;

         (h)      To review the activities of any person designated to carry out
                  any of the powers or duties of the  Committee and to report to
                  the Board of  Directors at least once each year on the overall
                  administration of the Plan;

         (i)      To  appoint  and remove any  Insurance  Company or  investment
                  manager (as defined in Section  3(38) of ERISA) by whom assets
                  of the Trust Fund are held or managed;

         (j)      To establish  asset  administration  objectives  for the Trust
                  Fund  consistent  with Plan  requirements as determined by the
                  Committee, and to determine and assign the amount of assets to
                  be placed under management of each Trustee,  Insurance Company
                  or  investment  manager  and to direct  the  Trustee as to the
                  investment of the Trust Fund;

         (k)      To continuously  monitor the adequacy of the funds  supporting
                  the  Plan  to  meet   future   liabilities   and   make   such
                  recommendations  as needed to assure that the funds  available
                  are adequate to that purpose;

         (l)      To  periodically  review  the  investment  performance  of the
                  Trustee, Insurance Company and investment manager;

         (m)      To supervise at least one audit of the Trust Fund for each
                  Plan Year and review each Trustee's annual accounting;


                                      -35-

<PAGE>



         (n)      To prepare or collect  such  financial  or related data as the
                  Committee may request in connection  with the formulation of a
                  funding policy for the Plan or any Plan  description,  report,
                  other material or summary thereof.

         The duties and responsibilities  hereby allocated to the members of the
Board of Directors shall be limited solely to those duties and  responsibilities
expressly  provided in the Plan and Trust  Agreement and the additional  duty of
reviewing annually the annual report of the Trustee and the activities  relating
to the Plan of the Trustee,  any investment  manager,  Insurance Company and the
Committee.  The  Board of  Directors  may by  written  instrument,  delegate  to
designated   persons   the   authority   to  carry   out  all  or  part  of  its
responsibilities.

         Section 6.05.  Expenses.  The reasonable  expenses of the Committee and
other reasonable  expenses incident to the operation of the Plan,  including the
expenses for any bond required  under section 412 of ERISA and the  compensation
of persons employed pursuant to Section 6.04(f),  shall be paid out of the Trust
Fund,  but the Employer in its  discretion  may elect at any time to pay part or
all thereof  directly,  and any such election  shall not bind the Employer as to
its right to elect,  with  respect  to the same or other  expenses  at any other
time, to have such compensation paid from the Fund.

         Section 6.06. Funding Policy. The Committee, with the assistance of the
Plan's actuary,  shall adopt, review and, if necessary,  revise a funding policy
and method consistent with the objectives of the Plan.

         Section 6.07.  Liability  of  Committee  Members.   No  member  of  the
Committee  will  be  liable for any action or failure to act with respect to the
Plan except as expressly provided by ERISA.

         Section 6.08.  Reliance on Reports and  Certificates;  Actions Taken in
Good  Faith.  The  members of the  Committee,  the  Company  and its  directors,
officers and employees shall be entitled to rely  conclusively  upon all tables,
valuations,  certifications,  opinions and reports which may be furnished by any
actuary,  accountant,  controller,  counsel or other  person who is  employed or
engaged for such purposes.  In addition,  such parties shall be entitled to rely
upon information furnished by a Member or Beneficiary,  the Company or the legal
counsel for the Company.

         The members of the Committee,  the Company and its directors,  officers
and  employees  shall be fully  protected  with  respect to any action  taken or
suffered by them in good faith and in the absence of gross negligence or willful
misconduct in reliance upon any such tables, valuations,  certificates,  reports
or other advice of any such actuary,  accountant,  Trustee or investment manager
or upon any such information  furnished by a Member or Beneficiary,  the Company
or legal counsel for the Company.


                                      -36-

<PAGE>



         Section 6.09.  Member's  Own  Benefits.  No member of the Committee may
act,  vote  or  otherwise  influence  a  decision  of the Committee specifically
relating to his own benefits under the Plan.






End of Article 6

                                      -37-

<PAGE>



                                    ARTICLE 7

                        MEMBER ADMINISTRATIVE PROVISIONS


         Section 7.01.  Personal Data to Committee.  Each Member and Beneficiary
shall furnish to the Committee  evidence,  data, or information as the Committee
considers  necessary or desirable for the purpose of administering the Plan. The
provisions  of this Plan are  effective  for the benefit of each Member upon the
condition  precedent  that each Member will  promptly  furnish full,  true,  and
complete  evidence,  data,  and  information  when  requested  to do  so by  the
Committee,  provided the Committee shall advise each Member of the effect of his
failure to comply with its request.

         Section  7.02.   Address  for   Notification.   Each  Member  and  each
Beneficiary of a deceased Member shall file with the Committee,  in writing, his
post office address, and each subsequent change of such post office address. Any
payment or distribution  made hereunder,  and any  communication  addressed to a
Member or his Beneficiary,  at the last address filed with the Committee,  or if
no such address has been filed, then at the last address shown by the records of
the  Employer,  shall be  deemed  to have been  delivered  to the  Member or his
Beneficiary on the date that such  distribution or communication is deposited in
the United States Mail, postage prepaid, to be forwarded to such address.

         Section  7.03.  Inalienability  of  Benefits.  Except as  provided in a
Qualified  Domestic  Relations  Order or as permitted by the Code and ERISA,  no
benefit payment under the Plan, and no right or claim thereto,  shall be subject
in any manner to anticipation,  alienation, sale, transfer,  assignment, pledge,
encumbrance or charge and any attempt to do so shall be void and have no effect.
Likewise,  no benefit  payment under the Plan, or right or claim thereto,  be in
any way liable for or subject to the debts, contracts, liabilities,  engagements
or torts of any individual or institution  entitled to or possessing  such right
or claim.  If any Member,  Beneficiary  or other person  entitled to receive any
benefit  hereunder  is  adjudicated  bankrupt  or if  any  attempt  is  made  to
anticipate,  alienate,  sell, transfer,  assign, pledge,  encumber or charge any
such benefit or claim or right thereto,  except as specifically  provided in the
Plan, then the Employer shall not honor any such attempt and any such benefit or
any remaining  portion thereof shall be paid or held, after such adjudication or
attempt,  for the benefit of the Member or Beneficiary,  as the case may be, and
paid in accordance with the provisions of the Plan.

         Section 7.04.  Litigation  Against the Trust. If any legal action filed
against the Trustee,  the Board of Directors,  the Employer,  the Committee,  or
against any member or members of the Committee or Board of  Directors,  by or on
behalf of any Member or Beneficiary,  results  adversely to the Member or to the
Beneficiary,  the Trustee shall reimburse  itself,  the Board of Directors,  the
Employer, the Committee,  and any member or members of the Committee or Board of
Directors,  for all costs and fees  expended  by it or them by  surcharging  all
costs and fees against the sums  payable  under the Plan to the Member or to the
Beneficiary, but only to the

                                      -38-

<PAGE>



extent a court of competent jurisdiction specifically authorizes and directs any
such surcharges and then only to the extent  permitted under Section  401(a)(13)
of the Code.

         Section  7.05.  Information  Available.  Any  Member in the Plan or any
Beneficiary  may examine copies of the Plan's latest annual  report,  this Plan,
the Trust Agreement,  and any contract, or other instrument under which the Plan
was  established  or is  operated.  The Company  will  maintain all of the items
listed in this Section 7.05 for examination during reasonable  business hours in
its office,  or in such other place or places as it may  designate  from time to
time in order to  comply  with the  regulations  issued  under  ERISA.  Upon the
written request of a Member or Beneficiary, the Company shall furnish him with a
copy of any item listed in this Section 7.05.  The Company may make a reasonable
charge to the person requesting the copy so furnished.

         Section 7.06. Beneficiary's Right to Information. A Beneficiary's right
to  (and  the  Company's  or  Trustee's  duty  to  provide  to the  Beneficiary)
information  or data  concerning the Plan shall not arise until he first becomes
entitled to receive a benefit under the Plan.

         Section 7.07.  Claims Procedure.

         (a) General.  Upon  termination  of  employment  (except in the case of
early  Retirement),  prior to or upon  becoming  entitled  to  receive a benefit
hereunder,  a Member or Beneficiary shall file a claim for such benefit with the
Committee  at  the  time  and  in  the  manner   prescribed  by  the  Committee.
Notwithstanding the immediately preceding sentence, the Committee may direct the
Trustee to commence  payment of a Member's or Beneficiary's  benefits  hereunder
without  requiring the filing of a claim therefor if the Committee has knowledge
of  such  Member's  or   Beneficiary's   whereabouts  and  sufficient  facts  to
substantiate his entitlement to a benefit.

         (b) Early Retirement  Pension. A Member who is eligible to apply for an
Early Early Retirement Pension under Section 4.02 and elects to do so shall file
an  application  therefore  with the  Committee  at the  time and in the  manner
prescribed by the Committee.

         Section 7.08. Claims for Benefits. Except as otherwise provided in this
Article 7, any claim  relating to benefits  under the Plan shall be submitted in
writing to the  Committee  in such  manner as it may  direct.  If the  Committee
determines  that any  applicant  is not  entitled  to receive all or part of the
benefits  claimed,  it will mail or deliver  written notice to such applicant of
(a) its determination and the reasons therefor,  with appropriate  references to
pertinent   Plan   provisions,   and  (b)  the   procedure  for  review  of  its
determination.  Such notice shall, if  appropriate,  also explain how a claimant
may perfect his claim and why submission of additional  information is necessary
to do so. Such notice shall be provided within ninety (90) days of submission of
a denied claim unless the Committee provides the claimant with notice in writing
before the end of such ninety (90) day period that special circumstances require
an  extension  of time (of no more  than a  single  additional  ninety  (90) day
period) for processing such claim,  together with a statement of the reasons for
such extension and an indication of the date on which

                                      -39-

<PAGE>



a decision on such claim is expected to be rendered,  in which case the decision
of the  Committee  shall  be  rendered  no later  than the end of such  extended
period.

         Section 7.09.  Appeal and Review. An applicant for benefits whose claim
is submitted  pursuant to Section  7.08 has been denied in whole or in part,  or
the duly authorized  representative  of such  applicant,  may within ninety (90)
days after receipt of written notice of such denial request a review thereof and
submit to the  Committee in writing such further  information  as will,  in such
person's  opinion,  establish the applicant's  right to such benefits.  If, upon
receipt of this further information, the Committee determines that the applicant
is not entitled to the benefits  claimed,  it will afford the applicant,  or his
duly authorized  representative,  a reasonable  opportunity to submit issues and
comments in writing and to review  pertinent Plan documents.  The Committee will
then render its final  decision with the specific  reasons  therefor  (including
references  to pertinent  Plan  provisions)  in writing and will  transmit  such
written decision to the applicant within sixty (60) days after the submission of
such  request for review  unless (i) the time for such  decision is postponed by
agreement,  or (ii) the Committee notifies the applicant in writing that special
circumstances  require an extension (for no more than a single  additional sixty
(60) day  period) of the period  for review of such  claims,  in which case such
decision  will be  transmitted  to the  applicant  no later than the end of such
extended period.

         Section 7.10.   Service of   Legal Process.  The Committee shall be the
agent of the Plan for the service of legal notice or process.

         Section 7.11. Place of Payment and Proof of Continued  Eligibility.  As
required  by  Section  7.02,  each  Member and  Beneficiary  shall file with the
Committee  from time to time in writing his post office  address and each change
of post  office  address.  Any  check  representing  payment  hereunder  and any
communication  addressed to a Member or  Beneficiary  at his last address  filed
with the  Committee,  or if no such  address  has been  filed,  then at his last
address as shown by the  records of the  Employer,  shall be deemed to have been
delivered  to such  person on the date on which such check or  communication  is
deposited in the United States mail.  If the  Committee,  for any reason,  is in
doubt as to whether  Pension  payments are being received by the person entitled
thereto, it shall, by registered mail addressed to the person concerned,  at his
address  last known to the  Committee,  notify such person that all unmailed and
future  Pension  payments  shall be  henceforth  withheld  until he provides the
Committee  with  evidence  of his  entitlement  to such  benefit  and his proper
mailing address.

         Section 7.12.  No Rights  Implied.  Nothing  contained in this Plan, or
with respect to the  establishment  of the Trust Fund,  or any  modification  or
amendment to the Plan or Trust Agreement,  or in the creation of any account, or
the payment of any benefit, shall give any Employee,  Member, or Beneficiary any
right to continued  employment  with an Employer or any legal or equitable right
against an Employer or any officer, director, or Employee of an

                                      -40-

<PAGE>



Employer,  or  against  the  Trustee,  or its  agents  or  employees,  except as
expressly provided by the Plan, the Trust Agreement, or ERISA.




End of Article 7

                                      -41-

<PAGE>



                                    ARTICLE 8

                                   TRUST FUND


         Section 8.01. Purpose and Establishment of Trust Fund. All of the funds
of the Plan shall be held by a Trustee or  Trustees or by an  Insurance  Company
appointed from time to time by the Board of Directors of Eljer Industries, Inc.,
in trust under a Trust  Agreement or in  accordance  with the  provisions  of an
insurance or annuity contract, adopted, or as amended, by the Board of Directors
of Eljer  Industries,  Inc.  for use in  providing  the benefits of the Plan and
paying its expenses not paid directly by the Employer.

         Section 8.02. Exclusive Benefit of Members. Subject to Sections 5.01(e)
and  10.03,  the Trust Fund and the  assets of the Plan  invested  in or through
insurance  contracts or policies  shall be used and applied  only in  accordance
with the provisions of the Plan to provide the benefits thereof,  and no part of
the corpus or income of the Trust Fund or such insurance  contracts or policies,
shall be used for or diverted to purposes other than exclusively  benefiting the
Members and their  Beneficiaries and with respect to expenses of administration.
Notwithstanding  the  preceding  sentence,  as  provided in Section  10.03,  the
Employer reserves the right to recover any residual amounts as may remain in the
Trust Fund, or remain under such  insurance  contracts or policies,  after their
termination  and the  satisfaction of all liabilities of the Plan arising out of
any variations between actual requirements and expected actuarial requirements.

         Section 8.03.  Benefits  Supported Only By the Trust Fund and Insurance
Contracts.  Any person  having any claim under the Plan shall look solely to the
assets of the Trust Fund and insurance contracts or policies in or through which
assets of the Plan have been invested for  satisfaction,  and no Employer  shall
have any  liability  to any  Member  or  Beneficiary  beyond  the  amount of its
contributions to the Plan.





End of Article 8

                                      -42-

<PAGE>



                                    ARTICLE 9

                               GENERAL PROVISIONS


         Section 9.01. No Rights of Employment.  The  establishment  of the Plan
shall not be construed as conferring any legal rights upon any employee or other
person for continuation of employment, nor shall it interfere with the rights of
the  Employer to discharge  any Employee and to treat him without  regard to the
effect which such treatment might have upon him as a Member of the Plan.

         Section 9.02.  Certain Pension  Reductions.  The Committee shall,  upon
direction  of the  Board of  Directors  uniformly  applicable  to all  Employees
similarly  situated,  deduct from any Pension  under the Plan all or part of any
amount paid or payable to or on account of any Member  under the  provisions  of
any  present  or  future  law,  pension  or  benefit  scheme  of  any  sovereign
government,   or  any  political   subdivision  thereof,  on  account  of  which
contributions  have been made or  premiums  or taxes paid by any  Employer  with
respect  thereto;  provided that  benefits  payable under Title II of the Social
Security Act are not to be used to reduce the benefits  otherwise provided under
this Plan,  except as  specifically  provided  in Article 4. Prior to making any
offset under this Section 9.02, the Employer  shall notify the Internal  Revenue
Service by  certified  mail that such  offset is to be made,  and no such offset
shall be made unless the  Internal  Revenue  Service  shall have  approved  said
offset.

         Section  9.03.  Payments  in the  Event of  Death,  Illness  and  Legal
Disability. In the event of the death of a Member or beneficiary not survived by
a person  designated  to receive any payment  then due, or in the event that the
Committee  shall  find that a Member or other  person  entitled  to a benefit is
unable to care for his  affairs  because of illness or accident or is a minor or
under other legal  incompetency,  the Committee may, in such event,  in its sole
discretion,  direct that any benefit  payment due him, be paid to his spouse,  a
child,  a parent or other blood  relative,  or to a person with whom he resides,
unless  claim  shall  have  been  made  therefor  by  a  duly  appointed   legal
representative.  Any payment made pursuant to the power herein  conferred on the
Committee shall operate as a complete  discharge of all obligations of the Plan,
the Employer,  the  Committee and the Trustee,  to the extent of the payments so
made.

         Section 9.04.  Certain Credited Service.

         (a) If any persons  become  employees  of the Employer as the result of
merger or  consolidation  or as the result of  acquisition of all or part of the
assets  or  business  of  another  company,  the  Board  of  Directors  may,  by
appropriate  resolution adopted prior to the date of such merger,  consolidation
or  acquisition,  exclude  all or a  specified  class  of  said  Employees  from
participation  in the Plan.  In the absence of such a  resolution,  the Board of
Directors shall  determine to what extent,  if any, credit and benefits shall be
granted for previous service with such other company.  The foregoing  actions of
the Board of Directors shall be subject to the

                                      -43-

<PAGE>



continued  qualification  of the trust for the Plan as tax-exempt under the Code
and shall be subject to Section 401(a)(4) of the Code.

         (b) If  any  company  is  now or  hereafter  becomes  a  subsidiary  or
associated  company of the Company,  the Board of Directors  may, in  accordance
with Section 401(a)(4) of the Code,  include the employees of such subsidiary or
associated company in the membership of the Plan upon appropriate action by such
company necessary to adopt the Plan. In such event, the Board of Directors shall
determine  to what  extent,  if any,  credit and  benefits  shall be granted for
previous service with such subsidiary or associated company,  but subject to the
continued  qualification of the trust for the Plan as tax-exempt under the Code.
Any such subsidiary or associated company may terminate its participation in the
Plan upon  appropriate  action by it.  The funds of the Plan held on  account of
Members in the employ of such company not yet retired,  after  provision in full
for all  Members  who have  retired  from the employ of such  company,  shall be
determined  by the Committee on the basis of actuarial  valuation,  and shall be
applied as  provided  in Article 10 in the  manner  there  provided  if the Plan
should be  terminated,  or shall be  segregated  by the Trustee or the Insurance
Company as a separate trust or fund, pursuant to certification to the Trustee or
the Insurance  Company by the Committee,  continuing the Plan as a separate Plan
for employees of such company under which the board of directors of such company
shall  succeed to all the powers  and  duties of the Board of  Directors  of the
Company, including the appointment of the members of the Committee.

         Section  9.05.  Merger or  Consolidation  of Plan.  The Plan may not be
merged or  consolidated  with,  nor may its assets or liabilities be transferred
to, any other plan unless each Member,  Spouse,  retired  Member or  Beneficiary
under the Plan would,  if the  resulting  plan were 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.

         Section 9.06. Merged Plan Pension.  The Company, by action of its Board
of  Directors,  may  authorize  the merger of any  retirement  plan (the "Merged
Plan") that is qualified under Section 401(a) of the Code and that is maintained
by an Affiliated Company with and into the Plan. Any such merger shall be deemed
to be an amendment and  restatement  of the Merged Plan in the form of the Plan;
provided,  however,  that  benefits of  participants  accrued in the Merged Plan
prior to the effective  date of the merger shall be protected  under the Plan to
the extent required  pursuant to Section 411(d)(6) of the Code. A participant in
the  Merged  Plan shall be  entitled  to a Pension  payable  from the Plan in an
amount equal to the benefit such  participant was entitled to under the terms of
the Merged Plan as of the  effective  date of the  merger,  plus any benefit the
participant may become entitled to under the Plan, if he is in a  classification
of employment  eligible to participate in the Plan. In connection  with a merger
described in this  Section  9.06,  the Company  shall attach an Appendix to this
Plan,  or take  such  other  action as it deems  appropriate,  to  identify  the
benefits and options of the Merged Plan protected under the Plan and shall cause
the Plan's  actuary to prepare a special  schedule of benefits,  as described in
Treasury  Regulation  Section  1.414(l)-1(f)(3),  or maintain data sufficient to
create  such  a  schedule,   as   described  in  Treasury   Regulation   Section
1.414(l)-1(i).

                                      -44-

<PAGE>




         Section 9.07.  Payments Only from Trust Fund.  All benefits of the Plan
shall be  payable  solely  from the Trust Fund and  neither  the  Employer,  the
Committee or the Trustee  shall have any  liability or  responsibility  therefor
except as expressly provided herein.

         Section 9.08. Unclaimed Benefits. Neither the Trustee nor the Committee
shall be obliged to search for, or ascertain the  whereabouts  of, any Member or
Beneficiary.  The  Committee,  by certified or registered  mail addressed to his
last known address of record with the  Committee or the  Employer,  shall notify
any Member or Beneficiary that he is entitled to a distribution under this Plan,
and the notice shall quote the relevant  provisions of this Section 9.08. If the
Member or Beneficiary  fails to claim his benefits or make his whereabouts known
in writing to the Committee within a reasonable period of time after the date of
notification,  the Committee shall notify the Social Security  Administration of
the Member's (or Beneficiary's) failure to claim the distribution to which he is
entitled.  The Committee  shall request the Social  Security  Administration  to
notify the Member (or  Beneficiary)  in  accordance  with the  procedures it has
established  for  such  purpose.  If the  Committee  or the  Trustee,  with  the
assistance  of the  Committee,  cannot make payment of any amount to a Member or
Beneficiary  within three years after such amount  becomes  payable  because the
identity or whereabouts of such Member or Beneficiary cannot be ascertained, the
Committee,  at the end of such  three-year  period  will  direct that all unpaid
amounts which would have been payable to such Member or  Beneficiary  be treated
as a  forfeiture  hereunder;  provided,  however,  that  if such  individual  is
subsequently located, benefits shall thereupon become payable in the same amount
as would  otherwise have been payable at the Normal  Retirement  Date or earlier
date of death of the Member.





End of Article 9

                                      -45-

<PAGE>



                                   ARTICLE 10

                            AMENDMENT OR TERMINATION


         Section 10.01.  Amendment and Duration of the Plan.

         (a)  Amendment  and  Termination  of the Plan.  The Company  expects to
continue the Plan  indefinitely  but it necessarily  reserves the right to amend
the  Plan,  in whole or in part,  at any time or from  time to time,  under  the
procedure  described in Section 10.02,  and to suspend or terminate the Plan, in
whole or in part, at any time, by action of the Board of Directors.

         (b) Limitation on Amendment and  Termination of the Plan. No amendment,
suspension  or  termination  of the Plan  otherwise  permitted  will deprive any
Member, Beneficiary or other person of his right to any benefits (in the case of
termination, to the extent such benefits are funded) to which any such person is
entitled  on  the  date  such  amendment,   suspension  or  termination  becomes
effective. In addition, no such action will operate to recapture for the Company
any part of the Trust Fund,  except as permitted  hereunder,  or,  except to the
extent necessary to meet the requirements of the Internal Revenue Service or any
other governmental authority.

         (c) Effect of  Termination.  If the Plan is completely  terminated,  no
further  contributions  will be  required  to be made  by the  Employer.  If the
Employer's  contributions  to the Plan are  suspended and the Plan is thereafter
completely terminated before the resumption of such contributions,  then, to the
extent permitted by Section 4044 of ERISA,  Section 10.3 shall be applied to all
Members  whose  employment  with the Employer  terminates  during the period for
which such  contributions  were  suspended as if the date of  termination of the
Plan had been the date on which such suspension of Employer contributions became
effective.

         (d) Vesting on Termination.  Notwithstanding any other provision of the
Plan to the contrary,  upon the date of full or partial  termination of the Plan
an affected  Member's  right to his  Pension  shall  become one hundred  percent
vested.  The value of such Pension  shall be  determined on the date the Pension
becomes fully vested.  The Committee shall interpret and administer this Section
10.1 in  accordance  with the intent and scope of the  regulations  issued under
Section 411(d)(3) of the Code.

         (e) Amendment to Vesting  Schedule.  Although the Company  reserves the
right to amend the vesting provisions of the Plan at any time, the Company shall
not amend the vesting  provisions  of Section  4.03 (and no  amendment  shall be
effective) if the amendment  would reduce the vested  percentage of any Member's
Pension  (determined  as of the  later  of  the  date  the  Company  adopts  the
amendment,  or the date the amendment  becomes  effective) to a percentage  less
than the  vested  percentage  computed  under  the Plan  without  regard  to the
amendment.


                                      -46-

<PAGE>



         In the event the  vesting  provisions  of the Plan are  amended  or any
other amendment to the Plan is adopted which directly or indirectly  affects the
computation of the vested percentage of a Member's  Pension,  the vested Pension
of any Member who has  completed  at least three (3) years of  Credited  Service
shall be computed under the vesting  schedule,  original or amended,  which will
result in the greatest vested percentage being credited to the affected Member.

         Section 10.02. Procedure for Amendment. Any amendment which is required
to be  made  to the  Plan  by the  Code  or  ERISA,  or by  any  regulations  or
interpretations  issued  by the  Department  of  Labor or the  Internal  Revenue
Service  with  respect  to the  requirements  of  ERISA,  as well  as all  other
amendments to the Plan, shall be made by action of the Board of Directors, or by
such person or persons,  including the Committee,  as may be designated,  by the
Board of Directors to exercise the authority of the Company to amend the Plan.

         Section  10.03.  Termination of the Plan. In the event of a complete or
partial  termination  of the Plan by the Company which affects the Trust Fund or
any right to any benefits  payable from the Trust Fund,  the assets of the Trust
Fund will be allocated,  subject to provision for expense of  administration  of
liquidation,  in the manner  required  by  Section  4044 of ERISA,  as  modified
pursuant  to  Treasury  Regulation  Section  1.414(l)-1(f)  following  a  merger
described  in Section  9.06.  To the extent  funded,  the rights of all  Members
affected  thereby to benefits payable from the Trust Fund accrued as of the date
of termination will be fully vested and  nonforfeitable.  Any residual assets of
the Trust Fund attributable to contributions of the Employer remaining after the
above  allocation will be distributed to the Company provided all liabilities of
the Trust Fund to all Members, their Beneficiaries and other persons entitled to
benefits payable from the Trust Fund under the Plan have been satisfied.

         Section 10.04. Corporate Transactions. The Plan shall not automatically
be terminated by the Employer's  acquisition by or merger into any other company
or as a  result  of a  similar  corporate  transaction,  but the  Plan  shall be
continued  after such  transaction  provided  the  successor  company  agrees to
continue the Plan. All rights to amend,  modify,  suspend, or terminate the Plan
shall be transferred to the successor  company,  effective as of the date of the
transaction.

         Section  10.05.  Certain   Restrictions  on  Distributions.   Upon  the
termination of the Plan,  the annual  Pension  payments to a Member who is among
the twenty-five (25) highest highly compensated employees (as defined in Section
414(q) of the Code) and the twenty-five  (25) highest former highly  compensated
employees  shall be  restricted to an amount equal to the payments that would be
made on behalf of the Member under a single life annuity that is the  Equivalent
Actuarial  Value  of  the  Member's   Pension  under  the  Plan.  The  foregoing
restrictions  will not apply,  however,  if one of the following  conditions are
satisfied:

         (a) After payment to a Member  described in the preceding  paragraph of
all of his  benefits  under the Plan,  the  value of the Plan  assets  equals or
exceeds  110% of the  value  of  current  liabilities,  as  defined  in  Section
412(l)(7) of the Code, or


                                      -47-

<PAGE>



         (b)      The value  of  "benefits"  for  a  Member  described  in   the
preceding paragraph is less than 1% of the value of current liabilities, or

         (c) The value of benefits payable to the Member under the Plan does not
exceed the amount  described in Section  411(a)(11)(A) of the Code regarding the
restrictions on mandatory lump sum distributions of less than $3,500.

         The term  "benefits"  for purposes of this  Section  10.5  includes any
periodic income, any withdrawal values payable to a living Member, and any death
benefits not provided for by insurance on the Member's life.

         Notwithstanding the foregoing provisions of this Section 10.5, upon the
termination of the Plan the Pensions payable to highly compensated employees (as
defined in Section  414(q) of the Code)  shall be limited to an amount  which is
nondiscriminatory within the meaning of Section 401(a)(4) of the Code.





End of Article 10

                                      -48-

<PAGE>



                                   ARTICLE 11

                              TOP HEAVY PROVISIONS


         Section 11.01. Top Heavy Rules Applied.  Notwithstanding any provisions
of this Plan to the contrary,  if during any Plan Year,  the Plan is a Top Heavy
Plan, the provisions of this Article 11 shall apply.

         Section 11.02. Minimum Benefits. During any Plan Year in which the Plan
is a Top Heavy Plan the Pension of each Member who is a Non-Key  Employee,  when
expressed as an annual retirement benefit, shall not be less than the lesser of:

         (a) 2% multiplied by the Member's years of Credited Service  (excluding
any such year of  Credited  Service  ending in a plan year  under the Prior Plan
beginning  before  January 1, 1984 and any year of Credited  Service that begins
after the  close of the last Plan Year in which the Plan was a Top Heavy  Plan);
or

         (b) 20% of the  Member's  average  Annual  Compensation  (as defined in
Section  4.13(h)(iii))  during the period of five  consecutive Plan Years during
which the Member had the greatest aggregate Annual Compensation.

         For the purposes of this Section 11.02, an annual retirement benefit is
a  benefit  payable  annually  in the form of a  single  life  annuity  (with no
ancillary benefits) beginning at Normal Retirement Age. An Employee who is not a
Key Employee may not fail to accrue a minimum  benefit  under this Section 11.02
because either (i) such Employee is otherwise  excluded from  participation  (or
accrues no benefit)  merely because the Employee's  Annual  Compensation is less
than  a  stated  amount  or  (ii)  the  Employee  is  otherwise   excluded  from
participation  (or  accrued  no  benefit)  merely  because  of a failure to make
mandatory Employee contributions.

         In addition,  notwithstanding the preceding  provisions of this Section
11.02,  the following rules shall apply for purposes of determining  whether the
minimum  benefit  requirements  of this Section 11.02 have been satisfied in the
event that during a Plan Year the Employer maintains two or more qualified plans
(within the meaning of Section 1.401-0(b) of the Treasury  Regulations) that are
Top Heavy  Plans or Super  Top Heavy  Plans  for a Plan  Year.  If the  Employer
maintains  during a Plan Year two or more  defined  benefit  plans  (within  the
meaning of Section 414(j) of the Code),  the minimum  benefits  required by this
Section  11.02  on  behalf  of a  Member  who  is  not a Key  Employee  and  who
participates  in both this Plan and such  other  plans  shall,  unless  provided
otherwise  in such other plans,  be provided  under this Plan to the extent this
Plan provides for a benefit accrual sufficient to satisfy such minimum, and only
to the  extent  that such  minimum  is not  provided  under  this Plan shall any
portion of such minimum benefits be provided under such other plans.


                                      -49-

<PAGE>



         If during a Plan Year,  the Employer  maintains this Plan and a defined
contribution  plan  (within  the  meaning of  Section  414(i) of the Code) and a
Member who is not a Key  Employee  participates  in both of such plans,  then if
such Member is entitled to accrue a benefit under this Plan with respect to such
Plan Year,  and such Member has  accrued a benefit  equal to or in excess of two
percent (2%)  multiplied by his number of years of Credited  Service  (excluding
years of service accrued during Plan Years, if any,  commencing prior to January
1,  1984,  and Plan  Years  during  which  the Plan  was not a Top  Heavy  Plan)
multiplied by the Member's  average Annual  Compensation  (as defined in Section
4.13(h)(iii))  during the five  consecutive  year period during which the Member
had the greatest aggregate Annual  Compensation from the Employer,  the Employer
shall not be  required  to  provide  for such  Member  under such other plan the
minimum  benefit  otherwise  required  under  Section  416 of the Code,  and for
purposes of determining  whether the minimum benefit  provisions of this Section
11.02 have been satisfied,  the minimum benefit accrual under this Plan shall be
offset by the  benefits  provided  under  such  other plan for such Plan Year as
provided in Section 1.416-1, M-12, of the Treasury Regulations.

         If for a Plan Year this Plan is a Top Heavy  Plan,  but not a Super Top
Heavy Plan,  and the Employer  makes  contributions  on behalf of a Member under
both this Plan and a defined  contribution  plan  (within the meaning of Section
414(i) of the Code) and the Employer  wishes to use a factor of 1.25 rather than
1.0 as a limitation on the sum of the Defined Contribution  Fraction (within the
meaning of Section  4.13(h)(iv))  and the Defined Benefit  Fraction  (within the
meaning of Section 4.13(h)(v)) for the Limitation Year, then the defined benefit
plan  minimum  benefit  accrual  specified  above  shall  be  increased  by  one
percentage  point (up to a maximum of ten  percentage  points)  for each year of
Credited Service within which a Plan Year during which this Plan was a Top Heavy
Plan or Super Top  Heavy  Plan  ended,  provided  that no such year of  Credited
Service  completed  under the Prior Plan during a plan year  beginning  prior to
January 1, 1984,  shall be counted for such  purpose.  The defined  contribution
minimum for such Limitation  Year shall be increased to 7-1/2% of  compensation.
Nothing  in  this  Section  11.02  shall   prohibit  the  Employer  from  making
contributions   in  excess  of  the  minimums   stated   herein   provided  such
contributions  are  otherwise in accordance  with the  provisions of the Plan or
other plan pursuant to which they are made.

         Section 11.03.  Adjustment to Limitation on Benefits.

         (a) Super Top Heavy  Plan  Years.  If during a Plan Year this Plan is a
Super Top Heavy Plan and a Member  also  participates  in one or more  qualified
defined contribution plans (as defined in Section 414(i) of the Code) maintained
by the  Employer  (as  defined in Section  4.13(h)(ii)),  Section  4.13 shall be
applied by  substituting  "1" for "1.25" each place "1.25" appears  therein.  In
addition,  the transition  rule of Section  415(e)(6)(B)(i)  shall be applied to
Section 11.02, if applicable, by substituting "$41,500" for "$51,875".

         (b) Top Heavy Plan Years. In addition, the above limitation shall apply
to this Plan in any  Limitation  Year that this Plan is a Top Heavy  Plan but is
not a Super Top Heavy  Plan and the  accrued  benefit  of each  Member  who is a
non-Key Employee,  when expressed as an annual retirement  benefit, is less than
3% multiplied by the number of years of Credited Service with

                                      -50-

<PAGE>



the Employer or 20% plus one percentage  point for each year for which this Plan
was taken into account  under  Section  416(h) of the Code (but not by more than
ten percentage  points) multiplied by the Member's average  compensation  during
the period of five  consecutive  years  during which the Member had the greatest
aggregate compensation from the Employer. Years of Credited Service for purposes
of the  immediately  preceding  sentence  shall not include any year of Credited
Service under the Prior Plan ending in a plan year  beginning  before January 1,
1984,  and shall not include any year of Credited  Service that begins after the
close of the last year in which the Plan was a Top Heavy Plan.  For the purposes
of this  Section  11.03,  an annual  retirement  benefit  is a  benefit  payable
annually  in the form of a single  life  annuity  (with no  ancillary  benefits)
beginning at Normal Retirement Age.

         (c) Special  Rule.  Notwithstanding  the  foregoing  provisions of this
Section  11.03,  if for any Plan Year the Plan is a Top Heavy  Plan or Super Top
Heavy  Plan,  the sum of the  Defined  Benefit  Fraction  (within the meaning of
Section 4.13(h)(v)) and the Defined Contribution Fraction (within the meaning of
Section  4.13(h)(iv))  for a Limitation  Year may in the case of a Member exceed
1.0 (but not 1.25) if, but only if,  there are no further  benefit  accruals for
that  individual  under any defined  benefit plan (within the meaning of Section
414(j)  of  the  Code)  maintained  by  the  Employer  (as  defined  in  Section
4.13(h)(ii))  and no further  annual  additions  (within  the meaning of Section
415(c)(2) of the Code) for that individual under any defined  contribution  plan
(within the meaning of Section  414(i) of the Code)  maintained  by the Employer
(as defined in Section  4.13(h)(ii))  until the sum of such fractions  satisfies
the  rules  of  Section  415(e)  of the  Code  using  the 1.0  factor  for  that
individual.

         Section  11.04.  Vesting  Schedule.  Notwithstanding  the provisions of
Section 4.03,  beginning with the first Plan Year  beginning  after December 31,
1983 in which the Plan is a Top Heavy Plan,  the following  provisions  shall be
applicable in  determining  the  nonforfeitable  interest in a Member's  Pension
under Section 4.03 of the Plan:

         (a) Except as provided in Section  11.03(b)  below,  each Member  whose
employment with the Employer  terminates  before his Normal Retirement Age shall
be  entitled  (as a vested  interest)  to receive a  percentage  of his  Pension
determined in accordance with the following schedule:

<TABLE>
<CAPTION>
                                Years of
                           Credited Service                                     Vested Interest
                           ----------------                                     ---------------
                           <S>                                                  <C>
                           Less than 2                                                    0%
                           2 but less than 3                                             20%
                           3 but less than 4                                             40%
                           4 but less than 5                                             60%
                           5 or more                                                    100%
</TABLE>

Notwithstanding any of the foregoing, if during any prior Plan Year the Plan was
a Top Heavy  Plan and in any  subsequent  Plan Year the Plan  ceases to be a Top
Heavy  Plan,  the  rights  of a Member  who had  performed  at least one hour of
service for the Employer  during the period the Plan was a Top Heavy Plan in and
to his Pension shall not be less than his vested rights during

                                      -51-

<PAGE>



the period that the Plan was a Top Heavy Plan. Provided, further, any Member who
has three or more years of Credited  Service at the  beginning of a Plan Year in
which  the Plan  ceases to be a Top Heavy  Plan  shall  have the right to elect,
within a  reasonable  time of the  beginning  of the Plan Year in which the Plan
ceases to be a Top Heavy Plan, to have his nonforfeitable  percentage under this
Plan computed in accordance with the schedule  applicable to Plan Years in which
the Plan is a Top Heavy Plan.  Any election  made under this Section 11.04 shall
be made in the manner specified by Section 10.01(e) as if such change in vesting
schedule had been made by way of an amendment to the Plan.

         (b) The  schedule  in  Section  11.04(a)  above  shall not apply to the
Pension  of any  Member  who does  not  perform  an hour of  service  after  the
Determination  Date on which the Plan first  became a Top Heavy  Plan;  any such
Member's  vested  interest in his Pension  shall be  determined  by applying the
vesting requirements of Section 4.03 of the Plan as applicable to the Plan prior
to the Determination Date on which the Plan first became a Top Heavy Plan.

         Section 11.05.  Additional Definitions.

         (a)  Aggregation   Employee  means  any  employee  of  the  Aggregation
Employer,  including any leased employees  (within the meaning of Section 414(n)
of  the  Code).  For  this  purpose,  an  individual  formerly  employed  by  an
Aggregation Single Employer shall be deemed an Aggregation Employee.

         (b) Aggregation Employer means the deemed single employer that includes
the Employer and results from the aggregation of employers that Sections 414(b),
414(c),  and 414(m) of the Code  require be  aggregated  and treated as a single
employer.

         (c) Aggregation Single Employer means an employer that Sections 414(b),
414(c), and 414(m) of the Code require be aggregated with the Employer and other
employers and treated as a single employer.

         (d)  Determination  Date means with respect to any plan year,  the last
day of the preceding  plan year,  except in the case of the first plan year of a
plan, in which event the  Determination  Date shall be the last day of such plan
year.  Whenever it is necessary to determine the value of accrued benefits as of
a given  Determination  Date, such value shall be determined as of the valuation
date  that  coincides  with  the  Determination  Date  or,  if  there is no such
valuation  date,  the most recent  valuation  date that is within a twelve-month
period ending on the Determination Date.

         (e) Key Employee means any Aggregation  Employee or former  Aggregation
Employee (including any deceased employee) who is an Employee defined in Section
416(i)(1) of the Code.

         (f)  Non-key Employee means an Employee defined in Section 416(i)(2) of
the Code.


                                      -52-

<PAGE>



         (g) Permissive  Aggregation Group means a plan or a group of plans that
must be aggregated in the Required Aggregation Group and any other plan or plans
of  an  Aggregation  Employer  if  the  group  would  continue  to  satisfy  the
requirements of Sections 401(a)(4) and 410 of the Code with such additional plan
being  taken into  account.  Benefits  under such plans shall be  aggregated  by
adding  together  the  present  values  of  the  accrued  benefits   (determined
separately  for each  plan as of each  plan's  Determination  Date)  and  adding
together the results for each plan as of the Determination  Dates for such plans
that fall within the same calendar year.

         (h) Plan.  The term "plan" as used in this  Section  11.05 means a plan
that satisfies the requirements of Section 401(a) of the Code.

         (i)  Plan Year.  The term "plan year" shall mean the plan year of a
plan of an Aggregation Single Employer.

         (j) Required  Aggregation  Group shall mean a group of plans consisting
of  (i)  each  plan  of  the  Aggregation  Employer  in  which  a  Key  Employee
participates  during the plan year  containing the  Determination  Date for such
plan or has participated  during any of the immediately  preceding four (4) plan
years and (ii) any other plan of the  Aggregation  Employer  that enables any of
such plans to satisfy the requirements of Section  401(a)(4) or 410 of the Code.
Benefits  under such plans shall be  aggregated  by adding  together the present
values of the accrued benefits  (determined  separately for each plan as of each
plan's  Determination  Date) and adding together the results for each plan as of
the Determination Dates for such plans that fall within the same calendar year.

         (k) Top Heavy  Plan.  If for a given Plan Year the Plan is not a member
of a Required  Aggregation  Group (because there are no other plans that must be
aggregated with the Plan), the Plan shall be a Top Heavy Plan (herein so called)
if the sum (determined as of the Determination Date for the Plan) of the present
value of the cumulative Accrued Benefits  (determined in accordance with Section
1.416-1 of the Treasury  Regulations)  for Key Employees of the Employer exceeds
60% of a similar sum determined for all Employees.  If for a given Plan Year the
Plan is a member of a Required  Aggregation Group, the Plan shall be a Top Heavy
Plan for such Plan Year if, as of the  Plan's  Determination  Date for such Plan
Year, both the Required  Aggregation Group and the Permissive  Aggregation Group
that  include the Plan are Top Heavy  Groups  (herein so  called).  A "Top Heavy
Group" is any Required Aggregation Group or Permissive  Aggregation Group if the
sum (determined as of the  Determination  Dates for the plans in such group that
fall  within the same  calendar  year) of (i) the  present  value of the accrued
benefits  (determined  in  accordance  with  Section  1.416-1  of  the  Treasury
Regulations  based on the 1984 Unisex  Pension  Annuity  Mortality  Table and an
interest rate of five percent per annum,  compounded annually) for Key Employees
under all defined  benefit  plans  (within the meaning of Section  414(j) of the
Code)  included  in such  group and (ii) the  accrued  benefits  (determined  in
accordance  with Section  1.416-1 of the Treasury  Regulations) of Key Employees
under all defined  contribution  plans (within the meaning of Section  414(i) of
the Code) included in such group exceeds 60% of a similar sum determined for all
Aggregation  Employees.  For the purpose of determining the present value of the
accrued benefit of any employee, the present value shall

                                      -53-

<PAGE>



be increased, as required by Section 1.416-1 of the Treasury Regulations, by the
aggregate distributions made with respect to such Employee under the plan during
the five year period ending on the  Determination  Date for such plan, and under
any  terminated  plan  that,  if it had not been  terminated,  would  have  been
included  in the  Required  Aggregation  Group.  Notwithstanding  the  foregoing
provisions of this Section  11.05(j),  if any  individual  has not performed any
service for any employer  maintaining  the plan at any time during the five year
period ending on the  Determination  Date for such plan, any accrued benefit for
such  individual  (and the account of such  individual)  shall not be taken into
account.

         Except to the extent  provided in  Regulations  of the Secretary of the
Treasury,  any  rollover  contribution  (or similar  transfer)  initiated  by an
Employee  to a  plan  shall  not be  taken  into  account  with  respect  to the
transferee  plan for  purposes of  determining  whether such plan is a Top Heavy
Plan (or whether any  aggregation  group which includes such plan is a Top Heavy
Group).  If any  individual  is not a Key Employee with respect to a plan in the
aggregation group for any plan year, but such individual was a Key Employee with
respect to a plan in the aggregation  group for any prior plan year, any accrued
benefit for such  Employee and the account of such  employee  shall not be taken
into  consideration  in making a  determination  of the top heavy  status of the
plan. Each plan in a Top Heavy Group shall be deemed a Top Heavy Plan.

         (l) Super Top Heavy  Plan means a Top Heavy Plan if the plan would be a
Top Heavy  Plan if "90%"  were  substituted  for "60%"  each place it appears in
Section 11.05(j) above.





End of Article 11

                                      -54-

<PAGE>



                                   ARTICLE 12

                                  MISCELLANEOUS


         Section 12.01.  Execution of Receipts and Releases.  Any payment to any
Member, or to his legal  representative  or Beneficiary,  in accordance with the
provisions of the Plan,  shall to the extent thereof be in full  satisfaction of
all claims  hereunder  against the Plan and the Trust. The Committee may require
such Member, legal representative,  or Beneficiary,  as a condition precedent to
such payment, to execute a receipt and release therefor in such form as it shall
determine.

         Section  12.02.  No Guarantee of  Interests.  Neither the Trustee,  the
Committee, nor any Employer guarantees the Trust Fund from loss or depreciation.
The Employer  does not guarantee the payment of any money which may be or become
due to any person from the Trust  Fund.  The  liability  of the  Committee,  the
Trustee and the  Employer to make any payment  from the Trust Fund is limited to
the then  available  assets of the Trust Fund,  and any  insurance  contracts or
policies purchased to fund the Trust Fund pursuant to the terms of the Plan.

         Section  12.03.  Employer  Records.  Records  of an  Employer  as to an
Employee's or Member's  period of employment,  termination of employment and the
reason therefor,  leaves of absence,  re-employment,  and  Compensation  will be
conclusive on all persons, unless determined to be incorrect.

         Section 12.04. Interpretations and Adjustments. To the extent permitted
by law,  an  interpretation  of the Plan and a decision  on any matter  within a
Fiduciary's  discretion  made in good faith is final,  binding and conclusive on
all persons.  A misstatement or other mistake of fact shall be corrected when it
becomes known and the person  responsible  shall make such adjustment on account
thereof as he considers equitable and practicable.

         Section  12.05.  Errors  in  Payment:   Misstatements.  If  any  error,
including an error  resulting  from any statement  made or omitted to be made by
any Member, surviving Spouse or Beneficiary in any document or other information
required  to be  submitted  in  connection  with the Plan,  shall  result in the
payment to any  individual or entity of more or less than such person would have
received  but for such error,  the  Committee  may correct such error and adjust
payments  hereunder  as far as  possible,  in such  manner  that the  Equivalent
Actuarial Value of the benefit to which such person was correctly entitled shall
be paid.

         Section 12.06.  Uniform Rules.  Uniform rules shall be applied in
administering the Plan to all Members similarly situated.

         Section 12.07. Evidence. Evidence required of anyone under the Plan may
be given by certificate,  affidavit,  document,  or other  information which the
person  acting on it  considers  pertinent  and  reliable,  and signed,  made or
presented by the proper party or parties.

                                      -55-

<PAGE>




         Section  12.08.  Severability.  In the event any  provision of the Plan
shall be held to be  illegal  or  invalid  for any  reason,  the  illegality  or
invalidity  shall not affect the remaining  provisions of the Plan, but shall be
fully  severable  and the Plan shall be construed and enforced as if the illegal
or invalid provision had never been included herein.

         Section 12.09.  Notice.  Any notice  required to be given herein by the
Trustee,  an Employer,  or the Committee,  shall be deemed  delivered,  when (a)
personally delivered, or (b) placed in the United States mails, postage prepaid,
in an  envelope  addressed  to the last known  address of the person to whom the
notice is given.

         Section 12.10.  Waiver of Notice.  Any person entitled to notice under
the Plan may waive the notice.

         Section 12.11.  Successors.  The Plan shall be binding upon all persons
entitled  to  benefits  under  the  Plan,   their  respective  heirs  and  legal
representatives, and upon the Employer, its successors and assigns, and upon the
Trustee, the Committee, and their successors.

         Section  12.12.  Obligations  of the Company.  The  obligations  of the
Company  under  the Plan  shall be  limited  to those  obligations  specifically
assumed by it under the terms hereof, together with such additional obligations,
if any, as may be imposed upon the Company by applicable law.

         Section 12.13.   Headings.  The titles and headings of Articles and
Sections are included for convenience of reference only and are not to be
considered in construing the provisions hereof.

         Section 12.14. Governing Law. All questions arising with respect to the
provisions of this  Agreement  shall be determined by application of the laws of
the State of Texas, except to the extent preempted by ERISA.





End of Article 12

                                      -56-

<PAGE>


     IN WITNESS WHEREOF, Eljer Manufacturing, Inc. has executed this Plan on the
29th day of September, 1995, with this amendment and restatement of the Plan
effective as set forth herein.

                                        ELJER MANUFACTURING, INC.




                                        By /s/Brooks F. Sherman
                                          -----------------------------------
97521.4/4

                                      -57-