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                                                                   EXHIBIT 10.17














                           THE BROWN & SHARPE SAVINGS
                  AND RETIREMENT PLAN FOR MANAGEMENT EMPLOYEES
                (Amended and Restated Effective January 1, 1998)











<PAGE>






                                TABLE OF CONTENTS

ARTICLE                                                                  PAGE

Article I.   Introduction...............................................   1
               1.1   Plan and Trust intended to qualify.................   1
               1.2   Purpose of Plan ...................................   1
               1.3   Effective dates....................................   1

Article II.  Definitions ...............................................   2
               2.1   "A&T Transfer Account".............................   2
               2.2   "Affiliated Company"...............................   2
               2.3   "After-Tax Contribution Account"...................   2
               2.4   "Annual Addition"..................................   2
               2.5   "Beneficiary"......................................   2
               2.6   "Board of Directors"...............................   2
               2.7   "Break in Service".................................   2
               2.8   "Change of Control"................................   2
               2.9   "Class B Stock"....................................   3
               2.10  "Code".............................................   3
               2.11  "Committee"........................................   3
               2.12  "Company"..........................................   3
               2.13  "Computation Period"...............................   3
               2.14  "Current Market Value".............................   3
               2.15  "Effective Date"...................................   3
               2.16  "Elective Contribution"............................   3
               2.17  "Elective Contribution Account"....................   3
               2.18  "Eligibility Period"...............................   3
               2.19  "Eligible Employee"................................   4
               2.20  "Employee".........................................   4
               2.21  "Employer".........................................   4
               2.22  "Employment Commencement Date".....................   4
               2.23  "Entry Date".......................................   4
               2.24  "ERISA"............................................   4
               2.25  "Hour of Service"..................................   4
               2.26  "Matching Contribution"............................   5
               2.27  "Matching Contribution Account"....................   5
               2.28  "Maternity/Paternity Absence"......................   5
               2.29  "Participant"......................................   6
               2.30  "Participating Employer"...........................   6
               2.31  "Participating Employer Contribution"..............   6
               2.32  "Participating Employer Contribution Account"......   6

                                      -i-

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ARTICLE                                                                  PAGE

               2.34  "Plan".............................................   6
               2.35  "Plan Year" or "Limitation Year"...................   6
               2.36  "Prior Matching Contribution Account"..............   6
               2.37  "Prior Plan".......................................   7
               2.38  "Qualified Domestic Relations Order"...............   7
               2.39  "Retirement".......................................   7
               2.40  "Salary"...........................................   7
               2.41  "Share of the Trust Fund"..........................   8
               2.42  "Social Security Wage Base"........................   8
               2.43  "Stock"............................................   8
               2.44  "Total and Permanent Disability"...................   8
               2.45  "Transfer Account".................................   8
               2.46  "Trust"............................................   8
               2.47  "Trust Fund".......................................   8
               2.48  "Trustee"..........................................   8
               2.49  "Valuation Date"...................................   8
               2.50  "Vesting Period"...................................   8
               2.51  "Year of Service for Vesting"......................   9

Article III.  Administration............................................  10
               3.1   Plan Administrator.................................  10
               3.2   Powers of Committee................................  10
               3.3   Effect of Interpretation or Determination..........  11
               3.4   Examination of records.............................  11
               3.5   Nondiscriminatory exercise of authority............  11
               3.6   Reliance on tables, etc............................  11
               3.7   Named fiduciary....................................  11
               3.8   Claims and review procedures.......................  11
               3.9   Indemnification of Committee Members and
                       Assistants.......................................  12
               3.10  Costs of Administration............................  12

Article IV.   Participation.............................................  13
               4.1   Participation......................................  13
               4.2   Cessation of Participation.........................  13
               4.3   Breaks in Participation............................  13

Article V.    Contributions; Limitations................................  14
               5.1   Elective Contributions.............................  14
               5.2   Matching Contributions.............................  14
               5.3   Participating Employer Contributions...............  14
               5.4   Certain prospective adjustments in Elective
                       Contributions....................................  15

                                      -ii-

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ARTICLE                                                                  PAGE

               5.5   Excess contributions returned......................  16
               5.6   Certain limitations and adjustments pertaining to
                       Matching Contributions...........................  17
               5.7   General provisions and limitations.................  19
               5.8   Mistake of fact, etc...............................  19

Article VI.   Accounts..................................................  21
               6.1   Committee to maintain accounts.....................  21
               6.2   Adjustment of accounts.............................  21
               6.3   Treatment of forfeitures...........................  21
               6.4   Limitations........................................  21
               6.5   Reports to Participants............................  22

Article VII.  Trust Fund................................................  23
               7.1   Appointment of Trustee.............................  23
               7.2   Investment of accounts.............................  23
               7.3   Certain Investments in the Company Stock Fund......  23

Article VIII. Withdrawals...............................................  25
               8.1   Withdrawal of prior contribution...................  25
               8.2   In-Service Withdrawal from A&T Transfer Account....  25
               8.3   In-Service Withdrawal After Attaining Age 70 1/2...  25
               8.4   Hardship withdrawals...............................  25
               8.5   Order of withdrawals; adjustment...................  27

Article IX.   Loans to Participants.....................................  28
               9.1   Loans..............................................  28

Article X.    Vesting of Accounts.......................................  31
               10.1  Immediate vesting of certain Accounts..............  31
               10.2  Deferred Vesting of Participating Employer
                       Contribution Account and A&T Transfer Account....  31
               10.3  Special vesting rules..............................  32
               10.4  Changes in vesting schedule........................  32
               10.5  Forfeitures........................................  33
               10.6  Separate Account...................................  33

Article XI.   Distribution of Benefits..................................  35
               11.1  Method of making distributions.....................  35
               11.2  Direct rollovers...................................  35
               11.3  Time of distributions..............................  35


                                     -iii-

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ARTICLE                                                                  PAGE

               11.4  Latest payment of benefits.........................  36
               11.5  Distributions after a participant's death..........  37
               11.6  Notice to Trustee..................................  37
               11.7  Designation of Beneficiary.........................  38

Article XII.  Amendment and Termination ................................  40
               12.1  Amendment .........................................  40
               12.2  Binding Effect on other Participating Employers ...  40
               12.3  Termination or partial termination ................  40
               12.4  Distributions upon termination of the Plan ........  41
               12.5  Merger or consolidation of Plan; transfer
                     of Plan assets ....................................  41
               12.6  Successor employers ...............................  41
               12.7  Participating Employer ceasing to be affiliated ...  41

Article XIII.  Miscellaneous. ..........................................  43
               13.1  Voting of Stock ...................................  43
               13.2  Tender or Exchange Offers .........................  43
               13.3  Special account for rollovers, etc. ...............  45
               13.4  Certain Non-U.S. Employees ........................  45
               13.5  Limitation of rights ..............................  45
               13.6  Nonalienability of benefits .......................  46
               13.7  Payment under Qualified Domestic Relations Orders .  46
               13.8  Information between Committee and Trustee .........  46
               13.9  Governing Law .....................................  46
               13.10  Reclassification of Employees ....................  46
               13.11  Amounts transferred from other plans .............  47
               13.12  Veterans' Re-Employment and Benefits Rights ......  47

Article XIV.  Special Top Heavy Rules ..................................  48
               14.1  Special contribution for top heavy plan years .....  48
               14.2  Adjustment to limitations .........................  48
               14.3  Definitions .......................................  49



                                      -iv-

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Article I. Introduction.

     1.1 Plan and Trust intended to qualify. This Plan and its related Trust are
intended to qualify under sections 401(a) and 401(k) of the Internal Revenue
Code of 1986, as amended. Subject to the provisions of Sections 5.8 and 6.4, no
part of the corpus or income of the Trust forming part of the Plan will be used
for or diverted to purposes other than for the exclusive benefit of each
Participant and Beneficiary.

     1.2 Purpose of Plan. The purposes of the amended Plan are (1) to encourage
thrift on the part of eligible employees through a program of elective savings,
with certain additional Participating Employer contributions, (2) to operate
this Plan as a profit-sharing plan, with or without the availability of current
and accumulated earnings and profits, and (3) to provide benefits to eligible
employees in the event of retirement, death, disability and certain other
separations of service. The Plan is intended as an amendment, restatement and
continuation of the Brown & Sharpe Savings and Retirement Plan for Management
Employees as in effect prior to the Effective Date.

     1.3 Effective dates. The provisions of the restated Plan as set forth below
are effective as of the date or dates set forth at Section 2.15 below.


<PAGE>



Article II. Definitions.

     Wherever used herein, the following terms have the following meanings
unless a different meaning is clearly required by context:

     2.1 "A&T Transfer Account" means that portion, if any, of a Participant's
Share of the Trust Fund attributable to amounts transferred from the Brown &
Sharpe Aftermarket Services, Inc. (or its predecessor) Savings and Investment
Plan, and to the earnings thereon.

     2.2 "Affiliated Company" means (i) any corporation (other than the Company)
which is a member of a controlled group of corporations (as defined in section
414(b) of the Code) with the Company, (ii) any trade or business (other than the
Company), whether or not incorporated, which is under common control (as defined
in section 414(c) of the Code) with the Company, (iii) any trade or business
(other than the Company) which is a member of an affiliated service group (as
defined in section 414(m) of the Code) of which the Company is also a member; or
(iv) any other corporation, trade or business after the Board of Directors in
its discretion declares it to be an "Affiliated Company." Solely for the
purposes of Section 6.4, sections 414(b) and 414(c) of the Code will be
considered modified as provided in section 415(h) of the Code.

     2.3 "After-Tax Contribution Account" means that portion, if any, of a
Participant's Share of the Trust Fund attributable to the Participant's own,
after-tax contributions to the Prior Plan prior to January 1, 1983, and to the
earnings thereon.

     2.4 "Annual Addition" means, in the case of any Participant for any
Limitation Year, the sum of all amounts contributed for such year by a
Participating Employer and credited to the Participant's accounts under the
Plan, including amounts, if any, returned to the Participant pursuant to Section
5.5 or Section 5.6 and the amount of any subsidy provided under Section 7.3 in
respect of investments in the Company Stock Fund.

     2.5 "Beneficiary" means the person or persons entitled under Article XI to
receive benefits under the Plan upon the death of the Participant.

     2.6 "Board of Directors" means the Board of Directors of the Company. The
Board of Directors may allocate and delegate its fiduciary responsibilities, or
may designate others to carry out its fiduciary responsibilities, in accordance
with Section 405 of ERISA.

     2.7 "Break in Service" means a Vesting Period during which an Employee has
completed no more than 500 Hours of Service.

     2.8 "Change of Control" means a change in control of the Company as defined
in Exhibit A.


                                       -2-

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     2.9 "Class B Stock" means the Class B Common Stock of the Company.

     2.10 "Code" means the Internal Revenue Code of 1986, as amended from time
to time. Reference to any section or subsection of the Code includes reference
to any comparable or succeeding provisions of any legislation which amends,
supplements or replaces such section or subsection.

     2.11 "Committee" means the committee appointed to administer the Plan in
accordance with Article III.

     2.12 "Company" means Brown & Sharpe Manufacturing Company and any successor
to all or a major portion of its assets or business which assumes the
obligations of the Company.

     2.13 "Computation Period" means an Eligibility Period or a Vesting Period,
as the context requires.

     2.14 "Current Market Value," as applied to Stock, means the closing market
price on the New York Stock Exchange on the day of reference or, if the New York
Stock Exchange is closed on such day, the closing price on the next preceding
trading day on which shares of Stock are traded. As applied to Class B Stock,
the term "Current Market Value" shall mean the fair market value of such stock
as determined by the Committee.

     2.15 "Effective Date" means January 1, 1998, provided, however, that with
respect to Sections 2.40, 5.4, 5.5, 5.6 and 11.4, the Effective Date shall be
January 1, 1997, and that with respect to Section 13.12, the Effective Date
shall be October 13, 1996.

     2.16 "Elective Contribution" means any contribution made for the benefit of
a Participant under Section 5.1.

     2.17 "Elective Contribution Account" means that portion of a Participant's
Share of the Trust Fund attributable to Elective Contributions (including basic
and supplemental contributions under the Prior Plan) and to the earnings
thereon.

     2.18 "Eligibility Period" means, with respect to an Employee, any of (i)
the period of six (6) consecutive months beginning with the Employee's
Employment Commencement Date, or (ii) the period of six (6) consecutive months
beginning with the day following the end of the six-month period described in
(i), or (iii) the period of six (6) consecutive months beginning on any
anniversary (adjusted as necessary for leap years) of the first day of the
six-month period described in (i), or (iv) the period of six (6) consecutive
months beginning on any anniversary (adjusted as necessary for leap years) of
the first day of the six-month period described in (ii).


                                       -3-

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     2.19 "Eligible Employee" means any Employee actively employed by a
Participating Employer, other than (a) an Employee covered by a collective
bargaining agreement, unless such agreement provides for participation in the
Plan, and (b) an Employee who is classified by his or her Participating Employer
as a student intern or co-operative student. For the avoidance of doubt, no
individual shall be considered an Eligible Employee if the individual is
classified by a Participating Employer as an independent contractor (regardless
of any later reclassification, whether or not retroactive), or the individual
would be considered an Employee solely by reason of the leased-employee rules of
section 414(n) of the Code or the second sentence of Section 2.20 unless the
Employer for which he or she performs services is a Participating Employer, such
Participating Employer has elected in writing to treat such individual as an
Eligible Employee, and the Company has consented to such election.

     2.20 "Employee" means any individual employed by the Employer. Any person
who is a "leased employee," within the meaning of section 414(n) of the Code, of
an Employer shall be considered an Employee to the extent required under section
414(n) of the Code.

     2.21 "Employer" means the Company and all Affiliated Companies.

     2.22 "Employment Commencement Date" means the date on which the Employee
first performs an Hour of Service.

     2.23 "Entry Date" means the first day of each payroll period.

     2.24 "ERISA" means the Employee Retirement Income Security Act of 1974, as
from time to time amended, and any successor statute or statutes of similar
import.

     2.25 "Hour of Service" means, with respect to any Employee,

          (1) each hour for which the Employee is directly or indirectly paid,
     or entitled to payment, for the performance of duties for the Employer,
     each such hour to be credited to the Employee for the Computation Period in
     which the duties were performed;

          (2) each hour for which the Employee is directly or indirectly paid,
     or entitled to payment, by the Employer (including payments made or due
     from a trust fund or insurer to which the Employer contributes or pays
     premiums) on account of a period of time during which no duties are
     performed (irrespective of whether the employment relationship has
     terminated) due to vacation, holiday, illness, incapacity, disability,
     layoff, jury duty, military duty, or leave of absence, each such hour to be
     credited to the Employee for the Computation Period in which such period of
     time occurs;


                                       -4-

<PAGE>

          (3) each hour not credited under (1) or (2) above for which back pay,
     irrespective of mitigation of damages, has been either awarded or agreed to
     by the Employer, each such hour to be credited to the Employee for the
     Computation Period to which the award or agreement pertains; and

          (4) each hour not credited under (1), (2) or (3) above during a period
     of leave of absence (i) from the Employer for service in the armed forces
     of the United States if the Employee returns to work for the Employer as an
     Employee at a time when he or she has reemployment rights under federal
     law, or (ii) which, under the Family and Medical Leave Act of 1993, is
     required to be credited for purposes of the Plan.

Solely for purposes of determining whether an Employee has had a Break in
Service, an Employee will also be credited with up to 501 Hour of Service for
each noncompensated hour during a Maternity/Paternity Absence. The following
special rules apply to a Maternity/Paternity Absence: (i) any Hour of Service
credited under this paragraph with respect to such Absence shall be credited (a)
only in the Plan Year in which the Absence begins, if the Employee would be
prevented from incurring a Break in Service in such Year solely because of Hours
of Service credited hereunder for such Absence, or (b) in any other case in the
immediately following Plan Year; and (ii) no Hour of Service shall be credited
hereunder that is also credited under another provision of this Section, except
to the extent required by law.

     Hours of Service to be credited to an individual under (1), (2) and (3)
above will be calculated and credited pursuant to Section 2530.200(b)-3(e) of
the Department of Labor Regulations which is incorporated herein by reference,
on the basis of 10 Hours of Service for each day for which the individual would
be credited with at least one Hour of Service under those paragraphs above.
Hours of Service to be credited to an individual under (4) above or in respect
of a Maternity/Paternity Absence will be determined by the Committee with
reference to the individual's most recent normal work schedule; provided, that
in the case of a Maternity/Paternity Absence, if the Committee cannot so
determine the number of Hours to be credited, there shall instead be credited
eight (8) Hours of Service for each day of absence.

     2.26 "Matching Contribution" means any contribution made to the Trust under
Section 5.2.

     2.27 "Matching Contribution Account" means that portion of a Participant's
Share of the Trust Fund which is attributable to Matching Contributions and
earnings thereon.

     2.28 "Maternity/Paternity Absence" means a period of absence from the
Employer for any of the following reasons:

          (a) the Employee's pregnancy;

          (b) birth of the Employee's child;



                                       -5-

<PAGE>

          (c) placement of a child with the Employee in connection with adoption
     of such child by the Employee; or

          (d) the caring for such child for a period beginning immediately
     following such birth or placement;

provided, however, that in order for an Employee's absence to qualify as a
Maternity/Paternity Absence, the Employee must furnish the Committee with such
information as the Committee may reasonably require (in such form and at such
time as the Committee may reasonably require) to establish that the absence from
work is an absence described hereunder and the number of days for which the
absence lasted.

     2.29 "Participant" means each Eligible Employee who participates in the
Plan in accordance with Article IV.

     2.30 "Participating Employer" means (a) the Company, and (b) each
Affiliated Company which has adopted the Plan with the consent of the Company.

     2.31 "Participating Employer Contribution" means any contribution made to
the Trust under Section 5.3.

     2.32 "Participating Employer Contribution Account" means that portion of a
Participant's Share of the Trust Fund attributable to Participating Employer
Contributions, and to the earnings thereon.

     2.33 "Period of Service for Participation" means, with respect to an
Employee, an Eligibility Period during which the Employee is credited with 500
or more Hours of Service. For purposes of this Section 2.34: (i) service
performed for Digital Electronics Automation Company shall be credited as
service for the Employer, provided, however, that no individuals shall
participate in the Plan before April 1, 1995, solely on account of the
application of this clause; and (ii) service performed for Brown & Sharpe
Aftermarket Services, Inc. (or its predecessor) shall be credited as service for
the Employer, provided, however, that no individuals shall participate in the
Plan before July 21, 1997, solely on account of the application of this clause.

     2.34 "Plan" means The Brown & Sharpe Savings and Retirement Plan for
Management Employees as set forth herein, together with any and all amendments
and supplements hereto.

     2.35 "Plan Year" or "Limitation Year" means the calendar year.

     2.36 "Prior Matching Contribution Account" means that portion, if any, of a
Participant's Share of the Trust Fund which is attributable to Participating
Employer matching contributions under the Prior Plan as in effect prior to
January 1, 1987, and the earnings thereon.



                                       -6-

<PAGE>

     2.37 "Prior Plan" means the Brown & Sharpe Savings and Retirement Plan for
Management Employees as in effect prior to the Effective Date, and includes the
Brown & Sharpe Fund as in effect prior to January 1, 1987.

     2.38 "Qualified Domestic Relations Order" means any judgment, decree or
order (including approval of a property settlement agreement) which is
determined by the Committee to:

          (a) relate to the provision of child support, alimony payments, or
     marital property rights to a spouse, former spouse, child or other
     dependent of a Participant;

          (b) be made pursuant to a State domestic relations law (including a
     community property law);

          (c) constitute a "qualified domestic relations order" within the
     meaning of Code Section 414(p) and ERISA Section 206(d)(3)(B), as added by
     the Retirement Equity Act of 1984; and

          (d) be entered on or after January 1, 1985.

     In addition, any judgment, decree or order which is determined to have
satisfied the requirements of (a) and (b) above, and which is entered prior to
January 1, 1985 may be treated as a Qualified Domestic Relations Order by the
Committee. A judgment, decree or order which is determined to have satisfied the
requirements of (a) and (b) above shall not be deemed to fail to satisfy (c)
above merely because it requires payment to an alternate payee prior to the
Participant's "earliest retirement age" (as that term is defined in Section
414(p) of the Code and ERISA section 206(d)(3)).

     2.39 "Retirement" means (i) separation from service (for any reason other
than death or a Total and Permanent Disability) on or after attainment of age
65, or (ii) if the Participant has at least ten (10) Years of Service for
Vesting, separation from service (for any reason other than death or a Total and
Permanent Disability) on or after attainment of age 55.

     2.40 "Salary" means gross compensation received during the period at issue
for services rendered to a Participating Employer while a Participant, including
any amount that would have been received by the individual from a Participating
Employer while a Participant but for elections under Code sections 125 and
401(k), but excluding any amounts which are excludable from the definition of
compensation under Code section 415 and the Treasury regulations promulgated
thereunder. For purposes of determining the status of an individual as a highly
compensated Employee or a key employee, "Salary" shall include such amounts
determined pursuant to the preceding sentence, but with respect to services
rendered to the Company or any Affiliated Company and without regard to whether
the individual is a Participant hereunder. Notwithstanding the foregoing, for
purposes of Sections 5.4, 5.5 and 5.6, "Salary" means compensation determined
pursuant to a definition acceptable under Code section 414(s) and the Treasury
regulations thereunder, as determined by the Committee.



                                       -7-

<PAGE>

         Salary shall include only Salary (as defined in the preceding
paragraph) that is actually paid to the Participant during the applicable Plan
Year (or that would have been so paid absent reduction pursuant to a Salary
reduction agreement under Article V) and shall be limited for purposes of the
Plan to $160,000 (or such larger amount as the Secretary of the Treasury may
determine under Section 401(a)(17) of the Code) for any Plan Year.

     2.41 "Share of the Trust Fund" means, in the case of each Participant, that
portion of the Trust's assets which is allocated to the accounts maintained on
behalf of the Participant under the Plan.

     2.42 "Social Security Wage Base" means the contribution and benefit base
under Section 230 of the Social Security Act as from time to time in effect.

     2.43 "Stock" means the Class A Common Stock of the Company.

     2.44 "Total and Permanent Disability" means a mental or physical impairment
that entitles the individual to Social Security disability benefits, based on
such evidence as the Committee may require.

     2.45 "Transfer Account" means that portion of a Participant's Share of the
Trust Fund, if any, attributable to amounts transferred under the Prior Plan for
the benefit of the Participant to the Trust from the trust associated with the
Brown & Sharpe Manufacturing Company Retirement Plan for Management Employees in
connection with the termination of such plan.

     2.46 "Trust" means the trust or trusts established by the Company in
connection with the Plan under an agreement between the Company and the Trustee,
together with any and all amendments thereto.

     2.47 "Trust Fund" means the property held in trust by the Trustee for the
benefit of Participants, former Participants and their Beneficiaries.

     2.48 "Trustee" means the person or person appointed as Trustee pursuant to
Section 7.1, any successor trustee or trustees, and any additional trustee or
trustees.

     2.49 "Valuation Date" means each day during which trading occurs on the New
York Stock Exchange, or such other day as the Committee may designate.

     2.50 "Vesting Period" means the Plan Year.


                                       -8-

<PAGE>


     2.51 "Year of Service for Vesting" means, with respect to any Employee, a
Vesting Period during which the Employee has completed 1,000 or more Hours of
Service. Employees who participated in the Prior Plan as of January 1, 1983
shall be granted one (1) Year of Service for Vesting for the Plan Year ended
December 31, 1982 regardless of the number of Hours of Service completed in such
Plan Year. For purposes of this Section 2.51, service performed for Digital
Electronic Automation Company or Brown & Sharpe Aftermarket Services, Inc. (or
its predecessor) shall be credited as service for the Employer.

     All pronouns used in the Plan that are gender-specific are intended to
include the opposite gender, unless the context dictates otherwise.


                                       -9-

<PAGE>

Article III. Administration.

     3.1 Plan Administrator. For purposes of ERISA, the plan administrator shall
be the Company. To administer the Plan, the Company, through its Board of
Directors, has established a Committee, consisting of at least three individuals
appointed from time to time by the Board of Directors, to serve at its pleasure.
Participants may be appointed to serve as members of the Committee at the
discretion of the Board of Directors. Except as may be directed by the Company,
no person serving on the Committee will receive any compensation for such
services.

     The Committee may adopt by-laws and regulations for the conduct of its
affairs and may appoint one of its members chairman. It may also appoint a
secretary and one or more other agents, none of whom need be a member of the
Committee. Any determination of the Committee may be made by a majority of the
Committee at a meeting thereof or without a meeting by a resolution or
memorandum signed by all the members. The Committee may authorize one or more of
its members, officers or agents to sign on its behalf any instructions of the
Committee to the Trustee, and the Trustee will be fully protected in acting
thereon.

     Any individual serving on the Committee who is a Participant will not vote
or act on any matter relating solely to himself.

     3.2 Powers of Committee. The Committee will have full power to administer
the Plan in all of its details, subject, however, to the requirements of ERISA.
For this purpose the Committee's power will include, but will not be limited to,
the following authority:

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

          (b) to interpret the Plan, its interpretation thereof in good faith to
     be final and conclusive on any Employee, former Employee, Participant,
     former Participant and Beneficiary;

          (c) to decide all questions and ambiguities concerning the Plan and
     the eligibility of any person to participate in the Plan;

          (d) to compute the amount of benefits which will be payable to any
     Participant, former Participant or Beneficiary in accordance with the
     provisions of the Plan, and to determine the person or persons to whom such
     benefits will be paid;

          (e) to authorize the payment of benefits;



                                      -10-

<PAGE>

          (f) to keep such records and submit such filings, elections,
     applications, returns or other documents or forms as may be required under
     the Code and applicable regulations, or under state or local law and
     regulation;

          (g) to appoint such agents, counsel, accountants and consultants as
     may be required to assist in administering the Plan; and

          (h) by written instrument, to allocate and delegate its fiduciary
     responsibilities in accordance with Section 405 of ERISA.

     3.3 Effect of Interpretation or Determination. Any interpretation of the
Plan or other determination with respect to the Plan by the Committee shall be
final and conclusive on all persons in the absence of clear and convincing
evidence that the Committee acted arbitrarily or capriciously.

     3.4 Examination of records. The Committee will make available to each
Participant such of its records as pertain to him or her, for examination at
reasonable times during normal business hours.

     3.5 Nondiscriminatory exercise of authority. Whenever, in the
administration of the Plan, any discretionary action by the Committee is
required, the Committee shall exercise its authority in a nondiscriminatory
manner so that all persons similarly situated will receive substantially the
same treatment.

     3.6 Reliance on tables, etc. In administering the Plan, the Committee will
be entitled, to the extent permitted by law, to rely conclusively on all tables,
valuations, certificates, opinions and reports which are furnished by any
accountant, trustee, counsel or other expert who is employed or engaged by the
Committee.

     3.7 Named fiduciary. The Committee will be a "named fiduciary" for purposes
of Section 402(a)(1) of ERISA with authority to control and manage the operation
and administration of the Plan, and will be responsible for complying with all
of the reporting and disclosure requirements of Part 1 of Subtitle B of Title I
of ERISA.

     3.8 Claims and review procedures.

          (a) Claims procedure. If any person believes he or she is being denied
     any rights or benefits under the Plan, such person may file a claim in
     writing with the Committee. If any such claim is wholly or partially
     denied, the Committee will notify such person of its decision in writing.
     Such notification will contain (i) specific reasons for the denial, (ii)
     specific reference to pertinent plan provisions, (iii) a description of any
     additional material or information necessary for such person to perfect
     such claim and an explanation of why such material or information is
     necessary and (iv)

                                      -11-

<PAGE>

     information as to the steps to be taken if the person wishes to submit a
     request for review. Such notification will be given within 90 days after
     the claim is received by the Committee (or within 180 days, if special
     circumstances require an extension of time for processing the claim, and if
     written notice of such extension and circumstances is given to such person
     within the initial 90 day period). If such notification is not given within
     such period, the claim will be considered denied as of the last day of such
     period and such person may request a review of his or her claim.

          (b) Review procedure. Within 60 days after the date on which a person
     receives written notice of a denied claim (or, if applicable, within 60
     days after the date on which such denial is considered to have occurred)
     such person (or the person's duly authorized representative, may (i) file a
     written request with the Committee for a review of the denied claim and of
     pertinent documents and (ii) submit written issues and comments to the
     Committee. The Committee will notify such person of its decision in
     writing. Such notification will be written in a manner calculated to be
     understood by such person and will contain specific reasons for the
     decision as well as specific references to pertinent Plan provisions. The
     decision on review will be made within 60 days after the request for review
     is received by the Committee (or within 120 days, if special circumstances
     require an extension of time for processing the request, such as an
     election by the Committee to hold a hearing, and if written notice of such
     extension and circumstances is given to such person within the initial 60
     day period). If the decision on review is not made within such period, the
     claim will be considered denied.

     3.9 Indemnification of Committee Members and Assistants. The Company agrees
to indemnify and defend to the fullest extent of the law, any Employee or former
Employee (a) who in good faith serves or has served as a member of the
Committee, (b) who has been appointed to assist the Committee in administering
the Plan, or (c) to whom the Committee has delegated any of its duties or
responsibilities, against any liabilities, damages, costs and expenses including
attorneys' fees or liability, including any sum paid in settlement of any claim
with the approval of the Board of Directors, arising out of any act or omission
to act in connection with the Plan, excepting only willful misconduct.

     3.10 Costs of Administration. To the extent consistent with ERISA, all
reasonable costs and expenses incurred by the Committee or members thereof in
administering the Plan will be paid by the Plan, unless otherwise paid by the
Company. The compensation of all agents, counsel or other persons retained or
employed by the Committee shall be fixed by the Committee, subject to the
approval of the Board of Directors, and shall be paid in the same manner as
provided in the preceding sentence.


                                      -12-

<PAGE>

Article IV. Participation.

     4.1 Participation. Each Eligible Employee who was eligible to receive
Participating Employer Contributions under the Plan as in effect on the day
before the Effective Date will continue to be a Participant for purposes of
Section 5.3 on and after the Effective Date, subject to Section 4.2 below. Each
other Eligible Employee will become a Participant for purposes of Section 5.3 on
the first administratively practicable Entry Date coinciding with or next
following his or her completion of a Period of Service for Participation,
provided that he or she is an Eligible Employee on that Entry Date.

     For all other purposes of the Plan, an Eligible Employee will become a
Participant on the day on which he or she first performs an Hour of Service as
an Eligible Employee.

     4.2 Cessation of Participation. In general, a Participant will cease to be
a Participant as of the earlier of (a) the date on which he or she ceases to be
an Eligible Employee, and (b) the date on which the Plan terminates.
Notwithstanding the preceding sentence, an individual will continue to be
treated as a Participant for purposes of Articles VI, VIII, IX, X and XI until
such time as the Participant's Share of the Trust Fund has been completely
forfeited or distributed.

     4.3 Breaks in Participation. If a Participant ceases to be a Participant
pursuant to Section 4.2(a) and thereafter returns to the employ of a
Participating Employer, he or she will again become a Participant on the day (if
prior to the date described in Section 4.2(b)) on which he or she performs an
Hour of Service as an Eligible Employee.


                                      -13-

<PAGE>

Article V. Contributions; Limitations.

     5.1 Elective Contributions. For each pay period a Participating Employer
will contribute to the Trust for the benefit of each Participant employed by
such Participating Employer an amount equal to the amount by which the
Participant's Salary for such period was reduced pursuant to the Salary
reduction agreement then in effect between the Participant and the Participating
Employer. Contributions made pursuant to this Section 5.1 will be paid to the
Trustee as soon as the contributions can be reasonably segregated from the
general assets of the Participating Employer, but in no event later than the
fifteenth business day of the month following the month during which the Salary
to which such contributions relate is paid, and will be credited to the
Participant's Elective Contribution Account in accordance with the provisions of
Section 6.2.

     For purposes of the Plan, "Salary reduction agreement" means an agreement
between a Participant and a Participating Employer that satisfies the
requirements of this paragraph. Each such agreement shall provide for (i)
reduction of the Participant's Salary by a percentage elected by the Participant
subject to such limitations and procedures as the Committee may prescribe, and
(ii) an equivalent contribution to the Trust by the Participating Employer
pursuant to this Section 5.1. Each Salary reduction agreement will be effective
as of the first pay period commencing after the agreement is received by the
Committee, or as soon as administratively practicable thereafter. Each such
agreement will be (A) irrevocable while the agreement is in effect with respect
to Salary already earned, but (B) revocable as provided in the following
sentence with respect to Salary not yet earned. Subject to such limitations and
procedures as the Committee may prescribe, a Participant may elect to increase
or decrease the amount by which his or her Salary is to be reduced with respect
to future pay periods, or to suspend or revoke a Salary reduction agreement with
respect to future pay periods, by giving notice pursuant to procedures
established by the Committee.

     5.2 Matching Contributions. For each pay period, a Participant's
Participating Employer shall contribute to the Trust for the Participant's
benefit Matching Contributions in an amount equal to a percentage (which may be
zero) (the "matching percentage") of the aggregate Elective Contributions, if
any, made for the pay period for the Participant's benefit. For purposes of the
preceding sentence, Elective Contributions for any pay period in excess of 6% of
the Participant's Salary for such pay period shall be disregarded. Except as the
Board of Directors may otherwise determine, the matching percentage for any pay
period shall be twenty-five (25%) percent.

     5.3 Participating Employer Contributions. The Participating Employers shall
contribute to the Trust, in addition to amounts (if any) contributed under
Sections 5.1 and 5.2, their allocable share (as determined by the Committee) of
an amount equal to the sum of (a) four (4%) percent of each eligible
Participant's Salary for such Plan Year to the extent such Salary does not
exceed the Social Security Wage Base as in effect at the beginning of the Year,
plus (b) eight (8%) percent of each eligible Participant's Salary for such Plan
Year in excess

                                      -14-

<PAGE>

of the Social Security Wage Base. The Board of Directors may provide for any
Plan Year that the rates of contribution under (a) and (b) above shall be less
or more than four and eight percent, respectively, or that no contributions
shall be made under this Section 5.3; provided, that in each case the relative
rates of contribution under this Section 5.3 for any Plan Year must satisfy the
requirements of Section 401(l) of the Code. Contributions under this Section 5.3
shall be made as soon as practicable following the close of each Plan Year and
shall be allocated in accordance with Section 6.2.

     For purposes of this Section 5.3, a Participant shall be considered an
"eligible Participant" for any Plan Year if he or she (i) is a Participant on
the last day of the Plan Year or separated from service on account of
Retirement, death or Total and Permanent Disability during the Plan Year, and
(ii) is (or, in the case of death, Retirement or Total and Permanent Disability
during the Plan Year, was at the time of such death, Retirement or Total and
Permanent Disability) employed by a Participating Employer designated by the
Board of Directors as participating in the program of Participating Employer
Contributions described in this Section.

     Only those Participating Employers which are so designated shall make
Participating Employer Contributions in accordance with the provisions of this
Section.

     5.4  Certain prospective adjustments in Elective Contributions.

          (a) If at any time during a Plan Year the Committee determines that
     the nondiscrimination standard of Code section 401(k)(3), hereby
     incorporated by reference and described below, may not be satisfied (or
     that the limitations set forth in Section 6.4 may be exceeded) by reason of
     excessive Elective Contributions made or to be made for such Year, the
     Committee may decrease the rate of future contributions under Section 5.1
     for the Plan Year to the extent it deems such a decrease to be necessary or
     appropriate to satisfy or meet the aforesaid standard or limitations (or
     both). In the event of any such decrease in a contribution made for the
     benefit of any Participant, the amount by which the Participant's Salary is
     reduced will be appropriately adjusted.

          (b) The nondiscrimination standard referred to in the preceding
     paragraph will be satisfied for a Plan Year if either of the following
     tests is satisfied: (i) the average of the ratios of all Elective
     Contributions to Salary ("Deferral Ratios") for the Plan Year for all
     highly compensated Participants does not exceed the product of 1.25 times
     the average of the Deferral Ratios for the Plan Year (or the preceding Plan
     Year, as applicable) for all Participants other than highly compensated
     Participants

                                      -15-

<PAGE>

     (including those Participants who do not make an election under Section
     5.1), or (ii) the excess of the average of the Deferral Ratios for the Plan
     Year for all highly compensated Participants over the average of the
     Deferral Ratios for the Plan Year (or the preceding Plan Year, as
     applicable) for all Participants other than highly compensated Participants
     is not more than two percentage points, and the average of the Deferral
     Ratios for the Plan Year for all highly compensated Participants does not
     exceed the product of two times the average of the Deferral Ratios for the
     Plan Year (or the preceding Plan Year, as applicable) for all Participants
     other than highly compensated Participants.

          For purposes of these tests, "highly compensated Participants" for the
     Plan Year includes only those Participants who would be considered highly
     compensated employees under section 414(q) of the Code after applying the
     "top-paid group" (rule of Code section 414(q)(1)(B)(ii)).

          In the event that the Plan satisfies the requirements of Code sections
     401(k), 410(a)(4) or 401(b) only if aggregated with one or more other plans
     with the same plan year, or if one or more of the plans with the same plan
     year satisfy such Code sections only if aggregated with the Plan, then this
     Section 5.4 shall be applied by determining the deferral ratios as if as
     such plans were a single plan, provided that each such plan uses the same
     "current year" or "prior year" testing method. Also, if, in addition to
     this Plan, a highly compensated Participant for the Plan Year is eligible
     to have elective deferrals (including qualified matching contributions, to
     the extent treated as elective deferrals) allocated to his or her accounts
     under any other cash or deferred arrangement described in Code section
     401(k) and maintained by the Employer, the highly compensated Participant's
     Deferral Ratio shall be determined as if the additional elective deferrals,
     if any, are made under this Plan.

          (c) If the Committee determines pursuant to this Section 5.4 to
     decrease the rate of contributions under Section 5.1 in order to satisfy
     the nondiscrimination standard described above, any such decrease shall be
     affected by a method determined by the Committee in its discretion to
     satisfy the nondiscrimination requirement described in this Section 5.4.

          (d) If the Committee requires a decrease in the rate of Elective
     Contributions in order to meet the requirements of Section 6.4 with respect
     to any Participant, only those contributions which would have been made for
     the benefit of the Participant will be decreased.

          (e) The Plan shall be tested under the "current year" testing method
     for the Plan Year beginning January 1, 1997, and shall be tested under the
     "prior year" method for the Plan Year beginning January 1, 1998 and each
     year thereafter unless otherwise elected by the Committee consistent with
     procedures and guidance issued by the Internal Revenue Service.

     5.5 Excess contributions returned. If, notwithstanding the adjustments
described in Section 5.4, the Committee determines that the nondiscrimination
standard of Code section 401(k)(3), described in Section 5.4, will not be (or
has not been) satisfied for such Year,

                                      -16-

<PAGE>

     excess contributions (as hereinafter defined) for such Year shall be
     returned to Participants within 2 1/2 months after the close of the Plan
     Year, in accordance with and subject to the following rules:

          (a) No return of contributions pursuant to this Section shall be
     effected except in accordance with section 401(k)(8) of the Code.

          (b) The Committee shall determine the excess Elective Contribution
     attributable to each highly compensated Participant by (i) first, treating
     Elective Contributions made on behalf of all highly compensated
     Participants as having been reduced in the order of the Participants'
     respective Deferral Ratios, beginning with the largest such Ratio, until
     the Deferral Ratios for the highly compensated Participants (as so reduced)
     would satisfy the nondiscrimination standard of Section 5.4(b) above, and
     (ii) second, aggregating the excess contributions determined under clause
     (i). The Committee shall then cause an amount equal to the aggregate amount
     of such excess to be distributed to highly compensated Participants as
     follows: (A) first, highly compensated Participants shall be ranked in
     descending order based on the amounts of Elective Contributions that were
     contributed to the Plan for their benefit; and (B) second, there shall be
     distributed to the Participant with the highest dollar amount of Elective
     Contributions the amount required to cause that Participant's undistributed
     Elective Contributions to equal the dollar amount of the Elective
     Contributions for the benefit of the highly compensated Participant with
     the next highest dollar amount of Elective Contributions. These steps shall
     be repeated until the aggregate amount of Elective Contributions so
     distributed equals the aggregate amount of excess Elective Contributions
     determined under the first sentence of this Section 5.5(b). There shall be
     distributed together with any Elective Contributions that are returned
     under this subsection earnings attributable to such contributions, as
     determined by the Committee in a manner consistent with applicable
     regulations.

          (c) Elective Contributions for the benefit of a Participant which are
     returned as a result of this Section shall not be taken into account in
     determining the amount of Matching Contributions to be made for the
     Participant's benefit. To the extent Matching Contributions have already
     been made with respect to the Elective Contributions at the time the
     Elective Contributions are determined to be excess contributions, such
     Matching Contributions shall be distributed to the Participant at the same
     time the Elective Contributions are returned.

     5.6  Certain limitations and adjustments pertaining to Matching
          Contributions.

          (a) In general. Matching Contributions made under the Plan and any
     subsidy provided pursuant to Section 7.3 (together, "Matching Amounts") are
     subject to the limits of Code section 401(m), as more fully described
     below. The Plan provisions relating to the 401(m) limits are to be
     interpreted and applied in accordance with Code


                                      -17-

<PAGE>

     sections 401(m) and 401(a)(4), which are hereby incorporated by reference,
     and in such manner as to satisfy such other requirements relating to Code
     section 401(m) as may be prescribed by the Secretary of the Treasury from
     time to time.

          (b) Limits. In addition to the limitations of Section 5.7, Matching
     Amounts for any Plan Year shall be limited so that the nondiscrimination
     standard described in this subsection is satisfied. The nondiscrimination
     standard described in this subsection is satisfied if and only if

                    (i) either (A) the average of the ratios of all Matching
               Contributions to Salary (the "Contribution Ratios") for the Plan
               Year for all highly compensated Participants does not exceed 1.25
               times the average of the Contribution Ratios for the Plan Year
               (of the preceding Plan Year, as applicable) for all Participants
               other than highly compensated Participants, or (B) the excess of
               the average of the Contribution Ratios for the Plan Year for all
               highly compensated Participants over the average of the
               Contribution Ratios for the Plan Year (of the preceding Plan
               Year, as applicable) for all Participants other than highly
               compensated Participants is not more than two percentage points,
               and the average of the Contribution Ratios for the Plan Year for
               all highly compensated Participants does not exceed the product
               of two times the average of the Contribution Ratios for the Plan
               Year (of the preceding Plan Year, as applicable) for all
               Participants other than highly compensated Participants; and

                    (ii) after taking into account Elective Contributions made
               for the Plan Year for the benefit of highly compensated
               Participants, the so-called "multiple use" limitations of
               Treasury regulation section 1.401(m)-2 have not been exceeded.

     For purposes of these determinations, "highly compensated Participants" has
     the same meaning as in Section 5.4. Elective Contributions not applied to
     satisfy the Code section 401(k)(3) limits described in Section 5.4 above
     may be treated as Matching Amounts for purposes of the limitations
     described in this Section to the extent permitted by Treasury regulation
     section 1.401(m)-1(b)(5). In the event that the Plan satisfies the
     requirements of Code sections 401(k), 410(a)(4), or 410(b) only if
     aggregated with one or more other plans with the same plan year, or if one
     or more other plans with the same plan year satisfy such Code sections only
     if aggregated with this Plan, then this Section shall be applied by
     determining the ratios of Matching Amounts to Salary as if all such plans
     were a single plan, provided that each such plan uses the same "current
     year" or "prior year" method of testing described above. The Plan shall be
     tested under the "current year" testing method for the Plan Year beginning
     January 1, 1997, and shall be tested under the "prior year" method for the
     Plan Year beginning January 1, 1998 and each year thereafter unless
     otherwise elected by the Committee consistent with procedures and guidance
     issued by the Internal Revenue Service.


                                      -18-

<PAGE>



          (c) Adjustments; return. Notwithstanding Section 5.2 above, if the
     amount determined to be contributed to the Trust for any Plan Year as
     Matching Amounts would result in a failure to satisfy the limitations of
     paragraph (b) above, then the Matching Amounts to be contributed to the
     Trust for the benefit of highly compensated Participants shall be reduced
     in such manner and to such extent as the Committee determines to be
     necessary to satisfy such limitations. If, notwithstanding such
     precautions, Matching Amounts made to the Trust for a Plan Year exceed the
     limitations of paragraph (b) above, the excess of such contributions shall
     be determined and distributed as follows. First, the amount of excess shall
     be determined by treating Matching Amounts made for the benefit of highly
     compensated Participants as having been reduced in the order of their
     respective Contribution Ratios, beginning with the largest such ratio,
     until the Contribution Ratios for the highly compensated Participants (as
     so reduced) would satisfy the nondiscrimination standard of Section 5.6(b)
     above. Second, the amount of the excess contributions determined under the
     preceding sentence shall be aggregated. Third, the aggregate excess amount
     so determined shall be distributed by (i) ranking highly compensated
     Participants in descending order based on the amounts of Matching Amounts
     made for their benefit, and (ii) then distributing to the Participant with
     the highest dollar amount of such contributions the amount necessary to
     cause the undistributed portion of such contributions to equal the dollar
     amount of Matching Amounts for the benefit of the highly compensated
     Participant with the next highest amount of such contributions, and so
     forth until the entire aggregate excess amount of Matching Amounts has been
     distributed. Any distributions made pursuant to the preceding sentence
     shall consist first of Matching Contributions, then, to the extent
     necessary, any subsidy under Section 7.3, and only then any other
     contributions treated as Matching Amounts. There shall be distributed
     together with any amounts distributed under the preceding sentences
     earnings attributable to such amounts, as determined by the Committee in a
     manner consistent with applicable regulations. Any excess Matching Amounts
     distributed in accordance with this subsection shall nevertheless be
     treated as employer contributions for purposes of Code sections 401(a)(4),
     404, and 415.

     5.7 General provisions and limitations. In no event will the sum of a
Participating Employer's contributions under Sections 5.1, 5.2 and 5.3 for any
Plan Year (a) exceed the maximum amount which is permitted to be deducted for
federal income tax purposes, including amounts deductible under the carryover
provisions of the Code, or (b) be in an amount which would cause the Annual
Addition for any Participant to exceed the amount permitted under Section 6.4.
Contributions under the Plan are conditioned on their deductibility under
section 404 of the Code. In no event shall the sum of the Elective Contributions
made for the benefit of any Participant under Section 5.1 for any calendar year
exceed $10,000 (or such higher amount as may be in effect for such year under
section 402(g)(1) of the Code).

     5.8 Mistake of fact, etc. If a contribution to the Trust is,


                                      -19-

<PAGE>






          (a) made by reason of a good faith mistake of fact, or

          (b) believed in good faith to be deductible under section 404 of the
     Code, but the deduction is disallowed,

the Trustee shall, upon request by the Participating Employer making the
contribution, return the excess of the amount contributed over the amount, if
any, that would have been contributed had there not occurred a mistake of fact
or a mistake in determining the deduction. If the Trust has suffered a net loss
since the time of the excess contribution, the amount returned shall be reduced
by the portion of the net loss attributable to the excess contribution.

     If the excessive amount described in the preceding paragraph has been
credited to the accounts of Participants, the amount returned under this Section
5.8 shall be subtracted from each Participant's Share of the Trust Fund in
proportion to the portion of the excess amount allocated to the Participant.
However, if, as a result of distributions from the Trust, a Participant's Share
of the Trust Fund is less than the amount to be subtracted from it under the
preceding sentence, the amount returned shall be reduced by the difference, and
the accounts of other Participants shall not be further adjusted under the
preceding sentence. In no event shall the return of a contribution hereunder
cause any Participant's Share of the Trust Fund to be reduced to less than it
would have been had the mistaken or nondeductible amount not been contributed.

     No return of a contribution hereunder shall be made more than one year
after the mistaken payment of the contribution, or disallowance of the
deduction, as the case may be.



                                      -20-

<PAGE>

Article V1. Accounts.

     6.1 Committee to maintain accounts. The Committee will establish and
maintain on its books for each Participant an Elective Contribution Account, a
Participating Employer Contribution Account, a Matching Contribution Account and
such other accounts or sub-accounts as it deems necessary or desirable to
fulfill the provisions of the Plan (including, if applicable, an After-Tax
Contribution Account, a Prior Matching Contribution Account, and a Transfer
Account).

     6.2 Adjustment of accounts. The Committee will, with respect to the
accounts maintained under Section 6.1 for each Participant,

          (a) First, as of each Valuation Date, reduce the Participant's
     accounts by the aggregate amount of all distributions, forfeitures and
     withdrawals made with respect to the Participant since the preceding
     Valuation Date;

          (b) Second, as of each Valuation Date, adjust the balance of such
     accounts to reflect the current fair market value of the Trust assets;

          (c) Third, with respect to each pay period and as of the Valuation
     Date coinciding with or next following the date such contributions are
     deposited in the Trust, credit the Participant's Elective Contribution
     Account with the Elective Contributions (if any) and the Participant's
     Matching Contribution Account with the Matching Contributions (if any) made
     for the Participant's benefit for such pay period;

          (d) Fourth, as of the last Valuation Date in each Plan Year, credit
     the Participant's Participating Employer Contribution Account with the
     Participating Employer Contributions (if any) made in respect of such
     Participant for such Plan Year.

     6.3 Treatment of forfeitures. If a Participant forfeits any interest in the
Trust Fund as provided under Section 10.5 below, the amount of the forfeiture
will be applied toward Matching Contributions under Section 5.2 (if any) for the
Plan Year, with any excess applied toward Participating Employer Contributions
for such Year, if any. If any excess remains after application of the preceding
sentence, the excess shall be applied first toward the correction of any errors
in allocation, the determination of benefit amounts or the execution of benefit
payments, and then toward the payment of Plan expenses in accordance with
Section 3.10. If any excess still remains after application of the preceding
sentences, it shall be allocated in the same manner as Participating Employer
Contributions.

     6.4 Limitations. Each Plan Year, the requirements of Code section 415,
hereby incorporated by reference into the Plan, shall apply to limit
contributions under the Plan.


                                      -21-

<PAGE>

          (a) Order of reduction. To the extent necessary to satisfy the
     limitations of Code Section 415 for any Participant, the Annual Addition
     which would otherwise be made on behalf of a Participant under the Plan
     shall be reduced after the Participant's benefit is reduced under any and
     all defined benefit plans, and before the Participant's Annual Addition is
     reduced under any other defined contribution plan.

          (b) Correction of excess Annual Addition. The Committee, to the extent
     necessary to satisfy the foregoing limitations in the case of any
     Participant, shall: (i) first, reduce any future contributions remaining to
     be made for the Limitation Year for the benefit of the Participant; (ii)
     second, if a reduction is necessary in respect of amounts already
     contributed, return to the affected Participant his or her Elective
     Contributions while transferring any related Matching Contributions (and
     earnings) to a suspense account within the Plan, to be applied or allocated
     as hereinafter provided; and (iii) if a further reduction is necessary,
     transfer any Participating Employer Contributions (and earnings) for the
     benefit of the Participant to a suspense account within the Plan, to be
     applied or allocated as hereinafter provided. Amounts held in a suspense
     account pursuant to the preceding sentence shall be used to reduce Matching
     Contributions for the benefit of the effected Participant during the next
     Limitation Year (and succeeding Limitation Years, if any), provided the
     Participant is an Eligible Employee. If the Participant ceases to be an
     Eligible Employee, any amount remaining in such suspense account shall be
     applied toward Matching Contributions for remaining Participants. If for
     any Plan Year a Participating Employer Contribution but no Matching
     Contribution is made to the Trust, any amounts that would have been applied
     under this Section to Matching Contributions shall instead be applied to
     reduce Participating Employer Contributions.

     6.5 Reports to Participants. The Committee, at least quarterly, will
determine each Participant's Share of the Trust Fund and will report the same in
writing to the Participant concerned.


                                      -22-

<PAGE>

Article VII. Trust Fund.

     7.1 Appointment of Trustee. The Board of Directors will appoint one or more
persons (including, in the Board of Directors' discretion, banks or other
institutions as well as natural persons) to act as Trustee under the Plan, and
at any time may remove and appoint a successor to any such person or persons.
The Company may, without reference to any Participant or other party in
interest, enter into a trust agreement with the Trustee and make such amendments
to such trust agreement or such further agreements as the Company in its sole
discretion may deem necessary or desirable to carry out the Plan, including
designations of investment counsel to direct the Trustee in the investment and
reinvestment of the Diversified Fund and/or the Guaranteed Interest Fund created
hereunder.

     7.2 Investment of accounts. All contributions to the Trust and all
investments held thereunder will be held by the Trustee in the Trust Fund. All
Participant accounts under the Plan shall be invested in one or more investment
options made available from time to time by the Company for this purpose. The
Plan is intended to qualify, to the maximum extent possible taking into account
the other provisions of the Plan, as an "ERISA section 404(c) plan" within the
meaning of regulations issued pursuant to such section. Participants shall have
the opportunity, at least once in any 3-month period, to give investment
instructions to the Committee (with an opportunity to obtain written
confirmation of such instructions) as to the investment of contributions made on
his or her behalf among the investment options. The Committee shall be obligated
to comply with such instructions except as otherwise provided in the ERISA
section 404(c) regulations. The Committee shall prescribe the form and manner in
which such directions shall be made, as well as the frequency with which such
directions may be made or changed, and the dates as of which they shall be
effective, in a manner consistent with the foregoing. By failing to submit a
completed investment election form or otherwise affirmatively directing the
initial investment of his or her accounts, a Participant shall be deemed to
elect that contributions shall be contributed to The Brown & Sharpe Stable Value
Fund. The Committee shall be the fiduciary identified to furnish the information
contemplated by ERISA section 404(c), but may designate on its behalf another
person or entity to provide such information or to perform any of the
obligations of the Committee under this Section 7.2.

     7.3 Certain Investments in the Company Stock Fund. Effective as to Elective
Contributions (but not Participating Employer or Matching Contributions or
existing account balances, from wherever derived) directed to be invested in the
Company Stock Fund, the following special rules shall apply:

          (a) At the Company's election, either (i) such Elective Contribution
     shall be invested in Stock purchased from the Company at a price equal to
     80 percent of Current Market Value, or (ii) the Participant's Employer
     shall contribute to the Trust, together with the Elective Contributions, a
     supplemental cash payment in an amount which, when added to the Elective
     Contributions and applied toward the purchase of Stock at Current Market
     Value, results in the purchase of the same number of shares of Stock as
     would have been purchased under (i).

                                      -23-

<PAGE>



          (b) Notwithstanding Section 7.2 above, amounts invested in Stock
     pursuant to this Section 7.3 shall remain invested in the Company Stock
     Fund for not less than 12 months, subject, however, to Section 5.6, Section
     9.1(g), or unless the Trust or the Common Stock Fund sooner terminates.


                                      -24-

<PAGE>

Article VIII. Withdrawals.

     8.1 Withdrawal of prior contributions. Any Participant who was a
Participant in the Prior Plan prior to January 1, 1983, may withdraw all or any
part of that portion of his or her Share of the Trust Fund attributable to his
or her After-Tax Contribution Account, the value of such portion to be
determined as of the Valuation Date coinciding with or immediately preceding the
date of the withdrawal. A request for a withdrawal under this Section 8.1 shall
be made in compliance with such rules and procedures as may be established by
the Committee.

     8.2 In-Service Withdrawal from A&T Transfer Account. A Participant who is
an Employee and who has attained age 59 1/2 may withdraw all or any part of the
vested portion of his or her Share of the Trust Fund attributable to his or her
A&T Transfer Account, the value of such portion to be determined as of the
Valuation Date coinciding with or immediately proceeding the date of the
withdrawal. A request for a withdrawal under this Section 8.2 shall be made in
compliance with such rules and procedures as may be established by the
Committee.

     8.3 In-Service Withdrawal After Attaining Age 70 1/2. A Participant who is
an Employee and who has attained age 70 1/2 may, once each calendar year,
withdraw his or her Share of the Trust Fund, the value to be determined as of
the Valuation Date coinciding with or immediately proceeding the date of the
withdrawal. A request for a withdrawal under this Section 8.3 shall be made in
compliance with such rules and procedures as may be established by the
Committee.

     8.4 Hardship withdrawals.

          (a) Any Participant who has demonstrated to the satisfaction of the
     Committee that he or she has suffered an immediate and heavy financial need
     as defined in this paragraph (a) may request a withdrawal from his or her
     Share of the Trust Fund of any sum not in excess of his or her cumulative
     Elective Contributions (determined as of the Valuation Date coinciding with
     or immediately preceding the date of the withdrawal) reduced by the amount
     of previous distributions made pursuant to this Section 8.4. A request for
     withdrawal under this Section 8.4 shall be made in accordance with such
     rules and procedures as may be established by the Committee. Such request
     shall set forth the facts establishing the existence of the hardship and
     the amount requested. In addition to such request, the Committee may
     require such other information, in form satisfactory to the Committee, as
     it deems necessary to discharge its responsibilities pursuant to this
     Article VIII. Upon receipt of such a request, the Committee will determine
     whether an immediate and heavy financial need exits; if the Committee
     determines that such a need does exist, it will further determine what
     portion of the amount requested by the Participant is required to relieve
     the financial need and will direct the Trustee to distribute to the
     Participant in a single lump sum the amount so

                                      -25-

<PAGE>




     determined to be required. For purposes of this Section, a distribution
     will be deemed to be on account of an immediate and heavy financial need if
     the distribution is on account of:

               (i) medical expenses described in Section 213(d) of the Code
          incurred by the Participant, his or her spouse or a dependent of the
          Participant, or

               (ii) payment of tuition for the next 12 months of post-secondary
          education of the Participant or the Participant's spouse, children or
          dependents, or

               (iii) the purchase (excluding mortgage payments) of a principal
          residence for the Participant, or

               (iv) the need to prevent the eviction of the Participant from his
          or her principal residence or foreclosure on the mortgage of the
          Participant's principal residence.

          (b) For purposes of this Section, a distribution will be treated as an
     "amount necessary to relieve the financial need" if

               (i) the distribution is not in excess of the amount of the
          immediate and heavy financial need of the Participant (including any
          amounts necessary to pay any federal, state or local income taxes or
          penalties reasonably anticipated to result from the distribution),

               (ii) the Participant has obtained all distributions (if any)
          available under this and all other qualified retirement plans
          maintained by the Employer (other than hardship withdrawals), and

               (iii) the Participant has obtained all nontaxable loans currently
          available under Article IX and under all other qualified plans of the
          Employer.

          (c) Any Participant making a withdrawal under this Section shall be
     ineligible to have Elective Contributions (or any other contributions
     described in Code section 402(g)(3)) made to the Plan or to any other
     qualified or nonqualified plans of deferred compensation of the Employer
     (other than health or welfare benefit plans) for a 12-months period
     following the Valuation Date as of which the withdrawal is effective. Such
     12-month period shall begin as of the first pay period following such
     hardship withdrawal as is administratively practicable. In addition, for
     the Plan Year following the year the hardship withdrawal is effective, no
     Elective Contributions (and any other contributions described in Code
     section 402(g)(3)) shall be made for the benefit of the Participant to the
     Plan or to any other qualified retirement plan maintained by the


                                      -26-

<PAGE>

     Employer for such Year in excess of the applicable limit in effect under
     Section 402(g)(1) of the Code for such Year reduced by the aggregate amount
     of Elective Contributions (and any other contributions described in Code
     section 402(g)(3)) made for the benefit of the Participant to all other
     qualified retirement plans maintained by the Employer for the Plan Year in
     which the hardship withdrawal is effective.

     8.5 Order of withdrawals; adjustments. Amounts withdrawn pursuant to this
Article VIII in the case of any Participant will be taken pro rata from each of
the investment options in which the Participant's Share of the Trust Fund is
invested (determined as of the Valuation Date coinciding with or immediately
preceding the date of the withdrawal).



                                      -27-

<PAGE>

Article IX. Loans to Participants.

     9.1 Loans. Upon the request of a Participant on a form and in a manner
approved or prescribed by the Committee, the Committee may direct the Trustee to
make a loan from the Plan to such Participant, subject to the following
conditions:

          (a) The Committee shall determine the time or times each year when
     loans shall be made available to Participants, and shall formulate such
     rules and procedures as it deems appropriate relating to such loans
     including such terms as may from time to time be specified by the Committee
     in accordance with this Article IX. Any written procedures developed by the
     Committee shall become part of this Plan.

          (b) The amount of any loan (the "subject loan"), together with the
     aggregate amount of principal and accrued interest owed by the Participant
     with respect to any prior loans from the Trust, shall not exceed the least
     of:

               (i) $50,000 reduced by the excess (if any) of (A) the highest
          outstanding balance of loans from the Plan to the Participant during
          the one-year period ending on the day before the date on which the
          subject loan is made, over (B) the outstanding balance of loans from
          the Plan to the Participant on the date on which the subject loan is
          made; or

               (ii) one-half of the vested portion of that part of the
          Participant's Share of the Trust Fund.

          For purposes of this Section 9.1(b), the value of a Participant's
     account shall be determined as of the Valuation Date immediately preceding
     the date the loan is approved. A loan shall not be available under the Plan
     unless the loan (determined after applying the limitations described above)
     is at least $1,000.

          For purposes of this Article IX, a former Participant, an individual
     described in Section 13.3 or 13.12, and a Beneficiary of a Participant
     shall be treated as a Participant only to the extent required by applicable
     regulations issued by the Department of Labor.

          (c) Each loan must be evidenced by a note and must be secured by not
     more than 50% of the Participant's nonforfeitable interest in his or her
     Share of the Trust Fund, including as part of such security the note
     evidencing the loan. The amount of the loan shall bear interest at


                                      -28-

<PAGE>

     an annual percentage interest rate to be fixed by the Committee. In
     determining the interest rate, the Committee shall take into consideration
     interest rates currently being charged by persons in the business of
     lending money with respect to loans made in similar circumstances. The
     Committee shall make such determination through consultation with one or
     more lending institutions, as the Committee deems appropriate. Loans
     granted at different times may bear different interest rates. In the event
     of any default by a Participant under the note evidencing any loan under
     this Section 9.1(c), the unpaid principal of the note shall immediately
     become due and payable in full. Such unpaid principal, together with any
     accrued but unpaid interest, shall thereupon be deducted from the
     Participant's Share of the Trust Fund, subject to the following
     restriction: in no event shall the Committee apply the Participant's Share
     of the Trust Fund to satisfy the Participant's loan obligation, whether or
     not the Participant is in default, unless and until the amount so applied
     could be distributed in accordance with Article XI of the Plan or withdrawn
     in accordance with Article VIII of the Plan.

          (d) Each such loan made to a Participant who is an Employee shall be
     repayable by payroll deduction, with substantially level amortization (as
     that term is used in section 72(p)(2)(C) of the Code) and payments not less
     frequent than quarterly, over a specified period of time, as determined by
     the Committee. Each such loan made to any other Participant shall be
     repayable in a manner providing for substantially level amortization (as
     that term is used in section 72(p)(2)(C) of the Code) and payments not less
     frequent than quarterly, over a specified period of time, as determined by
     the Committee. Such period of time shall not exceed five years, unless the
     loan is used to acquire a dwelling unit which is to be used within a
     reasonable time as the principal residence of the Participant, in which
     case such period may not exceed fifteen years.

          (e) If, at the time benefits are to be distributed to a Participant or
     the Participant's Beneficiary under Article XI of the Plan, there remains
     any unpaid balance of a loan hereunder, such unpaid balance must become
     immediately due and payable in full. Such unpaid balance, together with any
     accrued but unpaid interest on the loan, shall be deducted from the
     Participant's account before any such distribution of benefits is made. No
     loan shall be made hereunder after the time distributions to a Participant
     or Beneficiary under Article XI are to be paid or commence.


                                      -29-

<PAGE>

          (f) A note evidencing a loan to a Participant under this Article IX
     shall be an asset of the Trust which is allocated to the account of the
     Participant, and shall be deemed to have a fair market value at any given
     time equal to the unpaid balance of the note plus the amount of any accrued
     but unpaid interest.

          (g) Amounts necessary to provide a loan under this Article shall be
     obtained by the Trustee pro rata from each of the investment options in
     which the Participant's accounts are invested. Any repayment of a loan
     hereunder shall be reinvested in the investments funds in accordance with
     written rules or procedures prescribed by the Committee. The Committee
     shall communicate the rules and procedures which it formulates hereunder to
     each Participant who applies for a loan under the Plan.

          (h) Loans shall be made available to all Participants on a reasonably
     equivalent basis, except that the Committee may make reasonable
     distinctions based upon creditworthiness, other obligations of the
     Participant, state law restrictions affecting payroll deductions and any
     other factors that may adversely effect the ability to assure repayment
     through payroll deduction, where applicable, or such other manner as the
     Committee may require. The Committee may reduce or refuse a requested loan
     where it determines that timely repayment of the loan through payroll
     deduction is not assured.

          (i) In the case of a loan made hereunder to a Participant who is
     married at the time the loan is made, the Committee shall require the
     Participant's grant of a security interest in his or her accounts be
     accompanied by the written consent of the Participant's spouse to any
     set-off by the Plan with respect to such security interest. The Spouse's
     consent (together with the spouse's acknowledgment of the effect of the
     Participant's grant of the security interest) must be witnessed by a Plan
     representative or a notary public.


                                      -30-

<PAGE>

Article X. Vesting of Accounts.

     10.1 Immediate vesting of certain Accounts. A Participant will at all times
be 100% vested in the balance of his or her Elective Contribution Account,
Matching Contribution Account and, if applicable, his or her Prior Matching
Contribution Account, After-Tax Contribution Account, Transfer Account, any
accounts maintained for the Participant's benefit under Sections 13.3, and any
accounts or sub-accounts established by the Committee under Section 6.1 other
than the Participant's Participating Employer Contribution Account and A&T
Transfer Account, if any, and any sub-accounts relating thereto.

     10.2 Deferred Vesting of Participating Employer Contribution Account and
A&T Transfer Account.

          (a) Each Participant whose Employment Commencement Date is prior to
     January 1, 1998 and who is credited with one or more Hours of Service on or
     after that date shall have a vested interest in a percentage of his or her
     Participating Employer Contribution Account and A&T Transfer Account, if
     any, determined in accordance with the following schedule and based on the
     Participant's Years of Service for Vesting:

                 Years of Service                   Applicable
                   for Vesting                      Percentage

                 Less than 1                                0%
                 1, but fewer than 2                       20%
                 2, but fewer than 3                       40%
                 3 or more                                100%

          (b) Each Participant whose Employment Commencement Date is on or after
     January 1, 1998, shall have a vested interest in a percentage of his or her
     Participating Employer Contribution Account determined in accordance with
     the following schedule and based on the Participant's Years of Service for
     Vesting:

                 Years of Service                   Applicable
                  for Vesting                       Percentage

                 Less than 1                                0%
                 1, but fewer than 2                       20%
                 2, but fewer than 3                       40%
                 3, but fewer than 4                       60%
                 4, but fewer than 5                       80%
                 5 or more                                100%



                                      -31-

<PAGE>

          (c) Each Participant whose Employment Commencement Date is prior to
     January 1, 1998 but who is not credited with at least one Hour of Service
     on or after that date shall a vested interest in a percentage of his or her
     Participating Employer Contribution Account and A&T Transfer Account, if
     any, determined in accordance with the Plan as in effect prior to January
     1, 1998.

     10.3 Special vesting rules. Notwithstanding any provision of the Plan to
the contrary:

          (a) A participant will be fully vested in his or her Share of the
     Trust Fund upon the happening of any one of the following events:

               (1)  The Participant's attainment of Normal Retirement Age while
                    an Employee.

               (2)  The Participant's death while an Employee.

               (3)  The termination or partial termination of the Plan or the
                    complete cessation of contributions to the Plan, to the
                    extent that the Participant is affected by such termination,
                    partial termination, or complete discontinuance.

               (4)  The Participant's separation from service due to his or her
                    Total and Permanent Disability.

          (b) Any person who was a Participant in the Prior Plan on May 15,
     1987, shall be fully vested in the balance of all his or her accounts as of
     that date, but shall have a nonforfeitable interest in subsequent
     allocations, if any, in accordance with Sections 10.1, 10.2 and 10.3.

          (c) Any person who is a Participant on the date immediately preceding
     a Change of Control shall be fully vested in the balance of all his or her
     accounts as of that date, but shall have a nonforfeitable interest in
     subsequent allocations, if any, in accordance with Sections 10.1, 10.2 and
     10.3.

     10.4 Changes in vesting schedule. If the Plan's vesting schedule is
amended, or the Plan is amended in any way that directly or indirectly affects
the computation of a Participant's vested percentage (of if the Plan changes to
or from a top-heavy vesting schedule), each Participant who has completed 3
Years of Service for Vesting may elect, within the period described below, to
have his or her vested percentage determined without regard to such


                                      -32-

<PAGE>



amendment or change. The period referred to in the preceding sentence will begin
on the date the amendment of the vesting schedule is adopted and will end 60
days after the latest of the following dates:

          (a) the date on which such amendment is adopted;

          (b) the date on which such amendment becomes effective; and

          (c) the date on which the Participant is issued written notice of such
     amendment by the Committee.

     10.5 Forfeitures. If a Participant separates from the service of the
Employer at a time when he or she has a less than 100 percent (100%)
nonforfeitable interest in his or her Participating Employer Contribution
Account or A&T Transfer Account, if any, the forfeitable portions of such
Accounts will immediately be treated as forfeited. Notwithstanding the
foregoing, if at any time prior to incurring five consecutive Breaks in Service
the Participant is reemployed by the Employer, any amount so forfeited will be
recredited to the Participant's Participating Employer Contribution Account and
A&T Transfer Account, as applicable, subject to the following special rules:

          (a) Amounts required to be recredited to a Participant's Accounts
     pursuant to this Section will be taken first from amounts forfeited by
     other Participants which have not yet been applied in accordance with
     Section 6.3.

          (b) A reemployed Participant's nonforfeitable interest in any amounts
     recredited to his or her Accounts pursuant to this Section will be
     determined under Section 10.2, taking into account the Participant's Years
     of Service for Vesting accumulated before the separation from service which
     caused the forfeiture.

All forfeitures arising under this Section 10.5, to the extent not applied to
the recrediting of Accounts of reemployed Participants as described above, will
be applied in accordance with Section 6.3.

     10.6 Separate Account If a distribution has been made to a Participant at a
time when he or she has a nonforfeitable right to less than one hundred (100%)
percent of his or her Share of the Trust Fund, the vesting schedule in Section
10.2 will thereafter apply only to his or her Accounts attributable to
contributions allocated after such distribution. The balance in his or her
Accounts which were not 100% vested at the time of such distribution shall,
immediately after such distribution, be transferred to separate accounts which
will be maintained for the purpose of determining his or her interest therein at
any later time. At any relevant time, his or her nonforfeitable interest in the
portion of his or her Share of the Trust Fund held in each such separate account
will be equal to P(AB+D)-D, where P is the nonforfeitable percentage


                                      -33-

<PAGE>

of his or her Account at the relevant time determined under Section 10.2; AB is
the account balance of the separate account at the relevant time; and D is the
amount of the distribution. However, if any portion of such separate account is
forfeited under Section 10.5, the Participant's interest in the remaining
balance, if any, in such separate account will thereafter be fully vested and
nonforfeitable.



                                      -34-

<PAGE>

Article XI. Distribution of Benefits.

     11.1 Method of making distributions. Distributions to a Participant or
Beneficiary from the Trust will normally be made in a single lump sum payment.
However, a Participant who separates from service by reason of Retirement may
irrevocably elect, by notice given to the Committee in accordance with such
rules and procedures as the Committee may establish for this purpose, to receive
his or her entire Share of the Trust Fund in ten (10) annual installments, the
amount of each such installment to be determined by dividing the former
Participant's remaining Share of the Trust Fund by the number of years over
which payments remain to be made. If a Participant elects installment payments
in accordance with this Section, all costs, including recordkeeping costs,
associated with maintaining the Participant's remaining Share of the Trust Fund
will be charged, for the installment payment period, against the Participant's
account.

     All amounts distributed from the Trust Fund shall be paid in cash, except
that, at the election of the Participant or Beneficiary, distributions from the
Company Stock Fund shall be paid in cash or in whole shares of Stock, with the
value of any fractional share paid in cash. For purposes of the preceding
sentence, the value of shares of Stock shall be the market value on the
Valuation Date coinciding with or next preceding the date of distribution.

     11.2 Direct rollovers. To the extent a distribution pursuant to Article XI
or Section 8.1 constitutes an "eligible rollover distributions" as described in
Code section 402(c)(4), a Participant, a Beneficiary who is the Participant's
surviving spouse, or an alternate payee of a Participant under a Qualified
Domestic Relations Order described in Section 13.7 may elect, at the time and in
the manner prescribed by the Committee, to have any portion of the eligible
rollover distribution paid directly to an eligible retirement plan. For this
purpose, an "eligible retirement plan" is an individual retirement account
described in Code Section 408(a), an individual retirement annuity described in
Code Section 408(b), a qualified plan described in Code Section 401(a), or an
annuity plan described in Code Section 403(a). However, in the case of a
distribution under this Section 11.2 to a Participant's surviving spouse, an
"eligible retirement plan" is an individual retirement account or individual
retirement annuity.

     The Committee shall give a distributee notice of his or her right to elect
a direct rollover and an explanation of the withholding consequences if not
making the election. Such notice shall be given no earlier than 90 days and no
less than 30 days before the date of distribution. However, a distribution may
commence before the expiration of the 30-day period, at the election of the
distributee, provided the distributee is provided information clearly indicating
his or her right to such 30-day period.

     11.3 Time of distributions. Distribution with respect to a Participant's
separation from service will commence as soon as practicable after the
Participant's separation from service.


                                      -35-

<PAGE>

In the case of a Participant whose vested portion of his or her Share of the
Trust Fundis valued in excess of $5,000 and who has not yet attained age 65,
distribution may not be made under this Section unless:

          (a) between the 30th and 90th day prior to the date distribution is to
     be made, the Committee notifies the Participant in writing that he or she
     may defer distribution until age 65; and

          (b) the Participant consents to the distribution in writing after the
     information described above has been provided to him or her, and files such
     consent with the Committee;

Notwithstanding the foregoing, a distribution may commence less than 30 days
after the notification under paragraph (ii)(a) above is given, provided that the
Committee informs the Participant that he or she has a right to a period of at
least 30 days after receiving the notice to consider any distribution election
and the Participant may rescind any election to receive a distribution for a
period of at least seven days after the date the individual receives such
notice. For purposes of (i) above, the vested portion of a Participant's
accounts will be considered to be valued in excess of $5,000 if the value of
such portion exceeds such amount at the time of the distribution in question or
exceeded such amount at the time of any prior distribution to the Participant
under the Plan.

     The failure of a Participant to consent to an immediate distribution under
paragraph (b) above shall be deemed to be an election to defer commencement of
the payment of benefits as provided under Section 11.4. An individual who elects
deferral of a benefit under this Section 11.3 may at any time subsequent to such
election request a distribution of the benefit deferred. The Committee may
prescribe such rules as it deems necessary pertaining to the form of such a
request or to any information or signatures required with respect thereto.

     Distribution under this Section will be made in any case not later than the
earliest to occur of the following: (1) the latest date for payment prescribed
by Section 11.4, (2) as soon as reasonably practicable after the Committee is
notified of the Participant's death, or (3) as soon as reasonably practicable
after the Committee receives from the Participant and records a written consent
to distribution.

     11.4 Latest payment of benefits.

          (a) In no event will any payment of benefits to a Participant under
     the Plan commence later than the earliest of the dates described in (1),
     (2) and (3), where:

               (1) is, unless otherwise elected by the Participant, the 60th day
          after the close of the Plan Year in which occurs the latest of the
          date on which the Participant attains age 65, the tenth anniversary of
          the year in which the

                                      -36-

<PAGE>

          Participant commenced participation in the Plan, and the date on which
          the Participant ceases to be an Employee,

               (2) is, for a Participant who is not a 5% owner, April 1
          following the calendar year during which the Participant retires or
          attains age 70 1/2, whichever is later, and

               (3) is, for a Participant who is a 5% owner, April 1 following
          the calendar year in which the Participant attains age 70 1/2.

          (b) Notwithstanding paragraph (a)(2), with respect to any Participant
     who is not a 5% owner and who attains age 70 1/2 on or after January 1,
     1996, and on or before December 31, 1998, the payment of the Participant's
     Share of the Trust Fund shall commence no later than the April 1 following
     the close of the calendar year in which the Participant attains age 70 1/2
     (or such later date as may be permitted under guidance from the Internal
     Revenue Service), unless such Participant elects to delay such payment
     until he or she retires. In addition, any Participant who is not a 5% owner
     and who attained age 70 1/2 before January 1, 1996 may elect, in accordance
     with rules and procedures established by the Committee, to stop receiving
     payments pursuant to paragraph (a)(2) until such Participant retires.

          (c) If a Participant remains an Employee after the beginning of the
     year in which benefits are to commence under (a)(3) above or (b), the
     Participant's Share of the Trust Fund shall be distributed on or before the
     following April 1, and any additional amounts credited to the Participant's
     Accounts shall be distributed on or before each subsequent December 31.

          (d) Notwithstanding any other provision of the Plan to the contrary,
     all benefit distributions under the Plan shall be made in a manner
     consistent with Section 401(a)(9) of the Code and regulations thereunder,
     including Prop. Reg. Section 1.401(a)(9)-2.

     11.5 Distributions after a participant's death. If a Participant dies
before the complete distribution of his or her Accounts, the Participant's
Beneficiary will receive the vested portion of the Participant's Accounts in
cash in a single sum as soon as practicable following the Participant's death
(but in no event later than December 31 of the calendar year following the year
of the Participant's death). The value of such Accounts shall be determined as
of the Valuation Date coinciding with or immediately following receipt from the
Beneficiary and recording by the Committee of a certified copy of the death
certificate for the Participant and the final distribution form to be provided
by the Committee.

     11.6 Notice to Trustee. The Committee will notify the Trustee whenever any
Participant or Beneficiary is entitled to receive a distribution under the Plan.
In giving such notice, the Committee will specify the name and last known
address of the person receiving



                                      -37-

<PAGE>

such distribution. Upon receipt of such notice from the Committee, the Trustee
will, as soon as is reasonably practicable, distribute such amount.

     11.7 Designation of Beneficiary.

          (a) Subject to the provisions of this Section, a Participant's
     Beneficiary shall be the person or persons and entity or entities, if any,
     designated by the Participant from time to time on a form approved by the
     Committee. A non-spouse Beneficiary designation by a Participant who is
     married at the time of his or her death shall not be effective unless

               (1)  prior to the Participant's death, the Participant's
                    surviving spouse consented to and acknowledged the effect of
                    the Participant's designation of a specific non-spouse
                    Beneficiary (including any class of Beneficiaries or any
                    contingent Beneficiaries) or a written form approved by the
                    Committee and witnessed by a notary public or a duly
                    authorized Plan representative; or

               (2)  it is established to the satisfaction of the Committee that
                    spousal consent may not be obtained because there is no
                    spouse, because the spouse has died, because the spouse
                    cannot be located, or because of such other circumstances as
                    the Secretary of the Treasury may prescribe; or

               (3)  the spouse had earlier executed a general consent form
                    permitting the Participant (A) to select from among certain
                    specified Beneficiaries without any requirement of further
                    consent by the spouse (and the participant designates a
                    Beneficiary from the specified list), or (B) to change his
                    or her beneficiary without any requirement of further
                    consent by the spouse. Any such general consent shall be on
                    a form approved by the Committee, and must acknowledge that
                    the spouse has the right to limit consent to a specific
                    Beneficiary and that the spouse voluntarily elects to
                    relinquish such right.

     Notwithstanding the foregoing, the Committee may, in its discretion,
     determine whether a Beneficiary designation is effective, and shall reject
     as ineffective any designation first received by or presented to the
     Committee after the death of the Participant. In the event a spouse is
     legally incompetent to give consent, the spouse's legal guardian, even if
     the guardian is the Participant, may give consent on behalf of the spouse.
     Any consent and acknowledgment by (or on behalf of) a spouse, or the
     establishment that the consent and acknowledgment cannot be obtained, shall
     be effective only with respect to such spouse, but shall be irrevocable
     once made.


                                      -38-

<PAGE>



          (b) A Participant who has designated a Beneficiary in accordance with
     this Section 11.7 may change such designation at any time by giving written
     notice to the Committee, subject to the conditions of this Section 11.7 and
     such additional conditions and requirements as the Committee may prescribe
     in accordance with applicable law.

          (c) If a Participant dies without a surviving Beneficiary, the full
     amount payable upon his or her death will be paid to his or her surviving
     spouse or, if none, to his or her issue per stirpes. If any of such issue
     is a minor, the Trustees may deposit his or her share in a savings account
     to his or her credit in a savings bank or other financial institution for
     the benefit of such issue. If there is no surviving spouse or issue, then
     the amount may be paid to the Participant's executor or administrator or
     applied to the payment of his or her debts and funeral expenses, all as the
     Committee shall determine.


                                      -39-

<PAGE>

Article XII. Amendment and Termination.

     12.1 Amendment. The Company reserves the power at any time or times to
amend the provisions of the Plan and Trust to any extent and in any manner that
it may deem advisable by written instrument, executed by an officer of the
Company, providing for such amendment. Any such instrument will be effective in
accordance with its terms as to all Participants and all persons having or
claiming any interest hereunder. This power to amend shall be exercised by vote
of the Board of Directors, pursuant to the rules established in the Company's
By-Laws. However, notwithstanding this provision of power, the Company will not
have the power:

          (a) to amend the Plan and Trust in such manner as would cause or
     permit any part of the assets of the Trust to be diverted to purposes other
     than for the exclusive benefit of each Participant and his or her
     Beneficiary, unless such amendment is permitted by law, governmental
     regulations or ruling;

          (b) to amend the Plan or Trust retroactively in such a manner as would
     eliminate or reduce any benefit attributable to service before the
     amendment to the extent such elimination or reduction would be prohibited
     under Section 411(d)(6) of the Code; or

          (c) to amend the Plan or Trust in such manner as would increase the
     duties or liabilities of the Trustee or affect its fee for services
     hereunder, unless the Trustee consents thereto in writing.

     12.2 Binding Effect on other Participating Employers. Any amendment or
termination of the Plan by the Company under Section 12.1 shall bind all of the
other Participating Employers without the requirement for action or consent on
the part of any such Participating Employer. In addition, no participating
Employer other than the Company shall have any power to amend, modify, suspend
or terminate the Plan as to its own or any other Participating Employer's
participation therein, and all such power is exclusively vested in the Company.
In addition, the Plan shall be treated as if it were maintained by a single
employer, and the withdrawal from participation in the Plan of one or more
Participating Employers shall not be deemed to be a termination or partial
termination of the Plan with respect to the Participants employed by such
participating Employer or Employers unless required to be treated as such by
applicable laws or regulations.

     12.3 Termination or partial termination. The Company has established the
Plan and the Trust with the bona fide intention and expectation that
contributions will be continued indefinitely, but the Company will have no
obligation or liability whatsoever to maintain the Plan for any given length of
time and may discontinue contributions under the Plan or terminate the Plan at
any time by written notice delivered to the Trustee without any liability
whatsoever for any such discontinuance or termination. The Plan will be deemed
terminated (a) if and when the Company is judicially declared bankrupt, (b) if
and when the Company is a


                                      -40-

<PAGE>

party to a merger in which it is not the surviving corporation or sells all or
substantially all of its assets, unless the surviving corporation or the
purchaser adopts the Plan by an instrument in writing delivered to the Trustee
within 60 days after the merger or sale, or (c) upon dissolution of the Company.

     12.4 Distributions upon termination of the Plan. Upon termination of the
Plan or complete discontinuance of contributions thereunder, each affected
Participant (including a terminated Participant in respect of amounts not
previously forfeited by him or her) will have a fully vested and nonforfeitable
interest in his or her Share of the Trust Fund, and the Trustee will make prompt
distribution to each Participant or other person entitled to distribution of an
amount equal to his or her Share of the Trust Fund, in a lump sum payment,
subject to Treasury regulation section 1.411(a)-11(e). However, if a successor
plan is maintained or established within the meaning of Treasury regulation
section 1.401(k)-1(d)(3), distributions shall be made to Participants and their
Beneficiaries only in accordance with Article XI. Upon the completion of
distributions to all Participants and Beneficiaries, the Trust will terminate,
the Trustee will be relieved from all liability under the Trust, and no
Participant or other person will have any claims thereunder, except as required
by applicable law.

     Notwithstanding the foregoing, if the Plan and Trust (or any portion
thereof) are terminated in connection with the merger into, or transfer to,
another plan and trust, distributions shall not be made upon termination but
shall be governed by the successor or transferee plan and trust.

     12.5 Merger or consolidation of Plan; transfer of Plan assets. In case of
any merger or consolidation of the Plan with, or transfer of assets and
liabilities of the Plan to, any other plan, provision must be made so that each
Participant would, if the Plan then terminated, receive a benefit immediately
after the merger, consolidation or transfer which is equal to or greater than
the benefit he or she would have been entitled to receive immediately before the
merger, consolidation or transfer if the Plan had then terminated.

     12.6 Successor employers. In the event of the dissolution, merger,
consolidation or reorganization of a Participating Employer or all Participating
Employers, provision may be made by which the Plan and the Trust will be
continued by or under the sponsorship of the successor employer; and in that
event, such successor shall be substituted for the Participating Employer or
Employers under this Plan. This substitution of the successor shall constitute
an assumption of the applicable Plan liabilities by the successor, and the
successor shall have all of the powers (if any), duties and responsibilities of
the replaced Participating Employer or Employers under the Plan.

     12.7 Participating Employer ceasing to be affiliated. In the event a
Participating Employer (other than the Company) ceases to be a subsidiary or
other affiliate of the Company


                                      -41-

<PAGE>

as a result of a merger, reorganization, or sale or other transfer of stock, the
following provisions shall apply:

          (a) Such Participating Employer shall thereupon cease to be a
     participating Employer under the Plan.

          (b) The Plan shall not terminate with respect to the Participants
     employed by such former Participating Employer solely because it ceased to
     be a Participating Employer.

          (c) The Company may agree with such former Participating Employer (or
     with an organization acquiring the former Participating Employer) that the
     assets of the Trust properly allocable to Participants employed by the
     former Participating Employer be transferred to another plan maintained by
     the former Participating Employer (or by such other organization), provided
     that the requirements of Section 12.5 are satisfied and such other plan
     assumes all liabilities of the Plan with respect to such Participants. The
     Committee shall direct the Trustee to carry out such transfer in accordance
     with the terms of such agreement.


                                      -42-

<PAGE>

Article XIII. Miscellaneous.

     13.1 Voting of Stock. Before each annual or special meeting of the
stockholders of the Company, the Company shall cause to be sent to each
Participant having an interest in the Company Stock Fund a copy of the proxy
solicitation material therefor, together with a form requesting confidential
instructions to the Trustee on how to vote the number of shares of Stock or
Class B Stock representing the Participant's interest in the Company Stock Fund.
Upon receipt of such instructions, the Trustee shall vote the shares of Stock or
Class B Stock as instructed. Instructions received from individual Participants
by the Trustee shall be held in the strictest confidence and shall not be
divulged or released to any person, including officers or employees of the
Company. At the direction of the Committee, the Trustee shall vote, in person or
by proxy at its discretion, shares of the Stock held in the Trust for which
voting instructions shall not have been received.

     13.2 Tender or Exchange Offers. The provisions of this Section shall apply
in the event a tender offer (hereinafter, a "tender offer") for Stock is
commenced by a person or persons.

          (a) Certain Tender Offers Not Approved by Continuing Directors. In the
     event a tender offer not approved by the continuing directors (as
     hereinafter defined) for Stock (including, for purposes of this Section
     13.2, Class B Stock) is commenced by a person or persons other than (i) the
     Company, (ii) an Affiliated Company (determined as of the date immediately
     preceding the commencement of the tender offer), (iii) the Plan, or (iv)
     any other employee benefit plan maintained by an Affiliated Company
     (determined as of the date immediately preceding the commencement of the
     tender offer), the Company and the Trustee, promptly after receiving notice
     of the commencement of any such tender offer, shall transfer the
     recordkeeping functions and responsibilities under the Plan hereinafter
     described to an independent recordkeeper. The independent recordkeeper in
     turn shall confidentially solicit from each Participant and Beneficiary to
     whose accounts units representing an interest in shares of Stock are
     allocated, instructions as to whether shares are to be tendered or held.
     Each Participant and Beneficiary shall be given the right of instruction as
     to that number of shares of Stock which bears the same relationship to the
     total number of shares of Stock for which unit interests are allocated to
     individual accounts under the Plan, as the number of units allocated to
     such Participant's or Beneficiary's accounts bears to the total number of
     units allocated to individual accounts under the Plan. On the basis of
     these instructions, the recordkeeper shall determine a fraction, the
     numerator of which is the total number of shares of Stock for which it has
     received instructions to tender and the denominator of which is the total
     number of shares of Stock as to which unit interests are allocated under
     the Plan to the individual accounts of Participants and Beneficiaries. The
     recordkeeper shall then multiply this fraction by the total number of
     shares of Stock held in the Trust and shall instruct the Trustee to tender,
     and the Trustee shall


                                      -43-

<PAGE>

     tender from among the shares of stock held in the Trust, that number of
     shares of stock which equals the resulting product. The Trustee shall not
     tender shares of Stock in excess of the number so authorized to be
     tendered.

          Following any tender offer described in the preceding paragraph that
     has resulted in the sale or exchange of any shares of Stock held in the
     Trust, the recordkeeper shall continue to maintain on a confidential basis
     the accounts of Participants and Beneficiaries to whose accounts units
     representing an interest in shares of Stock were allocated at any time
     during such offer, until complete distribution of such accounts. In the
     event that there is no sale or exchange of any shares of Stock held in the
     Trust pursuant to the tender offer, the recordkeeper shall transfer back to
     the Trustee and the Company the recordkeeping functions, provided, however,
     it shall keep confidential any instructions which it may have received from
     Participants and Beneficiaries relating to the tender offer.

          (b) Other Tender Offers. In the event of a tender offer not covered by
     subsection (a) above, the Trustee shall solicit from each Participant and
     Beneficiary to whose accounts units representing interests in shares of
     Stock are allocated, instructions as to whether shares are to be tendered
     or held. Each Participant and Beneficiary shall be given the right of
     instruction as to that number of shares of Stock which bears the same
     relationship to the total number of shares of Stock for which unit
     interests are allocated to individual accounts under the Plan, as the
     number of units allocated to such Participant's or Beneficiary's accounts
     bears to the total number of units allocated to individual accounts under
     the Plan. On the basis of these instructions, the Trustee shall determine a
     fraction, the numerator of which is the total number of shares of Stock for
     which it has received instructions to tender and the denominator of which
     is the total number of shares of Stock as to which unit interests are
     allocated under the Plan to the individual accounts of Participants and
     Beneficiaries. The Trustee shall then multiply this fraction by the total
     number of shares of Stock held in the Trust and shall tender, from among
     the shares of Stock held in the Trust, that number of shares of Stock which
     equal the resulting product. The Trustee shall not tender shares of Stock
     in excess of the number so authorized to be tendered.

          (c) Other. For purposes of allocating the proceeds of any sale or
     exchange pursuant to a tender offer, the Committee or the independent
     recordkeeper, as the case may be, shall treat as having been sold or
     exchanged first those shares of Stock as to which, immediately prior to the
     sale or exchange, unit interests were allocated to individual accounts. Any
     proceeds remaining after application of the preceding sentences shall be
     treated as proceeds from the sale or exchange of unallocated shares. Any
     adjustments to individual accounts pursuant to the provisions of the Plan
     shall be made by the Committee or the independent recordkeeper, as the case
     may be, on information supplied by the Company, the Committee or the
     Trustee.


                                      -44-

<PAGE>




          (d) Definition of "Continuing Director". For purposes of this Section,
     a "continuing director" is any director of the Company (i) who has
     continuously been a director of the Company since April 29, 1988 or (ii)
     who is a successor of a continuing director as defined in (i) if such
     successor (and any intervening successor) shall have been recommended or
     elected to succeed a continuing director by a majority of the then
     continuing directors.

     13.3 Special account for rollovers, etc. An individual who becomes an
Employee of a Participating Employer and who immediately prior thereto had an
interest in a pension or profit-sharing plan (the "other plan") qualified under
section 401(a) of the Code which was maintained by an employer other than a
Participating Employer, may make a rollover contribution to the Plan of an
amount in cash equal to the value of all or a portion of such individual's
vested interest in the other plan upon demonstration to the Committee that the
contribution is eligible for transfer to the Plan pursuant to the rollover
provisions of the Code. In no event shall any such rollover contribution be
permitted if, in the opinion of the Committee, such transfer would adversely
affect the qualification of the Plan under the Code. The amount so rolled over
to the Trust will be invested by the Trustee, pursuant to such individual's
directions as transmitted to the Trustee by the Committee, in the same manner as
Elective Contributions under Article VII. The individual making a rollover
hereunder will not become a Participant until he or she has satisfied the
eligibility requirements of Article IV, but a special account will be maintained
for the individual, and the balance thereof will be adjusted from time to time,
as if he or she were a Participant. In addition, such individual will be treated
as a Participant, with respect to his or her interest in such account, for
purposes of Articles VI, VIII, IX, X and XI of the Plan. Such individual will
have a fully vested and nonforfeitable interest in the balance of such special
account.

     13.4 Certain Non-U.S. Employees. In the event any amount is held under the
Trust for the benefit of an Employee who transfers employment outside the U.S.
(whether or not to an Affiliated Company), and such amount includes a portion
attributable to benefits previously earned by the Employee in non-U.S.
employment (the "Transferable Portion"), the Committee shall take such steps as
are necessary to cause the Transferable Portion to be transferred as soon as
practicable to such successor plan as the employee shall designate, or if no
such plan is designated, then to the Employee; provided, that in no
circumstances shall such transfer be effected if it would cause the Plan to fail
to satisfy the provisions of section 401(a) or 401(k) of the Code.

     13.5 Limitation of rights. Neither the establishment of the Plan and the
Trust, nor any amendment thereof, nor the creation of any fund or account, nor
the payment of any benefits, will be construed as giving to any Participant or
other person any legal or equitable right against any Participating Employer,
the Committee or the Trustee, except as provided herein, and in no event will
the terms of employment or service of any Participant be modified or in any way
be affected hereby. It is a condition of the Plan, and each Participant
expressly agrees

                                      -45-

<PAGE>

by his or her participation herein, that each Participant will look solely to
the assets held in the Trust for the payment of any benefit to which he or she
is entitled under the Plan.

     13.6 Nonalienability of benefits. The benefits provided hereunder will not
be subject to alienation, assignment, garnishment, attachment, execution or levy
of any kind, and any attempt to cause such benefits to be so subjected will not
be recognized, except to such extent as may be required by law.

     The provisions of the preceding paragraph shall apply in general to the
creation, assignment or recognition of a right to any benefit payable with
respect to a Participant pursuant to a domestic relations order. Notwithstanding
the foregoing, if such order is a Qualified Domestic Relations Order, the
provisions of the preceding paragraph shall not apply.

     13.7 Payment under Qualified Domestic Relations Orders. Notwithstanding any
provisions of the Plan to the contrary, if there is entered any Qualified
Domestic Relations Order that affects the payment of benefits hereunder, such
benefits shall be paid in accordance with the applicable requirements of such
Order. The Committee shall establish procedures to determine whether an order or
other decree is a Qualified Domestic Relations Order, and to administer
distributions under such Orders.

     13.8 Information between Committee and Trustee. The Committee will furnish
to the Trustee, and the Trustee will furnish to the Committee, such information
relating to the Plan and Trust as may be required under the Code and any
regulations issued or forms adopted by the Treasury Department thereunder or
under the provisions of ERISA and any regulations issued or forms adopted by the
Labor Department thereunder.

     13.9 Governing Law. The Plan will be construed, administered and enforced
according to the laws of the State of Rhode Island to the extent such laws are
not inconsistent with, or preempted by, ERISA or other Federal laws.

     13.10 Reclassification of Employees. In the event of any reclassification
of Employees by the Employer which results in an Employee's change from
management to hourly employment status, the Employer may transfer funds and
liabilities held for the benefit of such Employee who is a Participant in the
Plan from the Trust, subject to Section 12.5, directly to the trustee of the
trust forming part of The Brown & Sharpe Savings and Retirement Plan, in
accordance with the provisions of the Plan and such rules as the administrator
of suchother plan may establish. Each Participant for whom such funds and
liabilities are transferred will cease to be a Participant in the Plan in
accordance with Section 4.2, and such funds and liabilities will cease to be
assets of the Trust as of the date they are received by the trustee of such
trust.

     In the event of a reclassification which results in an Employee's change
from hourly to management employment status, the Employer may transfer funds and
liabilities held for the

                                      -46-

<PAGE>

benefit of such Employee who is a participant in The Brown & Sharpe Savings and
Retirement Plan from the trust forming part of such plan directly to the
Trustee, in accordance with the provisions of such plan and such rules as the
Trustee may establish. Each participant for whom such funds and liabilities are
transferred will become a Participant in the Plan for all purposes as of the
date of the reclassification, and such funds and liabilities will become assets
of the Trust as of the date they are received by the Trustee.

     13.11 Amounts transferred from other plans. From time to time the Company
may determine to merge or consolidate another tax-qualified plan with, or
transfer all or a portion of the assets and liabilities of another tax-qualified
plan to, the Plan, whether in connection with an acquisition by the Company or
otherwise. Such merger, consolidation or transfer of amounts from another plan
to the Plan may occur only if the Committee determines that the requirements of
Code section 414(l) will be satisfied with respect to the affected participants
of the other plan and that such merger, consolidation or transfer will not
jeopardize the Plan's tax qualification under section 401(a) of the Code.

     In connection with any such merger, consolidation or transfer, an
individual whose benefits are transferred to the Plan will not become a
Participant until he or she has satisfied the eligibility requirements of
Article IV, but shall be treated as a Participant (with respect to such
transferred benefit) for purposes of Articles VI, VIII, IX, X and XI. To the
extent necessary to satisfy the requirements of Code section 411(d)(6), or as
otherwise determined by the Committee, forms of benefit distributions with
respect to transferred amounts shall be preserved hereunder. The Committee may
provide for the separate accounting of benefits transferred pursuant to this
Section to the extent it deems such separate accounting necessary or appropriate
to carry out the provisions of this Section.

     13.12 Veterans' Re-Employment and Benefits Rights. Notwithstanding any
provision of the Plan to the contrary, contributions, benefits and service
credit with respect to qualified military service will be provided in accordance
with Code section 414(u). In addition, loan repayments will be suspended under
the Plan as permitted under Section 414(u)(4) of the Code.


                                      -47-

<PAGE>

Article XIV. Special Top Heavy Rules.

     14.1 Special contribution for top heavy plan years. Notwithstanding
anything contained in the Plan to the contrary, if for any top heavy plan year
the Participating Employer Contribution made for the benefit of any Participant
who is not a key employee for that year is less than three percent of such
Participant's Salary, a special contribution shall be made hereunder so that the
sum of the special contribution and Participating Employer Contribution equals
three percent of the Participant's Salary; provided, however, that if for such
top heavy plan year the sum of the Elective, Matching and Participating Employer
Contributions made for the benefit of each key employee, expressed as a
percentage of his or her Salary, is less than three percent, the minimum
contribution required under this Section 14.1 for the benefit of each
Participant who is not a key employee will be limited to an amount which, when
added to the Participating Employer Contributions made for the benefit of such
Participant, constitutes a percentage of such Participant's Salary not less than
the highest percentage obtained by dividing, for each key employee, the sum of
the Elective, Matching and Participating Employer Contributions made for the
benefit of such key employee by his or her Salary. In applying the preceding
sentence, there shall be aggregated with contributions made for a Participant's
benefit under the Plan all Employer contributions (other than elective
contributions, in the case of a Participant who is not a key employee) for the
benefit (and forfeitures allocated to the account) of the Participant under all
qualified defined contribution plans (if any) required to be aggregated with the
Plan pursuant to the first sentence of Section 14.3(b)(iii), subject to the
special rule of Code section 416(c)(2)(B)(ii)(II).


     Notwithstanding the foregoing, no amount shall be required to be
contributed pursuant to this Section in respect of any Participant for any year
if, by reason of amounts contributed or benefits accrued with respect to such
Participant of such year under one or more other plans maintained by the
Employer, a contribution in respect of such Participant for such year under this
Section would result in the duplication of minimum benefits or contributions, as
determined under section 416(f) of the Code and the regulations thereunder.

     Any additional contribution made for the benefit of any Participant under
this Section shall be credited to his or her Participating Employer Contribution
Account as soon as practicable after the close of the Plan Year for which the
contribution is made.

14.2 Adjustment to limitations. For any Plan Year which is a top heavy plan
year, the adjustment described in Section 416(h) of the Code will apply for
purposes of determining a Participant's "defined benefit plan fraction" (as
determined under Section 415(e)(2) of the Code and the regulations promulgated
thereunder) and "defined contribution plan fraction" (as determined under
Section 415(e)(3) of the Code and the regulations promulgated thereunder,
including, if elected, the special transition rule of Section 415(e)(7) of the
Code) unless (a) the Plan and each qualified plan with which the Plan is
required to be aggregated pursuant to the first sentence of Section 14.3(b)(iii)
satisfies the requirements of Section 416(h)(2)(A) of the

                                      -48-

<PAGE>

Code, and (b) such Plan year would not be a top heavy plan year if "ninety
percent" were substituted for "sixty percent" in the first paragraph of Section
14.3(b).

     14.3 Definitions. As used in this Article, the following words shall have
the following meaning:

          (a) "Key employee" means any Employee or Beneficiary who is a "key
     employee" within the meaning of section 416(i) of the Code and the
     regulations promulgated thereunder. For purposes of determining who is a
     key employee, the compensation taken into account shall be the individual's
     Salary. Any Employee (and any Beneficiary of an Employee) who is not a key
     employee shall be a non-key employee.

          (b) "Top heavy plan year" means a Plan Year commencing on or after
     January 1, 1984 if the sum of the account balances of all key employees
     under the Plan and under each other qualified defined contribution plan (as
     of the applicable determination date of each such plan) which is aggregated
     with this Plan plus the sum of the present value of the total accrued
     benefits of all key employees under each qualified defined benefit plan (as
     of the applicable determination date of each such plan) which is aggregated
     with this Plan exceeds 60 percent of the sum of such amounts for all
     Employees, former Employees and Beneficiaries (other than former key
     employees) under such plans.

     The following rules shall apply for purposes of the foregoing
determination:

               (i) all determinations hereunder will be computed in accordance
          with section 416 of the Code and the regulations promulgated
          thereunder, which are specifically incorporated herein by reference.

               (ii) The term "determination date" means, with respect to the
          initial plan year of a plan, the last day of such plan year and, with
          respect to any other plan year of a plan, the last day of the
          preceding plan year of such plan. The term "applicable determination
          date" means, with respect to the Plan, the determination date of the
          Plan Year of reference and, with respect to any other plan, the
          determination date for any plan year of such plan which falls within
          the same calendar year as the applicable determination date of the
          Plan. Accrued benefits or account balances under a plan will be
          determined as of the most recent valuation date of the plan; provided,
          however, that in the case of a defined benefit plan such valuation
          date must be the same date as is employed for computing plan costs for
          minimum funding purposes, and in the case of a defined contribution
          plan the value so determined will be adjusted for contributions made
          after the valuation date to the extent required by applicable Treasury
          regulations.


                                      -49-

<PAGE>

               (iii) There shall be aggregated with this Plan (1) any other plan
          of an Employer under which at least one key employee participates and
          which is able to satisfy the requirements of sections 401(a)(4) or 410
          of the Code by reason, at least in part, of the existence of this
          Plan, and (2) if at least one key employee is a Participant hereunder,
          any other plan of an Employer (A) in which a key employee participates
          or (B) which enables another such plan (including, but not limited to,
          the Plan) to satisfy the requirements of sections 401(a)(4) or 410 of
          the Code. Any plan of an Employer not required to be aggregated with
          the Plan may nevertheless, at the discretion of the Committee, be
          aggregated with the Plan if the benefits and coverage of all
          aggregated plans would continue to satisfy the requirements of
          sections 401(a)(4) and 410 of the Code.

     IN WITNESS WHEREOF, Brown & Sharpe Manufacturing Company has caused this
instrument to be signed by its duly authorized officer this 23rd day of
December, 1998.

                                        BROWN & SHARPE MANUFACTURING
                                        COMPANY

                                        By /s/ AC Genor
                                          --------------------------




                                      -50-

<PAGE>

                                    Exhibit A

                                Change in Control

A "Change in Control" shall be deemed to have occurred if:

     (a) any "person" as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act") (other than (i) the
Company; (ii) any subsidiary of the Company; (iii) any trustee or other
fiduciary holding securities under an employee benefit plan of the Company or of
any subsidiary of the Company; or (iv) any company owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of Stock of the Company), is or becomes the
"beneficial owner" (as defined in Section 13(d) of the 1934 Act), together with
all Affiliates and Associates (as such terms are used in Rule 12b-2 of the
General Rules and Regulations under the 1934 Act) of such person, directly or
indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities; or

     (b) the shareholders of the Company approve a merger or consolidation of
the Company with any other company, other than (i) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity), in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary of the Company, at least 65% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (with the exception given and the
method of determining `beneficial ownership' used in clause (a) of this
definition) acquires more than 50% of the combined voting power of the Company's
then outstanding securities; or

     (c) during any period of two consecutive years (not including any period
prior to the execution of the Plan), individuals who, at the beginning of such
period, constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clause (a), (b), or (d) of this definition)
whose election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved
cease for any reason to constitute at least a majority thereof; or

     (d) the shareholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of all
or substantially all of the Company's assets



                                      -51-

<PAGE>


                                   Exhibit B

     The following Affiliated Companies participate in The Brown & Sharpe
Savings and Retirement Plan for Management Employees (in addition to the
Company):

         Borel & Dunner, Inc.

         Brown & Sharpe Aftermarket Services, Inc.


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