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EXHIBIT 10.20

                               SHOPKO STORES, INC.


                               SHARED SAVINGS PLAN
                               (2002 RESTATEMENT)







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SECTION 1              INTRODUCTION..............................................................................1

         1.1.          Definitions...............................................................................1
         1.1.1.        Accounts..................................................................................1
                         (a)    Total Account....................................................................1
                         (b)    401(k) Account...................................................................1
                         (c)    Employer Matching Account........................................................1
                         (d)    Profit Sharing Account...........................................................1
                         (e)    Rollover Account.................................................................2
                         (f)    Voluntary Account................................................................2
                         (g)    Suspense Account.................................................................2
                         (h)    Transfer Account.................................................................2
                         (i)    Additional Contributions Account.................................................2
         1.1.2.        Administrative Delegate...................................................................2
         1.1.3.        Affiliate.................................................................................2
         1.1.4.        Annual Valuation Date.....................................................................2
         1.1.5.        Beneficiary...............................................................................3
         1.1.6.        Code......................................................................................3
         1.1.7.        Disability................................................................................3
         1.1.8.        Effective Date............................................................................3
         1.1.9.        Eligibility Service.......................................................................3
                         (a)    Computation Periods..............................................................3
                         (b)    Completion.......................................................................3
                         (c)    Pre-Effective Date Service.......................................................3
                         (d)    Special Short Plan Year Rule.....................................................3
         1.1.10.       Employer..................................................................................3
         1.1.11.       Enrollment Date...........................................................................4
         1.1.12.       ERISA.....................................................................................4
         1.1.13.       Event of Maturity.........................................................................4
         1.1.14.       Fund......................................................................................4
         1.1.15.       Hours of Service..........................................................................4
                         (a)    Paid Duty........................................................................4
                         (b)    Paid Nonduty.....................................................................4
                         (c)    Back Pay.........................................................................5
                         (d)    Unpaid Absences..................................................................5
                         (e)    Special Rules....................................................................6
                         (f)    Equivalency for Exempt Employees.................................................6
                         (g)    Equivalency for Non-Exempt Truck Drivers.........................................6
         1.1.16.       Investment Manager........................................................................6
         1.1.17.       Normal Retirement Age.....................................................................7
         1.1.18.       One-Year Break in Service.................................................................7
         1.1.19.       Participant...............................................................................7
         1.1.20.       Plan......................................................................................7
         1.1.21.       Plan Statement............................................................................7
         1.1.22.       Plan Year and Short Plan Year.............................................................7
         1.1.23.       Pooled Investment Account.................................................................7
         1.1.24.       Principal Sponsor.........................................................................7
         1.1.25.       Prior Plan Statement......................................................................7

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         1.1.26.       Recognized Compensation...................................................................7
                         (a)    Included Items...................................................................7
                         (b)    Excluded Items...................................................................8
                         (c)    Pre-Participation Employment.....................................................8
                         (d)    Non-Recognized Employment........................................................8
                         (e)    Attribution to Periods...........................................................8
                         (f)    Excluded Periods.................................................................8
                         (g)    Multiple Employers...............................................................8
                         (h)    Annual Maximum...................................................................8
         1.1.27.       Recognized Employment.....................................................................8
         1.1.28.       Retirement Committee......................................................................9
         1.1.29.       Subfund...................................................................................9
         1.1.30.       401(k) Agreement..........................................................................9
         1.1.31.       Trustee...................................................................................9
         1.1.32.       Valuation Date............................................................................9
         1.1.33.       Vested....................................................................................9
         1.1.34.       Vesting Service...........................................................................9
                         (a)    Computation Periods.............................................................10
                         (b)    Completion......................................................................10
                         (c)    Pre-Effective Date Service......................................................10
                         (d)    Breaks in Service...............................................................10
                         (e)    Vesting in Pre-Break Accounts...................................................10
                         (f)    Special Short Plan Year Rule....................................................10
                         (g)    Prior Service with Pamida, Inc. and P.M. Place Stores Company...................10

         1.2.          Rules of Interpretation..................................................................10

         1.3.          Transitional Rules.......................................................................11

SECTION 2              ELIGIBILITY AND PARTICIPATION............................................................11

         2.1.          Eligibility Rules........................................................................11
         2.1.1.        General Rule.............................................................................11
         2.1.2.        Transitional Rule........................................................................11
         2.1.3.        Special Rule for Early Participation in Elective Retirement Savings Only.................11

         2.2.          Special Rule for Former Participants.....................................................12

         2.3.          Enrollment...............................................................................12

         2.4.          401(k) Agreement.........................................................................12

         2.5.          Modifications of 401(k) Agreement........................................................12
         2.5.1.        Increase or Decrease.....................................................................13
         2.5.2.        Cancellation of 401(k) Agreement.........................................................13
         2.5.3.        Termination of Recognized Employment.....................................................13
         2.5.4.        Form of Agreement........................................................................13

         2.6.          Section 401(k) Compliance................................................................13
         2.6.1.        Special Definitions......................................................................13
                         (a)    Eligible employee...............................................................13
                         (b)    Highly compensated eligible employees...........................................13

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                         (c)    Deferral percentage.............................................................13
                         (d)    Compensation....................................................................13
                         (e)    Average deferral percentage.....................................................13
         2.6.2.        Special Rules............................................................................14
                         (a)    Rounding........................................................................14
                         (b)    Highly Compensated Employees....................................................14
                         (c)    Permissive Aggregation..........................................................14
         2.6.3.        The Tests................................................................................14
         2.6.4.        Remedial Action..........................................................................14
         2.6.5.        Safe Harbor After January 1, 2001........................................................15

SECTION 3              CONTRIBUTIONS AND ALLOCATION THEREOF.....................................................15

         3.1.          Employer Contributions...................................................................15
         3.1.1.        Source of Employer Contributions.........................................................15
         3.1.2.        Limitation...............................................................................15
         3.1.3.        Form of Payment..........................................................................15

         3.2.          Retirement Savings Contributions.........................................................15
         3.2.1.        Amount...................................................................................15
         3.2.2.        Allocation...............................................................................15

         3.3.          Discretionary Contributions..............................................................15
         3.3.1.        General..................................................................................15
         3.3.2.        Section 401(k) Curative Allocation.......................................................15
         3.3.3.        Section 401(m) Curative Allocation.......................................................16
         3.3.4.        Discretionary Profit Sharing Contributions...............................................16

         3.4.          Eligible Participants....................................................................16

         3.5.          Matching Employer Contributions Prior to January 1, 2001.................................17
         3.5.1.        Amount and Eligibility...................................................................17
         3.5.2.        Allocation...............................................................................17

         3.6.          Section 401(m) Compliance................................................................17
         3.6.1.        Special Definitions......................................................................17
                         (a)    Eligible employee...............................................................17
                         (b)    Highly compensated eligible employees...........................................17
                         (c)    Contribution percentage.........................................................18
                         (d)    Average contribution percentage.................................................18
         3.6.2.        Special Rules............................................................................18
                         (a)    Rounding........................................................................18
                         (b)    Highly Compensated Employees....................................................18
                         (c)    Permissive Aggregation..........................................................18
         3.6.3.        The Tests................................................................................18
         3.6.4.        Remedial Action..........................................................................19

         3.7.          Safe Harbor Matching Employer Contributions From and After January 1, 2001...............19
         3.7.1.        Amount and Eligibility...................................................................19
         3.7.2.        Full Vesting.............................................................................20
         3.7.3.        Allocation...............................................................................20

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         3.7.4.        Safe Harbor 401(m) Compliance............................................................20

         3.8.          Adjustments..............................................................................20
         3.8.1.        Make-Up Contributions for Omitted Participants...........................................20
         3.8.2.        Mistaken Contributions...................................................................21

         3.9.          Rollover Contributions...................................................................21
         3.9.1.        Contingent Provision.....................................................................21
         3.9.2.        Eligible Contributions...................................................................21
         3.9.3.        Specific Review..........................................................................21
         3.9.4.        Allocation...............................................................................21

         3.10.         Nondeductible Voluntary Contributions....................................................21

         3.11.         Limitation on Annual Additions...........................................................21

         3.12.         Effect of Disallowance of Deduction or Mistake of Fact...................................21

         3.13.         Uniformed Services Employment and Reemployment Rights Act (USERRA).......................22

SECTION 4              INVESTMENT AND ADJUSTMENT OF ACCOUNTS....................................................22

         4.1.          Establishment of Subfunds................................................................22
         4.1.1.        Establishing Subfunds....................................................................22
         4.1.2.        Operational Rules........................................................................22
         4.1.3.        Revising Subfunds........................................................................22
         4.1.4.        ERISA Section 404(c) Compliance..........................................................22

         4.2.          Valuation and Adjustment of Accounts.....................................................23
         4.2.1.        Valuation................................................................................23
         4.2.2.        Additions and Withdrawals................................................................23
         4.2.3.        Pooled Funds.............................................................................24
         4.2.4.        Other Rules..............................................................................24

         4.3.          Management and Investment of Fund........................................................24

SECTION 5              VESTING..................................................................................24

         5.1.          Profit Sharing Account...................................................................24
         5.1.1.        Progressive Vesting......................................................................24
         5.1.2.        Full Vesting.............................................................................24
         5.1.3.        Forfeiture Event.........................................................................25
         5.1.4.        Pre-Effective Date Vesting...............................................................25

         5.2.          Other Accounts...........................................................................25

SECTION 6              MATURITY.................................................................................25

         6.1.          Events of Maturity.......................................................................25

         6.2.          Disposition of Nonvested Portion of Account..............................................26
         6.2.1.        Rehire Before Annual Valuation Date......................................................26
         6.2.2.        Rehire After Annual Valuation Date.......................................................26
         6.2.3.        Forfeitures..............................................................................27
         6.2.4.        Restorations.............................................................................27

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         6.3.          Unclaimed Vested Total Accounts..........................................................27
         6.3.1.        Forfeitures..............................................................................27
         6.3.2.        Restorations.............................................................................27

SECTION 7              DISTRIBUTION..............................................................................28

         7.1.          Application for Distribution.............................................................28
         7.1.1.        Application Required.....................................................................28
         7.1.2.        Exception for Small Amounts..............................................................28
         7.1.3.        Exception for Required Distributions.....................................................28
         7.1.4.        Notices..................................................................................28
         7.1.5.        Direct Rollover..........................................................................28
                         (a)    Eligible rollover distribution and eligible retirement plan.....................29
                         (b)    Direct rollover.................................................................29

         7.2.          Time and Form of Distribution............................................................29
         7.2.1.        Earliest Beginning Date..................................................................29
                         (a)    Participant.....................................................................29
                         (b)    Beneficiary.....................................................................29
         7.2.2.        Required Beginning Date..................................................................29
                         (a)    Participant.....................................................................29
                         (b)    Beneficiary.....................................................................29
         7.2.3.        Form of Distribution of Transfer Accounts from the Penn-Daniels Plan.....................29
         7.2.4.        Required Minimum Distributions...........................................................30

         7.3.          Other Rules..............................................................................30
         7.3.1.        Effect of Reemployment...................................................................30
         7.3.2.        TEFRA Section 242(b) Designations........................................................30

         7.4.          Designation of Beneficiaries.............................................................30
         7.4.1.        Right to Designate.......................................................................30
         7.4.2.        Spousal Consent..........................................................................31
         7.4.3.        Failure of Designation...................................................................31
         7.4.4.        Disclaimers by Beneficiaries.............................................................31
         7.4.5.        Definitions..............................................................................32
         7.4.6.        Special Rules............................................................................32

         7.5.          Death Prior to Full Distribution.........................................................33

         7.6.          Distribution in Cash.....................................................................33

         7.7.          Facility of Payment......................................................................33

         7.8.          Withdrawals from Voluntary and Rollover Accounts.........................................33
         7.8.1.        When Available...........................................................................33
         7.8.2.        Limitation...............................................................................33
         7.8.3.        Sequence of Accounts.....................................................................33
         7.8.4.        Coordination with Section 4.1............................................................34

         7.9.          In-Service Distributions.................................................................34
         7.9.1.        When Available...........................................................................34
         7.9.2.        Purposes.................................................................................34
         7.9.3.        Limitations..............................................................................34

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         7.9.4.        Limit on Distributions from Voluntary Account............................................34
         7.9.5.        Coordination with Section 4.1............................................................34
         7.9.6.        In-Service Withdrawals at 59 1/2.........................................................34

         7.10.         Hardship Distributions...................................................................35
         7.10.1.       When Available...........................................................................35
         7.10.2.       Purposes.................................................................................35
         7.10.3.       Limitations..............................................................................35
         7.10.4.       Coordination with Other Plans............................................................36
         7.10.5.       Coordination with Section 4.1............................................................36
         7.10.6.       Hardship Withdrawals from Transfer Accounts from the Penn-Daniels Plan...................36

         7.11.         Loans....................................................................................36
         7.11.1.       Availability.............................................................................36
         7.11.2.       Administration...........................................................................37
         7.11.3.       Loan Terms...............................................................................37
         7.11.4.       Accounting for the Loan..................................................................37
         7.11.5.       Other Terms Governed by Committee Loan Program Rules.....................................38
         7.11.6.       Reporting and Disclosure.................................................................38
         7.11.7.       Loans from Transfer Accounts from the Penn-Daniels Plan..................................38

         7.12.         Corrective Distributions.................................................................38
         7.12.1.       Excess Elective Deferrals ($7,000 Limit as Adjusted).....................................38
                         (a)    In General......................................................................38
                         (b)    Definitions.....................................................................38
                         (c)    Claims..........................................................................38
                         (d)    Determination of Income or Loss.................................................38
                         (e)    Accounting for Excess Elective Deferrals........................................39
         7.12.2.       Excess Contributions (Section 401(k) Test) ..............................................39
                         (a)    In General......................................................................39
                         (b)    Excess Contributions............................................................39
                         (c)    Determination of Income or Loss.................................................39
                         (d)    Accounting for Excess Contributions.............................................40
         7.12.3.       Excess Aggregate Contributions (Section 401(m) Test) ....................................40
                         (a)    In General......................................................................40
                         (b)    Excess Aggregate Contributions..................................................40
                         (c)    Determination of Income.........................................................40
                         (d)    Accounting for Excess Aggregate Contributions...................................41
         7.12.4.       Priority.................................................................................41
         7.12.5.       Matching Contributions...................................................................41
         7.12.6.       Safe Harbor Compliance...................................................................41
         7.12.7.       Committee Discretion.....................................................................41

SECTION 8              SPENDTHRIFT PROVISIONS...................................................................41

SECTION 9              AMENDMENT AND TERMINATION................................................................42

         9.1.          Amendment................................................................................42

         9.2.          Discontinuance of Contributions and Termination of Plan..................................42

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         9.3.          Merger or Spinoff of Plans...............................................................43
         9.3.1.        In General...............................................................................43
         9.3.2.        Limitations..............................................................................43
         9.3.3.        Beneficiary Designations.................................................................43
         9.3.4.        Pamida Merger............................................................................43

         9.4.          Adoption by Other Employers..............................................................43
         9.4.1.        Adoption by Consent......................................................................43
         9.4.2.        Procedure for Adoption...................................................................44
         9.4.3.        Effect of Adoption.......................................................................44

SECTION 10             CONCERNING THE TRUSTEE...................................................................44

         10.1.         Dealings with Trustee....................................................................44
         10.1.1.       No Duty to Inquire.......................................................................44
         10.1.2.       Assumed Authority........................................................................44
         10.1.3.       Directed Trustee.........................................................................44

         10.2.         Compensation of Trustee..................................................................45

         10.3.         Resignation and Removal of Trustee.......................................................45
         10.3.1.       Resignation, Removal and Appointment.....................................................45
         10.3.2.       Surviving Trustees.......................................................................45
         10.3.3.       Successor Organizations..................................................................45
         10.3.4.       Co-Trustee Responsibility................................................................46
         10.3.5.       Allocation of Responsibility.............................................................46
         10.3.6.       Majority Decisions.......................................................................46

         10.4.         Accountings by Trustee...................................................................46
         10.4.1.       Periodic Reports.........................................................................46
         10.4.2.       Special Reports..........................................................................46

         10.5.         Trustee's Power to Protect Itself on Account of Taxes....................................46

         10.6.         Other Trust Powers.......................................................................47

         10.7.         Investment Managers......................................................................51
         10.7.1.       Appointment and Qualifications...........................................................51
         10.7.2.       Removal..................................................................................51
         10.7.3.       Relation to Other Fiduciaries............................................................51

         10.8.         No Investment in Employer Real Property..................................................51

         10.9.         Investment in Employer Securities........................................................52

         10.10.        Fiduciary Principles.....................................................................52

         10.11.        Prohibited Transactions..................................................................52

         10.12.        Indemnity................................................................................52

SECTION 11             DETERMINATIONS -- RULES AND REGULATIONS..................................................53

         11.1.         Determinations...........................................................................53

         11.2.         Rules and Regulations....................................................................53
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         11.3.         Method of Executing Instruments..........................................................53
         11.3.1.       Employer or Committee....................................................................53
         11.3.2.       Trustee..................................................................................53

         11.4.         Claims Procedure.........................................................................53
         11.4.1.       Original Claim...........................................................................53
         11.4.2.       Claims Review Procedure..................................................................54
         11.4.3.       General Rules............................................................................54

         11.5.         Information Furnished by Participants....................................................54

SECTION 12             PLAN ADMINISTRATION......................................................................55

         12.1.         Principal Sponsor........................................................................55
         12.1.1.       Officers.................................................................................55
         12.1.2.       Chief Executive Officer..................................................................55
         12.1.3.       Board of Directors.......................................................................55

         12.2.         Committee................................................................................55
         12.2.1.       Appointment and Removal..................................................................55
         12.2.2.       Automatic Removal........................................................................55
         12.2.3.       Authority................................................................................55
         12.2.4.       Majority Decisions.......................................................................57

         12.3.         Limitation on Authority..................................................................57
         12.3.1.       Fiduciaries Generally....................................................................57
         12.3.2.       Trustee..................................................................................57

         12.4.         Conflict of Interest.....................................................................57

         12.5.         Dual Capacity............................................................................57

         12.6.         Administrator............................................................................58

         12.7.         Named Fiduciaries........................................................................58

         12.8.         Service of Process.......................................................................58

         12.9.         Administrative Expenses..................................................................58

         12.10.        IRS Qualification........................................................................58

SECTION 13             IN GENERAL...............................................................................58

         13.1.         Disclaimers..............................................................................58
         13.1.1.       Effect on Employment.....................................................................58
         13.1.2.       Sole Source of Benefits..................................................................58
         13.1.3.       Co-Fiduciary Matters.....................................................................58

         13.2.         Reversion of Fund Prohibited.............................................................59

         13.3.         Contingent Top Heavy Plan Rules..........................................................59

         13.4.         Continuity...............................................................................59

         13.5.         Execution in Counterparts................................................................59

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         13.6.         Governing Law............................................................................59


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SECTION 14             EGTRRA PLAN AMENDMENTS...................................................................59

         14.1.         Amendment of the Plan for EGTRRA.........................................................59
         14.1.1.       Adoption and Effective Date of EGTRRA Amendments.........................................59
         14.1.2.       Supersession of Inconsistent Provisions..................................................59

         14.2.         Limitations on Contributions.............................................................59
         14.2.1.       Effective Date...........................................................................59
         14.2.2.       Maximum Annual Addition..................................................................60

         14.3.         Increase in Compensation Limit...........................................................60

         14.4.         Modification of Top-Heavy Rules..........................................................60
         14.4.1.       Effective Date...........................................................................60
         14.4.2.       Determination of top-heavy status........................................................60
                         (a)    Key employee....................................................................60
                         (b)    Determination of present values and amounts.....................................60
                         (c)    Distributions during year ending on the determination date......................60
                         (d)    Employees not performing services during year ending on the
                                determination date..............................................................61
         14.4.3.       Minimum benefits.........................................................................61
                         (a)    Matching contributions..........................................................61
                         (b)    Contributions under other plans.................................................61

         14.5.         Direct Rollovers of Plan Distributions from this Plan....................................61
         14.5.1.       Effective date...........................................................................61
         14.5.2.       Modification of definition of eligible retirement plan...................................61
         14.5.3.       Modification of definition of eligible rollover distribution to exclude hardship
                       distributions............................................................................61
         14.5.4.       Modification of definition of eligible rollover distribution to include after-tax
                       employee contributions...................................................................61

         14.6.         Rollovers Disregarded in Involuntary Cash-Outs...........................................62

         14.7.         Repeal of Multiple Use Test..............................................................62

         14.8.         Modification of Top-Heavy Rules..........................................................62

         14.9.         Elective Deferrals - Contribution Limitation.............................................62

         14.10.        Catch-Up Contributions...................................................................62

         14.11.        Suspension Period Following Hardship Distribution........................................62

         14.12.        Distribution Upon Severance from Employment..............................................62

SCHEDULE I             .........................................................................................64

APPENDIX A             LIMITATION ON ANNUAL ADDITIONS...........................................................65

APPENDIX B             CONTINGENT TOP HEAVY PLAN RULES..........................................................73

APPENDIX C             QUALIFIED DOMESTIC RELATIONS ORDERS......................................................83

APPENDIX D             HIGHLY COMPENSATED EMPLOYEE..............................................................87
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                               SHOPKO STORES, INC.
                               SHARED SAVINGS PLAN
                               (2002 RESTATEMENT)


         THIS AGREEMENT, is made as of ______________, 2002, by and between
SHOPKO STORES, INC., a Wisconsin corporation (the "Principal Sponsor"), and
American Express Trust Company, a Minnesota corporation, as trustee (together
with its successors, the "Trustee").

         WHEREAS, the Principal Sponsor maintains a profit sharing plan (the
"Plan") formerly known as the "PROFIT SHARING AND SHARED SAVER PLAN" and now
known as the SHOPKO STORES, INC. SHARED SAVINGS PLAN (the "Plan") which was last
amended and restated in the form of a single plan document in 1998; and

         WHEREAS, the Principal Sponsor has reserved to itself the power to make
further amendments of the Plan documents; and

         WHEREAS, the Principal Sponsor now wishes to further amend and restate
the Plan to bring it into compliance with various legislative changes and to
make certain other changes;

         NOW, THEREFORE, the Plan documents are hereby amended and restated,
generally effective as of February 23, 1997, unless otherwise stated, to read in
full as follows:

                                    SECTION 1

                                  INTRODUCTION

         1.1. DEFINITIONS. When the following terms are used herein with initial
capital letters, they shall have the following meanings:

                  1.1.1. ACCOUNTS -- the following Accounts will be maintained
         under the Plan for Participants:

                           (a) TOTAL ACCOUNT -- for convenience of reference, a
                  Participant's entire interest in the Fund, including the
                  Participant's 401(k) Account, Profit Sharing Account, Employer
                  Matching Account, Rollover Account, Voluntary Account and
                  Transfer Account (but excluding the Participant's interest in
                  a Suspense Account).

                           (b) 401(K) ACCOUNT -- the Account maintained for each
                  Participant to which are credited the Employer contributions
                  made in consideration of such Participant's earnings
                  reductions pursuant to Section 3.2 (or comparable provisions
                  of the Prior Plan Statement, if any), or Employer
                  contributions made pursuant to Section 3.3.2, together with
                  any increase or decrease thereon.

                           (c) EMPLOYER MATCHING ACCOUNT -- the Account
                  maintained for each Participant to which is credited the
                  Participant's allocable share of the Employer contributions
                  made pursuant to Section 3.10 or made pursuant to Section
                  3.3.3, together with an increase or decrease thereon. A
                  Participant may invest the Employer Matching Account in any of
                  the investment funds designated by the Retirement Committee.

                           (d) PROFIT SHARING ACCOUNT -- the Account maintained
                  for each Participant to which was credited the Participant's
                  allocable share of the Employer contributions made under the
                  provisions of the Prior Plan Statement together with any
                  increase or


<PAGE>

                  decrease thereon. Effective as of January 1, 2001,
                  discretionary profit sharing contributions have been
                  discontinued, but such Account record shall continue to be
                  maintained.

                           (e) ROLLOVER ACCOUNT -- the Account maintained for
                  each Participant to which are credited the Participant's
                  rollover contributions made pursuant to Section 3.6 (or
                  comparable provisions of the Prior Plan Statement, if any),
                  together with any increase or decrease thereon.

                           (f) VOLUNTARY ACCOUNT -- the Account maintained for
                  each Participant to which were credited the nondeductible
                  voluntary contributions made by the Participant to the Plan
                  under the Prior Plan Statement before December 1, 1986,
                  together with any increase or decrease thereon.

                           (g) SUSPENSE ACCOUNT -- the Account maintained for
                  each Participant to which is credited the portion of the
                  Participant's Profit Sharing Account which is not Vested upon
                  the occurrence of an Event of Maturity (pending reemployment
                  or forfeiture pursuant to Section 6.2), together with any
                  increase or decrease thereon. Notwithstanding any other
                  provision of the Plan, effective as of March 1, 1996, no
                  separate Suspense Accounts will be maintained. Instead, all
                  amounts which would have been credited to the Suspense Account
                  shall be maintained in an aggregate forfeiture account and
                  thereafter shall either become a forfeiture or be restored to
                  the Participant's Total Account in accordance with the Plan
                  terms. From and after March 1, 1996, all references to
                  Suspense Accounts shall be deemed to refer to such aggregate
                  forfeiture account.

                           (h) TRANSFER ACCOUNT -- the Account maintained for
                  each Participant to which is credited the Participant's
                  interest, if any, transferred from another qualified plan by
                  the trustee of such other plan pursuant to an agreement made
                  under Section 9.3 and not credited to any other Account
                  pursuant to such agreement (or another provision of this Plan
                  Statement), together with any increase or decrease thereon.

                           (i) ADDITIONAL CONTRIBUTIONS ACCOUNT -- the Account
                  maintained for each Participant to which are credited any
                  special make-up contributions under Section 3.8.1 or other
                  remedial contributions.

                  1.1.2. ADMINISTRATIVE DELEGATE -- one or more persons or
         institutions to whom the Retirement Committee has delegated certain
         administrative functions pursuant to a written agreement.

                  1.1.3. AFFILIATE -- a business entity which is under "common
         control" with the Employer or which is a member of an "affiliated
         service group" that includes the Employer, as those terms are defined
         in Section 414(b), (c) and (m) of the Code. A business entity which is
         a predecessor to the Employer shall be treated as an Affiliate if the
         Employer maintains a plan of such predecessor business entity or if,
         and to the extent that, such treatment is otherwise required by
         regulations under Section 414(a) of the Code. A business entity shall
         also be treated as an Affiliate if, and to the extent that, such
         treatment is required by regulations under Section 414(o) of the Code.
         In addition to said required treatment, the Principal Sponsor may, in
         its discretion, designate as an Affiliate any business entity which is
         not such a "common control," "affiliated service group" or
         "predecessor" business entity but which is otherwise affiliated with
         SHOPKO STORES, INC., subject to such limitations as the Principal
         Sponsor may impose.

                  1.1.4. ANNUAL VALUATION DATE -- effective as of December 31,
         1998, the last day of the Plan Year.



                                       2
<PAGE>

                  1.1.5. BENEFICIARY -- a person designated by a Participant (or
         automatically by operation of this Plan Statement) to receive all or a
         part of the Participant's Vested Total Account in the event of the
         Participant's death prior to full distribution thereof. A person so
         designated shall not be considered a Beneficiary until the death of the
         Participant.

                  1.1.6. CODE -- the Internal Revenue Code of 1986, including
         applicable regulations for the specified section of the Code. Any
         reference in this Plan Statement to a section of the Code, including
         the applicable regulation, shall be considered also to mean and refer
         to any subsequent amendment or replacement of that section or
         regulation.

                  1.1.7. DISABILITY -- a medically determinable physical or
         mental impairment which: (i) renders the individual incapable of
         performing any substantial gainful employment, (ii) can be expected to
         be of long-continued and indefinite duration or result in death, and
         (iii) is evidenced by a certification to this effect by a doctor of
         medicine approved by the Retirement Committee. In lieu of such a
         certification, the Retirement Committee may accept, as proof of
         Disability, the official written determination that the individual will
         be eligible for disability benefits under the federal Social Security
         Act as now enacted or hereinafter amended (when any waiting period
         expires). The Retirement Committee shall determine the date on which
         the Disability shall have occurred if such determination is necessary.

                  1.1.8. EFFECTIVE DATE -- February 23, 1997, subject to Section
         1.3, and other provisions hereof with differing effective date
         provisions.

                  1.1.9. ELIGIBILITY SERVICE -- a measure of an employee's
         service with the Employer and all Affiliates (stated as a number of
         years) which is equal to the number of computation periods for which
         the employee is credited with one thousand (1,000) or more Hours of
         Service; subject, however, to the following rules:

                           (a) COMPUTATION PERIODS. The computation periods for
                  determining Eligibility Service shall be the twelve (12)
                  consecutive month period beginning with the date the employee
                  first performs an Hour of Service and all Plan Years beginning
                  after such date (irrespective of any termination of employment
                  and subsequent reemployment).

                           (b) COMPLETION. A year of Eligibility Service shall
                  be deemed completed only as of the last day of the computation
                  period (irrespective of the date in such period that the
                  employee completed one thousand Hours of Service). (Fractional
                  years of Eligibility Service shall not be credited.)

                           (c) PRE-EFFECTIVE DATE SERVICE. Eligibility Service
                  shall be credited for Hours of Service earned and computation
                  periods completed before the Effective Date as if this Plan
                  Statement were then in effect.

                           (d) SPECIAL SHORT PLAN YEAR RULE. For any employee
                  for whom the Short Plan Year (March 1, 1998 to December 31,
                  1998) is an applicable computation period, such employee shall
                  be credited with one (1) year of Eligibility Service if the
                  employee is either credited with eight hundred and
                  thirty-three (833) or more Hours of Service in the Short Plan
                  Year or alternatively, is credited with one thousand (1,000)
                  or more Hours of Service in the twelve (12) month period
                  beginning on March 1, 1998 and ending February 27, 1999.

                  1.1.10. EMPLOYER -- the Principal Sponsor, each business
         entity listed in Schedule I to the Plan Statement, any business entity
         affiliated with the Principal Sponsor that adopts the Plan pursuant to
         Section 9.4, and any successor thereof that adopts the Plan.



                                       3
<PAGE>

                  1.1.11. ENROLLMENT DATE -- Effective as of April 1, 1998, the
         Enrollment Dates shall be (i) January 1, April 1, July 1 and October 1,
         (ii) the January 1, April 1, July 1 or October 1 next following the
         date upon which an individual who had previously met the age and
         service requirements of Section 2.1 but who was not then in Recognized
         Employment is transferred to Recognized Employment (applicable for such
         individual only), and (iii) the date upon which an individual who had
         previously been a Participant is reemployed in Recognized Employment
         (applicable for such individual only), and (iv) such other dates as the
         Retirement Committee may by rule establish from time to time for the
         commencement of retirement savings under Section 2.3.

                  1.1.12. ERISA -- the Employee Retirement Income Security Act
         of 1974, including applicable regulations for the specified section of
         ERISA. Any reference in this Plan Statement to a section of ERISA,
         including the applicable regulation, shall be considered also to mean
         and refer to any subsequent amendment or replacement of that section or
         regulation.

                  1.1.13. EVENT OF MATURITY -- any of the occurrences described
         in Section 6 by reason of which a Participant or Beneficiary may become
         entitled to a distribution from the Plan.

                  1.1.14. FUND -- the assets of the Plan held by the Trustee
         from time to time, including all contributions and the investments and
         reinvestment, earnings and profits thereon, whether invested under the
         general investment authority of the Trustee or under the terms
         applicable to any Subfund established pursuant to Section 4.1.

                  1.1.15. HOURS OF SERVICE -- a measure of an employee's service
         with the Employer and all Affiliates, determined for a given
         computation period and equal to the number of hours credited to the
         employee according to the following rules:

                           (a) PAID DUTY. An Hour of Service shall be credited
                  for each hour for which the employee is paid, or entitled to
                  payment, for the performance of duties for the Employer or an
                  Affiliate. These hours shall be credited to the employee for
                  the computation period or periods in which the duties are
                  performed.

                           (b) PAID NONDUTY. An Hour of Service shall be
                  credited for each hour for which the employee is paid, or
                  entitled to payment, by the Employer or an Affiliate 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
                  (including disability), layoff, jury duty, military duty or
                  leave of absence; provided, however, that:

                                    (i) no more than five hundred one (501)
                           Hours of Service shall be credited on account of a
                           single continuous period during which the employee
                           performs no duties (whether or not such period occurs
                           in a single computation period),

                                    (ii) no Hours of Service shall be credited
                           on account of payments made under a plan maintained
                           solely for the purpose of complying with applicable
                           worker's compensation, unemployment compensation or
                           disability insurance laws,

                                    (iii) no Hours of Service shall be credited
                           on account of payments which solely reimburse the
                           employee for medical or medically related expenses
                           incurred by the employee, and



                                       4
<PAGE>

                                    (iv) payments shall be deemed made by or due
                           from the Employer or an Affiliate whether made
                           directly or indirectly from a trust fund or an
                           insurer to which the Employer or an Affiliate
                           contributes or pays premiums.

                  These hours shall be credited to the employee for the
         computation period for which payment is made or, if the payment is not
         computed by reference to units of time, the hours shall be credited to
         the first computation period in which the event, for which any part of
         the payment is made, occurred.

                           (c) BACK PAY. An Hour of Service shall be credited
                  for each hour for which back pay, irrespective of mitigation
                  of damages, has been either awarded or agreed to by the
                  Employer or an Affiliate. The same Hours of Service credited
                  under paragraph (a) or (b) shall not be credited under this
                  paragraph (c). The crediting of Hours of Service under this
                  paragraph (c) for periods and payments described in paragraph
                  (b) shall be subject to all the limitations of that paragraph.
                  These hours shall be credited to the employee for the
                  computation period or periods to which the award or agreement
                  pertains rather than the computation period in which the
                  award, agreement or payment is made.

                           (d) UNPAID ABSENCES.

                                    (i) MILITARY LEAVES. During service in the
                           Armed Forces of the United States, if the employee
                           both entered such service and returned to employment
                           with the Employer or an Affiliate from such service
                           under circumstances entitling the employee to
                           reemployment rights granted veterans under federal
                           law, the employee shall be credited with the number
                           of Hours of Service which otherwise would normally
                           have been credited to such employee but for such
                           absence; provided, however, that if the employee does
                           not return to employment for any reason other than
                           death, Disability or attainment of Normal Retirement
                           Age within the time prescribed by law for the
                           retention of veteran's reemployment rights, such
                           Hours of Service shall not be credited. However,
                           notwithstanding any provision of this Plan, in case
                           of reemployments occurring on or after December 12,
                           1994, veterans rights shall be determined pursuant to
                           Section 3.12.

                                    (ii) LEAVES OF ABSENCE. If (and to the
                           extent that) the Retirement Committee so provides in
                           rules, during each unpaid leave of absence authorized
                           by the Employer or an Affiliate for Plan purposes
                           under such rules, the employee shall be credited with
                           the number of Hours of Service which otherwise would
                           normally have been credited to such employee but for
                           such absence; provided, however, that if the employee
                           does not return to employment for any reason other
                           than death, Disability or attainment of Normal
                           Retirement Age at the expiration of the leave of
                           absence, such Hours of Service shall not be credited.

                                    (iii) PARENTING LEAVES. To the extent not
                           otherwise credited and solely for the purpose of
                           determining whether a One-Year Break in Service has
                           occurred, Hours of Service shall be credited to an
                           employee for any period of absence from work
                           beginning in Plan Years commencing after February 23,
                           1985, due to pregnancy of the employee, the birth of
                           a child of the employee, the placement of a child
                           with the employee in connection with the adoption of
                           such child by the employee or for the purpose of
                           caring for such child for a period beginning
                           immediately following such birth or placement. The
                           employee shall be credited with the number of Hours
                           of Service which otherwise would normally have been
                           credited to such employee but for such absence. If it
                           is



                                       5
<PAGE>

                           impossible to determine the number of Hours of
                           Service which would otherwise normally have been so
                           credited, the employee shall be credited with eight
                           (8) Hours of Service for each day of such absence. In
                           no event, however, shall the number of Hours of
                           Service credited for any such absence exceed five
                           hundred one (501) Hours of Service. Such Hours of
                           Service shall be credited to the computation period
                           in which such absence from work begins if crediting
                           all or any portion of such Hours of Service is
                           necessary to prevent the employee from incurring a
                           One-Year Break in Service in such computation period.
                           If the crediting of such Hours of Service is not
                           necessary to prevent the occurrence of a One-Year
                           Break in Service in that computation period, such
                           Hours of Service shall be credited in the immediately
                           following computation period (even though no part of
                           such absence may have occurred in such subsequent
                           computation period). These Hours of Service shall not
                           be credited until the employee furnishes timely
                           information which may be reasonably required by the
                           Retirement Committee to establish that the absence
                           from work is for a reason for which these Hours of
                           Service may be credited.

                           (e) SPECIAL RULES. For periods prior to March 1,
                  1976, Hours of Service may be determined using whatever
                  records are reasonably accessible and by making whatever
                  calculations are necessary to determine the approximate number
                  of Hours of Service completed during such prior period. To the
                  extent not inconsistent with other provisions hereof,
                  Department of Labor regulations 29 C.F.R.ss. 2530.200b-2(b)
                  and (c) are hereby incorporated by reference herein. To the
                  extent required under Section 414 of the Code, services of
                  leased employees, leased owners, leased managers, shared
                  employees, shared leased employees and other similar
                  classifications by the Employer or an Affiliate shall be taken
                  into account as if such services were performed as a common
                  law employee of the Employer for the purposes of determining
                  Eligibility Service, Vesting Service and One-Year Breaks in
                  Service as applied to Vesting Service.

                           (f) EQUIVALENCY FOR EXEMPT EMPLOYEES. Notwithstanding
                  anything to the contrary in the foregoing, the Hours of
                  Service for any employee for whom the Employer or an Affiliate
                  is not otherwise required by state or federal "wage and hour"
                  or other law to count hours worked shall be credited on the
                  basis that, without regard to the employee's actual hours,
                  such employee shall be credited with one hundred ninety (190)
                  Hours of Service for a calendar month if, under the provisions
                  of this Section (other than this paragraph), such employee
                  would be credited with at least one (1) Hour of Service during
                  that calendar month.

                           (g) EQUIVALENCY FOR NON-EXEMPT TRUCK DRIVERS.
                  Notwithstanding anything to the contrary in the foregoing, the
                  Hours of Service for any truck driver for whom the Employer or
                  an Affiliate is required by state or federal "wage and hour"
                  or other law to count hours worked shall be credited on the
                  basis that, without regard to the employee's actual hours,
                  such employee shall be credited with the number of hours equal
                  to the employee's total earnings for the performance of duties
                  during the computation period divided by the minimum wage as
                  established from time to time under Section 6(a)(1) of the
                  Fair Labor Standards Act of 1938, as amended; provided that
                  750 Hours of Service credited under this paragraph (g) are
                  treated as equivalent to 1,000 Hours of Service and 375 Hours
                  of Service under this paragraph (g) are treated as equivalent
                  to 500 Hours of Service.

                  1.1.16. INVESTMENT MANAGER -- the person or persons, other
         than the Trustee, appointed pursuant to Section 10.7 to manage all or a
         portion of the Fund or any Subfund.



                                       6
<PAGE>

                  1.1.17. NORMAL RETIREMENT AGE -- the date a Participant
         attains age sixty-five (65) years.

                  1.1.18. ONE-YEAR BREAK IN SERVICE -- a Plan Year for which an
         employee is not credited with more than five hundred (500) Hours of
         Service. (A One-Year Break in Service shall be deemed to occur only on
         the last day of such Plan Year.)

                  1.1.19. PARTICIPANT -- an employee of the Employer who becomes
         a Participant in the Plan in accordance with the provisions of Section
         2 or any comparable provision of the Prior Plan Statement. An employee
         who has become a Participant shall be considered to continue as a
         Participant in the Plan until the date of the Participant's death or,
         if earlier, the date when the Participant is no longer employed in
         Recognized Employment and upon which the Participant no longer has any
         Account under the Plan (that is, the Participant has both received a
         distribution of all of the Participant's Vested Total Account, if any,
         and the Participant's Suspense Account, if any, has been forfeited and
         disposed of as provided in Section 6.2).

                  1.1.20. PLAN -- the tax-qualified profit sharing plan of the
         Employer established for the benefit of employees eligible to
         participate therein, as first set forth in the Prior Plan Statement and
         as amended and restated in this Plan Statement. (As used herein, "Plan"
         refers to the legal entity established by the Employer and not to the
         documents pursuant to which the Plan is maintained. Those documents are
         referred to herein as the "Prior Plan Statement" and the "Plan
         Statement.") Effective as of January 1, 2001, the Plan shall be
         referred to as the "SHOPKO STORES, INC. SHARED SAVINGS PLAN." Prior
         thereto, the plan was known as the "PROFIT SHARING AND SUPER SAVER
         PLAN."

                  1.1.21. PLAN STATEMENT -- this document entitled "SHOPKO
         STORES, INC. SHARED SAVINGS PLAN" (2001 Restatement), as adopted by the
         Principal Sponsor generally effective as of February 23, 1997, as the
         same may be amended from time to time thereafter.

                  1.1.22. PLAN YEAR AND SHORT PLAN YEAR -- the period of
         fifty-two (52) or fifty-three (53) consecutive weeks ending on the last
         Saturday in each February, changing as of March 1, 1998 to the calendar
         year (as a result of which a Short Plan Year is created for the period
         from March 1, 1998 to December 31, 1998, sometimes herein referred to
         as the "Short Plan Year").

                  1.1.23. POOLED INVESTMENT ACCOUNT -- an account established
         pursuant to an administrative services agreement between the Principal
         Sponsor and the Trustee.

                  1.1.24. PRINCIPAL SPONSOR -- SHOPKO STORES, INC., a Wisconsin
         corporation.

                  1.1.25. PRIOR PLAN STATEMENT -- the series of documents
         pursuant to which the Plan was established effective as of June 15,
         1965, and operated thereafter until the Effective Date.

                  1.1.26. RECOGNIZED COMPENSATION -- wages within the meaning of
         Section 3401(a) of the Code for purposes of federal income tax
         withholding at the source but determined without regard to any rules
         that limit the remuneration included in wages based on the nature or
         location of the employment or the services performed (such as the
         exception for agricultural labor in Section 3401(a)(2) of the Code) and
         paid to the Participant by the Employer for the applicable period;
         subject, however, to the following:

                           (a) INCLUDED ITEMS. In determining a Participant's
                  Recognized Compensation there shall be included elective
                  contributions made by the Employer on behalf of the
                  Participant that are not includible in gross income under
                  Sections 125, 402(e)(3), 402(h), 403(b), 414(h)(2) and 457 of
                  the Code including elective contributions authorized by the
                  Participant under a 401(k) Agreement, a cafeteria plan or any
                  other



                                       7
<PAGE>

                  qualified cash or deferred arrangement under Section 401(k) of
                  the Code, and from and after January 1, 2002, elective
                  contributions under any qualified transportation fringe
                  benefit under 132(f) of the Code.

                           (b) EXCLUDED ITEMS. A Participant's Recognized
                  Compensation is reduced by all of the following (even if
                  includible in gross income): reimbursements or other expense
                  allowances, fringe benefits (cash and non-cash), moving
                  expenses, deferred compensation, and welfare benefits.

                           (c) PRE-PARTICIPATION EMPLOYMENT. Remuneration paid
                  by the Employer attributable to periods prior to the date the
                  Participant became a Participant in the Plan shall not be
                  taken into account in determining the Participant's Recognized
                  Compensation.

                           (d) NON-RECOGNIZED EMPLOYMENT. Remuneration paid by
                  the Employer for employment that is not Recognized Employment
                  shall not be taken into account in determining a Participant's
                  Recognized Compensation.

                           (e) ATTRIBUTION TO PERIODS. A Participant's
                  Recognized Compensation shall be considered attributable to
                  the period in which it is actually paid and not when earned or
                  accrued; provided, however, that amounts earned but not paid
                  in a Plan Year because of timing of pay periods and pay days
                  may be included in the Plan Year when earned if these amounts
                  are paid during the first few weeks of the next Plan Year, the
                  amounts are included on a uniform and consistent basis with
                  respect to all similarly situated Participants and no amount
                  is included in more than one Plan Year.

                           (f) EXCLUDED PERIODS. Amounts received after the
                  Participant's termination of employment shall not be taken
                  into account in determining a Participant's Recognized
                  Compensation; provided, however, that amounts attributable to
                  severance pay, vacation pay, and stock options earned but not
                  paid or exercised during the Participant's period of
                  Recognized Employment shall be taken into account in
                  determining a Participant's Recognized Compensation if the
                  severance pay or vacation pay is paid, or stock options are
                  exercised, during the first few weeks after termination of
                  Recognized Employment and the amounts are included on a
                  uniform and consistent basis with respect to all similarly
                  situated Participants.

                           (g) MULTIPLE EMPLOYERS. If a Participant is employed
                  by more than one Employer in a Plan Year, a separate amount of
                  Recognized Compensation shall be determined for each Employer.

                           (h) ANNUAL MAXIMUM. A Participant's Recognized
                  Compensation for a Plan Year shall not exceed the annual
                  compensation limit under Section 401(a)(17) of the Code, as
                  adjusted from time to time. For purposes of the foregoing, the
                  annual compensation limit under Section 401(a)(17) of the Code
                  shall be Two Hundred Thousand Dollars ($200,000) (as adjusted
                  under the Code for cost-of-living increases) for Plan Years
                  beginning before January 1, 1994, and shall be One Hundred and
                  Fifty Thousand Dollars ($150,000) (as so adjusted) for Plan
                  Years beginning on or after January 1, 1994. For the Short
                  Plan Year, such compensation limit shall be One Hundred and
                  Thirty-Three Thousand Three Hundred and Thirty-Three Dollars
                  ($133,333).

                  1.1.27. RECOGNIZED EMPLOYMENT -- all employment with the
         Employer, excluding however:


                                       8
<PAGE>

                           (a) employment in a unit of employees whose terms and
                  conditions of employment are subject to a collective
                  bargaining agreement between the Employer and a union
                  representing that unit of employees, unless such collective
                  bargaining agreement provides for the inclusion of those
                  employees in the Plan,

                           (b) employment of a nonresident alien who is not
                  receiving any earned income from the Employer which
                  constitutes income from sources within the United States,

                           (c) employment in a division or facility of the
                  Employer which is not in existence on February 26, 1989 (that
                  is, was acquired, established, founded or produced by the
                  liquidation or similar discontinuation of a separate
                  subsidiary after February 26, 1989) unless and until the
                  Retirement Committee shall declare such employment to be
                  Recognized Employment,

                           (d) employment of a United States citizen outside the
                  United States unless and until the Retirement Committee shall
                  declare such employment to be Recognized Employment,

                           (e) services of a person who is not a common law
                  employee of the Employer including, without limiting the
                  generality of the foregoing, services of a leased employee,
                  leased owner, leased manager, shared employee, shared leased
                  employee or other similar classification, and services of a
                  person who is classified by an Employer as other than an
                  employee, for the entire period of such classification,
                  without regard to any subsequent reclassification which may
                  occur by operation of law or otherwise, and

                           (f) employment of a highly compensated employee (as
                  defined in Appendix D to this Plan Statement) to the extent
                  either agreed to in writing by the employee or specified in
                  the Plan.

                  1.1.28. RETIREMENT COMMITTEE. The committee established in
         accordance with the provisions of Section 12.2, also known as the
         Committee.

                  1.1.29. SUBFUND -- any separate pool of assets of the Fund set
         aside for investment purposes or any separate investment fund selected
         by the Retirement Committee under Section 4.1. Any reference to a
         subfund shall include a separate investment fund and vice versa.

                  1.1.30. 401(K) AGREEMENT -- the agreement which may be entered
         into by a Participant as provided in Section 2.3.

                  1.1.31. TRUSTEE -- the Trustee originally named hereunder and
         its successor or successors in trust. Where the context requires,
         Trustee shall also mean and refer to any one or more co-trustees
         serving hereunder.

                  1.1.32. VALUATION DATE -- any day the New York Stock Exchange
         is open for business or any other date chosen by the Retirement
         Committee.

                  1.1.33. VESTED -- nonforfeitable, i.e., a claim obtained by a
         Participant or the Participant's Beneficiary to that part of an
         immediate or deferred benefit hereunder which arises from the
         Participant's service, which is unconditional and which is legally
         enforceable against the Plan.

                  1.1.34. VESTING SERVICE -- a measure of an employee's service
         with the Employer and all Affiliates (stated as a number of years)
         which is equal to the number of computation periods for




                                       9
<PAGE>

         which the employee is credited with one thousand (1,000) or more Hours
         of Service; subject, however, to the following rules:

                           (a) COMPUTATION PERIODS. The computation periods for
                  determining Vesting Service shall be the Plan Years.

                           (b) COMPLETION. A year of Vesting Service shall be
                  deemed completed as of the date in the computation period that
                  the employee completes one thousand (1,000) Hours of Service.
                  (Fractional years of Vesting Service shall not be credited.)

                           (c) PRE-EFFECTIVE DATE SERVICE. Vesting Service shall
                  be credited for Hours of Service earned and computation
                  periods completed before the Effective Date as if this Plan
                  Statement were then in effect.

                           (d) BREAKS IN SERVICE. Vesting Service canceled
                  before the Effective Date by operation of the Plan's break in
                  service rules as they existed before the Effective Date shall
                  continue to be canceled on and after the Effective Date.

                           (e) VESTING IN PRE-BREAK ACCOUNTS. If an employee who
                  has not attained a Vested interest in his or her Profit
                  Sharing Account has five (5) or more consecutive One-Year
                  Breaks in Service, the employee's service after such One-Year
                  Breaks in Service shall not be counted as years of Vesting
                  Service for the purpose of determining the Vested percentage
                  of that portion of the employee's Profit Sharing Account
                  derived from Employer contributions allocated with respect to
                  the employee's service before such One-Year Breaks in Service.
                  However, any employee who has either attained a Vested
                  interest in such Account (which will be 100% since the Plan
                  does not provide for graduated vesting) or whose consecutive
                  number of One-Year Breaks in Service is less than 5 shall
                  continue to have all of his or her years of Vesting Service
                  counted, whether before or after such One-Year Breaks in
                  Service.

                           (f) SPECIAL SHORT PLAN YEAR RULE. For the Short Plan
                  Year (March 1, 1998 to December 31, 1998), an employee shall
                  be credited with one (1) year of Vesting Service if the
                  employee is either credited with eight hundred and
                  thirty-three (833) or more Hours of Service in the Short Plan
                  Year or, alternatively, is credited with one thousand (1,000)
                  or more Hours of Service in the twelve (12) month period
                  beginning on March 1, 1998 and ending February 27, 1999.

                           (g) PRIOR SERVICE WITH PAMIDA, INC. AND P.M. PLACE
                  STORES COMPANY. Notwithstanding any other provision of the
                  Plan, past service of employees with Pamida, Inc. prior to
                  November 15, 2000, when Pamida, Inc. was acquired by the
                  Principal Sponsor and with P.M. Place Stores Company prior to
                  January 1, 2001, when P.M. Place Stores Company was acquired
                  by the Principal Sponsor shall count as Vesting Service for
                  purposes of the Plan.

         1.2. RULES OF INTERPRETATION. An individual shall be considered to have
attained a given age on the individual's birthday for that age (and not on the
day before). The birthday of any individual born on a February 29 shall be
deemed to be February 28 in any year that is not a leap year. Notwithstanding
any other provision of this Plan Statement or any election or designation made
under the Plan, any individual who feloniously and intentionally kills a
Participant or Beneficiary shall be deemed for all purposes of this Plan and all
elections and designations made under this Plan to have died before such
Participant or Beneficiary. A final judgment of conviction of felonious and
intentional killing is conclusive for the purposes of this Section. In the
absence of a conviction of felonious and intentional killing, the Retirement
Committee shall determine whether the killing was felonious and intentional for
the purposes of this Section. Whenever appropriate, words used herein in the
singular may be read in the



                                       10
<PAGE>

plural, or words used herein in the plural may be read in the singular; the
masculine may include the feminine; and the words "hereof," "herein" or
"hereunder" or other similar compounds of the word "here" shall mean and refer
to this entire Plan Statement and not to any particular paragraph or Section of
this Plan Statement unless the context clearly indicates to the contrary. The
titles given to the various Sections of this Plan Statement are inserted for
convenience of reference only and are not part of this Plan Statement, and they
shall not be considered in determining the purpose, meaning or intent of any
provision hereof. Any reference in this Plan Statement to a statute or
regulation shall be considered also to mean and refer to any subsequent
amendment or replacement of that statute or regulation. The term "employee"
shall exclude any person who is classified by an Employer as other than an
employee, for the entire period of such classification, without regard to any
subsequent reclassification which may occur by operation of law or otherwise.
This document has been executed and delivered in the State of Wisconsin and has
been drawn in conformity to the laws of that State and shall, except to the
extent that federal law is controlling, be construed and enforced in accordance
with the laws of the State of Wisconsin.

         1.3. TRANSITIONAL RULES. Notwithstanding the general effective date of
Section 1.1.8, Section 7.11 of the Plan Statement is effective October 19, 1989,
for all loans granted or renewed on and after that date. In addition,
Participants who actually began receiving installment payments before February
26, 1989, shall continue to receive such payments under the rules specified in
the Prior Plan Statement to the extent that such rules are not inconsistent with
current laws and regulations, including, specifically, Section 401(a)(9) and
Section 411(d)(6) of the Code. Only those Participants shall be allowed to
receive installment payments.

                                    SECTION 2

                          ELIGIBILITY AND PARTICIPATION

         2.1. ELIGIBILITY RULES.

                  2.1.1. GENERAL RULE. Subject to Section 2.1.2, each employee
         shall become a Participant on the Enrollment Date coincident with or
         next following the date as of which the employee has both:

                           (a) attained age twenty (20) years, and

                           (b) completed one (1) year of Eligibility Service,


         if the employee is then employed in Recognized Employment. If the
         employee is not then employed in Recognized Employment, the employee
         shall become a Participant on the first date thereafter upon which the
         employee enters Recognized Employment.

                  2.1.2. TRANSITIONAL RULE. Each employee who has attained age
         twenty (20) years before February 26, 1989, and is in Recognized
         Employment on February 26, 1989, shall become a Participant on the
         first date as of which the employee has completed one (1) year of
         Eligibility Service if the employee is then employed in Recognized
         Employment and has completed the one (1) year of Eligibility Service
         within the employee's first twelve (12) month period of employment. If
         the foregoing requirements are not satisfied, the employee shall become
         a Participant as provided in Section 2.1.1.

                  2.1.3. SPECIAL RULE FOR EARLY PARTICIPATION IN ELECTIVE
         RETIREMENT SAVINGS ONLY. Effective as of April 1, 2002, each employee
         who has not as of any Enrollment Date satisfied the conditions of
         Sections 2.1.1 or 2.1.2 above shall nevertheless become an "Early
         Participant," but only with regard to the opportunity to make
         retirement savings as set forth in Section 2.4 below



                                       11
<PAGE>

         and not with regard to any discretionary or matching Employer
         contributions, on the Enrollment Date coincident with or next following
         the date as of which the employee has both:

                           (a) attained age eighteen (18) years, and

                           (b) completed ninety (90) days of service,

         if the employee is then employed in Recognized Employment. If the
         employee is not then in Recognized Employment, the employee shall
         become an Early Participant on the first day thereafter upon which the
         employee enters Recognized Employment. Such Participants shall be
         referred to in the Plan as "Early Participants." The intent of the
         Principal Sponsor is to test the Early Participants for compliance
         under average deferral percentage rules of Section 401(k) of the Code
         as set forth in Section 2.6 below as a separate group of employees
         under Section 410(b)(4)(B) of the Code and to only apply the safe
         harbor matching contributions provided for in Section 3.7 to those
         Participants who have satisfied the requirements of Sections 2.1.1 and
         2.1.2 above and the Plan shall be construed accordingly.

         2.2. SPECIAL RULE FOR FORMER PARTICIPANTS. A Participant whose
employment with the Employer terminates and who subsequently is reemployed by
the Employer shall immediately reenter the Plan as a Participant upon the
Participant's return to Recognized Employment.

         2.3. ENROLLMENT. Each employee who is or will become a Participant as
provided in Section 2.1 or Section 2.2 may enroll for retirement savings by
completing a 401(k) Agreement and delivering it to the Retirement Committee or
its delegate prior to the Enrollment Date as of which the employee desires to
make it effective. If an employee does not enroll when first eligible to do so,
the employee may enroll as of any subsequent Valuation Date by completing a
401(k) Agreement and delivering it to the Retirement Committee or its delegate
prior to that date.

         2.4. 401(K) AGREEMENT. Subject to the following rules, the 401(k)
Agreement which each Participant may execute shall provide for retirement
savings through a reduction of the amount of Recognized Compensation which
otherwise would be paid to the Participant by the Employer each payday either:

                           (a) in even increments of one percent (1%) equal to
                  not less than one percent (1%) nor more than fifteen percent
                  (15%), increasing to eighteen percent (18%) effective as of
                  January 1, 2001, and

                           (b) effective as of February 1, 2002, in even
                  increments of one percent (1%) equal to not less than one
                  percent (1%) nor more than fifty percent (50%).

Such retirement savings, however, shall not exceed the applicable dollar amount
as provided under Section 402(g) of the Code, as adjusted form time to time
($10,500 for 2001) pursuant to the Code under the Plan and any other plan of the
Employer and Affiliates for that Participant's taxable year. The Retirement
Committee may, from time to time under rules, change the minimum and maximum
allowable retirement savings, provided that from and after January 1, 2001,
eligible non-highly compensated employees will be given the opportunity to make
elective deferrals in an amount that is at least sufficient to receive the
maximum amount of Employer Matching Contribution available for a Plan Year,
unless other Code limitations apply, in order to comply with safe harbor rules
of Code Section 401(k)(12). The reductions in earnings for retirement savings
agreed to by the Participant shall be made by the Employer from the
Participant's remuneration each payday on and after the date of the
Participant's enrollment for so long as the 401(k) Agreement remains in effect.



                                       12
<PAGE>

         2.5. MODIFICATIONS OF 401(K) AGREEMENT. The 401(k) Agreement of a
Participant may be modified as follows.

                  2.5.1. INCREASE OR DECREASE. A Participant may, upon giving
         notice to the Retirement Committee or its delegate, by any method
         authorized by the Retirement Committee including, but not limited to,
         telephonic communication, amend the 401(k) Agreement to increase or
         decrease the amount of reduction as soon as administratively feasible
         following such notice.

                  2.5.2. CANCELLATION OF 401(K) AGREEMENT. A Participant who has
         a 401(k) Agreement in effect may, upon giving notice to the Retirement
         Committee or its delegate, completely terminate the 401(k) Agreement
         beginning with the next following payroll period. Thereafter, such
         Participant may, upon notice to the Retirement Committee or its
         delegate, enter into a new 401(k) Agreement if the Participant is
         employed in Recognized Employment.

                  2.5.3. TERMINATION OF RECOGNIZED EMPLOYMENT. The 401(k)
         Agreement of a Participant who ceases to be employed in Recognized
         Employment shall be terminated automatically as of the date he ceases
         to be employed in Recognized Employment. If such Participant returns to
         Recognized Employment, the Participant may enter into a new 401(k)
         Agreement effective as of the date of the Participant's return to
         Recognized Employment or, upon notice to the Retirement Committee or
         its delegate, as of the first payday on or after any subsequent
         Valuation Date.

                  2.5.4. FORM OF AGREEMENT. The Retirement Committee shall
         specify the form of the 401(k) Agreement, the form of any notices
         modifying the 401(k) Agreement and all procedures for the delivery and
         acceptance of forms and notices.

         2.6. SECTION 401(K) COMPLIANCE.

                  2.6.1. SPECIAL DEFINITIONS. For purposes of this Section 2.6,
         the following special definitions shall apply:

                           (a) ELIGIBLE EMPLOYEE means an individual who is
                  entitled to enter into a 401(k) Agreement for all or a part of
                  the Plan Year (whether or not the individual does so).

                           (b) HIGHLY COMPENSATED ELIGIBLE EMPLOYEES means those
                  eligible employees defined as highly compensated employees in
                  Appendix D to this Plan Statement.

                           (c) DEFERRAL PERCENTAGE means the ratio (calculated
                  separately for each eligible employee) of:

                                    (i) the total amount, for the Plan Year, of
                           Employer contributions credited to the eligible
                           employee's 401(k) Account, to

                                    (ii) the eligible employee's compensation,
                           as defined below, for such Plan Year.

                  For this purpose, Employer contributions will be considered
                  made in the Plan Year if they are allocated as of a date
                  during such Plan Year and are delivered to the Trustee within
                  twelve (12) months after the end of such Plan Year.

                           (d) COMPENSATION means Recognized Compensation.



                                       13
<PAGE>

                           (e) AVERAGE DEFERRAL PERCENTAGE means, for a
                  specified group of eligible employees for the Plan Year, the
                  average of the deferral percentages for all eligible employees
                  in such group.

                  2.6.2. SPECIAL RULES. For purposes of this Section 2.6, the
         following special rules apply:

                           (a) ROUNDING. The deferral percentage of each
                  eligible employee and the average deferral percentage for each
                  group of eligible employees shall be calculated to the nearest
                  one-hundredth of one percent.

                           (b) HIGHLY COMPENSATED EMPLOYEES. In the case of a
                  highly compensated eligible employee who participates in any
                  other plan of the Employer to which Employer contributions are
                  made on behalf of the highly compensated eligible employee
                  pursuant to a salary reduction agreement, all such Employer
                  contributions must be aggregated for purposes of determining
                  the highly compensated eligible employee's deferral
                  percentage.

                           (c) PERMISSIVE AGGREGATION. To the extent permitted
                  under the Code, the Retirement Committee may elect to
                  aggregate the Plan with any other plan of the Employer for
                  purposes of determining whether the tests set forth in this
                  Section are satisfied for a Plan Year.

                  2.6.3. THE TESTS. Notwithstanding the foregoing provisions,
         401(k) Agreements in effect for each Plan Year shall be limited and
         modified under rules established by the Retirement Committee and by the
         rules hereinafter provided in order that all such 401(k) Agreements (in
         the aggregate) will satisfy at least one of the following two (2) tests
         for that Plan Year:

                           TEST 1: The average deferral percentage for the group
                  of highly compensated eligible employees is not more than the
                  average deferral percentage of all other eligible employees
                  multiplied by one and twenty-five hundredths (1.25).

                           TEST 2: The excess of the average deferral percentage
                  for the group of highly compensated eligible employees over
                  that of all other eligible employees is not more than two (2)
                  percentage points, and the average deferral percentage for the
                  group of highly compensated eligible employees is not more
                  than the average deferral percentage of all other eligible
                  employees multiplied by two (2).

                  2.6.4. REMEDIAL ACTION. If the Committee determines that
         neither of the tests will be satisfied (or may not be satisfied) for a
         Plan Year, then during such Plan Year, the following actions may be
         taken so that one of the tests will be satisfied or so that the margin
         of failure will be reduced for such Plan Year:

                           (a) The highly compensated eligible employees who
                  have the largest enrollment amount under Section 2.4 shall be
                  deemed for all purposes of the Plan to have elected for that
                  Plan Year a lower enrollment amount (and the amounts credited
                  pursuant to Section 3.2 shall be reduced accordingly).

                           (b) If neither of the tests is satisfied after such
                  adjustment, the enrollment amount under Section 2.4 of the
                  highly compensated eligible employees who then have the
                  largest enrollment amount (including any reduced under (a)
                  above) shall be reduced to a lower enrollment amount (and the
                  amounts credited pursuant to Section 3.2 shall be reduced
                  accordingly).



                                       14
<PAGE>

                           (c) If neither of the tests is satisfied after such
                  adjustment, this method of adjustment shall be repeated one or
                  more additional times until one of the tests is satisfied or
                  the margin of failure is reduced, as determined by the
                  Retirement Committee.


         The Committee shall prescribe rules concerning such adjustments,
         including the frequency of applying the tests and the commencement and
         termination dates for any adjustments.

                  2.6.5. SAFE HARBOR AFTER JANUARY 1, 2001. The Plan is designed
         to be a safe harbor plan under the provisions of Section 401(k)(12) of
         the Code from and after January 1, 2001, by use of a basic matching
         formula as specified in Section 3.6 that will be treated as satisfying
         the special requirements of this Section 2.6 and 3.5 without the need
         for any testing.

                                   SECTION 3

                      CONTRIBUTIONS AND ALLOCATION THEREOF

         3.1. EMPLOYER CONTRIBUTIONS.

                  3.1.1. SOURCE OF EMPLOYER CONTRIBUTIONS. All Employer
         contributions to the Plan may be made without regard to profits.

                  3.1.2. LIMITATION. The contribution of the Employer to the
         Plan for any year, when considered in light of its contribution for
         that year to all other tax-qualified plans it maintains, shall, in no
         event, exceed the maximum amount deductible by it for federal income
         tax purposes as a contribution to a tax-qualified profit sharing plan
         under Section 404 of the Code. Each such contribution to the Plan is
         conditioned upon its deductibility for such purpose.

                  3.1.3. FORM OF PAYMENT. The appropriate contribution of the
         Employer to the Plan, determined as herein provided, shall be paid to
         the Trustee and may be paid either in cash or in common shares of the
         Employer or of any successor or in any combination of the foregoing
         ways.

         3.2. RETIREMENT SAVINGS CONTRIBUTIONS.

                  3.2.1. AMOUNT. Within the time required by regulations of the
         United States Department of Labor, the Employer shall contribute to the
         Trustee for deposit in the Fund the reduction in Recognized
         Compensation which was agreed to by each Participant pursuant to a
         401(k) Agreement.

                  3.2.2. ALLOCATION. The portion of this contribution made with
         respect to each Participant shall be credited to that Participant's
         401(k) Account as of the Valuation Date actually received.

         3.3. DISCRETIONARY CONTRIBUTIONS.

                  3.3.1. GENERAL. The Employer may (but shall not be required
         to) make discretionary contributions from year to year during the
         continuance of the Plan in such amounts as the Board of Directors of
         ShopKo Stores, Inc. (or a committee appointed by the Board of Directors
         of ShopKo Stores, Inc.) shall from time to time determine. Such
         contributions shall be delivered to the Trustee for deposit in the Fund
         not later than the time prescribed by federal law (including
         extensions) for filing the federal income tax return of the Employer
         for the taxable year in which the Plan Year ends. The Employer
         discretionary contribution for a Plan Year, including forfeited




                                       15
<PAGE>

         Suspense Accounts, if any to be included with that contribution or
         reallocated as of the Annual Valuation Date of such Plan Year, shall be
         allocated in the following order.

                  3.3.2. SECTION 401(k) CURATIVE ALLOCATION. If neither of the
         Section 401(k) tests set forth in Section 2 has been satisfied and a
         distribution of "excess contributions" has not been made, then all or a
         portion of the Employer discretionary contribution for that Plan Year
         shall be allocated to meet one of such tests. Forfeited Suspense
         Accounts, however, shall not be included in this allocation. Only those
         Participants who were not "highly compensated eligible employees" (as
         defined in Section 2) for that Plan Year and for whom some contribution
         was made pursuant to Section 3.2 for such Plan Year shall share in such
         allocation. This allocation shall be made first to the Participant with
         the least amount of compensation (as defined in Section 2) and then, in
         ascending order of compensation (as defined in Section 2), to other
         Participants. The amount of the Employer discretionary contribution to
         be so allocated shall be that amount required to cause the Plan to
         satisfy either of the Section 401(k) tests set forth in Section 2 for
         the Plan Year; provided, however, that in no case shall amounts be so
         allocated to cause a Participant's deferral percentage (as defined in
         Section 2) to exceed twenty percent (20%). The Employer discretionary
         contribution so allocated to a Participant shall be credited to that
         Participant's 401(k) Account as of the Annual Valuation Date in the
         Plan Year for which this Employer discretionary contribution is made,
         or if earlier, the Valuation Date coincident with or next following the
         date as of which such contribution is received by the Trustee. For the
         purpose of allocating gains and losses under Section 4, however, the
         contribution shall be credited as of the Valuation Date coincident with
         or next following the date on which the contribution is received by the
         Trustee.

                  3.3.3. SECTION 401(M) CURATIVE ALLOCATION. If neither of the
         Section 401(m) tests set forth in Section 3 has been satisfied and a
         distribution of "excess aggregate contributions" has not been made
         pursuant to Section 7, then any remaining portion of the Employer
         discretionary contribution for that Plan Year shall be allocated to
         meet one of such tests. Forfeited Suspense Accounts, however, shall not
         be included in this allocation. Only those Participants who were not
         "highly compensated eligible employees" (as defined in Section 3) for
         that Plan Year and who were entitled to receive an Employer matching
         contribution shall share in such allocation. This allocation shall be
         made to the Participant with the least amount of compensation (as
         defined in Section 3) and then, in ascending order of compensation (as
         defined in Section 3), to other Participants. The amount of the
         Employer discretionary contribution to be so allocated shall be that
         amount required to cause the Plan to satisfy either of the Section
         401(m) tests set forth in Section 3 for the Plan Year. The Employer
         discretionary contribution so allocated to a Participant shall be
         credited to that Participant's Employer Matching Account as of the
         Annual Valuation Date in the Plan Year for which this Employer
         discretionary contribution is made, or if earlier, the Valuation Date
         coincident with or next following the date as of which such
         contribution is received by the Trustee. For the purpose of allocating
         gains and losses under Section 4, however, the contribution shall be
         credited as of the Valuation Date coincident with or next following the
         date on which the contribution is received by the Trustee.

                  3.3.4. DISCRETIONARY PROFIT SHARING CONTRIBUTIONS. Any
         remaining portion of the Employer discretionary contribution shall be
         allocated to the Profit Sharing Accounts of eligible Participants under
         Section 3.4. The contribution shall be allocated to the Profit Sharing
         Accounts of eligible Participants in the ratio which the Recognized
         Compensation of each such eligible Participant for the Plan Year bears
         to the Recognized Compensation for such Plan Year of all such eligible
         Participants. The amount so allocated to an eligible Participant shall
         be credited to such Participant's Profit Sharing Account as of the
         Annual Valuation Date in the Plan Year for which such contribution is
         made, or if earlier, the Valuation Date coincident with or next
         following the date as of which such contribution is received by the
         Trustee. For the purpose of allocating gains and losses under Section
         4, however, the contribution shall be credited as of the



                                       16
<PAGE>

         Valuation Date coincident with or next following the date on which the
         contribution is received by the Trustee.

         3.4. ELIGIBLE PARTICIPANTS. For purposes of this Section 3, a
Participant shall be an eligible Participant for a Plan Year only if such
Participant satisfies all of the following requirements in either (a) or (b)
below:

                           (a) the Participant:

                                    (i) is credited with at least one thousand
                           (1,000) Hours of Service for such Plan Year (or, for
                           the Short Plan Year, at least eight hundred
                           thirty-three (833) Hours of Service), and

                                    (ii) is on the last day of such Plan Year,
                           an employee of the Employer or an Affiliate (ignoring
                           for this purpose, any period of time represented by
                           final accrued but unused vacation and sick days and
                           periods used in determining severance settlements,
                           but including for this purpose any Participant who
                           then is on temporary layoff or authorized leave of
                           absence or who, during such Plan Year, was inducted
                           into the Armed Forces of the United States from
                           employment with the Employer); or

                           (b) the Participant terminates employment with the
                  Employer within the Plan Year by reason of death, retirement
                  at or after attaining age fifty-five (55) years and completing
                  ten (10) or more years of Vesting Service, retirement at or
                  after the Participant's Normal Retirement Age or Disability.

No other Participant shall be an eligible Participant. Notwithstanding the
foregoing, a Participant who is in Recognized Employment as a licensed
optometrist is not an eligible Participant.

         3.5. MATCHING EMPLOYER CONTRIBUTIONS PRIOR TO JANUARY 1, 2001.

                  3.5.1. AMOUNT AND ELIGIBILITY. For Plan Years prior to January
         1, 2001, the Employer shall contribute to the Trustee for deposit in
         the Fund and for crediting to the Participant's Employer Matching
         Account an amount which will equal fifty-percent (50%) of the amount of
         the first six percent (6%) of reduction in Recognized Compensation for
         each pay period which was agreed to by the Participant pursuant to a
         401(k) Agreement; provided, however, that no Participant who is in
         Recognized Employment as a licensed optometrist shall be eligible to
         receive a matching contribution. Such Employer matching contributions
         shall be delivered to the Trustee for deposit in the Fund not later
         than the time prescribed by federal law (including extensions) for
         filing the federal income tax return of the Employer for the taxable
         year in which the Plan Year ends.

                  3.5.2. ALLOCATION. The Employer matching contribution which is
         made with respect to a Participant shall be credited to that
         Participant's Employer Matching Account as of the Valuation Date
         coincident with or next following the date as of which such
         contribution is received by the trustee.

         3.6. SECTION 401(M) COMPLIANCE.

                  3.6.1. SPECIAL DEFINITIONS. For purposes of this Section, the
         following special definitions shall apply:



                                       17
<PAGE>

                           (a) ELIGIBLE EMPLOYEE means an individual who is
                  eligible to receive an Employer matching contribution for any
                  portion of the Plan Year (whether or not the individual does
                  so).

                           (b) HIGHLY COMPENSATED ELIGIBLE EMPLOYEES means those
                  eligible employees defined as highly compensated employees in
                  Appendix D to this Plan Statement.

                           (c) CONTRIBUTION PERCENTAGE means the ratio
                  (calculated separately for each eligible employee) of:

                                    (i) the total amount, for the Plan Year, of
                           Employer matching contributions credited to the
                           eligible employee's Employer Matching Account (but if
                           the Committee elects to include the Employer matching
                           contributions in the Section 401(k) test in Section
                           2, the Committee may elect to not include the
                           Employer matching contributions in this Section
                           401(m) test), and if the Committee elects all or a
                           portion of the amount, for the Plan Year, of Employer
                           contributions credited to the eligible employee's
                           401(k) Account or Employer Profit Sharing Account, or
                           both, to

                                    (ii) the eligible employee's Recognized
                           Compensation for the portion of such Plan Year that
                           the employee is an eligible employee.


                  For this purpose, Employer contributions will be considered
                  made in the Plan Year if they are allocated as of a date
                  during such Plan Year and are delivered to the Trustee within
                  twelve (12) months after the end of such Plan Year.

                           (d) AVERAGE CONTRIBUTION PERCENTAGE means, for a
                  specified group of eligible employees for the Plan Year, the
                  average of the contribution percentages for all eligible
                  employees in such group.

                  3.6.2. SPECIAL RULES. For purposes of this Section, the
         following special rules apply:

                           (a) ROUNDING. The contribution percentage of each
                  eligible employee and the average contribution percentage for
                  each group of eligible employees shall be calculated to the
                  nearest one-hundredth of one percent.

                           (b) HIGHLY COMPENSATED EMPLOYEES. In the case of a
                  highly compensated eligible employee who participates in any
                  other plan of the Employer and Affiliates (other than an
                  employee stock ownership plan described in Sections 409(a) and
                  4975(e)(7) of the Code) to which Employer matching
                  contributions are made on behalf of the highly compensated
                  eligible employee, all such Employer matching contributions,
                  and if used to determine the contribution percentage of
                  eligible employees, Employer contributions made pursuant to a
                  salary reduction agreement or qualified nonelective
                  contributions (within the meaning of Section 401(m)(4)(C) of
                  the Code), or both, shall be aggregated for purposes of
                  determining the highly compensated eligible employee's
                  contribution percentage; provided, however, that such Employer
                  contributions made under an employee stock ownership plan
                  shall not be aggregated.

                           (c) PERMISSIVE AGGREGATION. To the extent permitted
                  under the Code, the Committee may elect to aggregate the Plan
                  with any other plan of the Employer and Affiliates for
                  purposes of determining whether the tests set forth in this
                  Section are satisfied for a Plan Year.



                                       18
<PAGE>

                  3.6.3. THE TESTS. Notwithstanding the foregoing provisions,
         the Employer matching contributions made for each Plan Year shall be
         limited and modified under rules established by the Committee and by
         the rules hereinafter provided in order that one of the following two
         (2) tests is satisfied for that Plan Year:

                           TEST 1: The average contribution percentage for the
                  group of highly compensated eligible employees is not more
                  than the average contribution percentage of all other eligible
                  employees multiplied by one and twenty-five hundredths (1.25).

                           TEST 2: The excess of the average contribution
                  percentage for the group of highly compensated eligible
                  employees over that of all other eligible employees is not
                  more than two (2) percentage points, and the average
                  contribution percentage for the group of highly compensated
                  eligible employees is not more than the average contribution
                  percentage of all other eligible employees multiplied by two
                  (2).


         For any Plan Year prior to 2002 in which Test 2 is satisfied for the
         purposes of the Section 401(k) test in Section 2, this Plan must
         satisfy either: (i) Test 1 for the purposes of the Section 401(m) test
         in this Section, or (ii) the aggregate limit or multiple use test as
         described in regulations issued by the Secretary of the Treasury which
         are incorporated by reference herein. If corrective distributions under
         Section 7 are required to satisfy the aggregate limit because of excess
         aggregate contributions as defined in Section 401(m)(b)(13) of the
         Code, the amount of such excess aggregate contributions shall first be
         determined by leveling the contribution percentages for the highly
         compensated employees in the order of their contribution percentages
         and once such amount has been calculated, the corrective distributions
         shall be determined by reducing the Employer matching contributions of
         the highly compensated eligible employees in order of the contribution
         amount beginning with the largest such amount until the aggregate limit
         is satisfied.

                  3.6.4. REMEDIAL ACTION. If the Committee determines that
         neither of the tests will be satisfied (or may not be satisfied) for a
         Plan Year, then during such Plan Year, the following actions may be
         taken so that one of the tests will be satisfied or so that the margin
         of failure will be reduced for such Plan Year:

                           (a) The Employer matching contributions for the
                  highly compensated eligible employees who have the largest
                  contribution amount shall be reduced to the extent necessary
                  to reduce their contribution amount to the next lower amount.

                           (b) If neither of the tests is satisfied after such
                  adjustment, the Employer matching contributions for the highly
                  compensated eligible employees who then have the largest
                  contribution amount (including those reduced under (c) above)
                  shall be reduced to the extent necessary to reduce their
                  contribution amount to the next lower amount.

                           (c) If neither of the tests is satisfied after such
                  adjustment, this method of adjustment shall be repeated one or
                  more additional times until one of the tests is satisfied or
                  the margin of failure is reduced, as determined by the
                  Committee.


         The Committee shall prescribe rules concerning such adjustments,
         including the frequency of applying the tests and the commencement and
         termination dates for any adjustments.

         3.7. SAFE HARBOR MATCHING EMPLOYER CONTRIBUTIONS FROM AND AFTER JANUARY
1, 2001.

                  3.7.1. AMOUNT AND ELIGIBILITY. Effective for the Plan Year
         commencing January 1, 2001, and for each Plan Year thereafter for which
         the Employer provides a timely written notice



                                       19
<PAGE>

         containing all information required under Section 401(k)(12)(D) of the
         Code, the Employer shall contribute to the Trustee for deposit in the
         Fund and for crediting to the Participant's Employer Matching Account
         an amount which will equal:

                           (a) One hundred percent (100%) of the first three
                  percent (3%) of the reduction in Recognized Compensation for
                  each pay period which was agreed to by the Participant
                  pursuant to a 401(k) Agreement; plus

                           (b) Fifty percent (50%) of the next two percent (2%)
                  of such reductions in Recognized Compensation

provided that no Participant who is in Recognized Employment as a licensed
optometrist and who is also a Highly Compensated Employee shall be eligible to
receive a matching contribution. Such matching contributions are later referred
to in the Plan as "Safe Harbor Matching Contributions." Effective for the Plan
Year commencing January 1, 2002, Safe Harbor Matching Contributions shall only
be made on behalf of those Participants who have attained both age 20 and
completed 1 year of Eligibility Service as of any Enrollment Date during the
Plan Year and not on behalf of Early Participants. As noted in Section 2.1.3,
the Principal Sponsor has elected pursuant to Section 410(b)(4)(B) of the Code
to treat the Plan as two separate Plans for purposes of Section 401(k) of the
Code and not to provide Safe Harbor matching Contributions to Early
Participants. However, it is recognized that the elective deferral contributions
made by the Early Participants must satisfy the Section 401(k) compliance tests
set forth in Section 2.6, using current year testing, unless otherwise allowed
under applicable rules. Safe Harbor Matching Contributions shall be made on a
payroll period basis, rather than an annual Plan Year basis, and must be
deposited into the Fund no later than the last day of the Plan Year quarter
following the Plan Year quarter for which the applicable contributions were
made. However, the Principal Sponsor reserves the right to amend the Plan during
a Plan Year to reduce or eliminate Safe Harbor Matching Contributions, provided
that a supplemental notice is given to all eligible Participants explaining the
consequences of and effective date of the amendment and that all such
Participants have a reasonable opportunity (including a reasonable period) to
change their 401(k) Agreements prior to such reduction or elimination. The
amendment reducing or eliminating Safe Harbor Matching Contributions may not
become effective earlier than the later of (i) 30 days after such eligible
Participants are given the supplemental notice or (ii) the date the amendment is
adopted. If such an amendment is adopted then the tests provided in Sections 2.6
and 3.6 must again be satisfied, using the current year testing method, for the
entire Plan Year in which such amendment is adopted, and the safe harbor
requirements of Section 401(k)(12) must be satisfied through the effective date
of the amendment.

                  3.7.2. FULL VESTING. Safe Harbor Matching Contributions shall
         at all times be fully 100% Vested and are subject to the withdrawal
         restrictions specified in Section 401(k)(2)(B) and reflected in
         Sections 6.1 and 7.10 of the Plan, which are intended to satisfy all of
         the requirements of Section 401(k)(12) of the Code and shall be so
         construed.

                  3.7.3. ALLOCATION. Safe Harbor Matching Contributions made
         with respect to a Participant shall be credited to that Participant's
         Employer Matching Account as of the Valuation Date coincident with or
         next following the date as of which such contribution is received by
         the Trustee.

                  3.7.4. SAFE HARBOR 401(M) COMPLIANCE. The Plan is designed so
         that from and after January 1, 2001, it will be deemed to satisfy the
         special rules of Sections 2.6 and 3.6 without the need for any testing.

         3.8. ADJUSTMENTS.

                  3.8.1. MAKE-UP CONTRIBUTIONS FOR OMITTED PARTICIPANTS. If,
         after any Employer's contribution for a Plan Year has been made and
         allocated, it should appear that, through oversight



                                       20
<PAGE>

         or a mistake of fact or law, a Participant (or an employee who should
         have been considered a Participant) who should have been entitled to
         share in such contribution received no allocation or received an
         allocation which was less than he should have received, the Retirement
         Committee may, at its election, and in lieu of reallocating such
         contribution if reallocation is relevant (i.e., for prior year
         discretionary Employer Profit Sharing contributions, but not Safe
         Harbor Matching contributions), direct the Employer to make a special
         make-up contribution for the Account of such Participant in an amount
         adequate to provide for him the same addition to the Participant's
         Account for such Plan Year as he should have received.

                  3.8.2. MISTAKEN CONTRIBUTIONS. If, after an Employer
         contribution has been made and allocated, it should appear that,
         through oversight or a mistake of fact or law, a Participant (or an
         individual who was not a Participant) received an allocation which was
         more than the Participant should have received, the Retirement
         Committee may direct that the mistaken contribution, adjusted for its
         pro rata share of any net loss or net gain in the value of the Fund
         which accrued while such mistaken contribution was held therein, shall
         be withdrawn from the Account of such individual and retained in the
         Fund and used to reduce the amount of the next succeeding contribution
         of the Employer to the Fund due after the determination that such
         mistaken contribution has occurred.

         3.9. ROLLOVER CONTRIBUTIONS.

                  3.9.1. CONTINGENT PROVISION. The provisions of this Section
         3.9 shall not be implemented unless and until the Retirement Committee
         shall so determine in its discretion, and, upon being implemented,
         shall be subject to such conditions and limitations as the Retirement
         Committee may prescribe from time to time for administrative
         convenience and to preserve the tax-qualified status of the Plan.

                  3.9.2. ELIGIBLE CONTRIBUTIONS. Each employee in Recognized
         Employment may contribute to the Plan, within such time and in such
         form and manner as may be prescribed by the Retirement Committee in
         accordance with those provisions of federal law relating to rollover
         contributions, cash (or the cash proceeds from distributed property)
         received by the employee in Recognized Employment in an eligible
         rollover distribution from a qualified plan or from an individual
         retirement account or annuity established solely to hold such eligible
         rollover distribution. Also, the Committee may establish rules and
         conditions regarding the acceptance of direct rollovers under Section
         401(a)(31) of the Code from trustees or custodians of other qualified
         pension, profit sharing or stock bonus plans.

                  3.9.3. SPECIFIC REVIEW. The Retirement Committee shall have
         the right to reject, or to direct the Trustee to return, any such
         rollover contribution if, in the opinion of the Retirement Committee,
         the acceptance thereof might jeopardize the tax-qualified status of the
         Plan or unduly complicate its administration, but the acceptance of any
         such rollover contribution shall not be regarded as an opinion or
         guarantee on the part of the Employer, the Retirement Committee, the
         Trustee or the Plan as to the tax consequences which may result to the
         contributing Participant thereby.

                  3.9.4. ALLOCATION. The rollover contribution made by a
         employee in Recognized Employment to the Plan shall be allocated to the
         Participant's Rollover Account and shall be credited to such Account as
         of the Valuation Date coincident with or next following the date on
         which such contribution is received by the Trustee.

         3.10. NONDEDUCTIBLE VOLUNTARY CONTRIBUTIONS. Effective December 1,
1986, nondeductible voluntary contributions shall not be accepted by the Plan.
Prior to December 1, 1986, the Plan accepted nondeductible voluntary
contributions. All such contributions held in the Voluntary Account shall


                                       21
<PAGE>

continue to share in any trust earnings or losses and be distributed in
accordance with the provisions of Section 7.

         3.11. LIMITATION ON ANNUAL ADDITIONS. In no event shall amounts be
allocated to the Account of any Participant if, or to the extent, such amounts
would exceed the limitations set forth in Appendix A to this Plan Statement.

         3.12. EFFECT OF DISALLOWANCE OF DEDUCTION OR MISTAKE OF FACT. All
Employer contributions to the Plan are conditioned on their qualification for
deduction for federal income tax purposes under Section 404 of the Code. If any
such deduction should be disallowed, in whole or in part, for any Employer
contribution to the Plan for any year, or if any Employer contribution to the
Plan is made by reason of a mistake of fact, then there shall be calculated the
excess of the amount contributed over the amount that would have been
contributed had there not occurred a mistake in determining the deduction or a
mistake of fact. The Principal Sponsor shall direct the Trustee to return such
excess, adjusted for its pro rata share of any net loss (but not any net gain)
in the value of the Fund which accrued while such excess was held therein, to
the Employer within one (1) year of the disallowance of the deduction or the
mistaken payment of the contribution, as the case may be. If the return of such
amount would cause the balance of any Account of any Participant to be reduced
to less than the balance which would have been in such Account had the mistaken
amount not been contributed, however, the amount to be returned to the Employer
shall be limited so as to avoid such reduction.

         3.13. UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT
(USERRA). Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Section 414(u) of the Code.

                                   SECTION 4

                      INVESTMENT AND ADJUSTMENT OF ACCOUNTS

         4.1. ESTABLISHMENT OF SUBFUNDS.

                  4.1.1. ESTABLISHING SUBFUNDS. At the direction of the
         Retirement Committee, the Trustee shall divide the Fund into two (2) or
         more Subfunds or establish different investment funds, which shall
         serve as vehicles for the investment of Participants' Accounts.

                  4.1.2. OPERATIONAL RULES. In accordance with rules, the
         Retirement Committee shall determine the circumstances under which a
         particular Subfund may be elected, or shall be automatically utilized,
         the minimum or maximum amount or percentage of an Account which may be
         invested in a particular Subfund, the procedures for making or changing
         investment elections, the extent (if any) to which Beneficiaries of
         deceased Participants may make investment elections and the effect of a
         Participant's or Beneficiary's failure to make an effective election
         with respect to all or any portion of an Account.

                  4.1.3. REVISING SUBFUNDS. The Retirement Committee shall have
         the power, from time to time, to dissolve Subfunds, to direct that
         additional Subfunds be established and, under rules, to withdraw or
         limit participation in a particular Subfund. In connection with the
         power to commingle reserved to the Trustee under Section 10.6, the
         Retirement Committee shall also have the power to direct the Trustee to
         consolidate any separate Subfunds hereunder with any other separate
         Subfunds having the same investment objectives which are established
         under any other retirement plan trust fund of the Employer or any
         business entity affiliated in ownership or management with the Employer
         of which the Trustee is trustee and which are managed by the Trustee or
         the same Investment Manager.



                                       22
<PAGE>

                  4.1.4. ERISA SECTION 404(C) COMPLIANCE. If the Committee so
         determines, the Committee may establish investment subfunds and
         operational rules which are intended to satisfy Section 404(c) of ERISA
         and the regulations thereunder. Such investment subfunds shall permit
         Participants and Beneficiaries the opportunity to choose from at least
         three investment alternatives, each of which is diversified, each of
         which present materially different risk and return characteristics, and
         which, in the aggregate, enable Participants and Beneficiaries to
         achieve a portfolio with appropriate risk and return characteristics
         consistent with minimizing risk through diversification. Such
         operational rules shall provide the following, and shall otherwise
         comply with Section 404(c) of ERISA and the regulations and rules
         promulgated thereunder from time to time:

                           (a) Participants and Beneficiaries may give
                  investment instructions to the Trustee at least once every
                  three months;

                           (b) the Trustee must follow the investment
                  instructions of Participants and Beneficiaries that comply
                  with the Plan's operational rules, provided that the Trustee
                  may in any event decline to follow any investment instructions
                  that:

                                    (i) would result in a prohibited transaction
                           described in Section 406 of ERISA or Section 4975 of
                           the Code;

                                    (ii) would result in the acquisition of an
                           asset that might generate income which is taxable to
                           the Plan;

                                    (iii) would not be in accordance with the
                           documents and instruments governing the Plan insofar
                           as they are consistent with Title I of ERISA;

                                    (iv) would cause a fiduciary to maintain
                           indicia of ownership of any assets of the Plan
                           outside of the jurisdiction of the district courts of
                           the United States other than as permitted by Section
                           404(b) of ERISA and Department of Labor regulation
                           Section 2050.404b-1;

                                    (v) would jeopardize the Plan's tax status
                           under the Code;

                                    (vi) could result in a loss in excess of a
                           Participant's or Beneficiary's Account balance;

                           (c) Participants and Beneficiaries shall be
                  periodically informed of actual expenses to their Accounts
                  which are imposed by the Plan and which are related to their
                  Plan investment decisions.

                           (d) with respect to any subfund consisting of
                  Employer securities and intended to satisfy the requirements
                  of Section 404(c) of ERISA, (i) Participants and Beneficiaries
                  shall be entitled to all voting, tender and other rights
                  appurtenant to the ownership of such securities, (ii)
                  procedures shall be established to ensure the confidential
                  exercise of such rights, except to the extent necessary to
                  comply with federal and state laws not preempted by ERISA, and
                  (iii) the Trustee shall ensure the sufficiency of and
                  compliance with such confidentiality procedures.

         4.2. VALUATION AND ADJUSTMENT OF ACCOUNTS. The intent of this Section
is to cause all income of the Trust Fund and changes in the value of the assets
of the Trust Fund to be distributed among each Participant Account in the Trust
Fund. Accordingly, the Trustee shall, following the end of each Valuation Date,
value all assets of the Trust Fund, allocate net gains or losses, and process
additions to and withdrawals from Account balances in the following manner:



                                       23
<PAGE>

                  4.2.1. VALUATION. The Trustee shall first compute the fair
         market value of securities and/or the other assets comprising each
         investment fund designated by the Retirement Committee for direction of
         investment by the Participants of this Plan. Each Account balance shall
         be adjusted each business day by applying the closing market price of
         the investment fund on the current business day to the share/unit
         balance of the investment fund as of the close of business on the
         current business day.

                  4.2.2. ADDITIONS AND WITHDRAWALS. The Trustee shall then
         account for any requests for additions or withdrawals made to or from a
         specific designated investment fund by any Participant, including
         allocations of contributions and forfeitures. In completing the
         valuation procedure described above, such adjustments in the amounts
         credited to such Accounts shall be made on the business day to which
         the investment activity relates. Contributions received by the Trustee
         pursuant to this Plan shall not be taken into account until the
         Valuation Date coinciding with or next following the date such
         contribution was both actually paid to the Trustee and allocated among
         the Accounts of Participants.

                  4.2.3. POOLED FUNDS. Notwithstanding Sections 4.2.1 and 4.2.2
         above, in the event a pooled investment fund is created as a designated
         fund for Participant investment election in this Plan, valuation of the
         pooled investment fund and allocation of earnings of the pooled
         investment fund shall be governed by the Administrative Services
         Agreement for such pooled investment fund. The provisions of any such
         Administrative Services Agreement shall be deemed a part of this Plan.

                  4.2.4. OTHER RULES. Notwithstanding the foregoing, the
         Committee and the Trustee may agree in writing to revised rules or
         additional rules for the adjustment of Accounts including, without
         limiting the generality of the foregoing, the times when contributions
         shall be credited under Section 3 for the purposes of allocating gains
         or losses under this Section 4.

         4.3. MANAGEMENT AND INVESTMENT OF FUND. The Fund in the hands of the
Trustee, together with all additional contributions made thereto and together
with all net income thereof, shall be controlled, managed, invested, reinvested
and ultimately paid and distributed to Participants and Beneficiaries by the
Trustee with all the powers, rights and discretions generally possessed by
trustees, and with all the additional powers, rights and discretions conferred
upon the Trustee under this Plan Statement. Except to the extent that the
Trustee is subject to the authorized and properly given investment directions of
a Participant, a Beneficiary or an Investment Manager, and subject to the
directions of the Retirement Committee with respect to the payment of benefits
hereunder, the Trustee shall have the exclusive authority to manage and control
the assets of the Fund and shall not be subject to the direction of any person
in the discharge of its duties, nor shall its authority be subject to delegation
or modification except by formal amendment of this Plan Statement.

                                    SECTION 5

                                     VESTING

         5.1. PROFIT SHARING ACCOUNT.

                  5.1.1. PROGRESSIVE VESTING. Except as hereinafter provided,
         the Profit Sharing Account of each Participant shall become Vested in
         accordance with the following schedule:

<TABLE>
<CAPTION>
                  When the Participant Has                The Vested Portion of the
                Completed the Following Years            Participant's Profit Sharing
                     of Vesting Service:                       Account Will Be:
                     -------------------                       ----------------
<S>                                                      <C>
                      Less than 3 years                               0%
                      3 years or more                               100%
</TABLE>



                                       24
<PAGE>

         provided, however, that the Vested percentage of any Participant who
         was a Participant in the Plan as of March 1, 1996, shall not be less
         than the percentage the Participant would have earned had the Prior
         Plan Statement continued in effect.

                  5.1.2. FULL VESTING. Notwithstanding any of the foregoing
         provisions for progressive vesting of Profit Sharing Accounts of
         Participants, the entire Profit Sharing Account of each Participant
         shall be fully Vested upon the earliest occurrence of any of the
         following events while in the employment of the Employer or an
         Affiliate:

                           (a) the Participant's death,

                           (b) the Participant's attainment of Normal Retirement
                  Age,

                           (c) the Participant's Disability,

                           (d) a partial termination of the Plan which is
                  effective as to the Participant, or

                           (e) a complete termination of the Plan or a complete
                  discontinuance of Employer contributions hereto.

                  5.1.3. FORFEITURE EVENT. A Participant who is not in the
         employment of the Employer or an Affiliate upon a complete termination
         of the Plan or a complete discontinuance of Employer contributions
         hereto, shall be fully Vested if, on the date of such termination or
         discontinuance, such Participant has not had a forfeiture event as
         described below:

                           (a) the occurrence after an Event of Maturity of five
                  (5) consecutive One-Year Breaks in Service,

                           (b) the Event of Maturity of a Participant who has no
                  Vested interest in the Participant's Total Account,

                           (c) the distribution after an Event of Maturity, to
                  (or with respect to) a Participant of the entire Vested
                  portion of the Total Account of the Participant, or

                           (d) the death of the Participant at a time and under
                  circumstances which do not entitle the Participant to be fully
                  (100%) Vested in the Participant's Total Account.

                  5.1.4. PRE-EFFECTIVE DATE VESTING. For any person who does not
         perform one (1) Hour of Service on or after February 26, 1989, the
         Vesting provisions of the Prior Plan Statement shall continue to apply.

         5.2. OTHER ACCOUNTS. The 401(k) Account, Employer Matching Account,
Rollover Account, Voluntary Account and Transfer Account of each Participant
shall be fully (100%) Vested at all times.



                                       25
<PAGE>

                                    SECTION 6

                                    MATURITY

         6.1. EVENTS OF MATURITY. A Participant's Total Account shall mature and
the Vested portion shall become distributable in accordance with Section 7 upon
the earliest occurrence of any of the following events while in the employment
of the Employer or an Affiliate:

                           (a) the Participant's death,

                           (b) the Participant's separation from service,
                  whether voluntary or involuntary,

                           (c) the Participant's attainment of age seventy and
                  one-half (70 1/2) years, except that such occurrence as an
                  Event of Maturity has been eliminated with regard to
                  Participants who reached age 70 1/2 on or after January 1,
                  1999,

                           (d) the Participant's Disability,

                           (e) termination of the Plan without the establishment
                  or maintenance of another defined contribution plan (other
                  than an employee stock ownership plan as defined in Section
                  4975(e)(7) of the Code) or a partial termination of the Plan
                  effective as to the Participant,

                           (f) the disposition by the Employer to an unrelated
                  organization of substantially all the assets (within the
                  meaning of Section 409(d)(2) of the Code or other guidance
                  issued by the Internal Revenue Service) used by the Employer
                  in a trade or business of the Employer, but only with respect
                  to employees who continue employment with the organization
                  acquiring such assets and only if the purchase and sale
                  agreement specifically authorizes distribution of this Plan's
                  assets in connection with such disposition and the Employer
                  continues to maintain the Plan after disposition, or

                           (g) the disposition by the Employer to an unrelated
                  organization of the Employer's interest in a subsidiary
                  (within the meaning of Section 409(d)(3) of the Code or other
                  guidance issued by the Internal Revenue Service), but only
                  with respect to employees who continue employment with such
                  subsidiary and only if the purchase and sale agreement
                  specifically authorizes distribution of this Plan's assets in
                  connection with such disposition and the Employer continues to
                  maintain the Plan after disposition;

                           (h) effective as of May 30, 2001, the Participant's
                  attainment of age 59 1/2,

provided, however, that a transfer from Recognized Employment to employment with
the Employer that is other than Recognized Employment or a transfer from the
employment of one Employer participating in the Plan to another such Employer or
to any Affiliate shall not constitute an Event of Maturity.

         6.2. DISPOSITION OF NONVESTED PORTION OF ACCOUNT. Upon the occurrence
of a Participant's Event of Maturity, if any portion of the Participant's Profit
Sharing Account is not Vested, such portion shall be transferred to the
Participant's Suspense Account as of the Valuation Date coincident with or next
following such Event of Maturity.

                  6.2.1. REHIRE BEFORE ANNUAL VALUATION DATE. If such
         Participant is reemployed by the Employer or an Affiliate before the
         Annual Valuation Date following the Participant's Event of Maturity,
         the portion of the Participant's Profit Sharing Account which was not
         Vested upon such Event of Maturity (and therefore became the
         Participant's Suspense Account) shall be



                                       26
<PAGE>

         transferred back to and held in the Participant's Profit Sharing
         Account under the Plan as of the Valuation Date coincident with or next
         following the reemployment date and it shall be held there pending the
         occurrence of another Event of Maturity effective as to the
         Participant, during which period of subsequent employment the
         Participant may earn a Vested interest in some or all of such portion
         in accordance with the provisions of Section 5.

                  6.2.2. REHIRE AFTER ANNUAL VALUATION DATE. If such Participant
         is not reemployed by the Employer or an Affiliate before the Annual
         Valuation Date following the Participant's Event of Maturity, the
         portion of the Participant's Profit Sharing Account which was not
         Vested upon such Event of Maturity (and therefore became the
         Participant's Suspense Account):

                           (a) shall be forfeited as of that Annual Valuation
                  Date as provided in Section 6.2.3 and the Plan shall be deemed
                  to have made a distribution of such Participant's vested
                  interest (which shall be zero) as of such date, and

                           (b) shall be restored to the Participant's Profit
                  Sharing Account (without adjustment for gains or losses after
                  such Annual Valuation Date) as provided in Section 6.2.4 if
                  the Participant returns to employment with the Employer or an
                  Affiliate before the Participant has five (5) consecutive
                  One-Year Breaks in Service. This restoration shall occur as of
                  the Annual Valuation Date next following the Participant's
                  return to employment and shall be conditioned upon the
                  Participant's remaining in employment with the Employer or an
                  Affiliate until that Annual Valuation Date.

                  6.2.3. FORFEITURES. Forfeited Suspense Accounts shall be used
         first to restore any forfeited Suspense Accounts for rehired
         Participants of the same Employer as required in Section 6.2.2, and,
         prior to January 1, 2001, any remaining portion shall be added to the
         Employer discretionary contribution, if any, to be allocated as of such
         Annual Valuation Date, to the Profit Sharing Accounts of all
         Participants during the Plan Year, as provided in Section 3.3 of the
         Plan. From and after January 1, 2001, forfeited suspense Accounts shall
         be used to reduce the Safe Harbor Matching Contribution required of the
         Employer under Section 3.7 or to pay administrative expenses as
         provided in Section 12.9, as directed by the Employer. Any Suspense
         Accounts remaining at the termination of the Plan shall be likewise
         used and if any remain after such uses are satisfied, the same may be
         allocated to a Profit Sharing Account for each Participant remaining in
         the employment of the Employer as of the termination, pro-rata to
         Recognized Compensation.

                  6.2.4. RESTORATIONS. The amount necessary to make the
         restoration required under Section 6.2.2(b) shall come first from
         Suspense Accounts of Participants of the rehiring Employer that are to
         be forfeited on the Annual Valuation Date on which the restoration is
         to occur. If such Suspense Accounts are not adequate for this purpose,
         the rehiring Employer shall make a contribution adequate to make the
         restoration as of that Annual Valuation Date (in addition to any
         contributions made under Section 3). If the Participant is rehired by
         an Affiliate that is not an Employer, the amount necessary to make the
         restoration shall come first from Suspense Accounts of Participants of
         the Principal Sponsor that are to be forfeited on the Annual Valuation
         Date on which the restoration is to occur and, if such Suspense
         Accounts are not adequate for this purpose, then the Principal Sponsor
         shall make a contribution adequate to make the restoration as of that
         Annual Valuation Date (in addition to any contributions made under
         Section 3).

         6.3. UNCLAIMED VESTED TOTAL ACCOUNTS. If a Participant or Beneficiary
cannot be found under procedures established by the Retirement Committee, the
Vested Total Account of such Participant or Beneficiary shall be forfeited as of
the Annual Valuation Date the Account is both (i) distributable under Section
7.1.2 or Section 7.2.2 and (ii) determined by the Retirement Committee to be
unclaimed. A Vested Total Account so forfeited shall be restored (without
adjustment for gains or losses after the



                                       27
<PAGE>

forfeiture of the Account) as of the Annual Valuation Date following a claim for
the Account by the Participant or Beneficiary; provided, however, the claim is
made before the termination of the Plan. The forfeiture and restoration of an
unclaimed Vested Total Account shall be in accordance with the following
procedures.

                  6.3.1. FORFEITURES. Forfeited unclaimed Vested Total Accounts
         shall be used first to restore any forfeited unclaimed Vested Total
         Account for a `Participant or Beneficiary who makes a claim for a
         Vested Total Account as of the Annual Valuation Date. Any remaining
         forfeited unclaimed Vested Total Accounts as of the Annual Valuation
         Date in the Plan Year in which the forfeiture occurred shall be used to
         reduce the Employer's Safe Harbor Matching Contribution under Section
         3.7 or to pay administrative expenses as provided in Section 12.9, as
         directed by the Employer. Any forfeited unclaimed Vested Total Accounts
         remaining at the termination of the Plan shall be used in a similar
         fashion or otherwise as provided in Section 6.2.4.

                  6.3.2. RESTORATIONS. The amount necessary to make the
         restoration of a forfeited unclaimed Vested Total Account shall come
         first from the unclaimed Vested Total Accounts of Participants or
         Beneficiaries that are to be forfeited as of the Annual Valuation Date
         on which the restoration is to occur. If such Vested Total Accounts are
         not adequate for this purpose, the Employer shall make a contribution
         adequate to make the restoration as of that Annual Valuation Date (in
         addition to any contributions made under Section 3).

                                    SECTION 7

                                  DISTRIBUTION

         7.1. APPLICATION FOR DISTRIBUTION.

                  7.1.1. APPLICATION REQUIRED. No distribution shall be made
         from the Plan until the Retirement Committee has received an
         application for distribution from the Participant or the Beneficiary
         entitled to receive distribution (the "Distributee"). The Retirement
         Committee may prescribe rules regarding the form of such application,
         the manner of filing such application and the information required to
         be furnished in connection with such application.

                  7.1.2. EXCEPTION FOR SMALL AMOUNTS. Effective for Plan Years
         beginning on or after January 1, 1998, a Vested Total Account which
         does not exceed Five Thousand Dollars ($5,000) (or for distributions
         made prior to October 17, 2000, never exceeded that amount at the time
         of any prior distribution) shall be distributed automatically in a
         single lump sum as soon as is administratively feasible following the
         occurrence of an Event of Maturity effective as to a Participant,
         without an application for distribution.

                  7.1.3. EXCEPTION FOR REQUIRED DISTRIBUTIONS. Any Vested Total
         Account for which no application has been received on the required
         beginning date effective as to a Distributee under Section 7.2.2, shall
         be distributed automatically in a single lump sum as of that date
         without an application for distribution. Any amounts credited to a
         Vested Total Account after the required beginning date effective as to
         a Distributee under Section 7.2.2 shall be distributed in a single lump
         sum following the crediting of such amounts to the Account as directed
         by the Retirement Committee. The distribution shall be made without an
         application for distribution.

                  7.1.4. NOTICES. The Retirement Committee will issue such
         notices as may be required under Sections 402(f), 411(a)(11) and other
         sections of the Code in connection with distributions from the Plan. No
         distribution will be made unless it is consistent with such notice
         requirements. Distribution may commence less than thirty (30) days
         after the notice required under



                                       28
<PAGE>

         Section 1.411(a)-11(c) of the Income Tax Regulations or the notice
         required under Section 1.402(f)-2T of the Income Tax Regulations is
         given, provided that:

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

                           (b) The Distributee, after receiving the notice,
                  affirmatively elects a distribution.

                  7.1.5. DIRECT ROLLOVER. A Distributee who is eligible to elect
         a direct rollover may elect, at the time and in the manner prescribed
         by the Committee, to have all or any portion of an eligible rollover
         distribution paid directly to an eligible retirement plan specified by
         the Distributee in a direct rollover. A Distributee who is eligible to
         elect a direct rollover includes only a Participant, a Beneficiary who
         is the surviving spouse of a Participant and a Participant's spouse or
         former spouse who is the alternate payee under a qualified domestic
         relations order, as defined in Appendix C.

                           (a) ELIGIBLE ROLLOVER DISTRIBUTION AND ELIGIBLE
                  RETIREMENT PLAN for purposes of the Plan shall the same
                  meanings as defined in Section 401(a)(31) of the Code.

                           (b) DIRECT ROLLOVER means the payment of an eligible
                  rollover distribution by the Plan to the eligible retirement
                  plan specified by the Distributee who is eligible to elect a
                  direct rollover.

         7.2. TIME AND FORM OF DISTRIBUTION. Upon the receipt of a proper
application for distribution from the Distributee after the occurrence of an
Event of Maturity effective as to a Participant, and after the Participant's
Vested Total Account has been determined and the right of the Distributee to
receive a distribution has been established, the Retirement Committee shall
cause the Trustee to make distribution of such Vested Total Account in a single
lump sum as of (and as soon as administratively feasible after) a Valuation Date
specified by the Distributee which is not earlier than nor later than the dates
specified below.

                  7.2.1. EARLIEST BEGINNING DATE. Distribution shall not be made
         as of a Valuation Date which is earlier than the earliest beginning
         date.

                           (a) PARTICIPANT. If the Distributee is a Participant,
                  the earliest beginning date is the Valuation Date coincident
                  with or next following the date of the Participant's Event of
                  Maturity.

                           (b) BENEFICIARY. If the Distributee is a Beneficiary
                  of a Participant, the earliest beginning date is the Valuation
                  Date coincident with or next following the date of such
                  Participant's death.


         Distribution shall not be made, however, as of a Valuation Date which
         is earlier than the date the Retirement Committee receives any required
         application for distribution.

                  7.2.2. REQUIRED BEGINNING DATE. In all events distribution
         shall be made not later than the required beginning date.



                                       29
<PAGE>

                           (a) PARTICIPANT. The required beginning date of a
                  Participant is the later of the April 1 of the calendar year
                  following the calendar year in which the Participant attains
                  age 70 1/2 or retires, except that benefit distributions to a
                  5-percent owner (as defined in Appendix B to the Plan
                  statement) must commence by the April 1 of the calendar year
                  following the calendar year in which the Participant attains
                  age 70 1/2. The preretirement or in-service age 70 1/2
                  distribution option has been eliminated with respect to
                  employees who reach age 70 1/2 on or after January 1, 1999.

                           (b) BENEFICIARY. If the Distributee is a Beneficiary
                  of a Participant, the required beginning date is the November
                  30 of the calendar year in which occurs the fifth (5th)
                  anniversary of the Participant's death.

                  7.2.3. FORM OF DISTRIBUTION OF TRANSFER ACCOUNTS FROM THE
         PENN-DANIELS PLAN. In accordance with Section 411(d)(6) of the Code,
         any individual who has had an account transferred from the
         Penn-Daniels, Incorporated Employees' Savings and Retirement Plan (the
         "Penn-Daniels Plan") to this Plan shall have such account distributed
         in the form of a qualified joint and survivor annuity. Notwithstanding
         the foregoing, such individual may elect any optional form of
         distribution available under the Penn-Daniels Plan as in effect on July
         1, 1998, if the Participant's spouse consents to such distribution in a
         writing signed by the spouse and witnessed by a Plan representative or
         notary public. The Plan administrator shall cause to be furnished to
         each married Participant a written explanation, in non-technical terms,
         of the availability of the joint and survivor annuity, as specifically
         applicable to the Participant and spouse and of the fact that such
         Participant may elect an optional form of benefit. The written
         explanation shall be furnished to such participant during a reasonable
         period (generally at least thirty (30), but not more than ninety (90)
         days) before the commencement date of any benefits, consistent with
         applicable governmental regulations. The Participant may waive (with
         spousal consent) the requirement that such written explanation be
         provided at least thirty (30) days before the commencement date,
         consistent with applicable governmental regulations. Further,
         notwithstanding the above provision, the qualified joint and survivor
         annuity forms and the other optional forms of distribution under the
         Penn-Daniels Plan are hereby eliminated under this Plan effective as of
         August 15, 2001, provided that a written notice explaining this
         elimination is given to all Participants who have transfer accounts now
         in the Penn-Daniels Plan and such elimination is not applied to any
         such Participant who incurs an Event of Maturity and elects to have his
         or her benefits attributable to such Transfer Account begin before the
         end of a 90 day period after receipt of such notice.

                  7.2.4. REQUIRED MINIMUM DISTRIBUTIONS. All distributions under
         this Plan made after the Participant's Required Beginning Date or after
         the Participant's death shall comply with the minimum distribution
         requirements under Section 401(a)(9) of the Code, and regulations
         thereunder (which are hereby incorporated by reference). With respect
         to distributions under the Plan made in calendar years beginning on or
         after January 1, 2002, the Plan will apply the minimum distribution
         requirements of Section 401(a)(9) of the Internal Revenue Code in
         accordance with the regulations under Section 401(a)(9) that were
         proposed in January 2001, notwithstanding any provision of the Plan to
         the contrary. This amendment shall continue in effect until the end of
         the last calendar year beginning before the effective date of final
         regulations under Section 401(a)(9) or such other date specified in
         guidance published by the Internal Revenue Service.

         7.3. OTHER RULES.

                  7.3.1. EFFECT OF REEMPLOYMENT. If a Participant is reemployed
         by the Employer or an Affiliate after distribution has been scheduled
         to be made but before the Participant attains Normal Retirement Age and
         before actual distribution, distribution of the Participant's Vested


                                       30
<PAGE>

         Total Account shall be suspended, provided the request for such
         suspension is received by the Trustee sufficiently in advance so that
         such suspension is administratively feasible, and the Vested Total
         Account shall continue to be held in the Fund until another Event of
         Maturity effective as to the Participant shall occur after the
         Participant's reemployment. It is the general intent of this Plan that
         no distributions shall be made before the Normal Retirement Age of a
         Participant while the Participant is employed by the Employer or an
         Affiliate.

                  7.3.2. TEFRA SECTION 242(B) DESIGNATIONS. Effective February
         26, 1989, TEFRA Section 242(b) designations shall not be given effect.
         Prior to February 26, 1989, distributions to or with respect to each
         individual eligible to make a designation (before January 1, 1984) of a
         method of distribution pursuant to Section 242(b) of the Tax Equity and
         Fiscal Responsibility Act of 1982 were made in accordance with the
         TEFRA Section 242(b) designation provisions set forth in the Prior Plan
         Statement.

         7.4. DESIGNATION OF BENEFICIARIES.

                  7.4.1. RIGHT TO DESIGNATE. Each Participant may designate,
         upon forms to be furnished by and filed with the Retirement Committee,
         one or more primary Beneficiaries or alternative Beneficiaries to
         receive all or a specified part of the Participant's Vested Total
         Account in the event of the Participant's death. The Participant may
         change or revoke any such designation from time to time without notice
         to or consent from any Beneficiary or spouse. No such designation,
         change or revocation shall be effective unless executed by the
         Participant and received by the Retirement Committee during the
         Participant's lifetime.

                  7.4.2. SPOUSAL CONSENT. Notwithstanding the foregoing, a
         designation will not be valid for the purpose of paying benefits from
         the Plan to anyone other than a surviving spouse of the Participant (if
         there is a surviving spouse) unless that surviving spouse consents in
         writing to the designation of another person as Beneficiary. To be
         valid, the consent of such spouse must be in writing, must acknowledge
         the effect of the designation of the Beneficiary and must be witnessed
         by a notary public. The consent of the spouse must be to the
         designation of a specific named Beneficiary which may not be changed
         without further spousal consent, or alternatively, the consent of the
         spouse must expressly permit the Participant to make and to change the
         designation of Beneficiaries without any requirement of further spousal
         consent. The consent of the spouse to a Beneficiary is a waiver of the
         spouse's rights to death benefits under the Plan. The consent of the
         surviving spouse need not be given at the time the designation is made.
         The consent of the surviving spouse need not be given before the death
         of the Participant. The consent of the surviving spouse will be
         required, however, before benefits can be paid to any person other than
         the surviving spouse. The consent of a spouse shall be irrevocable and
         shall be effective only with respect to that spouse.

                  7.4.3. FAILURE OF DESIGNATION. If a Participant:

                           (a) fails to designate a Beneficiary,

                           (b) designates a Beneficiary and thereafter such
                  designation is revoked without another Beneficiary being
                  named, or

                           (c) designates one or more Beneficiaries and all such
                  Beneficiaries so designated fail to survive the Participant,


         such Participant's Vested Total Account, or the part thereof as to
         which such Participant's designation fails, as the case may be, shall
         be payable to the first class of the following classes of automatic
         Beneficiaries with a member surviving the Participant and (except in
         the case of the



                                       31
<PAGE>

         Participant's surviving issue) in equal shares if there is more than
         one member in such class surviving the Participant:

                  Participant's surviving spouse
                  Participant's surviving issue per stirpes and not per capita
                  Participant's surviving parents Participant's surviving
                  brothers and sisters Representative of Participant's estate.

                  7.4.4. DISCLAIMERS BY BENEFICIARIES. A Beneficiary entitled to
         a distribution of all or a portion of a deceased Participant's Vested
         Total Account may disclaim his or her interest therein subject to the
         following requirements. To be eligible to disclaim, a Beneficiary must
         be a natural person, must not have received a distribution of all or
         any portion of a Vested Total Account at the time such disclaimer is
         executed and delivered, and must have attained legal age as of the date
         of the Participant's death. Any disclaimer must be in writing and must
         be executed personally by the Beneficiary before a notary public. A
         disclaimer shall state that the Beneficiary's entire interest in the
         undistributed Vested Total Account is disclaimed or shall specify what
         portion thereof is disclaimed. To be effective, duplicate original
         executed copies of the disclaimer must be both executed and actually
         delivered to both the Retirement Committee and to the Trustee after the
         date of the Participant's death but not later than nine (9) months
         after the date of the Participant's death. A disclaimer shall be
         irrevocable when delivered to both the Retirement Committee and the
         Trustee. A disclaimer shall be considered to be delivered to the
         Retirement Committee or the Trustee only when actually received by the
         Retirement Committee or the Trustee (and in the case of a corporate
         Trustee, shall be considered to be delivered only when actually
         received by a trust officer familiar with the affairs of the Plan). The
         Retirement Committee (and not the Trustee) shall be the sole judge of
         the content, interpretation and validity of a purported disclaimer.
         Upon the filing of a valid disclaimer, the Beneficiary shall be
         considered not to have survived the Participant as to the interest
         disclaimed. A disclaimer by a Beneficiary shall not be considered to be
         a transfer of an interest in violation of the provisions of Section 8
         and shall not be considered to be an assignment or alienation of
         benefits in violation of federal law prohibiting the assignment or
         alienation of benefits under this Plan. No other form of attempted
         disclaimer shall be recognized by either the Retirement Committee or
         the Trustee.

                  7.4.5. DEFINITIONS. When used herein and, unless the
         Participant has otherwise specified in the Participant's Beneficiary
         designation, when used in a Beneficiary designation, "issue" means all
         persons who are lineal descendants of the person whose issue are
         referred to, including legally adopted descendants and their
         descendants but not including illegitimate descendants and their
         descendants; "child" means an issue of the first generation; "per
         stirpes" means in equal shares among living children of the person
         whose issue are referred to and the issue (taken collectively) of each
         deceased child of such person, with such issue taking by right of
         representation of such deceased child; and "survive" and "surviving"
         mean living after the death of the Participant.

                  7.4.6. SPECIAL RULES. Unless the Participant has otherwise
         specified in the Participant's Beneficiary designation, the following
         rules shall apply:

                           (a) If there is not sufficient evidence that a
                  Beneficiary was living at the time of the death of the
                  Participant, it shall be deemed that the Beneficiary was not
                  living at the time of the death of the Participant.

                           (b) The automatic Beneficiaries specified in Section
                  7.4.3 and the Beneficiaries designated by the Participant
                  shall become fixed at the time of the Participant's death so
                  that, if a Beneficiary survives the Participant but dies
                  before the



                                       32
<PAGE>

                  receipt of all payments due such Beneficiary hereunder, such
                  remaining payments shall be payable to the representative of
                  such Beneficiary's estate.

                           (c) If the Participant designates as a Beneficiary
                  the person who is the Participant's spouse on the date of the
                  designation, either by name or by relationship, or both, the
                  dissolution, annulment or other legal termination of the
                  marriage between the Participant and such person shall
                  automatically revoke such designation. (The foregoing shall
                  not prevent the Participant from designating a former spouse
                  as a Beneficiary on a form executed by the Participant and
                  received by the Retirement Committee after the date of the
                  legal termination of the marriage between the Participant and
                  such former spouse, and during the Participant's lifetime.)

                           (d) Any designation of a nonspouse Beneficiary by
                  name that is accompanied by a description of relationship to
                  the Participant shall be given effect without regard to
                  whether the relationship to the Participant exists either then
                  or at the Participant's death.

                           (e) Any designation of a Beneficiary only by
                  statement of relationship to the Participant shall be
                  effective only to designate the person or persons standing in
                  such relationship to the Participant at the Participant's
                  death.









                                       33
<PAGE>

A Beneficiary designation is permanently void if it either is executed or is
filed by a Participant who, at the time of such execution or filing, is then a
minor under the law of the state of the Participant's legal residence. The
Retirement Committee (and not the Trustee) shall be the sole judge of the
content, interpretation and validity of a purported Beneficiary designation.

         7.5. DEATH PRIOR TO FULL DISTRIBUTION. If a Participant dies after the
Participant's Event of Maturity but before distribution of the Participant's
Vested Total Account has been made, the undistributed Vested Total Account shall
be distributed in the same manner as hereinbefore provided in the Event of
Maturity by reason of death. If, at the death of the Participant, any payment to
the Participant was due or otherwise pending but not actually paid, the amount
of such payment shall be included in the Vested Total Account which is payable
to the Beneficiary (and shall not be paid to the Participant's estate).

         7.6. DISTRIBUTION IN CASH. Distribution of a Participant's Vested Total
Account shall be made in cash. If, however, the Vested Total Account to be
distributed consists in whole or in part of a Participant's unpaid promissory
note, the Trustee shall cause distribution of that portion of the Vested Total
Account to be made in kind.

         7.7. FACILITY OF PAYMENT. In case of the legal disability, including
minority, of a Participant or Beneficiary entitled to receive any distribution
under the Plan, payment shall be made, if the Retirement Committee shall be
advised of the existence of such condition:

                           (a) to the duly appointed guardian, conservator or
                  other legal representative of such Participant or Beneficiary,
                  or

                           (b) to a person or institution entrusted with the
                  care or maintenance of the incompetent or disabled Participant
                  or Beneficiary, provided such person or institution has
                  satisfied the Retirement Committee that the payment will be
                  used for the best interest and assist in the care of such
                  Participant or Beneficiary, and provided further, that no
                  prior claim for said payment has been made by a duly appointed
                  guardian, conservator or other legal representative of such
                  Participant or Beneficiary.

Any payment made in accordance with the foregoing provisions of this Section
shall constitute a complete discharge of any liability or obligation of the
Employer, the Retirement Committee, the Trustee and the Fund therefor.

         7.8. WITHDRAWALS FROM VOLUNTARY AND ROLLOVER ACCOUNTS.

                  7.8.1. WHEN AVAILABLE. A Participant (or an employee who has
         made a rollover) may make withdrawals from time to time from the
         Participant's Voluntary Account or Rollover Account. To receive such a
         withdrawal, the Participant or such employee must file an application
         with the Retirement Committee. In the application, the Participant or
         such employee shall specify the dollar amount to be withdrawn. Such
         withdrawal application shall be approved by the Retirement Committee to
         be made as of the Valuation Date coincident with or next following the
         approval of a completed application by the Retirement Committee and
         shall be made in a lump sum cash payment as soon as administratively
         feasible after such Valuation Date.

                  7.8.2. LIMITATION. The amount of a Participant's withdrawal
         from the Participant's Voluntary Account shall not exceed the amount of
         contributions made to such Account.

                  7.8.3. SEQUENCE OF ACCOUNTS. Each withdrawal made pursuant to
         this Section 7.8 shall first be taken from and charged against the
         amount of contributions in the Participant's Voluntary Account and
         thereafter taken from and charged against the Participant's Rollover
         Account.


                                       34
<PAGE>

                  7.8.4. COORDINATION WITH SECTION 4.1. If a withdrawal is made
         from an Account which is invested in more than one (1) Subfund
         authorized and established under Section 4.1, the amount withdrawn
         shall be charged to each Subfund in the same proportions as the Account
         is invested in each Subfund.

         7.9. IN-SERVICE DISTRIBUTIONS.

                  7.9.1. WHEN AVAILABLE. A Participant may receive an in-service
         distribution from the Vested portion of such Participant's Profit
         Sharing Account if the Retirement Committee determines that such
         in-service distribution is for one of the purposes described in Section
         7.9.2 and the conditions in Section 7.9.3 have been fulfilled. To
         receive such a distribution, the Participant must file an in-service
         distribution application with the Retirement Committee. In the
         application, the Participant shall specify the dollar amount to be
         distributed. Such in-service distribution shall be approved by the
         Retirement Committee and shall be made in a lump sum cash payment as
         soon as administratively feasible following the approval of a completed
         application by the Retirement Committee.

                  7.9.2. PURPOSES. In-service distributions under Section 7.9.1
         shall be approved by the Retirement Committee only if it is established
         that the in-service distribution is to be made:

                           (a) to reimburse the Participant for medical expenses
                  not covered by insurance, or

                           (b) to reimburse the Participant for expense caused
                  by natural disasters such as floods, tornados, etc.

                  7.9.3. LIMITATIONS. Unless and until a Participant shall have
         been a Participant for five (5) full years, the Participant shall not
         be entitled to an in-service distribution from the Participant's Profit
         Sharing Account under this Section 7.9 which would reduce that Profit
         Sharing Account below the amounts credited as a result of the Employer
         contributions made during the most recent two (2) consecutive Plan
         Years ending coincident with or immediately preceding the date as of
         which such distribution is made.

                  7.9.4. LIMIT ON DISTRIBUTIONS FROM VOLUNTARY ACCOUNT.
         Distributions from the Participant's Voluntary Account shall be subject
         to the limitation described in Section 7.8.2.

                  7.9.5. COORDINATION WITH SECTION 4.1. If an in-service
         distribution is made from an Account which is invested in more than one
         (1) Subfund authorized and established under Section 4.1, the amount
         distributed shall be charged to each Subfund in the same proportions as
         the Account is invested in each Subfund.

                  7.9.6. IN-SERVICE WITHDRAWALS AT 59 1/2. Notwithstanding any
         other provision of this Plan, any individual that has had an account
         transferred from Penn-Daniels, Incorporated Employees' Savings and
         Retirement Plan may have the balance of such account distributed at any
         time after he attains age 59 1/2, subject to the provisions of that
         plan regarding such withdrawals, as then in effect on July 1, 1998.
         Further, effective as of the date stated in Section 6.1(h), any
         Participant may withdraw all or any part of the Total Account which is
         vested on or after reaching age 59 1/2, even if such Participant is
         continuing in the service of the Employer, subject to such reasonable
         rules as the Committee may adopt with regard to minimum withdrawals and
         frequency. Distributions made to a Participant who has assets in more
         than one Account shall be deemed to have been made from the Accounts in
         the following sequence:


                                       35

<PAGE>


                  Voluntary Account
                  Rollover Account
                  Penn-Daniels Deferral Account
                  401(k) Account
                  Penn-Daniels Matching Account
                  Employer Matching Account
                  Additional Contributions account
                  Penn-Daniels Employer Account - Other
                  Profit Sharing Account

         7.10. HARDSHIP DISTRIBUTIONS.

                  7.10.1. WHEN AVAILABLE. A Participant may receive an
         in-service hardship distribution from the Vested portion of the
         Accounts if the Committee determines that such hardship distribution is
         for one of the purposes described in Section 7.10.2 and the conditions
         in Section 7.10.3 and Section 7.10.4 have been fulfilled. To receive
         such a distribution, the Participant must file a hardship distribution
         application with the Committee. In the application, the Participant
         shall specify the dollar amount to be distributed. Subject to the rules
         in Section 7.1, such hardship distribution shall be approved by the
         Committee and such hardship distribution shall be made in a lump sum
         cash payment as soon as administratively feasible following the
         approval of a completed application by the Committee.

                  7.10.2. PURPOSES. In-service hardship distributions shall be
         allowed under Section 7.11.1 only if the Participant establishes that
         the in-service hardship distribution is to be made for one of the
         following purposes:

                           (a) expenses for medical care described in Section
                  213(d) of the Code previously incurred by the Participant, the
                  Participant's spouse or any dependents of the Participant (as
                  defined in Section 152 of the Code) or necessary for these
                  persons to obtain medical care described in Section 213(d) of
                  the Code,

                           (b) costs directly related to the purchase of a
                  principal residence for the Participant (excluding mortgage
                  payments),

                           (c) payment of tuition and related educational fees
                  for the next twelve (12) months of post-secondary education
                  for the Participant, or the Participant's spouse, children or
                  dependents (as defined in Section 152 of the Code), or

                           (d) payments necessary to prevent the eviction of the
                  Participant from the Participant's principal residence or
                  foreclosure on the mortgage of that principal residence.


         Such purposes shall be considered to be an immediate and heavy
financial need of the Participant.

                  7.10.3. LIMITATIONS. In no event shall the cumulative amount
         of hardship distributions withdrawn from a Participant's 401(k) Account
         exceed the amount of contributions to that Account made pursuant to
         Section 3.2 (i.e., hardship distributions from that Account shall not
         include any earnings on such contributions or any curative allocations
         or earnings on curative allocations made pursuant to Section 3.3.2).
         The amount of the hardship distribution shall not exceed the amount of
         the Participant's immediate and heavy financial need; provided,
         however, that the amount of the immediate and heavy financial need may
         include amounts necessary to pay any federal, state, or local income
         taxes or penalties reasonably anticipated to result from the
         distribution. In addition, a hardship distribution which includes a
         portion of the Participant's



                                       36

<PAGE>

         401(k) Account shall not be allowed unless the Participant has obtained
         all distributions, other than hardship distributions, and, prior to
         February 1, 2002, all nontaxable loans (at the time of the loan)
         currently available under all plans maintained by the Employer and
         Affiliates. If a hardship distribution does not include any portion of
         the Participant's 401(k) Account, then the Participant shall not be
         required to have obtained all available non-taxable loans as a
         condition to such distribution. Other funds are not currently available
         unless the funds are available prior to or coincidentally with the date
         the hardship distribution is available. Distributions from the
         Participant's Voluntary Account shall be distributed in the sequence
         described in Section 7.8.

                  7.10.4. COORDINATION WITH OTHER PLANS. The rules described in
         this Section 7.10.4 apply only if the hardship distribution includes a
         portion of the Participant's 401(k) Account. The Participant's 401(k)
         Agreement and elective contributions and employee contributions under
         all other plans maintained by the Employer and Affiliates shall be
         canceled for twelve (12) months after receipt of a hardship
         distribution and shall not be automatically reinstated. Thereafter, the
         Participant may, upon notice to the Committee, enter into a new 401(k)
         Agreement effective as of the payday on or after any subsequent
         Valuation Date following such twelve (12) month period, provided the
         Participant is in Recognized Employment on that date. However, in the
         case of any hardship distribution made by the Plan after December 31,
         2001, the suspension period shall become six (6) months, instead of
         twelve (12). In addition, the Participant shall not be allowed to make
         elective contributions under the Plan and all other plans maintained by
         the Employer and Affiliates for the Participant's taxable year
         immediately following the taxable year of the hardship distribution
         which exceed the adjusted limit ($10,500 for 2001) (as described in
         Section 2.4) for the next taxable year less the amount of such
         Participant's elective contributions for the taxable year of the
         hardship distribution. The limitation described in the preceding
         sentence is referred to below as the "Post-Hardship Contribution
         Limit." For the purposes of this Section 7.10, all other plans
         maintained by the Employer and Affiliates shall mean all qualified and
         nonqualified plans of deferred compensation maintained by the Employer
         and Affiliates (including stock option, stock purchase or similar
         plans). However, the Post-Hardship Contribution Limit is eliminated
         effective as of January 1, 2002 for any Participant who received a
         hardship distribution during 2001 or thereafter.

                  7.10.5. COORDINATION WITH SECTION 4.1. If the hardship
         distribution is made from an Account which is invested in more than one
         (1) Subfund authorized and established under Section 4.1, the amount
         withdrawn shall be charged to each Subfund in the same proportions as
         the Account is invested in each Subfund.

                  7.10.6. HARDSHIP WITHDRAWALS FROM TRANSFER ACCOUNTS FROM THE
         PENN-DANIELS PLAN. Notwithstanding any other provision of this Plan, at
         any time prior to the elimination of the qualified joint and survivor
         annuity rules form the Penn-Daniels Plan as provided in Section 7.2.3
         above, hardship withdrawals made from accounts transferred from the
         Penn-Daniels, Incorporated Employees' Savings and Retirement Plan, will
         remain subject to the qualified election provisions of that plan as in
         effect on July 1, 1998, including the requirement that spousal consent
         be obtained prior to such distribution.

         7.11. LOANS. The provisions of this Section shall be subject to the
following rules, conditions and limitations:

                  7.11.1. AVAILABILITY. Loans shall be made available to all
         Participants who are active employees and to any other Participant or
         Beneficiary, whether or not an active employee, who is a party in
         interest as defined in Section 3(14) of ERISA, subject to limitations
         and conditions established under this Section on a reasonably
         equivalent basis and shall not be made available to highly compensated
         employees (as defined in Appendix D to the Plan Statement) in an amount
         (expressed as a percentage of the Total Account) greater than is made
         available to other



                                       37
<PAGE>

         employees. An alternate payee shall be considered a Beneficiary for
         this purpose only after the domestic relation order has been finally
         determined to be a qualified domestic relations order as defined in
         Appendix C to the Plan Statement.

                  7.11.2. ADMINISTRATION. Loans shall be made available to any
         eligible borrower as determined by the Retirement Committee, in
         accordance with this Section 7 or any separate loan program rules (the
         "Rules") developed by the Retirement Committee, which are incorporated
         by reference. Denials shall be processed under the claims procedure
         rules of the Plan. Loans shall be approved (or denied) by the
         Retirement Committee. The Retirement Committee shall be contacted for
         this purpose at the address shown in the summary plan description. A
         copy of the Rules and any other information that is available
         concerning loans shall be made available at that address upon written
         request or may be made available electronically. Loans under this Plan
         and any other Plan maintained by the Employer will be considered
         separate loans. A loan will be made upon the borrower's endorsement of
         the check representing the loan proceeds, or completion of such other
         actions, forms or information as may be required to comply with this
         Section

                  7.11.3. LOAN TERMS. Loans shall be made only from the
         borrower's 401(k) Account and Rollover Account. The total amount of
         such loans to any borrower under this Plan or under the plan of any
         other entity that is a member of the same controlled or affiliated
         service group as the Company under Section 414(b), (c) and (m) shall
         not exceed the lesser of:

                           (a) Fifty percent (50%) of the borrower's Vested
                  Total Account balance, or

                           (b) Fifty Thousand Dollars ($50,000);


         provided, however, that the Fifty Thousand Dollar ($50,000) limitation
         shall be reduced by the excess (if any) of: (i) the highest outstanding
         balance of loans from the Plan to such person during the one-year
         period ending on the day before the new loan is made, over (ii) the
         outstanding balance of all loans from the Plan to such person on the
         day the new loan is made. Loans will not be made in a principal amount
         less than One Thousand Dollars ($1,000). In the event of a foreclosure,
         the amount available from the borrower's 401(k) Account or Rollover
         Account for a loan shall be reduced by the amount of the foreclosure.

                  The interest rate on any loan shall be as specified in the
Rules.

                  Any such loan must be repaid in substantially level amounts,
         including principal and interest, over the term of the loan, with
         payments due not less frequently than quarterly. Any such loan shall
         provide that it shall be repaid within a definite period of time to be
         specified by the borrower in the loan application and the promissory
         note. That period shall not exceed five (5) years, except for loans
         used to acquire the principal residence of the Participant.

                  7.11.4. ACCOUNTING FOR THE LOAN. For the purpose of
         determining the extent to which a 401(k) Account or Rollover Account is
         entitled to share in income, gains or losses of the Fund under Section
         4, the same shall be deemed to be reduced by the unpaid balance of any
         outstanding loans to the borrower, and the interest payments on such
         loans shall be credited to the borrower's 401(k) Account and Rollover
         Account. If the loan is made to a person who has assets in more than
         one Account, such loan shall be deemed to have been made from the
         Accounts in the following sequence:

                  Rollover Account
                  401(k) Account

                                       38

<PAGE>

                  Penn-Daniels Deferral Account
                  Additional Contributions Account


         Repayments of principal on loans and payments of interest shall be
         apportioned among the Accounts from which the loan was made in
         proportion to the amounts by which the Accounts were initially reduced
         in order to make the loan.

                  7.11.5. OTHER TERMS GOVERNED BY COMMITTEE LOAN PROGRAM RULES.
         All other terms and provisions with respect to loans under the Plan
         shall be governed by the loan program rules as adopted by the Committee
         from time to time.

                  7.11.6. REPORTING AND DISCLOSURE. To the extent required by
         Section 72(p) of the Code, the Trustee shall report, from time to time,
         distributions of income in connection with loans made under this Plan,
         including deemed distributions under applicable regulations. The
         operation of those tax rules is entirely independent of the rules of
         the Plan. It may be possible for loans not in default under these rules
         to nevertheless require reports of distributable income. Similarly,
         loans in default under these rules may not result in such reports. This
         Plan shall make all disclosures required under applicable law.

                  7.11.7. LOANS FROM TRANSFER ACCOUNTS FROM THE PENN-DANIELS
         PLAN. Notwithstanding any other provision of this Plan, loans from
         Accounts transferred from the Penn-Daniels, Incorporated Employees'
         Savings and Retirement Plan are subject to the requirements of Code
         Section 401(a)(11) and the regulations thereunder, including the
         requirement that spousal consent be obtained before any portion of such
         an Account may be used as security for a loan. However, subject to the
         same terms and conditions as set forth in Section 7.2.3, the
         requirement for such spousal consent and the application of the joint
         and survivor annuity requirements of Code Section 401(a)(11) shall
         cease effective as of August 15, 2001.

         7.12. CORRECTIVE DISTRIBUTIONS.

                  7.12.1. EXCESS ELECTIVE DEFERRALS ($7,000 LIMIT AS ADJUSTED).

                           (a) IN GENERAL. A Participant may assign to this Plan
                  any excess elective deferrals made during a taxable year of
                  the Participant by notifying (in writing) the Retirement
                  Committee not later than the March 1 following such taxable
                  year of the amount of the excess elective deferral to be
                  assigned to the Plan. Notwithstanding any other provision of
                  the Plan Statement, a Participant's excess elective deferrals,
                  plus any income and minus any loss allocable thereto, shall be
                  distributed to the Participant no later than the first April
                  15 following the close of the Participant's taxable year.

                           (b) DEFINITIONS. For purposes of this Section,
                  "excess elective deferrals" shall mean the amount of
                  retirement savings allocated to the Participant's 401(k)
                  Account for a Participant's taxable year and which the
                  Participant allocates to this Plan pursuant to the claim
                  procedure described below.

                           (c) CLAIMS. The Participant's claim shall be in
                  writing; shall be submitted to the Retirement Committee not
                  later than March 1 with respect to the immediately preceding
                  taxable year; shall specify the amount of the Participant's
                  excess elective deferrals for the preceding taxable year; and
                  shall be accompanied by the Participant's written statement
                  that if such amounts are not distributed, such excess elective
                  deferrals, when added to amounts deferred under other plans or
                  arrangements described in Sections 401(k), 408(k) or 403(b) of
                  the Code, will exceed the limit imposed on the Participant by
                  Section 402(g) of the Code for the taxable year in which the
                  deferral occurred.



                                       39

<PAGE>

                           (d) DETERMINATION OF INCOME OR LOSS. The excess
                  elective deferrals shall be adjusted for income or loss. The
                  income or loss allocable to excess elective deferrals shall be
                  determined by multiplying the income or loss allocable to the
                  Participant's retirement savings for the Plan Year ending
                  within such preceding taxable year by a fraction, the
                  numerator of which is the excess elective deferrals on behalf
                  of the Participant for such preceding taxable year and the
                  denominator of which is the Participant's 401(k) Account
                  balance attributable to retirement savings on the Valuation
                  Date coincident with or immediately before the last day of
                  such preceding taxable year without regard to any income or
                  loss occurring during such taxable year. The excess elective
                  deferrals shall also be adjusted for income or loss for the
                  period between the Valuation Date coincident with or
                  immediately before the last day of such preceding taxable year
                  and the date of distribution. The income or loss allocable for
                  such period shall be equal to ten percent (10%) of the income
                  or loss allocable to the distributable excess elective
                  deferrals for the applicable taxable year multiplied by the
                  number of whole calendar months that have elapsed since the
                  Valuation Date coincident with or immediately before the last
                  day of such taxable year, including the month of distribution
                  if distribution occurs after the fifteenth (15th) of such
                  month.

                           (e) ACCOUNTING FOR EXCESS ELECTIVE DEFERRALS. Excess
                  elective deferrals distributed under this Section 7.12.1 shall
                  be distributed from the Participant's 401(k) Account.

                  7.12.2. EXCESS CONTRIBUTIONS (SECTION 401(K) TEST).

                           (a) IN GENERAL. Notwithstanding any other provision
                  of the Plan Statement, the amount of excess contributions for
                  a Plan Year as determined under (b) hereof, plus any income
                  and minus any loss allocable thereto, shall be distributed no
                  later than the last day of the following Plan Year to
                  Participants to whose accounts retirement savings were
                  allocated. Such distribution shall be accomplished by first
                  making a distribution to the highly compensated employee
                  Participants (as defined in Section 2) having the largest
                  dollar amount of such excess contributions and income or loss
                  allocable thereto until the total amount has been distributed
                  or until the amount of such Participant's remaining
                  contribution made under a 401(k) Agreement equals the 401(k)
                  Agreement contributions of such Highly Compensated Employee
                  Participants who have the next largest amount of such
                  contributions. This process shall continue until the total
                  amount of such excess contributions and income or loss
                  allocable thereto has been distributed.

                           (b) EXCESS CONTRIBUTIONS. For purposes of this
                  Section, "excess contributions" shall mean, with respect to
                  any Plan Year, the excess of:

                                    (i) the aggregate amount of Employer
                           contributions taken into account in computing the
                           average deferral percentage (as defined in Section 2)
                           of highly compensated eligible employees (as defined
                           in Section 3) for such Plan Year, over

                                    (ii) the maximum amount of such
                           contributions permitted by the Section 401(k) test
                           described in Section 2 (determined by reducing
                           contributions made on behalf of the highly
                           compensated eligible employees in order of their
                           actual deferred percentage ratios, as defined in
                           Section 2, beginning with the highest of such
                           ratios).

                           (c) DETERMINATION OF INCOME OR LOSS. The excess
                  contributions shall be adjusted for income or loss. The income
                  or loss allocable to excess contributions shall be determined
                  by multiplying income or loss allocable to the Participant's
                  retirement


                                       40

<PAGE>

                  savings for the Plan Year by a fraction, the numerator of
                  which is the excess contributions on behalf of the Participant
                  for the Plan Year and the denominator of which is the sum of
                  the Participant's account balances attributable to retirement
                  savings on the last day of the Plan Year, without regard to
                  any income or loss occurring during such Plan Year. The excess
                  contributions shall also be adjusted for income or loss for
                  the period between the last day of the Plan Year and the date
                  of distribution. The income or loss allocable for such period
                  shall be equal to ten percent (10%) of the income or loss
                  allocable to the distributable excess contributions for the
                  applicable Plan Year multiplied by the number of whole
                  calendar months that have elapsed since the end of the
                  applicable Plan Year, including the month of distribution if
                  distribution occurs after the fifteenth (15th) of such month.

                           (d) ACCOUNTING FOR EXCESS CONTRIBUTIONS. Excess
                  contributions distributed under this Section 7.12.2 shall be
                  treated as distributions from the Participant's 401(k) Account
                  for the Plan Year.

                  7.12.3. EXCESS AGGREGATE CONTRIBUTIONS (SECTION 401(M) TEST).

                           (a) IN GENERAL. Notwithstanding any other provision
                  of the Plan Statement, the amount of excess aggregate
                  contributions as determined under (b) hereof, plus any income
                  and minus any loss allocable thereto, shall be distributed no
                  later than the last day of the following Plan Year to
                  Participants to whose accounts Employer matching
                  contributions, and if used to determine the contribution
                  percentage under Section 3, elective contributions or
                  qualified nonelective contributions (within the meaning of
                  Section 401(m)(4)(C) of the Code, or both, were allocated.
                  Such distributions shall be accomplished by first making a
                  distribution to the highly compensated employee Participant
                  (as defined in Section 2) having the largest dollar amount in
                  such excess aggregate contributions and income or loss
                  allocable thereto until the total amount has been distributed
                  or until the amount of Participant's remaining excess
                  aggregate contributions equals the excess aggregate
                  contributions of such highly compensated employee Participants
                  who have the next largest amount of such excess aggregate
                  contributions has been distributed. This process shall
                  continue until the total amount of such excess aggregate
                  contributions has been distributed.

                           (b) EXCESS AGGREGATE CONTRIBUTIONS. For purposes of
                  this Section, "excess aggregate contributions" shall mean,
                  with respect to any Plan Year, the excess of:

                                    (i) the aggregate amount of contributions
                           taken into account in computing the average
                           contribution percentage (as defined in Section 3) of
                           highly compensated eligible employees (as defined in
                           Section 3) for such Plan Year, over

                                    (ii) the maximum amount of such
                           contributions permitted by the Section 401(m) test
                           described in Section 3 (determined by reducing
                           contributions made on behalf of the highly
                           compensated eligible employees in order of their
                           actual contribution percentage ratios, as defined in
                           Section 3, beginning with the highest of such
                           ratios).

                           (c) DETERMINATION OF INCOME. The excess aggregate
                  contributions shall be adjusted for income or loss. Unless the
                  Committee and the Trustee agree otherwise in writing, the
                  income or loss allocable to excess aggregate contributions
                  shall be determined by multiplying the income or loss
                  allocable to the Participant's Employer matching contributions
                  (to the extent used to determine the eligible employee's


                                       41

<PAGE>

                  contribution percentage under Section 3), and if used to
                  determine an eligible employee's contribution percentage under
                  Section 3, elective contributions or qualified nonelective
                  contributions (within the meaning of Section 401(m)(4)(C) of
                  the Code), or both, for the Plan Year by a fraction, the
                  numerator of which is the excess aggregate contributions on
                  behalf of the Participant for the Plan Year and the
                  denominator of which is the sum of the account balances
                  attributable to Employer matching contributions and such
                  elective contributions or qualified nonelective contributions,
                  or both, on the last day of the Plan Year without regard to
                  any income or loss occurring during such Plan Year.

                           (d) ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS.
                  Excess aggregate contributions shall be distributed from the
                  Participant's Employer Matching Account (and, if applicable,
                  the Participant's 401(k) Account or Employer Profit Sharing
                  Account, or both) in proportion to the Participant's Employer
                  matching contributions, and if used to determine the
                  contribution percentage under Section 3, elective
                  contributions or qualified nonelective contributions (within
                  the meaning of Section 401(m)(4)(C) of the Code), or both, for
                  the Plan Year.

                  7.12.4. PRIORITY. The determination of the excess aggregate
         contributions shall be made after first determining the excess
         deferrals, and then determining the excess contributions. The amount of
         excess contributions shall be reduced by excess deferrals previously
         distributed to such Participant for the Participant's taxable year
         ending with or within such Plan Year.

                  7.12.5. MATCHING CONTRIBUTIONS. If excess deferrals, excess
         contributions or elective contributions treated as excess aggregate
         contributions are distributed pursuant to this Section 7.12, applicable
         matching contributions under Section 3.3 shall be treated as
         forfeitures and reallocated as if such forfeitures were an Employer
         matching contribution under Section 3.3 made for those Participants who
         were entitled to receive an Employer matching contribution for that
         Plan Year.

                  7.12.6. SAFE HARBOR COMPLIANCE. The Plan is designed so that
         from and after January 1, 2001, it will be deemed to satisfy the
         special rules of Section 401(k)(12)(D) of the Code and thus eliminate
         the need for any further testing for excess contributions or excess
         aggregate contributions, except as may otherwise be required in the
         case of Early Participants.

                  7.12.7. COMMITTEE DISCRETION. For any Plan Year in which the
         Code Section 401(k) or (m) tests or the aggregate limit or multiple use
         test referred to in Section 3.5.3 apply, notwithstanding any other
         provision of the Plan, the Committee may, in its discretion, use one or
         more alternative methods to satisfy such tests, if allowable under
         applicable government regulations, including (without limitation)
         applying Code Section 410(b)(4)(B) to disaggregate the Plan in
         satisfying the minimum coverage requirements (i.e., treating those
         Participants, if any, who have not satisfied the maximum age and
         service requirements under Section 410(b) of the Code as if covered
         under a separate plan for purposes of testing for the satisfaction of
         the minimum coverage requirements and for separate 401(k) and 401(m)
         testing) and in such event, applying Safe Harbor Matching Contributions
         only to the deemed separate plan that covers those Participants who
         have satisfied the maximum age and service requirements under Section
         410(b) of the Code.

                                   SECTION 8

                             SPENDTHRIFT PROVISIONS

         No Participant or Beneficiary shall have any transmissible interest in
any Account nor shall any Participant or Beneficiary have any power to
anticipate, alienate, dispose of, pledge or encumber the same while in the
possession or control of the Trustee, nor shall the Trustee, the Employer or the
Retirement



                                       42
<PAGE>

Committee recognize any assignment thereof, either in whole or in part, nor
shall any Account be subject to attachment, garnishment, execution following
judgment or other legal process while in the possession or control of the
Trustee.

         The power to designate Beneficiaries to receive the Vested Total
Account of a Participant in the event of death shall not permit or be construed
to permit such power or right to be exercised by the Participant so as thereby
to anticipate, pledge, mortgage or encumber the Participant's Account or any
part thereof, and any attempt of a Participant so to exercise said power in
violation of this provision shall be of no force and effect and shall be
disregarded by the Employer, the Retirement Committee and the Trustee.

         This Section shall not prevent the Employer, the Retirement Committee
or the Trustee from exercising, in their discretion, any of the applicable
powers and options granted to them upon the occurrence of an Event of Maturity,
as such powers may be conferred upon them by any applicable provision hereof,
nor prevent the Plan from foreclosing on the lien granted to secure any and all
loans made to a Participant or Beneficiary from the Fund. (In the event of a
default on a loan made to a Participant or a Beneficiary, foreclosure on the
promissory note and the attachment of the security interest in the Account will
not occur until an Event of Maturity occurs with respect to such Participant.)
This Section shall not prevent the Employer or the Trustee from observing the
terms of a qualified domestic relations order as provided in Appendix C to this
Plan Statement or from otherwise complying with applicable law.

         Notwithstanding the foregoing, a Participant's Accounts, even if fully
vested, may be offset against amounts that such Participant is ordered or
required to pay to the Plan if the order or requirement to pay arises on or
after August 5, 1997 as a result of a judgment of conviction for a crime
involving the Plan, a civil judgment (including a consent order or decree)
entered by a court in an action brought in connection with a breach or alleged
breach of fiduciary duty under ERISA, or a settlement agreement entered into by
the Participant and either the Secretary of Labor or the Pension Benefit
Guaranty Corporation in connection with a breach or alleged breach of fiduciary
duty under ERISA, all in accordance with and subject to the provisions of
Sections 206(d)(4) and (5) of ERISA, which are incorporated by reference.

                                   SECTION 9

                            AMENDMENT AND TERMINATION

         9.1. AMENDMENT. The Principal Sponsor reserves the power to amend this
Plan Statement either prospectively or retroactively or both:

                  (a) in any respect by resolution of its Board of Directors;
         and

                  (b) in any respect that does not materially increase the cost
         of the Plan by action of the ShopKo Stores, Inc. Retirement Committee;

provided that no amendment shall be effective to reduce or divest the Total
Account of any Participant unless the same shall have been adopted with the
consent of the Secretary of Labor pursuant to the provisions of ERISA, or in
order to comply with the provisions of the Code and the regulations and rulings
thereunder affecting the tax-qualified status of the Plan and the deductibility
of Employer contributions thereto.

         9.2. DISCONTINUANCE OF CONTRIBUTIONS AND TERMINATION OF PLAN. The
Principal Sponsor reserves the right to reduce, suspend or discontinue its
contributions to the Plan and to terminate the Plan herein embodied in its
entirety.


                                       43

<PAGE>

         9.3. MERGER OR SPINOFF OF PLANS.

                  9.3.1. IN GENERAL.

                           (a) The Retirement Committee may cause all or part of
                  this Plan to be merged with all or part of any other plan and
                  may cause all or part of the assets and liabilities to be
                  transferred from this Plan to another plan. In the case of
                  merger or consolidation of this Plan with, or transfer of
                  assets and liabilities of this Plan to, any other plan, each
                  Participant shall (if such other plan were then terminated)
                  receive a benefit immediately after the merger, consolidation
                  or transfer which is not less than the benefit the Participant
                  would have been entitled to receive immediately before the
                  merger, consolidation or transfer (if this Plan had then
                  terminated). If the Retirement Committee agrees to a transfer
                  of assets and liabilities to or from another plan, the
                  agreement under which such transfer is concluded (or an
                  amendment of or appendix to this Plan Statement) shall specify
                  the Accounts to which the transferred amounts are to be
                  credited.

                           (b) If any persons become employees of the Company as
                  the result of merger or consolidation or as the result of the
                  acquisition of all or part of the assets or business of
                  another company, the Retirement Committee shall determine to
                  what extent, if any, previous service with such company shall
                  be recognized under the Plan.

                  9.3.2. LIMITATIONS. No transfer shall be made to this Plan of
         assets that are subject to the joint and survivor annuity and
         pre-retirement survivor annuity rules of Section 401(a)(11) of Code,
         unless such transferred assets are maintained in a separate account
         (the "Transfer Account"). In no event shall assets be transferred from
         any other plan to this Plan unless this Plan complies (or has been
         amended to comply) with the optional form of benefit requirements of
         Section 411(d)(6)(B)(ii) of the Code (or, where applicable, the
         distribution rules of Section 401(k) of the Code) with respect to such
         transferred assets. In no event shall assets be transferred from this
         Plan to any other plan unless such other plan complies (or has been
         amended to comply) with the optional form of benefit requirements of
         Section 411(d)(6)(b)(ii) of the Code and the distribution rules of
         Section 401(k) of the Code with respect to such transferred assets.

                  9.3.3. BENEFICIARY DESIGNATIONS. If assets and liabilities are
         transferred from another plan to this Plan, Beneficiary designations
         made under that plan shall become void on the date as of which such
         transfer is made and the Beneficiary designation rules of this Plan
         Statement shall apply beginning on such date.

                  9.3.4. PAMIDA MERGER. Effective as of November 15, 2000, the
         Pamida, Inc. Savings Plus Plan (the "Pamida Plan") was merged into this
         Plan. Notwithstanding any other provisions of this Plan, for the
         portion of the Plan Year from November 15 to December 31, 2000, the
         employer matching contribution formula of the Pamida Plan (100% of the
         first 5% of pay contributed as elective salary deferrals) was continued
         for the benefit of the former Pamida Plan participants, rather than the
         matching formula under this Plan. Further, any forfeitures arising
         under this Plan as of December 31, 2000 were allocated only among
         employee Participants in this Plan other than the former Pamida Plan
         participants.

         9.4. ADOPTION BY OTHER EMPLOYERS.

                  9.4.1. ADOPTION BY CONSENT. The Retirement Committee may
         consent to the adoption of the Plan by any business entity subject to
         such conditions as the Retirement Committee may impose.


                                       44

<PAGE>

                  9.4.2. PROCEDURE FOR ADOPTION. Any such adopting business
         entity shall initiate its adoption of the Plan by delivery of a
         certified copy of the resolutions of its board of directors (or other
         authorized body or individual) adopting this Plan Statement to the
         Retirement Committee. Upon the consent by the Retirement Committee to
         the adoption by the adopting business entity, and the delivery to the
         Trustee of written evidence of the Retirement Committee's consent, the
         adoption of the Plan by the adopting business entity shall be effective
         as of the date specified by the Retirement Committee. If such adopting
         business entity is not a corporation, any reference in the Plan
         Statement to its board of directors shall be deemed to refer to such
         entity's governing body or other authorized individual.

                  9.4.3. EFFECT OF ADOPTION. Upon the adoption of the Plan by an
         adopting business entity as heretofore provided, the adopting business
         entity shall be an Employer hereunder in all respects. Each adopting
         business entity, as a condition of continued participation in the Plan,
         delegates to the Principal Sponsor the sole power and authority over
         all Plan matters except that the board of directors of each adopting
         business entity shall have the power to amend this Plan Statement as
         applied to it by establishing a successor plan to which assets and
         liabilities may be transferred as provided in Section 9.3 and to
         terminate the Plan as applied to it. Each reference herein to the
         Employer shall include the Principal Sponsor and all adopting business
         entities unless the context clearly requires otherwise.

                                   SECTION 10

                             CONCERNING THE TRUSTEE

         10.1. DEALINGS WITH TRUSTEE.

                  10.1.1. NO DUTY TO INQUIRE. No person, firm or corporation
         (other than the Retirement Committee, the Employer, or any fiduciary
         respecting the Plan with authority to direct the Trustee) dealing with
         the Trustee shall be required to take cognizance of the provisions of
         this Plan Statement or be required to make inquiry as to the authority
         of the Trustee to do any act which the Trustee shall do hereunder. No
         person, firm or corporation dealing with the Trustee shall be required
         to see either to the administration of the Plan or the Fund or to the
         faithful performance by the Trustee of its duties hereunder (except to
         the extent otherwise provided by ERISA). Any such person, firm or
         corporation shall be entitled to assume conclusively that the Trustee
         is properly authorized to do any act which it shall do hereunder. Any
         such person, firm or corporation shall be under no liability to anyone
         whomsoever for any act done hereunder pursuant to the written direction
         of the Trustee.

                  10.1.2. ASSUMED AUTHORITY. Any such person, firm or
         corporation may conclusively assume that the Trustee has full power and
         authority to receive and receipt for any money or property becoming due
         and payable to the Trustee. No such person shall be bound to inquire as
         to the disposition or application of any money or property paid to the
         Trustee or paid in accordance with the written directions of the
         Trustee.

                  10.1.3. DIRECTED TRUSTEE. The Principal Sponsor authorizes the
         Retirement Committee to direct and instruct the Trustee as provided in
         this Agreement. The Retirement Committee will direct the Trustee as to
         the Investment Funds to be established for investment of Trust Fund
         assets in accordance with the provisions of the Plan. Except for those
         Investment Funds that are mutual funds, the Retirement Committee or
         Investment Manager shall be responsible for determining the underlying
         investments of the Investment Funds. The Trustee shall invest in the
         Investment Funds in accordance with investment directions given by the
         Participants and Beneficiaries for whose Accounts such assets are held,
         to the extent so provided for in the Plan. All such directions by the
         Participants or Beneficiaries to the Trustee will be made by telephonic



                                       45

<PAGE>

         communication or in such other manner as is acceptable to the Trustee.
         Where the Retirement Committee, a Participant, a Beneficiary or an
         Investment Manager other than the Trustee has the power and authority
         to direct the investment of assets of the Trust Fund, the Trustee does
         not have any duty to question any direction, to review any securities
         or other property, or to make any suggestions in connection therewith.
         The Trustee will promptly comply with any direction given by the
         Retirement Committee, a Participant, a Beneficiary or Investment
         Manager. The Trustee will neither be liable for failing to invest any
         assets of the Trust Fund under the management and control of the
         Retirement Committee, a Participant, a Beneficiary or an Investment
         Manager in the absence of investment directions regarding such assets.

         10.2. COMPENSATION OF TRUSTEE. If a corporate Trustee shall be acting
hereunder, the corporate Trustee shall be entitled to receive compensation for
its services as Trustee hereunder as may be agreed upon from time to time by the
Principal Sponsor and the Trustee. Any individual Trustee who already receives
full-time pay from the Employer shall receive no compensation for services
hereunder. Other individual Trustees shall likewise serve without compensation
unless they shall otherwise specifically agree with the Principal Sponsor to the
contrary. In any event, however, the Trustee (whether corporate or individual
Trustees be acting) shall be entitled to receive reimbursement for reasonable
expenses, fees, costs and other charges incurred by it or payable by it on
account of the administration of the Plan and the Fund to the extent approved by
the Principal Sponsor. Such items of expense and compensation shall be payable
out of the Fund in a fair and equitable manner as determined by the Trustee,
except to the extent that the Employer, in its discretion, directly pays the
Trustee. In the event the Principal Sponsor files or declares bankruptcy, the
Principal Sponsor authorizes the Trustee to make payments from the Trust Fund
for any and all fees, expenses or other forms of compensation due under this
Section whether or not the fees, expenses or other compensation were earned but
not yet paid prior to or after the bankruptcy filing.

         10.3. RESIGNATION AND REMOVAL OF TRUSTEE.

                  10.3.1. RESIGNATION, REMOVAL AND APPOINTMENT. The Trustee (or
         in the event two or more co-trustees are acting, any such co-trustee)
         may resign by giving sixty (60) days' notice of intention so to do to
         the Principal Sponsor or such shorter notice as the Principal Sponsor
         may approve. The Principal Sponsor may remove any Trustee or successor
         Trustee hereunder by giving such Trustee (or any co-trustee) sixty (60)
         days' written notice of removal by certified mail. The Principal
         Sponsor shall have the power to appoint one or more individual or
         corporate Trustees, or both, as additional or successor Trustees. If no
         appointment of a successor Trustee is made by the Principal Sponsor
         within sixty (60) days following resignation or removal of the Trustee,
         the Trustee may apply to a court of competent jurisdiction for the
         appointment of a successor Trustee.

                  10.3.2. SURVIVING TRUSTEES. When any person appointed,
         qualified and serving as a Trustee hereunder shall cease to be a
         Trustee of the Fund, the remaining Trustee or Trustees then serving
         hereunder, or the successor Trustee or Trustees appointed hereunder, as
         the case may be, shall thereupon be and become vested with full title
         and right to possession of all assets and records of the Plan and the
         Fund in the possession or control of such prior Trustee, and the prior
         Trustee shall forthwith account for and deliver the same to such
         remaining or successor Trustee or Trustees. The successor Trustee will
         neither be liable or responsible for any act or omission to act with
         respect to the operation or administration of the Trust Fund under this
         Trust Agreement prior to the date it receives any Trust Fund assets and
         related documents, nor be under any duty or obligation to audit or
         otherwise inquire into or take any action concerning the acts or
         omissions of any predecessor Trustee.

                  10.3.3. SUCCESSOR ORGANIZATIONS. By designating a corporate
         Trustee, original or successor, hereunder, there is included in such
         designation and as a part thereof any other



                                       46

<PAGE>

         corporation possessing trust powers and authorized by law to accept the
         Plan and the Fund into which or with which the designated corporate
         Trustee, original or successor, shall be converted, consolidated or
         merged, and the corporation into which or with which any corporate
         Trustee hereunder shall be so converted, consolidated or merged shall
         continue to be the corporate Trustee of the Plan and the Fund.

                  10.3.4. CO-TRUSTEE RESPONSIBILITY. No Trustee shall be or
         become liable for any act or omission of a co-trustee serving hereunder
         with the Trustee (except to the extent that liability is imposed under
         ERISA) or of a prior Trustee hereunder, it being the purpose and intent
         that each Trustee shall be liable only for the Trustee's own acts or
         omissions during the Trustee's term of service as Trustee hereunder.

                  10.3.5. ALLOCATION OF RESPONSIBILITY. If there shall at any
         time be two (2) or more co-trustees serving hereunder, such Trustees,
         in addition to all other powers and authorities vested in them by law
         or conferred upon them by any provision of this Plan Statement, shall
         have power to allocate and reallocate from time to time to any one or
         more of their number specific responsibilities, obligations or duties
         and may delegate and redelegate from time to time to any one or more of
         their number the exercise of any right, power or discretion vested in
         the Trustees by law or conferred upon them by any provision of this
         Plan Statement, and any person, firm or corporation dealing with the
         co-trustees with respect to the Plan or the Fund may assume
         conclusively that any action taken or instrument executed by any one of
         such co-trustees is the action of all the co-trustees serving
         hereunder, and that authority for the doing of such act or the
         execution of such instrument has been conferred upon and delegated to
         the Trustee doing such act or executing such instrument. If any
         responsibility, obligation, duty, right, power or discretion vested in
         the Trustee is allocated or delegated to one or more co-trustees, the
         remaining co-trustees shall not be or become liable for an act or
         omission by the co-trustees to whom a right, power or discretion was
         delegated while such co-trustees were acting pursuant to such
         delegation.

                  10.3.6. MAJORITY DECISIONS. If there shall at any time be
         three (3) or more co-trustees serving hereunder who are qualified to
         perform a particular act, the same may be performed, on behalf of all,
         by a majority of those qualified, with or without the concurrence of
         the minority. No person who failed to join or concur in such act shall
         be held liable for the consequences thereof, except to the extent that
         liability is imposed under ERISA.

         10.4. ACCOUNTINGS BY TRUSTEE.

                  10.4.1. PERIODIC REPORTS. The Trustee shall render to the
         Retirement Committee an account and report within ninety (90) days
         after each Annual Valuation Date showing all transactions affecting the
         administration of the Plan and the Fund, including, but not necessarily
         limited to, such information concerning the Plan and the Fund and the
         administration thereof by the Trustee as shall be requested in writing
         by the Retirement Committee.

                  10.4.2. SPECIAL REPORTS. The Trustee shall also render such
         further reports from time to time as may be requested by the Retirement
         Committee and shall submit its final report and account to the
         Retirement Committee when it shall cease to be Trustee hereunder,
         whether by resignation or other cause.

         10.5. TRUSTEE'S POWER TO PROTECT ITSELF ON ACCOUNT OF TAXES. As a
condition to making the distribution of a Participant's Vested Total Account
during the Participant's lifetime, the Trustee may require the Participant (or
the person or persons entitled to receive the Participant's Vested Total Account
in the event of the Participant's death) to furnish the Trustee with proof of
payment of all income, inheritance, estate, transfer, legacy and succession
taxes and all other taxes of any different type or kind that may be imposed
under or by virtue of any state or federal statute or law upon the payment,
transfer, descent or distribution of such Vested Total Account and for the
payment of which the Trustee may, in its


                                       47

<PAGE>

judgment, be directly or indirectly liable. In lieu of the foregoing, the
Trustee may deduct, withhold and transmit to the proper taxing authorities any
such tax which it may be permitted or required to deduct and withhold and the
Vested Total Account to be distributed in such case shall be correspondingly
reduced. Unless the Employer and the Trustee agree otherwise in writing, the
Trustee shall be responsible for withholding federal income taxes and for
providing all required notices and elections concerning such withholding to all
Participants and Beneficiaries.

         10.6. OTHER TRUST POWERS. Pursuant to such direction, the Trustee shall
have the authority:

                           (a) To invest and reinvest any Subfunds established
                  pursuant to Section 4.1 in accordance with the investment
                  characteristics and objectives determined therefor and to
                  invest and reinvest the assets of the Fund in any securities
                  or properties in which an individual could invest the
                  individual's own funds and which it deems for the best
                  interest of the Fund, without limitation by any statute, rule
                  of law or regulation of any governmental body prescribing or
                  limiting the investment of trust assets by corporate or
                  individual trustees, in or to certain kinds, types or classes
                  of investments or prescribing or limiting the portion of the
                  Fund which may be invested in any one property or kind, type
                  or class of investment. Specifically and without limiting the
                  generality of the foregoing, the Trustee may invest and
                  reinvest principal and accumulated income of the Fund in any
                  real or personal property; preferred or common stocks of any
                  kind or class of any corporation, including but not limited to
                  investment and small business investment companies of all
                  types; voting trust certificates; interests in investment
                  trusts; shares of mutual funds including those for which the
                  Trustee or an affiliate of the Trustee serves as investment
                  advisor and receives a fee as an advisor; interests in any
                  limited or general partnership or other business enterprise,
                  however organized and for whatever purpose; group or
                  individual annuity contracts (which may involve investment in
                  the issuer's general account or any of its separate accounts);
                  interests in common or collective trusts, variable interest
                  notes or any other type of collective fund maintained by a
                  bank or similar institution (whether or not the Trustee
                  hereunder); bonds, notes and debentures, secured or unsecured;
                  mortgages, leases or other interests in real or personal
                  property; interests in mineral, gas, oil or timber properties
                  or other wasting assets; call options; put options; commodity
                  or financial futures contracts; foreign currency;
                  interest-bearing certificates or accounts in a bank or similar
                  financial institution, including the Trustee or an affiliate
                  of the Trustee provided such certificates, accounts or
                  instruments bear a reasonable rate of interest; insurance
                  contracts on the life of any "keyman" or shareholder of the
                  Employer; or conditional sales contracts. Prior to maturity
                  and distribution of the Vested Total Accounts of Participants,
                  the Trustee shall commingle the Accounts of Participants in
                  each Subfund and invest, reinvest, control and manage each of
                  the same as a common trust fund.

                           (b) To sell, exchange or otherwise dispose of any
                  asset of whatsoever character at any time held by the Trustee
                  in trust hereunder.

                           (c) To segregate any part or portion of the Fund for
                  the purpose of administration or distribution thereof and to
                  hold the Fund uninvested whenever and for so long as the same
                  is likely to be required for the payment in cash of Accounts
                  normally expected to become distributable in the near future,
                  or for any other reason which requires such action or makes
                  such action advisable.

                           (d) In connection with the Trustee's power to hold
                  uninvested reasonable amounts of cash whenever it is deemed
                  advisable to do so, to deposit the same, with or without
                  interest, in the commercial or savings departments of any
                  corporate Trustee serving hereunder or of any other bank,
                  trust company or other financial institution.



                                       48

<PAGE>

                           (e) To register any investment held in the Fund in
                  the name of the Trustee, without trust designation, or in the
                  name of a nominee or nominees, and to hold any investment in
                  bearer form, but the records of the Trustee shall at all times
                  show that all such investments are part of the Fund, and the
                  Trustee shall be as responsible for any act or default of any
                  such nominee as for its own.

                           (f) Subject to the prior approval of the Retirement
                  Committee, to retain and employ such attorneys, agents and
                  servants as may be necessary or desirable, in the opinion of
                  the Trustee, in the administration of the Fund, and to pay
                  them such reasonable compensation for their services as may be
                  agreed upon as an expense of administration of the Fund,
                  including power to employ and retain counsel upon any matter
                  of doubt as to the meaning of or interpretation to be placed
                  upon this Plan Statement or any provisions thereof with
                  reference to any question arising in the administration of the
                  Fund or pertaining to the distribution thereof or pertaining
                  to the rights and liabilities of the Trustee hereunder or to
                  the rights and claims of Participants and Beneficiaries. The
                  Trustee, in any such event, may act in reliance upon the
                  advice, opinions, records, statements and computations of any
                  attorneys and agents and on the records, statements and
                  computations of any servants so selected by it in good faith
                  and shall be released and exonerated of and from all liability
                  to anyone in so doing (except to the extent that liability is
                  imposed under ERISA).

                           (g) Subject to the prior approval of the Retirement
                  Committee, to institute, prosecute and maintain, or to defend,
                  any proceeding at law or in equity concerning the Plan or the
                  Fund or the assets thereof or any claims thereto, or the
                  interests of Participants and Beneficiaries hereunder at the
                  sole cost and expense of the Fund or at the sole cost and
                  expense of the Total Account of the Participant who may be
                  concerned therein or who may be affected thereby as, in the
                  Trustee's opinion, shall be fair and equitable in each case,
                  and to compromise, settle and adjust all claims and
                  liabilities asserted by or against the Plan or the Fund or
                  asserted by or against the Trustee, on such terms as the
                  Trustee, in each such case, shall deem reasonable and proper.
                  The Trustee shall be under no duty or obligation to institute,
                  prosecute, maintain or defend any suit, action or other legal
                  proceeding unless it shall be indemnified to its satisfaction
                  against all expenses and liabilities which it may sustain or
                  anticipate by reason thereof.

                           (h) Both with respect to any stock constituting
                  "Employer Securities" within the meaning of Section 10.9
                  hereof and with respect to all other investments held
                  hereunder, the Trustee shall deliver or cause to be executed
                  and delivered to the Retirement Committee, the designated
                  Investment Manager, or some other fiduciary designated by the
                  Retirement Committee, all notices, prospectuses, financial
                  statements, tender offers, proxies and proxy soliciting
                  materials relating to investments held hereunder. Except for
                  those Trust Fund assets for which American Express Trust is
                  the Investment Manager, the Trustee shall not vote any proxy
                  or tender offer election, participate in any voting trust,
                  exercise any options or subscription right or join in, dissent
                  from or oppose any merger, reorganization, consolidation,
                  liquidation or sale with respect to any asset held hereunder
                  except in accordance with the timely written instructions of
                  the Retirement Committee. If no such written instructions are
                  received, such proxies, elections and voting trust votes shall
                  not be voted; such options or subscription rights shall not be
                  exercised; and such mergers, reorganizations, consolidations,
                  liquidations or sales shall not be joined, dissented from or
                  opposed.

         However, the Retirement Committee may assign to the Participants the
right to vote proxies or exercise other rights of ownership (including tender
offers) with respect to such Employer Securities, or all or part of the other
investments held hereunder, or all of the foregoing of the Investment Funds. To
the


                                       49

<PAGE>

extent the right to vote or other incidents of ownership are vested in whole or
in part in the Participants, the Trustee shall act in this regard only in
accordance with the timely written instructions received from the Participants.
Solely for this purpose, each Participant shall act as the Named Fiduciary, as
defined in ERISA, in providing direction to the Trustee. To the extent
practicable, all unallocated assets or investments held hereunder, and all
assets or investment for which the trustee has not received instruction, shall,
solely for the purposes of this section be allocated to the Account of each
Participant who has issued instructions to the Trustee, in the same proportion
as such Participant's allocated proportion of assets or investments bears to the
aggregate of all like assets or investments for which instructions have been
issued by the Participant to the Trustee.

                           (i) In any matter of doubt affecting the meaning,
                  purpose or intent of any provision of this Plan Statement
                  which directly affects its duties, to determine such meaning,
                  purpose or intent.

                           (j) To require, as a condition to distribution of any
                  Vested Total Account, proof of identity or of authority of the
                  person entitled to receive the same, including power to
                  require reasonable indemnification on that account as a
                  condition precedent to its obligation to make distribution
                  hereunder.

                           (k) To collect, receive, receipt and give acquittance
                  for all payments that may be or become due and payable on
                  account of any asset in trust hereunder which has not, by act
                  of the Trustee taken pursuant thereto, been made payable to
                  others; and payment thereof by the company issuing the same,
                  or by the party obligated thereon, as the case may be, when
                  made to the Trustee hereunder or to any person or persons
                  designated by the Trustee, shall acquit, release and discharge
                  such company or obligated party from any and all liability on
                  account thereof.

                           (l) To determine from time to time, as required for
                  the purpose of distribution or for the purpose of allocating
                  trust income or for any other purpose of the Plan, the then
                  value of the Fund and the Accounts in the Fund, the Trustee,
                  in each such case, using and employing for that purpose the
                  fair market value of each of the assets constituting the Fund.
                  Each such determination so made by the Trustee in good faith
                  shall be binding and conclusive upon all persons interested or
                  becoming interested in the Plan or the Fund. The fair market
                  value of assets of the Trust Fund will be determined by the
                  Trustee on the basis of such sources of information as it may
                  deem reliable, including (but not limited to) information
                  reported in (i) newspapers of general circulation, (ii)
                  standard financial periodicals or publications, (iii)
                  statistical and valuation services, (iv) records of securities
                  exchanges, (v) reports of any Investment Manager, insurance
                  company or financial institution that has issued an investment
                  contract to the Trustee or brokerage firm deemed reliable by
                  the Trustee, or (vi) any combination of the foregoing. If the
                  Trustee is unable to value assets from sources, it may rely on
                  information from the Principal Sponsor, the Retirement
                  Committee, appraisers or other sources, and will not be liable
                  for inaccurate valuation based in good faith.

                  The Retirement Committee may, for administrative purposes,
         establish unit values for one or more Investment Funds (or any portion
         thereof) and maintain the Accounts setting forth each Participant's
         interest in such Investment Fund (or any portion thereof) in terms of
         such units, all in accordance with such rules and procedures as the
         Retirement Committee shall deem to be fair, equitable, and
         administratively practicable. In the event that unit accounting is thus
         established for any Investment Fund, the value of a Participant's
         interest in that Investment Fund (or any portion thereof) at any time
         shall be an amount equal to the then value of a unit in such Investment
         Fund (or any portion thereof) multiplied by the number of units then
         credited to the Participant.




                                       50
<PAGE>

                           (m) To receive and retain contributions made in a
                  form other than cash in the form in which the same are
                  received.

                           (n) To commingle, for investment purposes, the assets
                  of the Fund with the assets of any other qualified retirement
                  plan trust fund of the Employer, provided that the records of
                  the Trustee shall reflect the relative interests of the
                  separate trusts in such commingled fund.

                           (o) To grant options for the sale or other
                  disposition of Fund assets; to purchase options for the
                  acquisition of assets of any type; and to buy and sell
                  (including short sales) call options, put options and futures
                  contracts.

                           (p) To have and to exercise such other and additional
                  powers as may be advisable or proper in its opinion for the
                  effective and economical administration of the Fund.

                           (q) To deposit any part or all of the assets in any
                  collective trust fund which is now or hereafter maintained by
                  the Trustee, an agent of the Trustee or an Investment Manager
                  as a medium for the collective investment of funds of pension,
                  profit sharing or other employee benefit plans, and which is
                  qualified under Section 401(a) of the Code and exempt from
                  taxation under Section 501(a) of the Code, and to withdraw any
                  part or all of the assets so deposited and any assets
                  deposited with the trustee of a collective trust fund shall be
                  held and invested by the trustee thereunder pursuant to all
                  the terms and conditions of the trust agreement or declaration
                  of trust establishing the fund, which are hereby incorporated
                  herein by reference and shall prevail over any contrary
                  provisions of this Plan Statement.

                           (r) To invest or reinvest a portion of the assets in
                  individual Participant-directed loans.

                           (s) To accept the transfer of assets by use of
                  telephonic communications or any other method approved by the
                  Retirement Committee.

                           (t) To pool all or any of the assets of the Trust
                  with assets belonging to any other employee benefit trust
                  created by the Principal Sponsor or an Affiliate, or a
                  non-related employer and to commingle such assets and make
                  joint or common investment, carry joint accounts on behalf of
                  the Trust and such other trust or trusts, and allocate
                  undivided shares or interest in such investments or accounts
                  or in any pooled assets to the two or more trusts in respect
                  to their respective interests in the pooled investment.

                           (u) To appoint an investment manager, including the
                  right to appoint the Trustee as an investment manager, as that
                  term is defined in and subject to the requirements of Section
                  3(38) of ERISA.

                           (v) In addition to all other powers and authorities
                  elsewhere in this Plan Statement specifically granted to the
                  Trustee, the Trustee shall have the following powers and
                  authorities, to be exercised in its sole discretion:

                                    (i) To keep any or all securities or other
                           property in the name of a nominee with or without
                           power of attorney for a transfer or in its own name
                           without disclosing its fiduciary capacity, or in
                           bearer or book-entry form.



                                       51

<PAGE>

                                    (ii) To make, execute, acknowledge and
                           deliver any and all instruments deemed necessary or
                           appropriate to carry out the powers herein granted.

                                    (iii) To employ suitable agents, including,
                           but not limited to, auditors, actuaries, accountants,
                           and legal and other counsel, and to pay their
                           expenses and reasonable compensation for services to
                           the Trust from the Fund. The Trustee may from time to
                           time consult with legal counsel who may, but need not
                           be, legal counsel for the Employer and shall be fully
                           protected in acting or refraining from acting upon
                           the advice of any counsel with respect to legal
                           questions.

                                    (iv) To settle securities trades through a
                           securities depository that utilizes an institutional
                           delivery system, in accordance with appropriate trade
                           reports or statements given to the Trustee by such
                           depository.


         Notwithstanding anything contained herein to the contrary, all the
         powers described in this Section 10.6, with the exception of those
         described in Sections 10.6(e), (f), (k), (l), (p), and (v) shall only
         be exercised as directed by the Retirement Committee.

         10.7. INVESTMENT MANAGERS.

                  10.7.1. APPOINTMENT AND QUALIFICATIONS. The Principal Sponsor
         shall have the power to appoint from time to time one or more
         Investment Managers to direct the Trustee in the investment of, or to
         assume complete investment responsibility over, all or any portion of
         the Fund. An Investment Manager may be any person or firm (a) which is
         either (1) registered as an investment adviser under the Investment
         Advisers Act of 1940, (2) a bank, (3) an insurance company which is
         qualified to perform the services of an Investment Manager under the
         laws of more than one state, or (4) any other person described in
         Section 3(38) of ERISA; and (b) which acknowledges in writing that it
         is a fiduciary with respect to the Plan. The conditions prescribed in
         the preceding sentence shall apply to the issuer of any group annuity
         contract hereunder only if, and to the extent that, such issuer would
         otherwise be considered a "fiduciary" with respect to the Plan, within
         the meaning of ERISA.

                  10.7.2. REMOVAL. The Principal Sponsor may remove any such
         Investment Manager and shall have the power to appoint a successor or
         successors from time to time in succession to any Investment Manager
         who shall be removed, shall resign or shall otherwise cease to serve
         hereunder.

                  10.7.3. RELATION TO OTHER FIDUCIARIES. The Trustee shall
         comply with all investment directions given to the Trustee with respect
         to the designated portion of the Fund, and the Trustee shall be
         released and exonerated of and from all liability for or on account of
         any action taken or not taken by it pursuant to the directions of such
         Investment Manager, Retirement Committee, Participant, or Beneficiary,
         except to the extent that liability is imposed under ERISA. Neither the
         Employer or any of its officers, directors or employees nor any member
         of the Retirement Committee shall be liable for the acts or omissions
         of the Trustee or of any Investment Manager appointed hereunder unless
         liability is imposed under ERISA. The fees and expenses of any
         Investment Manager, as agreed upon from time to time between the
         Investment Manager and the Employer, shall be charged to and paid from
         the Fund in a fair and equitable manner, except to the extent that the
         Employer, in its discretion, may pay such directly to the Investment
         Manager.



                                       52
<PAGE>

         10.8. NO INVESTMENT IN EMPLOYER REAL PROPERTY. Notwithstanding any
other provision of this Plan Statement, the Plan may not acquire or hold any
"employer real property" as that term is defined in Section 407(d) of ERISA.

         10.9. INVESTMENT IN EMPLOYER SECURITIES. Notwithstanding any other
provision of this Plan Statement, the Plan may acquire or hold stock of ShopKo
Stores, Inc. which is a "qualifying employer security" (within the meaning of
Section 407(d)(5) of ERISA) up to one hundred percent (100%) of the assets of
the Plan.

         10.10. FIDUCIARY PRINCIPLES. The Trustee and each other fiduciary
hereunder, in the exercise of each and every power or discretion vested in them
by the provisions of this Plan Statement, shall (subject to the provisions of
ERISA) discharge their duties with respect to the Plan solely in the interest of
the Participants and Beneficiaries and:

                           (a) for the exclusive purpose of:

                                    (i) providing benefits to Participants and
                           Beneficiaries, and

                                    (ii) defraying reasonable expenses of
                           administering the Plan,

                           (b) with the care, skill, prudence and diligence
                  under the circumstances then prevailing that a prudent man
                  acting in a like capacity and familiar with such matters would
                  use in the conduct of an enterprise of a like character and
                  with like aims,

                           (c) by diversifying the investments of the Plan so as
                  to minimize the risk of large losses, unless under the
                  circumstances it is clearly prudent not to do so, and

                           (d) in accordance with the documents and instruments
                  governing the Plan, insofar as they are consistent with the
                  provisions of ERISA.


         Notwithstanding anything in this Plan Statement to the contrary, any
         provision hereof which purports to relieve a fiduciary from
         responsibility or liability for any responsibility, obligation or duty
         under Part 4 of Subtitle B of Title I of ERISA shall, to the extent the
         same is inconsistent with said Part 4, be deemed void.

         10.11. PROHIBITED TRANSACTIONS. Except as may be permitted by law,
regulation, or exemption, no Trustee or other fiduciary hereunder shall permit
the Plan to engage, directly or indirectly, in any prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code.

         10.12. INDEMNITY. Each individual (as distinguished from corporate)
trustee of the Plan or officer, director or employee of the Employer shall,
except as prohibited by law, be indemnified and held harmless by the Employer
from any and all liabilities, costs and expenses (including legal fees), to the
extent not covered by liability insurance, arising out of any action taken by
such individual with respect to the Plan, whether imposed under ERISA or
otherwise, unless the liability, cost or expense arises from the individual's
claim for his or her own benefit, the proven gross negligence, the bad faith or,
if the individual had reasonable cause to believe his or her conduct was
unlawful, the criminal misconduct of such individual. This indemnification shall
continue as to an individual who has ceased to be a trustee of the Plan or
officer, director or employee of the Employer and shall inure to the benefit of
the heirs, executors and administrators of such an individual.

         The Principal Sponsor recognizes that a burden of litigation may be
imposed upon the Trustee as a result of some transaction for which it has no
responsibility or over which it has no control under this Agreement. Therefore,
the Principal Sponsor agrees to indemnify and hold harmless and, if requested,


                                       53

<PAGE>

defend the Trustee (and any employee of the Trustee) from any expenses
(including counsel fees, liabilities, claims, damages, actions, suits or other
charges) incurred by the Trustee (or its employees) in defending against any
such litigation.

                                   SECTION 11

                     DETERMINATIONS -- RULES AND REGULATIONS

         11.1. DETERMINATIONS. The Retirement Committee shall make such
determinations as may be required from time to time in the administration of the
Plan. The Retirement Committee shall have the sole, full and complete
discretionary authority and responsibility to interpret and construe the Plan
Statement, to decide any matters presented as a part of the claims procedure set
forth in this Section, and to determine all factual and legal questions under
the Plan, including, but not limited to, the entitlement of employees,
Participants and Beneficiaries and the amounts of their respective interests.
The Trustee and other interested parties may act and rely upon all information
reported to them hereunder and need not inquire into the accuracy thereof, nor
be charged with any notice to the contrary.

         11.2. RULES AND REGULATIONS. Any rule not in conflict or at variance
with the provisions hereof may be adopted by the Retirement Committee.

         11.3. METHOD OF EXECUTING INSTRUMENTS.

                  11.3.1. EMPLOYER OR COMMITTEE. Information to be supplied or
         written notices to be made or consents to be given by the Principal
         Sponsor, the Employer, the Retirement Committee pursuant to any
         provision of this Plan Statement may be signed in the name of the
         Principal Sponsor or Employer by any officer thereof who has been
         authorized to make such certification or to give such notices or
         consents or by any committee member.

                  11.3.2. TRUSTEE. Any instrument or written notice required,
         necessary or advisable to be made or given by the Trustee may be signed
         by any Trustee, if all Trustees serving hereunder are individuals, or
         by any authorized officer or employee of the Trustee, if a corporate
         Trustee shall be acting hereunder as sole Trustee, or by any such
         officer or employee of the corporate Trustee or by an individual
         Trustee acting hereunder, if corporate and individual Trustees shall be
         serving as co-trustees hereunder.

         11.4. CLAIMS PROCEDURE. Until modified by the Retirement Committee, the
claims procedure set forth in this Section 11.4 shall be the claims procedure
for the resolution of disputes and disposition of claims arising under the Plan.
An application for a distribution under Section 7 shall be considered as a claim
for the purposes of this Section.

                  11.4.1. ORIGINAL CLAIM. Any employee, former employee, or
         Beneficiary of such employee or former employee may, if he or she so
         desires, file with the Retirement Committee a written claim for
         benefits under the Plan. Within ninety (90) days after the filing of
         such a claim, the Retirement Committee or its delegate shall notify the
         claimant in writing whether the claim is upheld or denied in whole or
         in part or shall furnish the claimant a written notice describing
         specific special circumstances requiring a specified amount of
         additional time (but not more than one hundred eighty days from the
         date the claim was filed) to reach a decision on the claim. If the
         claim is denied in whole or in part, the Retirement Committee shall
         state in writing:

                           (a) the specific reasons for the denial,

                           (b) the specific references to the pertinent
                  provisions of this Plan Statement on which the denial is
                  based,



                                       54

<PAGE>

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

                           (d) an explanation of the claims review procedure set
                  forth in this Section.

                  11.4.2. CLAIMS REVIEW PROCEDURE. A claimant who desires a
         review of any claim which has been denied in whole or in part must, in
         order to preserve any legal recourse, file a written request for such a
         review with the Retirement Committee within sixty (60) days after
         receipt of the notice of denial and may, in conjunction therewith,
         submit written issues and comments. Within sixty (60) days after the
         filing of such a request for review, the Retirement Committee shall
         notify the claimant in writing whether, upon review, the claim was
         upheld or denied in whole or in part or shall furnish the claimant a
         written notice describing specific special circumstances requiring a
         specified amount of additional time (but not more than one hundred
         twenty days from the date the request for review was filed) to reach a
         decision on the request for review.

                  11.4.3. GENERAL RULES.

                           (a) No inquiry or question shall be deemed to be a
                  claim or a request for a review of a denied claim unless made
                  in accordance with the claims procedure. The Retirement
                  Committee may require that any claim for benefits and any
                  request for a review of a denied claim be filed on forms to be
                  furnished by the Retirement Committee upon request.

                           (b) All decisions on claims and on requests for a
                  review of denied claims shall be made by the Retirement
                  Committee or its delegate.

                           (c) The Retirement Committee may, in its discretion,
                  hold one or more hearings on a claim or a request for a review
                  of a denied claim.

                           (d) Claimants may be represented by a lawyer or other
                  representative (at their own expense), but the Retirement
                  Committee reserves the right to require the claimant to
                  furnish written authorization. A claimant's representative
                  shall be entitled to copies of all notices given to the
                  claimant.

                           (e) The decision of the Retirement Committee on a
                  claim and on a request for a review of a denied claim shall be
                  served on the claimant in writing. If a decision or notice is
                  not received by a claimant within the time specified, the
                  claim or request for a review of a denied claim shall be
                  deemed to have been denied.

                           (f) Prior to filing a claim or a request for a review
                  of a denied claim, the claimant or the claimant's
                  representative shall have a reasonable opportunity to review a
                  copy of this Plan Statement and all other pertinent documents
                  in the possession of the Employer, the Retirement Committee
                  and the Trustee.

                           (g) A denied claim may be challenged in court only
                  after the review procedure above has been exhausted. If
                  challenged in court, determinations by the Retirement
                  Committee shall not be subject to an initial redetermination
                  of the claim but to review only and shall not be overturned
                  unless proven to be arbitrary and capricious based upon the
                  evidence considered by the Retirement Committee at the time of
                  the determination.



                                       55

<PAGE>

         11.5. INFORMATION FURNISHED BY PARTICIPANTS. Neither the Employer nor
the Retirement Committee nor the Trustee shall be liable or responsible for any
error in the computation of the Account of a Participant resulting from any
misstatement of fact made by the Participant, directly or indirectly, to the
Employer, the Retirement Committee or the Trustee and used by them in
determining the Participant's Account. Neither the Employer nor the Retirement
Committee nor the Trustee shall be obligated or required to increase the Account
of such Participant which, on discovery of the misstatement, is found to be
understated as a result of such misstatement of the Participant. However, the
Account of any Participant which is overstated by reason of any such
misstatement shall be reduced to the amount appropriate for the Participant in
view of the truth. Any refund received upon reduction of an Account so made
shall be used to reduce the next succeeding contribution of the Employer to the
Plan.

                                   SECTION 12

                               PLAN ADMINISTRATION

         12.1. PRINCIPAL SPONSOR.

                  12.1.1. OFFICERS. Except as hereinafter provided, functions
         generally assigned to the Principal Sponsor shall be discharged by its
         officers or delegated and allocated as provided herein.

                  12.1.2. CHIEF EXECUTIVE OFFICER. Except as hereinafter
         provided, the Chief Executive Officer of the Principal Sponsor may
         delegate or redelegate and allocate and reallocate to one or more
         persons or to a committee of persons jointly or severally, and whether
         or not such persons are directors, officers or employees, such
         functions assigned to the Principal Sponsor hereunder as the Chief
         Executive Officer may from time to time deem advisable.

                  12.1.3. BOARD OF DIRECTORS. Notwithstanding the foregoing, the
         Board of Directors of the Principal Sponsor shall have the exclusive
         authority, which may not be delegated, to act for the Principal
         Sponsor:

                           (a) to terminate the Plan,

                           (b) to appoint or remove members of the Committee;

                           (c) to determine the Employer contribution under
                  Section 3; to reduce, suspend or discontinue contributions to
                  the Plan,

         12.2. COMMITTEE.

                  12.2.1. APPOINTMENT AND REMOVAL. The Committee shall consist
         of such members as may be determined and appointed from time to time by
         the Board of Directors of the Principal Sponsor and they shall serve at
         the pleasure of such Board of Directors. Members of the Committee shall
         serve without compensation, but their reasonable expenses shall be an
         expense of the administration of the Fund and shall be paid by the
         Trustee from and out of the Fund except to the extent the Employer, in
         its discretion, directly pays such expenses.

                  12.2.2. AUTOMATIC REMOVAL. If any individual who is a member
         of the Committee is a director, officer or employee when appointed as a
         member of the Committee, then such individual shall be automatically
         removed as a member of the Committee at the earliest time such
         individual ceases to be a director, officer or employee. This removal
         shall occur automatically and without any requirement for action by the
         Board of Directors of the Principal Sponsor or any notice to the
         individual so removed.


                                       56

<PAGE>

                  12.2.3. AUTHORITY. The Committee may elect such officers as
         the Committee may decide upon. The Committee shall:

                           (a) establish rules for the functioning of the
                  Committee, including the times and places for holding
                  meetings, the notices to be given in respect of such meetings
                  and the number of members who shall constitute a quorum for
                  the transaction of business,

                           (b) organize and delegate to such of its members as
                  it shall select authority to execute or authenticate rules,
                  advisory opinions or instructions, and other instruments
                  adopted or authorized by the Committee; adopt such bylaws or
                  regulations as it deems desirable for the conduct of its
                  affairs; appoint a secretary, who need not be a member of the
                  Committee, to keep its records and otherwise assist the
                  Committee in the performance of its duties; keep a record of
                  all its proceedings and acts and keep all books of account,
                  records and other data as may be necessary for the proper
                  administration of the Plan; notify the Employer and the
                  Trustee of any action taken by the Committee and, when
                  required, notify any other interested person or persons,

                           (c) determine from the records of the Employer the
                  compensation, service records, status and other facts
                  regarding Participants and other employees,

                           (d) cause to be compiled at least annually, from the
                  records of the Committee and the reports and accountings of
                  the Trustee, a report or accounting of the status of the Plan
                  and the Accounts of the Participants, and make it available to
                  each Participant who shall have the right to examine that part
                  of such report or accounting (or a true and correct copy of
                  such part) which sets forth the Participant's benefits and
                  ratable interest in the Fund,

                           (e) prescribe forms to be used for applications for
                  participation, benefits, notifications, etc., as may be
                  required in the administration of the Plan,

                           (f) set up such rules as are deemed necessary to
                  carry out the terms of this Plan Statement,

                           (g) resolve all questions of administration of the
                  Plan not specifically referred to in this Section,

                           (h) delegate or redelegate to one or more persons,
                  jointly or severally, and whether or not such persons are
                  members of the Committee or employees of the Employer, such
                  functions assigned to the Committee hereunder as it may from
                  time to time deem advisable,

                           (i) perform all other acts reasonably necessary for
                  administering the Plan and carrying out the provisions of this
                  Plan Statement and performing the duties imposed on it,

                           (j) have the authority to appoint or remove a Trustee
                  or accept the resignation of a Trustee,

                           (k) have the authority to appoint or remove an
                  Investment Manager,

                           (l) have the authority and discretion to engage an
                  Administrative Delegate who shall perform, without
                  discretionary authority or control, administrative functions
                  within the framework of policies, interpretations, rules,
                  practices and procedures made by the Retirement Committee or
                  other Plan Fiduciary. Any action made or taken by the



                                       57
<PAGE>

                  Administrative Delegate may be appealed by an affected
                  Participant to the Retirement Committee in accordance with the
                  claims review procedures provided in Section 11.4. Any
                  decisions which call for interpretations of Plan provisions
                  not previously made by the Retirement Committee shall be made
                  only by the Retirement Committee. The Administrative Delegate
                  shall not be considered a fiduciary with respect to the
                  services it provides, unless otherwise required under ERISA,
                  and

                           (m) may, for administrative purposes, establish unit
                  values for one or more investment fund (or any portion
                  thereof) and maintain the Accounts setting forth each
                  Participant's interest in such investment fund (or any portion
                  thereof) in terms of such units, all in accordance with such
                  rules and procedures as shall be administratively practicable.
                  In the event that unit accounting is thus established for any
                  investment fund (or any portion thereof), the value of a
                  Participant's interest in that investment fund (or any portion
                  thereof) at any time shall be an amount equal to the then
                  value of a unit in such investment fund (or any portion
                  thereof) multiplied by the number of units then credited to
                  the Participant.

                  12.2.4. MAJORITY DECISIONS. If there shall at any time be
         three (3) or more members of the Committee serving hereunder who are
         qualified to perform a particular act, the same may be performed, on
         behalf of all, by a majority of those qualified, with or without the
         concurrence of the minority. No person who failed to join or concur in
         such act shall be held liable for the consequences thereof, except to
         the extent that liability is imposed under ERISA.

         12.3. LIMITATION ON AUTHORITY.

                  12.3.1. FIDUCIARIES GENERALLY. No action taken by any
         fiduciary, if authority to take such action has been delegated or
         redelegated to it, shall be the responsibility of any other fiduciary
         except as may be required by the provisions of ERISA. Except to the
         extent imposed by ERISA, no fiduciary shall have the duty to question
         whether any other fiduciary is fulfilling all of the responsibility
         imposed upon such other fiduciary by the Plan Statement or by ERISA.

                  12.3.2. TRUSTEE. The responsibilities and obligations of the
         Trustee shall be strictly limited to those set forth in this Plan
         Statement. The Trustee shall have no authority or duty to determine or
         enforce payment of any Employer contribution under the Plan or to
         determine the existence, nature or extent of any individual's rights in
         the Fund or under the Plan or question any determination made by the
         Principal Sponsor or the Retirement Committee regarding the same. Nor
         shall the Trustee be responsible in any way for the manner in which the
         Principal Sponsor, the Employer or the Retirement Committee carries out
         its responsibilities under this Plan Statement or, more generally,
         under the Plan. The Trustee shall give the Principal Sponsor notice of
         (and tender to the Principal Sponsor) the prosecution or defense of any
         litigation involving the Plan, the Fund or other fiduciaries of the
         Plan.

         12.4. CONFLICT OF INTEREST. If any officer or employee of the Employer,
any member of the board of directors of the Employer, any member of the
Retirement Committee or any Trustee to whom authority has been delegated or
redelegated hereunder shall also be a Participant or Beneficiary in the Plan,
the individual shall have no authority as such officer, employee, member or
Trustee with respect to any matter specially affecting his or her individual
interest hereunder (as distinguished from the interests of all Participants and
Beneficiaries or a broad class of Participants and Beneficiaries), all such
authority being reserved exclusively to the other officers, employees, members
or Trustees as the case may be, to the exclusion of such Participant or
Beneficiary, and such Participant or Beneficiary shall act only in his or her
individual capacity in connection with any such matter.




                                       58
<PAGE>

         12.5. DUAL CAPACITY. Individuals, firms, corporations or partnerships
identified herein or delegated or allocated authority or responsibility
hereunder may serve in more than one fiduciary capacity.

         12.6. ADMINISTRATOR. The Principal Sponsor shall be the administrator
for purposes of Section 3(16)(A) of ERISA.

         12.7. NAMED FIDUCIARIES. The Employer and the Retirement Committee
shall be named fiduciaries for the purpose of Section 402(a) of ERISA.

         12.8. SERVICE OF PROCESS. In the absence of any designation to the
contrary by the Retirement Committee, the Secretary of the Principal Sponsor is
designated as the appropriate and exclusive agent for the receipt of service of
process directed to the Plan in any legal proceeding, including arbitration,
involving the Plan.

         12.9. ADMINISTRATIVE EXPENSES. The reasonable expenses of administering
the Plan, including but not limited to record keeping fees, investment fees and
trustee fees, shall be payable out of the Fund except to the extent that the
Employer, in its discretion, directly pays the expenses. The Employer may direct
the Trustee to charge such expenses first against the aggregate forfeiture
account referred to in Section 1.1.1(g).

         12.10. IRS QUALIFICATION. This Plan is intended to qualify under
Section 401(a) of the Code as a defined contribution profit sharing plan (and
not as a defined contribution money purchase pension plan or stock bonus plan or
a defined benefit pension plan).

                                   SECTION 13

                                   IN GENERAL

         13.1. DISCLAIMERS.

                  13.1.1. EFFECT ON EMPLOYMENT. Neither the terms of this Plan
         Statement nor the benefits hereunder nor the continuance thereof shall
         be a term of the employment of any employee, and the Employer shall not
         be obliged to continue the Plan. The terms of this Plan Statement shall
         not give any employee the right to be retained in the employment of the
         Employer.

                  13.1.2. SOLE SOURCE OF BENEFITS. Neither the Employer nor any
         of its officers nor any member of its board of directors nor any member
         of the Retirement Committee or the Trustee in any way guarantee the
         Fund against loss or depreciation, nor do they guarantee the payment of
         any benefit or amount which may become due and payable hereunder to any
         Participant, Beneficiary or other person. Each Participant, Beneficiary
         or other person entitled at any time to payments hereunder shall look
         solely to the assets of the Fund for such payments. If a Vested Total
         Account shall have been distributed to a former Participant,
         Beneficiary or any other person entitled jointly to the receipt thereof
         (or shall have been transferred to the Trustee of another tax-qualified
         deferred compensation plan), such former Participant, Beneficiary or
         other person, as the case may be, shall have no further right or
         interest in the other assets of the Fund.

                  13.1.3. CO-FIDUCIARY MATTERS. Neither the Employer nor any of
         its officers nor any member of its board of directors nor any member of
         the Retirement Committee shall in any manner be liable to any
         Participant, Beneficiary or other person for any act or omission of the
         Trustee (except to the extent that liability is imposed under ERISA).
         Neither the Employer nor any of its officers nor any member of its
         board of directors nor any member of the Retirement





                                       59
<PAGE>

         Committee or the Trustee shall be under any liability or responsibility
         (except to the extent that liability is imposed under ERISA) for
         failure to effect any of the objectives or purposes of the Plan by
         reason of loss or fluctuation in the value of Fund or for the form,
         genuineness, validity, sufficiency or effect of any Fund asset at any
         time held hereunder, or for the failure of any person, firm or
         corporation indebted to the Fund to pay such indebtedness as and when
         the same shall become due or for any delay occasioned by reason of any
         applicable law, order or regulation or by reason of any restriction or
         provision contained in any security or other asset held by the Fund.
         Except as is otherwise provided in ERISA, the Employer and its
         officers, the members of its board of directors and the members of the
         Retirement Committee, the Trustee and other fiduciaries shall not be
         liable for an act or omission of another person with regard to a
         fiduciary responsibility that has been allocated to or delegated to
         such other person pursuant to the terms of this Plan Statement or
         pursuant to procedures set forth in this Plan Statement.

         13.2. REVERSION OF FUND PROHIBITED. The Fund from time to time
hereunder shall at all times be a trust fund separate and apart from the assets
of the Employer, and no part thereof shall be or become available to the
Employer or to creditors of the Employer under any circumstances other than
those specified in Section 3.11 and Appendix A to this Plan Statement. It shall
be impossible for any part of the corpus or income of the Fund to be used for,
or diverted to, purposes other than for the exclusive benefit of Participants
and Beneficiaries (except as hereinbefore provided).

         13.3. CONTINGENT TOP HEAVY PLAN RULES. The rules set forth in Appendix
B to this Plan Statement (concerning additional provisions that apply if the
Plan becomes top heavy) are incorporated herein.

         13.4. CONTINUITY. The tenure and membership of any committee previously
appointed, the rules of administration adopted and the Beneficiary designations
in effect under the Prior Plan Statement shall, to the extent not inconsistent
with this Plan Statement, continue in full force and effect until altered as
provided herein.

         13.5. EXECUTION IN COUNTERPARTS. This Plan Statement may be executed in
any number of counterparts, each of which, without production of the others,
shall be deemed to be an original.

         13.6. GOVERNING LAW. To the extent not preempted by federal law, the
Trust shall be governed under the laws of the State of Wisconsin.

                                   SECTION 14

                             EGTRRA PLAN AMENDMENTS

         14.1. AMENDMENT OF THE PLAN FOR EGTRRA.

                  14.1.1. ADOPTION AND EFFECTIVE DATE OF EGTRRA AMENDMENTS. This
         Section 14 of the Plan are adopted to reflect certain provisions of the
         Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA").
         These amendments are intended as good faith compliance with the
         requirements of EGTRRA and are to be construed in accordance with
         EGTRRA and guidance issued thereunder. Except as otherwise provided,
         the amendments in this Section 14 shall be effective as of the first
         day of the first Plan Year beginning after December 31, 2001.

                  14.1.2. SUPERSESSION OF INCONSISTENT PROVISIONS. This Section
         14 shall supersede the provisions of the Plan to the extent those
         provisions are inconsistent with the provisions of this Article.


                                       60

<PAGE>

         14.2. LIMITATIONS ON CONTRIBUTIONS.

                  14.2.1. EFFECTIVE DATE. This Section 14.2 shall be effective
         for limitation years beginning after December 31, 2001.

                  14.2.2. MAXIMUM ANNUAL ADDITION. Except to the extent
         permitted under Plan Section 14.9 and Section 414(v) of the Code, if
         applicable, the Annual Additions that may be contributed or allocated
         to a Participant's Account under the Plan for any limitation year shall
         not exceed the lesser of:

                           (a) $40,000, as adjusted for increases in the
                  cost-of-living under Section 415(d) of the Code, or

                           (b) 100% of the Participant's compensation, within
                  the meaning of Section 415(c)(3) of the Code, for the
                  limitation year.

         The compensation limit referred to in (b) shall not apply to any
         contribution for medical benefits after separation from service (within
         the meaning of Section 401(h) or Section 419A(f)(2) of the Code) which
         is otherwise treated as an Annual Addition.

         14.3. INCREASE IN COMPENSATION LIMIT. The annual Compensation of each
Participant taken into account in determining allocations for any Plan Year
beginning after December 31, 2001, shall not exceed $200,000, as adjusted for
cost-of-living increases in accordance with Section 401(a)(17)(B) of the Code.
Annual Compensation means Compensation during the Plan Year or such other
consecutive 12-month period over which Compensation is otherwise determined
under the Plan (the "determination period"). The cost-of-living adjustment in
effect for a calendar year applies to annual Compensation for the determination
period that begins with or within such calendar year.

         14.4. MODIFICATION OF TOP-HEAVY RULES.

                  14.4.1. EFFECTIVE DATE. This Section 14.4 shall apply for
         purposes of determining whether the Plan is a top-heavy plan under
         Section 416(g) of the Code for Plan Years beginning after December 31,
         2001, and whether the Plan satisfies the minimum benefits requirements
         of Section 416(c) of the Code for such years. This Section amends
         Appendix B of the Plan.

                  14.4.2. DETERMINATION OF TOP-HEAVY STATUS.

                           (a) KEY EMPLOYEE. Key employee means any employee or
                  former employee (including any deceased employee) who at any
                  time during the Plan Year that includes the determination date
                  was an officer of the Company having annual compensation
                  greater than $130,000 (as adjusted under Section 416(i)(1) of
                  the Code for Plan Years beginning after December 31, 2002), a
                  5% owner of the employer, or a 1% owner of the Company having
                  "annual compensation" of more than $150,000. For this purpose,
                  annual compensation means compensation within the meaning of
                  Section 415(c)(3) of the Code. The determination of who is a
                  key employee will be made in accordance with Section 416(i)(1)
                  of the Code and the applicable regulations and other guidance
                  of general applicability issued thereunder.

                           (b) DETERMINATION OF PRESENT VALUES AND AMOUNTS. This
                  Section 14.4.2(b), (c) and (d) shall apply for purposes of
                  determining the present values of accrued benefits and the
                  amounts of account balances of employees as of the
                  determination date.

                           (c) DISTRIBUTIONS DURING YEAR ENDING ON THE
                  DETERMINATION DATE. The present values of accrued benefits and
                  the amounts of account balances of an employee as



                                       61
<PAGE>

                  of the determination date shall be increased by the
                  distributions made with respect to the employee under the Plan
                  and any plan aggregated with the Plan under Section 416(g)(2)
                  of the Code during the 1-year period ending on the
                  determination date. The preceding sentence shall also apply to
                  distributions under a terminated plan which, had it not been
                  terminated, would have been aggregated with the Plan under
                  Section 416(g)(2)(A)(i) of the Code. In the case of a
                  distribution made for a reason other than separation from
                  service, death, or disability, this provision shall be applied
                  by substituting "5-year period" for "1-year period."

                           (d) EMPLOYEES NOT PERFORMING SERVICES DURING YEAR
                  ENDING ON THE DETERMINATION DATE. The accrued benefits and
                  accounts of any individual who has not performed services for
                  the Company during the 1-year period ending on the
                  determination date shall not be taken into account.

                  14.4.3. MINIMUM BENEFITS.

                           (a) MATCHING CONTRIBUTIONS. Company matching
                  contributions shall be taken into account for purposes of
                  satisfying the minimum contribution requirements of Section
                  416(c)(2) of the Code and the Plan. The preceding sentence
                  shall apply with respect to matching contributions under the
                  Plan or, if the Plan provides that the minimum contribution
                  requirement shall be met in another plan, such other plan.
                  Company matching contributions that are used to satisfy the
                  minimum contribution requirements shall be treated as matching
                  contributions for purposes of the Actual Contribution
                  Percentage Test and other requirements of Section 401(m) of
                  the Code.

                           (b) CONTRIBUTIONS UNDER OTHER PLANS. The Company may
                  provide that the minimum benefit requirement shall be met in
                  another plan (including another plan that consists solely of a
                  cash or deferred arrangement which meets the requirements of
                  Section 401(k)(12) of the Code and matching contributions with
                  respect to which the requirements of Section 401(m)(11) of the
                  Code are met).

         14.5. DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS FROM THIS PLAN.

                  14.5.1. EFFECTIVE DATE. This Section 14.5 shall apply to
         distributions made after December 31, 2001.

                  14.5.2. MODIFICATION OF DEFINITION OF ELIGIBLE RETIREMENT
         PLAN. For purposes of the direct rollover provisions in Section 7.6 of
         the Plan, an eligible retirement plan shall also mean an annuity
         contract described in Section 403(b) of the Code and an eligible plan
         under Section 457(b) of the Code which is maintained by a state,
         political subdivision of a state, or any agency or instrumentality of a
         state or political subdivision of a state and which agrees to
         separately account for amounts transferred into such plan from this
         Plan. The definition of eligible retirement plan shall also apply in
         the case of a distribution to a surviving spouse, or to a spouse or
         former spouse who is the alternate payee under a qualified domestic
         relation order, as defined in Section 414(p) of the Code.

                  14.5.3. MODIFICATION OF DEFINITION OF ELIGIBLE ROLLOVER
         DISTRIBUTION TO EXCLUDE HARDSHIP DISTRIBUTIONS. For purposes of the
         direct rollover provisions in Section 7.6 of the Plan, any amount that
         is distributed on account of hardship shall not be an eligible rollover
         distribution and the distributee may not elect to have any portion of
         such a distribution paid directly to an eligible retirement plan.

                  14.5.4. MODIFICATION OF DEFINITION OF ELIGIBLE ROLLOVER
         DISTRIBUTION TO INCLUDE AFTER-TAX EMPLOYEE CONTRIBUTIONS. For purposes
         of the direct rollover provision in Section 7.6 of the Plan,



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<PAGE>

         a portion of a distribution shall not fail to be an eligible rollover
         distribution merely because the portion consists of after-tax employee
         contributions which are not includable in gross income. However, such
         portion may be transferred only to an individual retirement account or
         annuity described in Section 408(a) or (b) of the Code, or to a
         qualified defined contribution plan described in Section 401(a) or
         403(a) of the Code that agrees to separately account for amounts so
         transferred, including separately accounting for the portion of such
         distribution which is includable in gross income and the portion of
         such distribution which is not so includable.

         14.6. ROLLOVERS DISREGARDED IN INVOLUNTARY CASH-OUTS. With respect to
distributions after December 31, 2001, for purposes of Section 7.1.2 of the
Plan, the value of a Participant's Vested Total Account shall be determined
without regard to that portion of the account balance that is attributable to
rollover contributions (and earnings allocable thereto) within the meaning of
Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii) and 457(e)(16) of the
Code. If the value of the Participant's Vested Total Account as so determined is
$5,000 or less, the Plan shall immediately distribute the Participant's entire
nonforfeitable account balance.

         14.7. REPEAL OF MULTIPLE USE TEST. The multiple use test described in
Treasury Regulation Section 1.401(m)-2 and Section 3.5.3 of the Plan shall not
apply for Plan Years beginning after December 31, 2001.

         14.8. MODIFICATION OF TOP-HEAVY RULES. The top-heavy requirements of
Section 416 of the Code and Appendix B of the Plan shall not apply in any year
beginning after December 31, 2001, in which the Plan consists solely of a cash
or deferred management which meets the requirements of Section 401(k)(12) of the
Code and matching contributions with respect to which the requirements of
Section 401(m)(11) of the Code are met.

         14.9. ELECTIVE DEFERRALS - CONTRIBUTION LIMITATION. No Participant
shall be permitted to have elective deferrals made under this Plan, or any other
qualified plan maintained by the Company during any taxable year, in excess of
the dollar limitation contained in Section 402(g) of the Code in effect for such
taxable year, except to the extent permitted under Section 14.9 and Section
414(v) of the Code, if applicable.

         14.10. CATCH-UP CONTRIBUTIONS. Effective for Salary Deferral
Contributions after December 31, 2001 and the effective date for implementation
of this provision as specified by the Retirement Committee, all employees who
are eligible to make elective deferrals under this Plan and who have attained
age 50 before the close of the Plan Year shall be eligible to make catch-up
contributions in accordance with, and subject to the limitations of, Section
414(v) of the Code. Such catch-up contributions shall not be taken into account
for purposes of the provisions of the Plan implementing the required limitations
of Sections 402(g) and 415 of the Code. The Plan shall not be treated as failing
to satisfy the provisions of the Plan implementing the requirements of Section
401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the Code, as applicable, by
reason of the making of such catch-up contributions.

         14.11. SUSPENSION PERIOD FOLLOWING HARDSHIP DISTRIBUTION. A Participant
who receives a distribution of elective deferrals after December 31, 2001, on
account of hardship shall be prohibited from making elective deferral and
employee contributions under this and all other plans of the employer for 6
months after receipt of the distribution. A Participant who receives a
distribution of elective deferrals in calendar year 2001 on account of hardship
shall be prohibited from making elective deferrals and employee contributions
under this and all other plans of the employer for 6 months after receipt of the
distribution or until January 1, 2002, if later.

         14.12. DISTRIBUTION UPON SEVERANCE FROM EMPLOYMENT. A Participant's
elective deferrals, qualified nonelective contributions, qualified matching
contributions, and earnings attributable to these contributions shall be
distributed on account of the Participant's severance from employment. However,


                                       63

<PAGE>

such a distribution shall be subject to the other provisions of the Plan
regarding distributions, other than provisions that require a separation from
service before such amounts may be distributed. This provision shall apply for
distributions after December 31, 2001, regardless of when the severance from
employment occurred.

         IN WITNESS WHEREOF, the Principal Sponsor and the Trustee, by their
duly authorized officers, have executed this Plan Trust Agreement on the _____
day of _______________, 2002, to become generally effective as of February 23,
1997.

                                               SHOPKO STORES, INC.
                                               (THE "PRINCIPAL SPONSOR")


                                               By:_____________________________

                                               Title:__________________________

                                               AMERICAN EXPRESS TRUST COMPANY
                                               (THE "TRUSTEE")


                                               By:_____________________________

                                               Title:__________________________





                                       64
<PAGE>
                                   SCHEDULE I
                                       TO
                       SHOPKO STORES, INC. SHARED SAVINGS

Participating Employers
As of __________, 2001

                    Employer                                        EIN

        1.       ShopKo Stores, Inc.                             41-0985054



        (update as appropriate)













                                       65
<PAGE>
                                   APPENDIX A

                         LIMITATION ON ANNUAL ADDITIONS

                                    SECTION 1

                                  INTRODUCTION

         Terms defined in the Plan Statement shall have the same meanings when
used in this Appendix. In addition, when used in this Appendix, the following
terms shall have the following meanings:

         1.1. ANNUAL ADDITION. Annual addition means, with respect to any
Participant for a limitation year, the sum of:

                           (a) all employer contributions (including employer
                  contributions of the Participant's earnings reductions under
                  Section 401(k), Section 403(b) and Section 408(k) of the Code)
                  allocable as of a date during such limitation year to the
                  Participant under all defined contribution plans;

                           (b) all forfeitures allocable as of a date during
                  such limitation year to the Participant under all defined
                  contribution plans; and

                           (c) all Participant contributions made as of a date
                  during such limitation year to all defined contribution plans.

                  1.1.1. SPECIFIC INCLUSIONS. With regard to a plan which
         contains a qualified cash or deferred arrangement or matching
         contributions or employee contributions, excess deferrals and excess
         contributions and excess aggregate contributions (whether or not
         distributed during or after the limitation year) shall be considered
         annual additions in the year contributed.

                  1.1.2. SPECIFIC EXCLUSIONS. The annual addition shall not,
         however, include any portion of a Participant's rollover contributions
         or any additions to accounts attributable to a plan merger or a
         transfer of plan assets or liabilities or any other amounts excludable
         under law.

                  1.1.3. ESOP RULES. In the case of an employee stock ownership
         plan within the meaning of Section 4975(e)(7) of the Code, annual
         additions shall not include any dividends or gains on sale of employer
         securities held by the employee stock ownership plan (regardless of
         whether such dividends or gains are (i) on securities which are
         allocated to Participants' accounts or (ii) on securities which are not
         allocated to Participants' accounts which, in the case of dividends
         used to pay principal on an employee stock ownership plan loan, result
         in employer securities being allocated to Participants' accounts or, in
         the case of a sale, result in sale proceeds being allocated to
         Participants' accounts). In the case of an employee stock ownership
         plan under which no more than one-third of the employer contributions
         for a limitation year which are deductible under Section 404(a)(9) of
         the Code are allocated to highly compensated employees (as defined in
         Section 414(q) of the Code), annual additions shall not include
         forfeitures of employer securities under the employee stock ownership
         plan if such securities were acquired with the proceeds of an exempt
         loan or employer contributions to the employee stock ownership plan
         which are deductible by the employer under Section 404(a)(9)(B) of the
         Code and charged against the Participant's account (i.e., interest
         payments).

         1.2. ANNUAL BENEFIT. Annual benefit means a retirement benefit under a
defined benefit plan which is payable annually in the form of a straight life
annuity.



                                       66
<PAGE>

                  1.2.1. STRAIGHT LIFE ANNUITY. Except as provided below, a
         benefit payable in a form other than a straight life annuity will be
         adjusted to the actuarial equivalent straight life annuity before
         applying the limitations of this Appendix. To determine this actuarial
         equivalent, the interest rate assumption shall be the greater of the
         interest rate specified in the defined benefit plan's plan document or
         five percent (5%) and the mortality assumption shall be that specified
         in the defined benefit plan's plan document.

                  1.2.2. EXCLUDED CONTRIBUTIONS. The annual benefit does not
         include any benefits attributable to employee contributions, rollover
         contributions or the assets transferred from a qualified plan that was
         not maintained by a controlled group member.

                  1.2.3. ANCILLARY BENEFITS. No actuarial adjustment to the
         annual benefit is required for: (i) the value of a qualified joint and
         survivor annuity (to the extent such value exceeds the sum of the value
         of a straight life annuity beginning on the same date and the value of
         post-retirement death benefits that would be paid even if the annuity
         were not in the form of a joint and survivor annuity), or (ii) the
         value of benefits that are not directly related to retirement benefits
         (such as a pre-retirement disability benefit, a pre-retirement death
         benefit or a post-retirement medical benefit), or (iii) the value of
         post-retirement cost-of-living increases made in accordance with
         regulations under the Code.

         1.3. CONTROLLED GROUP MEMBER. Controlled group member means the
Employer and each member of a controlled group of corporations (as defined in
Section 414(b) of the Code and as modified by Section 415(h) of the Code), all
commonly controlled trades or businesses (as defined in Section 414(c) of the
Code and as modified by Section 415(h) of the Code), affiliated service groups
(as defined in Section 414(m) of the Code) of which the Employer is a part and
other organizations required to be aggregated for this purpose under Section
414(o) of the Code.

         1.4. DEFINED BENEFIT AND DEFINED CONTRIBUTION PLANS. Defined benefit
plan and defined contribution plan have the meanings assigned to those terms by
Section 415(k)(1) of the Code. Whenever reference is made to defined benefit
plans and defined contribution plans in this Appendix, it shall include all such
plans maintained by the Employer and all controlled group members.

         1.5. DEFINED BENEFIT FRACTION.

                  1.5.1. GENERAL RULE. Defined benefit fraction means a fraction
         the numerator of which is the sum of the Participant's projected annual
         benefits under all defined benefit plans determined as of the close of
         the limitation year, and the denominator of which is the lesser of:

                           (i) One hundred twenty-five percent (125%) of the
                  dollar limitation in effect under Section 415(b)(l)(a) of the
                  Code as of the close of such limitation year (i.e., 125% of
                  $90,000 as adjusted for cost of living, commencement dates,
                  length of service and other factors), or

                           (ii) One hundred forty percent (140%) of the dollar
                  amount which may be taken into account under section
                  415(b)(l)(b) of the code with respect to such participant as
                  of the close of such limitation year (i.e., 140% of the
                  participant's highest average compensation as adjusted for
                  cost of living, length of service and other factors).

                  1.5.2. TRANSITION RULE. Notwithstanding the above, if the
         Participant was a participant as of the first day of the first
         limitation year beginning after December 31, 1986, in one or more
         defined benefit plans which were in existence on May 6, 1986, the
         denominator of this fraction will not be less than one hundred
         twenty-five percent (125%) of the sum of the annual benefits under such
         plans which the Participant had accrued as of the close of the last
         limitation year beginning before January 1, 1987, disregarding any
         changes in the terms and conditions of the



                                       67
<PAGE>

         Plan after May 5, 1986. The preceding sentence applies only if the
         defined benefit plans individually and in the aggregate satisfied the
         requirements of Section 415 of the Code for all limitation years
         beginning before January 1, 1987.

         1.6. DEFINED CONTRIBUTION FRACTION.

                  1.6.1. GENERAL RULE. Defined contribution fraction means a
         fraction the numerator of which is the sum of the Participant's annual
         additions (including Employer contributions which are allocated to a
         separate account established for the purpose of providing medical
         benefits or life insurance benefits with respect to a key employee (as
         defined in Appendix B) under a welfare benefit fund or individual
         medical account) as of the close of the limitation year and for all
         prior limitation years, and the denominator of which is the sum of the
         amounts determined under paragraph (i) or (ii) below, whichever is the
         lesser, for such limitation year and for each prior limitation year in
         which the Participant had any service with the employer (regardless of
         whether that or any other defined contribution plan was in existence
         during those years or continues in existence):

                           (i) one hundred twenty-five percent (125%) of the
                  dollar limitation in effect under Section 415(c)(l)(a) of the
                  Code for such limitation year determined without regard to
                  Section 415(c)(6) of the Code (i.e., 125% of $30,000 as
                  adjusted for cost-of-living), or

                           (ii) one hundred forty percent (140%) of the dollar
                  amount which may be taken into account under Section
                  415(c)(l)(b) of the Code with respect to such individual under
                  the plan for such limitation year (i.e., 140% of 25% of the
                  Participant's Section 415 compensation for such limitation
                  year).

                  1.6.2. TEFRA TRANSITION RULE. The Employer may elect that the
         amount taken into account for each Participant for all limitation years
         ending before January 1, 1983, under Section 1.6.1(i) and Section
         1.6.1(ii) shall be determined pursuant to the special transition rule
         provided in Section 415(e)(6) of the Code.

                  1.6.3. EMPLOYEE CONTRIBUTIONS. Notwithstanding the definition
         of "annual additions", for the purpose of determining the defined
         contribution fraction in limitation years beginning before January 1,
         1987, employee contributions shall not be taken into account to the
         extent that they were not required to be taken into account under
         Section 415 of the Code prior to the Tax Reform Act of 1986.

                  1.6.4. ANNUAL DENOMINATOR. The amounts to be determined under
         Section 1.6.1(i) and Section 1.6.1(ii) for the limitation year and for
         all prior limitation years in which the Participant had any service
         with the employer shall be determined separately for each such
         limitation year on the basis of which amount is the lesser for each
         such limitation year.

                  1.6.5. RELIEF RULE. If the Participant was a participant as of
         the end of the first day of the first limitation year beginning after
         December 31, 1986, in one or more defined contribution plans which were
         in existence on May 6, 1986, the numerator of this fraction will be
         adjusted if the sum of this fraction and the defined benefit fraction
         would otherwise exceed one (1.0) under the terms of this Plan
         Statement. Under the adjustment, an amount equal to the product of the
         excess of the sum of the fractions over one (10), times the denominator
         of this fraction, will be permanently subtracted from the numerator of
         this fraction. The adjustment is calculated using the fractions as they
         would be computed as of the end of the last limitation year beginning
         before January 1, 1987, and disregarding any changes in the terms and
         conditions of the plan made after May 6, 1986, but using the Section
         415 limitations applicable to the first limitation year beginning on or
         after January 1, 1987.



                                       68
<PAGE>

         1.7. HIGHEST AVERAGE COMPENSATION. Highest average compensation means
the average Section 415 compensation for the three (3) consecutive years of
service with the controlled group members that produce the highest average. A
year of service with the controlled group members is the Plan Year.

         1.8. INDIVIDUAL MEDICAL ACCOUNT. Individual medical account means an
account, as defined in Section 415(1)(2) of the Code maintained by the Employer
or a controlled group member which provides an annual addition.

         1.9. LIMITATION YEAR. The limitation year shall be the Plan Year.

         1.10. MAXIMUM PERMISSIBLE ADDITION.

                  1.10.1. GENERAL RULE. The maximum permissible addition (to
         defined contribution plans) for any one (1) limitation year shall be
         the lesser of:

                           (i) Thirty Thousand Dollars ($30,000), adjusted from
                  time to time for increases in the cost of living as provided
                  under applicable regulations (prorated for any short
                  limitation year), or

                           (ii) Twenty-five percent (25%) of the Participant's
                  Section 415 compensation for such limitation year, or if
                  greater, the percentage limitation under Section 415(c)(l)(B)
                  of the Code in effect for such limitation year.

                  1.10.2. ESOP RULE. For limitation years beginning before July
         13, 1989, in the case of an employee stock ownership plan within the
         meaning of Section 4975(e)(7) of the Code under which no more than one
         third of the employer contributions for a limitation year are allocated
         to highly compensated employees (as defined in Section 414(q) of the
         Code), the dollar limitation in Section 1.10.1(i) (after adjustment for
         cost of living) shall be increased to be equal to the sum of:

                           (i) the dollar limitation in Section 1.10.1(i) (after
                  adjustment for cost of living), and

                           (ii) the lesser of the dollar limitation in Section
                  1.10.1(i) (after adjustment for cost of living) or the amount
                  of employer securities contributed or purchased with cash
                  contributed to the employee stock ownership plan.

                  1.10.3. MEDICAL BENEFITS. The dollar limitation in Section
         1.10.1(i) (after adjustment for cost of living) shall be reduced by the
         amount of employer contributions which are allocated to a separate
         account established for the purpose of providing medical benefits or
         life insurance benefits with respect to a key employee (as defined in
         Appendix B) under a welfare benefit fund or an individual medical
         account.

         1.11. PROJECTED ANNUAL BENEFIT. Projected annual benefit means the
annual benefit payable to the Participant at his or her normal retirement age
(as defined in the defined benefit plan) adjusted to an actuarially equivalent
straight life annuity form (or, if it would be a lesser amount, to any
actuarially equivalent qualified joint and survivor annuity form that is
available under the defined benefit plan) assuming that:

                           (i) the Participant continues employment and
                  participation under the defined benefit plan until his or her
                  normal retirement age (as defined in the defined benefit plan)
                  or, if later, until his or her current age, and



                                       69
<PAGE>

                           (ii) the Participant's Section 415 compensation and
                  all other factors used to determine annual benefits under the
                  defined benefit plan remain unchanged for all future
                  limitation years.

         1.12. SECTION 415 COMPENSATION. Section 415 compensation (sometimes,"
Section 415 compensation") shall mean, with respect to any limitation year,
wages within the meaning of Section 3401(a) of the Code (for purposes of income
tax withholding at the source), but determined without regard to any rules that
limit the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in Section 3401(a)(2) of the Code). For Plan Years beginning after
February 28, 1998, Section 415 compensation shall include elective contributions
made by the Employer on behalf of the Participant that are not includible in
gross income under Sections 125, 402(e)(3), 402(h) and 403(b) of the Code,
including elective contributions authorized by the Participant under a 401(k)
Agreement, a cafeteria plan or any other qualified cash or deferred arrangement
under Section 401(k) of the Code, and including elective contributions under any
qualified transportation fringe benefit under Section 132(f) of the Code. For
limitation years beginning after December 31, 1991, Section 415 compensation
shall be determined on a cash basis.

         1.13. SOCIAL SECURITY RETIREMENT AGE. Social security retirement age
means the age used as retirement age under Section 216(l) of the Social Security
Act except that such section shall be applied (i) without regard to the age
increase factor, and (ii) as if the early retirement age under Section 216(1)(2)
of the Social Security Act were age sixty-two (62) years.

         1.14. WELFARE BENEFIT FUND. Welfare benefit fund means a fund as
defined in Section 419(e) of the Code which provides post-retirement medical
benefits allocated to separate accounts for key employees as defined in Section
419A(d)(3).

                                   SECTION 2

                         DEFINED CONTRIBUTION LIMITATION

         Notwithstanding anything to the contrary contained in the Plan
Statement, there shall not be allocated to the Account of any Participant for
any limitation year an amount which would cause the annual addition for such
Participant to exceed the maximum permissible addition.

                                   SECTION 3

                            COMBINED PLANS LIMITATION

         Notwithstanding anything to the contrary contained in the Plan
Statement, if the Participant participates in both a defined benefit plan and a
defined contribution plan, then for Plan Years commencing prior to January 1,
2000, the sum of the defined benefit fraction and the defined contribution
fraction shall not exceed one (1) at the close of any limitation year.

                                    SECTION 4

                                 REMEDIAL ACTION

         4.1. DEFINED CONTRIBUTION PLANS ONLY. If the Participant's annual
additions for a limitation year would exceed the maximum permissible additions
applicable to defined contribution plans alone, the



                                       70
<PAGE>

Employer shall, to the extent they cause such excess to occur, cause the
following to occur until such excess is eliminated:

                           (i) return any unmatched employee contributions made
                  by the Participant for the limitation year to the Participant
                  (adjusted for their proportionate share of gains but not
                  losses while held in the Plan), and

                           (ii) distribute unmatched elective deferrals (within
                  the meaning of Section 402(g)(3) of the Code) made for the
                  limitation year to the Participant (adjusted for their
                  proportionate share of gains but not losses while held in the
                  Plan), and

                           (iii) return any matched employee contributions made
                  by the Participant for the limitation year to the Participant
                  (adjusted for their proportionate share of gains but not
                  losses while held in the Plan), and

                           (iv) distribute matched elective deferrals (within
                  the meaning of Section 402(g)(3) of the Code) made for the
                  limitation year to the Participant (adjusted for their
                  proportionate share of gains but not losses while held in the
                  Plan).

         To the extent either matched employee contributions are returned or
matched elective deferrals are distributed, any matching contribution made with
respect thereto shall be forfeited and reallocated to Participants as provided
in the Plan Statement.



                                       71
<PAGE>

         If, after returning such employee contributions to the Participant and
distributing elective deferrals to the Participant, an excess still exists, the
Employer shall cause such excess to be used to reduce employer contributions for
the next limitation year ("second limitation year") (and succeeding limitation
years, as necessary) for that Participant if that Participant is covered by the
Plan at the end of the second limitation year (or succeeding limitation years).
If the Participant is not covered by the Plan at the end of the second
limitation year (or succeeding limitation years), however, then the excess
amounts must be held unallocated in an "excess account" for the second
limitation year (or succeeding limitation years) and allocated and reallocated
in the second limitation year (or succeeding limitation year) to all the
remaining Participants in the Plan as if an employer contribution for the second
limitation year (or succeeding limitation year). However, if the allocation or
reallocation of the excess amounts pursuant to the provisions of the Plan causes
the limitations of this Appendix to be exceeded with respect to each Participant
for the second limitation year (or succeeding limitation years), then these
amounts must be held unallocated in an excess account. If an excess account is
in existence at any time during the second limitation year (or any succeeding
limitation year), all amounts in the excess account must be allocated and
reallocated to Participants' accounts (subject to the limitations of this
Appendix) as if they were additional employer contributions before any employer
contribution and any Participant contributions which would constitute annual
additions may be made to the Plan for that limitation year. Furthermore, the
excess amounts must be used to reduce employer contributions for the second
limitation year (and succeeding limitation years, as necessary) for all of the
remaining Participants. Excess amounts may not be distributed from the Plan to
Participants or former Participants. If an excess account is in existence at any
time during a limitation year, the gains and losses and other income
attributable to the excess account shall be allocated to such excess account. To
the extent that investment gains or other income or investment losses are
allocated to the excess account, the entire amount allocated to Participants
from the excess account, including any such gains or other income or less any
losses, shall be considered as an annual addition. If the Plan should be
terminated prior to the date any such temporarily held, unallocated excess can
be allocated to the Accounts of Participants, the date of termination shall be
deemed to be an Annual Valuation Date for the purpose of allocating such excess
and, if any portion of such excess cannot be allocated as of such deemed Annual
Valuation Date by reason of the limitations of this Appendix, such remaining
excess shall be returned to the Employer. It is specifically intended that such
remedial action as may be necessary to correct an excess allocation shall be
made in the following defined contribution plans in the following sequence:

                           (i) all profit sharing and stock bonus plans
                  containing cash or deferred arrangements,

                           (ii) all money purchase pension plans,

                           (iii) all profit sharing and stock bonus plans other
                  than employee stock ownership plans or plans containing cash
                  or deferred arrangements,

                           (iv) all employee stock ownership plans.

         If an excess allocation occurs in two (2) or more plans in the same
category, correction of the excess allocation shall be made in chronological
order as determined by the effective date of each plan (using the original
effective date of the plan) beginning with the most recently established plan.

         4.2. COMBINED DEFINED BENEFIT AND DEFINED CONTRIBUTION PLANS. If for
any Plan Year commencing prior to January 1, 2000, the combination of benefits
under all defined contribution plans and all defined benefit plans would exceed
the limits described above which are applicable to a combination of defined
benefit and defined contribution plans, then such Participant shall not be
entitled to the accrual of any benefits under such defined benefit plans to the
extent it would cause such combination of plans to exceed the limits hereinabove
described. If such reduction or curtailment of the accrual of future benefits
under the defined benefit plans and the cancellation of previously accrued


                                       72
<PAGE>

benefits is not adequate to eliminate an excess under the combination-of-plans
rule, then annual additions to the defined contribution plans shall be reduced.
It is specifically intended that the Employer shall cause the reduction or
elimination of future accruals and the cancellation of previously accrued
benefits under all defined benefit plans (other than terminated defined benefit
plans) to occur before any reduction of annual additions to defined contribution
plans.













                                       73
<PAGE>
                                   APPENDIX B

                         CONTINGENT TOP HEAVY PLAN RULES

         Notwithstanding any of the foregoing provisions of the Plan Statement,
if, after applying the special definitions set forth in Section 1 of this
Appendix, this Plan is determined under Section 2 of this Appendix to be a top
heavy plan for a Plan Year, then the special rules set forth in Section 3 of
this Appendix shall apply. For so long as this Plan is not determined to be a
top heavy plan, the special rules in Section 3 of this Appendix shall be
inapplicable to this Plan.

                                    SECTION 1

                               SPECIAL DEFINITIONS

         Terms defined in the Plan Statement shall have the same meanings when
used in this Appendix. In addition, when used in this Appendix, the following
terms shall have the following meanings:

         1.1. AGGREGATED EMPLOYERS. Aggregated employers means the Employer and
each other corporation, partnership or proprietorship which is a "predecessor"
to the Employer, or is under "common control" with the Employer, or is a member
of an "affiliated service group" that includes the Employer, as those terms are
defined in Section 414(b), (c), (m) or (o) of the Code.

         1.2. AGGREGATION GROUP. Aggregation group means a grouping of this Plan
and:

                           (a) if any Participant in the Plan is a key employee,
                  each other qualified pension, profit sharing or stock bonus
                  plan of the aggregated employers in which a key employee is a
                  Participant (and for this purpose, a key employee shall be
                  considered a Participant only during periods when he is
                  actually accruing benefits and not during periods when he has
                  preserved accrued benefits attributable to periods of
                  participation when he was not a key employee), and

                           (b) each other qualified pension, profit sharing or
                  stock bonus plan of the aggregated employers which is required
                  to be taken into account for this Plan or any plan described
                  in paragraph (a) above to satisfy the qualification
                  requirements under Section 410 or Section 401(a)(4) of the
                  Code, and

                           (c) each other qualified pension, profit sharing or
                  stock bonus plan of the aggregated employers which is not
                  included in paragraph (a) or (b) above, but which the Employer
                  elects to include in the aggregation group and which, when
                  included, would not cause the aggregation group to fail to
                  satisfy the qualification requirements under Section 410 or
                  Section 401(a)(4) of the Code.

         1.3. COMPENSATION. Unless the context clearly requires otherwise,
compensation means wages within the meaning of Section 3401(a) of the Code (for
purposes of income tax withholding at the source) but determined without regard
to any rules that limit the remuneration included in wages based on the nature
or location of the employment or the services performed (such as the exception
for agricultural labor in Section 3401(a)(2) of the Code), but limited to Two
Hundred Thousand Dollars adjusted annually as provided in Section 401(a)(17) of
the Code. Compensation shall be determined on a cash basis.

         1.4. DETERMINATION DATE. Determination date means, for the first (1st)
Plan Year of a plan, the last day of such first (1st) Plan Year, and for each
subsequent Plan Year, the last day of the immediately preceding Plan Year.



                                       74
<PAGE>

         1.5. FIVE PERCENT OWNER. Five percent owner means for each aggregated
employer that is a corporation, any person who owns (or is considered to own
within the meaning of the shareholder attribution rules) more than five percent
(5%) of the value of the outstanding stock of the corporation or stock
possessing more than five percent (5%) of the total combined voting power of the
corporation, and, for each aggregated employer that is not a corporation, any
person who owns more than five percent (5%) of the capital interest or the
profits interest in such aggregated employer. For the purposes of determining
ownership percentages, each corporation, partnership and proprietorship
otherwise required to be aggregated shall be viewed as a separate entity.

         1.6. KEY EMPLOYEE. Key employee means each Participant (whether or not
then an employee) who at any time during a Plan Year (or any of the four
preceding Plan Years) is:

                           (a) an officer of any aggregated employer (excluding
                  persons who have the title of an officer but not the authority
                  and including persons who have the authority of an officer but
                  not the title) having an annual compensation from all
                  aggregated employers for any such Plan Year in excess of fifty
                  percent (50%) of the amount in effect under Section
                  415(b)(1)(A) of the Code for any such Plan Year, or

                           (b) one (1) of the ten (10) employees (not
                  necessarily Participants) owning (or considered to own within
                  the meaning of the shareholder attribution rules) both more
                  than one-half of one percent (1/2%) ownership interest in
                  value and the largest percentage ownership interests in value
                  of any of the aggregated employers (which are owned by
                  employees) and who has an annual compensation from all the
                  aggregated employers in excess of the limitation in effect
                  under Section 415(c)(1)(A) of the Code for any such Plan Year,
                  or

                           (c) a five percent owner, or

                           (d) a one percent owner having an annual compensation
                  from the aggregated employers of more than One Hundred Fifty
                  Thousand Dollars ($150,000);


         provided, however, that no more than fifty (50) employees (or, if
         lesser, the greater of three of all the aggregated employers' employees
         or ten percent of all the aggregated employers' employees) shall be
         treated as officers. For the purposes of determining ownership
         percentages, each corporation, partnership and proprietorship otherwise
         required to be aggregated shall be viewed as a separate entity. For
         purposes of paragraph (b) above, if two (2) employees have the same
         interest in any of the aggregated employers, the employee having the
         greatest annual compensation from that aggregated employer shall be
         treated as having a larger interest. For the purpose of determining
         compensation, however, all compensation received from all aggregated
         employers shall be taken into account. The term "key employee" shall
         include the beneficiaries of a deceased key employee.

         1.7. ONE PERCENT OWNER. One percent owner means, for each aggregated
employer that is a corporation, any person who owns (or is considered to own
within the meaning of the shareholder attribution rules) more than one percent
(1%) of the value of the outstanding stock of the corporation or stock
possessing more than one percent (1%) of the total combined voting power of the
corporation, and, for each aggregated employer that is not a corporation, any
person who owns more than one percent (1%) of the capital or the profits
interest in such aggregated employer. For the purposes of determining ownership
percentages, each corporation, partnership and proprietorship otherwise required
to be aggregated shall be viewed as a separate entity.

         1.8. SHAREHOLDER ATTRIBUTION RULES. Shareholder attribution rules means
the rules of Section 318 of the Code, (except that subparagraph (C) of Section
318(a)(2) of the Code shall be applied



                                       75
<PAGE>

by substituting "5 percent" for "50 percent") or, if the Employer is not a
corporation, the rules determining ownership in such Employer which shall be set
forth in regulations prescribed by the Secretary of the Treasury.

         1.9. TOP HEAVY AGGREGATION GROUP. Top heavy aggregation group means any
aggregation group for which, as of the determination date, the sum of:

                           (i) the present value of the cumulative accrued
                  benefits for key employees under all defined benefit plans
                  included in such aggregation group, and

                           (ii) the aggregate of the accounts of key employees
                  under all defined contribution plans included in such
                  aggregation group,

exceed sixty percent (60%) of a similar sum determined for all employees. In
applying the foregoing, the following rules shall be observed:

                           (a) For the purpose of determining the present value
                  of the cumulative accrued benefit for any employee under a
                  defined benefit plan, or the amount of the account of any
                  employee under a defined contribution plan, such present value
                  or amount shall be increased by the aggregate distributions
                  made with respect to such employee under the plan during the
                  five (5) year period ending on the determination date.

                           (b) Any rollover contribution (or similar transfer)
                  initiated by the employee, made from a plan maintained by one
                  employer to a plan maintained by another employer and made
                  after December 31, 1983, to a plan shall not be taken into
                  account with respect to the transferee plan for the purpose of
                  determining whether such transferee plan is a top heavy plan
                  (or whether any aggregation group which includes such plan is
                  a top heavy aggregation group). Any rollover contribution (or
                  similar transfer) not described in the preceding sentence
                  shall be taken into account with respect to the transferee
                  plan for the purpose of determining whether such transferee
                  plan is a top heavy plan (or whether any aggregation group
                  which includes such plan is a top heavy aggregation group).

                           (c) If any individual is not a key employee with
                  respect to a plan for any Plan Year, but such individual was a
                  key employee with respect to a plan for any prior Plan Year,
                  the cumulative accrued benefit of such employee and the
                  account of such employee shall not be taken into account.

                           (d) The determination of whether a plan is a top
                  heavy plan shall be made once for each Plan Year of the plan
                  as of the determination date for that Plan Year.

                           (e) In determining the present value of the
                  cumulative accrued benefits of employees under a defined
                  benefit plan, the determination shall be made as of the
                  actuarial valuation date last occurring during the twelve (12)
                  months preceding the determination date and shall be
                  determined on the assumption that the employees terminated
                  employment on the valuation date except as provided in Section
                  416 of the Code and the regulations thereunder for the first
                  and second Plan Years of a defined benefit plan. The accrued
                  benefit of any employee (other than a key employee) shall be
                  determined under the method which is used for accrual purposes
                  for all plans of the employer or if there is no method which
                  is used for accrual purposes under all plans of the employer,
                  as if such benefit accrued not more rapidly than the slowest
                  accrual rate permitted under Section 411(b)(1)(C) of the Code.
                  In determining this present value, the mortality and interest
                  assumptions shall be those which would be used by the Pension
                  Benefit Guaranty Corporation in valuing the defined benefit
                  plan if it terminated on such



                                       76
<PAGE>

                  valuation date. The accrued benefit to be valued shall be the
                  benefit expressed as a single life annuity.

                           (f) In determining the accounts of employees under a
                  defined contribution plan, the account values determined as of
                  the most recent asset valuation occurring within the twelve
                  (12) month period ending on the determination date shall be
                  used. In addition, amounts required to be contributed under
                  either the minimum funding standards or the plan's
                  contribution formula shall be included in determining the
                  account. In the first year of the plan, contributions made or
                  to be made as of the determination date shall be included even
                  if such contributions are not required.

                           (g) If any individual has not performed any services
                  for any employer maintaining the plan at any time during the
                  five (5) year period ending on the determination date, any
                  accrued benefit of the individual under a defined benefit plan
                  and the account of the individual under a defined contribution
                  plan shall not be taken into account.

                           (h) For this purpose, a terminated plan shall be
                  treated like any other plan and must be aggregated with other
                  plans of the employer if it was maintained within the last
                  five (5) years ending on the determination date for the Plan
                  Year in question and would, but for the fact that it
                  terminated, be part of the aggregation group for such Plan
                  Year.

         1.10. TOP HEAVY PLAN. Top heavy plan means a qualified plan under which
(as of the determination date):

                           (i) if the plan is a defined benefit plan, the
                  present value of the cumulative accrued benefits for key
                  employees exceeds sixty percent (60%) of the present value of
                  the cumulative accrued benefits for all employees, and

                           (ii) if the plan is a defined contribution plan, the
                  aggregate of the accounts of key employees exceeds sixty
                  percent (60%) of the aggregate of all of the accounts of all
                  employees.

         In applying the foregoing, the following rules shall be observed:

                           (a) Each plan of an Employer required to be included
                  in an aggregation group shall be a top heavy plan if such
                  aggregation group is a top heavy aggregation group.

                           (b) For the purpose of determining the present value
                  of the cumulative accrued benefit for any employee under a
                  defined benefit plan, or the amount of the account of any
                  employee under a defined contribution plan, such present value
                  or amount shall be increased by the aggregate distributions
                  made with respect to such employee under the plan during the
                  five (5) year period ending on the determination date.

                           (c) Any rollover contribution (or similar transfer)
                  initiated by the employee, made from a plan maintained by one
                  employer to a plan maintained by another employer and made
                  after December 31, 1983, to a plan shall not be taken into
                  account with respect to the transferee plan for the purpose of
                  determining whether such transferee plan is a top heavy plan
                  (or whether any aggregation group which includes such plan is
                  a top heavy aggregation group). Any rollover contribution (or
                  similar transfer) not described in the preceding sentence
                  shall be taken into account with respect to the transferee
                  plan for the



                                       77
<PAGE>

                  purpose of determining whether such transferee plan is a top
                  heavy plan (or whether any aggregation group which includes
                  such plan is a top heavy aggregation group).

                           (d) If any individual is not a key employee with
                  respect to a plan for any Plan Year, but such individual was a
                  key employee with respect to the plan for any prior Plan Year,
                  the cumulative accrued benefit of such employee and the
                  account of such employee shall not be taken into account.

                           (e) The determination of whether a plan is a top
                  heavy plan shall be made once for each Plan Year of the plan
                  as of the determination date for that Plan Year.

                           (f) In determining the present value of the
                  cumulative accrued benefits of employees under a defined
                  benefit plan, the determination shall be made as of the
                  actuarial valuation date last occurring during the twelve (12)
                  months preceding the determination date and shall be
                  determined on the assumption that the employees terminated
                  employment on the valuation date except as provided in Section
                  416 of the Code and the regulations thereunder for the first
                  and second Plan Years of a defined benefit plan. The accrued
                  benefit of any employee (other than a key employee) shall be
                  determined under the method which is used for accrual purposes
                  for all plans of the employer or if there is no method which
                  is used for accrual purposes under all plans of the employer,
                  as if such benefit accrued not more rapidly than the slowest
                  accrual rate permitted under Section 411(b)(1)(C) of the Code.
                  In determining this present value, the mortality and interest
                  assumptions shall be those which would be used by the Pension
                  Benefit Guaranty Corporation in valuing the defined benefit
                  plan if it terminated on such valuation date. The accrued
                  benefit to be valued shall be the benefit expressed as a
                  single life annuity.

                           (g) In determining the accounts of employees under a
                  defined contribution plan, the account values determined as of
                  the most recent asset valuation occurring within the twelve
                  (12) month period ending on the determination date shall be
                  used. In addition, amounts required to be contributed under
                  either the minimum funding standards or the plan's
                  contribution formula shall be included in determining the
                  account. In the first year of the plan, contributions made or
                  to be made as of the determination date shall be included even
                  if such contributions are not required.

                           (h) If any individual has not performed any services
                  for any employer maintaining the plan at any time during the
                  five (5) year period ending on the determination date, any
                  accrued benefit of the individual under a defined benefit plan
                  and the account of the individual under a defined contribution
                  plan shall not be taken into account.

                           (i) For this purpose, a terminated plan shall be
                  treated like any other plan and must be aggregated with other
                  plans of the employer if it was maintained within the last
                  five (5) years ending on the determination date for the Plan
                  Year in question and would, but for the fact that it
                  terminated, be part of the aggregation group for such Plan
                  Year.

                                   SECTION 2

                         DETERMINATION OF TOP HEAVINESS

         Once each Plan Year, as of the determination date for that Plan Year,
the administrator of this Plan shall determine if this Plan is a top heavy plan.



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<PAGE>

                                    SECTION 3

                              CONTINGENT PROVISIONS

         3.1. WHEN APPLICABLE. If this Plan is determined to be a top heavy plan
for any Plan Year, the following provisions shall apply for that Plan Year (and,
to the extent hereinafter specified, for subsequent Plan Years), notwithstanding
any provisions to the contrary in the Plan.

         3.2. VESTING REQUIREMENT.

                  3.2.1. GENERAL RULE. During any Plan Year that the Plan is
         determined to be a Top Heavy Plan, then all accounts of all
         Participants in a defined contribution plan that is a top heavy plan
         and the accrued benefits of all Participants in a defined benefit plan
         that is a top heavy plan shall be vested and nonforfeitable in
         accordance with the following schedule if, and to the extent, that it
         is more favorable than other provisions of the Plan:

<TABLE>
<CAPTION>
                            If the Participant Has                         His Vested
                            Completed the Following                        Percentage
                           Years of Vesting Service:                        Shall Be:
                           -------------------------                        ---------
<S>                                                                        <C>
                  Less than 2 years                                            0%
                  2 years but less than 3 years                                20%
                  3 years but less than 4 years                                40%
                  4 years but less than 5 years                                60%
                  5 years but less than 6 years                                80%
                  6 years or more                                             100%
</TABLE>

                  3.2.2. SUBSEQUENT YEAR. In each subsequent Plan Year that the
         Plan is determined not to be a top heavy plan, the other
         nonforfeitability provisions of the Plan Statement (and not this
         section) shall apply in determining the vested and nonforfeitable
         rights of Participants who do not have five (5) or more years of
         Vesting Service (three or more years of Vesting Service for
         Participants who have one or more Hours of Service in any Plan Year
         beginning after December 31, 1988) as of the beginning of such
         subsequent Plan Year; provided, however, that they shall not be applied
         in a manner which would reduce the vested and nonforfeitable percentage
         of any Participant.

                  3.2.3. CANCELLATION OF BENEFIT SERVICE. If this Plan is a
         defined benefit plan and if the Participant's vested percentage is
         determined under this Appendix and if a Participant receives a lump sum
         distribution of the present value of the vested portion of his accrued
         benefit, the Plan shall:

                           (a) thereafter disregard the Participant's service
                  with respect to which he received such distribution in
                  determining his accrued benefit, and

                           (b) permit the Participant who receives a
                  distribution of less than the present value of his entire
                  accrued benefit to restore this service by repaying (after
                  returning to employment covered under the Plan) to the trustee
                  the amount of such distribution together with interest at the
                  interest rate of five percent (5%) per annum compounded
                  annually (or such other interest rate as is provided by law
                  for such repayment). If the distribution was on account of
                  separation from service such repayment must be made before the
                  earlier of,

                                    (i) five (5) years after the first date on
                           which the Participant is subsequently reemployed by
                           the employer, or



                                       79
<PAGE>

                                    (ii) the close of the first period of five
                           (5) consecutive one-year breaks in service commencing
                           after the distribution.


         If the distribution was on account of any other reason, such repayment
         must be made within five (5) years after the date of the distribution.

         3.3. DEFINED CONTRIBUTION PLAN MINIMUM BENEFIT REQUIREMENT.

                  3.3.1. GENERAL RULE. If this Plan is a defined contribution
         plan, then for any Plan Year that this Plan is determined to be a top
         heavy plan, the Employer shall make a contribution for allocation to
         the account of each employee who is a Participant for that Plan Year
         and who is not a key employee in an amount (when combined with other
         Employer contributions and forfeited accounts allocated to his account)
         which is at least equal to three percent (3%) of such Participant's
         compensation. (This minimum contribution amount shall be further
         reduced by all other Employer contributions to this Plan or any other
         defined contributions plan.) This contribution shall be made for each
         Participant who has not separated from service with the Employer at the
         end of the Plan Year (including for this purpose any Participant who is
         then on temporary layoff or authorized leave of absence or who, during
         such Plan Year, was inducted into the Armed Forces of the United States
         from employment with the Employer) including, for this purpose, each
         employee of the Employer who would have been a Participant if he had:
         (i) completed one thousand (1,000) Hours of Service (or the equivalent)
         during the Plan Year, and (ii) made any mandatory contributions to the
         Plan, and (iii) earned compensation in excess of the stated amount
         required for participation in the Plan.

                  3.3.2. SPECIAL RULE. Subject to the following rules, the
         percentage referred to in Section 3.3.1 of this Appendix shall not
         exceed the percentage at which contributions are made (or required to
         be made) under this Plan for the Plan Year for that key employee for
         whom that percentage is the highest for the Plan Year.

                           (a) The percentage referred to above shall be
                  determined by dividing the Employer contributions for such key
                  employee for such Plan Year by his compensation for such Plan
                  Year.

                           (b) For the purposes of this Section 3.3, all defined
                  contribution plans required to be included in an aggregation
                  group shall be treated as one (l) plan.

                           (c) The exception contained in this Section 3.3.2
                  shall not apply to (be available to) this Plan if this Plan is
                  required to be included in an aggregation group if including
                  this Plan in an aggregation group enables a defined benefit
                  plan to satisfy the qualification requirements of Section 410
                  or Section 401(a)(4) of the Code.

                  3.3.3. SALARY REDUCTION AND MATCHING CONTRIBUTIONS. For the
         purpose of this Section 3.3, all Employer contributions attributable to
         a salary reduction or similar arrangement shall be taken into account
         for the purpose of determining the minimum percentage contribution
         required to be made for a particular Plan Year for a Participant who is
         not a key employee but not for the purpose of determining whether that
         minimum contribution requirement has been satisfied. For the purpose of
         this Section 3.3 during all Plan Years beginning after December 31,
         1988, all Employer matching contributions shall be taken into account
         for the purposes of determining the minimum percentage contribution
         required to be made for a particular Plan Year for a Participant who
         was not a key employee but not for the purpose of determining whether
         that minimum contribution requirement has been satisfied.



                                       80
<PAGE>

         3.4. DEFINED BENEFIT PLAN MINIMUM BENEFIT REQUIREMENT.

                  3.4.1. GENERAL RULE. If this Plan is a defined benefit plan,
         then for any Plan Year that the Plan is determined to be a top heavy
         plan, the accrued benefit for each Participant who is not a key
         employee shall not be less than one-twelfth (1/12) of the applicable
         percentage of the Participant's average compensation for years in the
         testing period.

                  3.4.2. SPECIAL RULES AND DEFINITIONS. In applying the general
         rule of Section 3.4.1 of this Appendix, the following special rules and
         definitions shall apply:

                           (a) The term "applicable percentage" means the lesser
                  of:

                                    1) two percent (2%) multiplied by the number
                           of years of service with the Employer, or

                                    2) twenty percent (20%).

                           (b) For the purpose of this Section 3.4, a
                  Participant's years of service with the Employer shall be
                  equal to the Participant's Vesting Service except that a year
                  of Vesting Service shall not be taken into account if:

                                    1) the Plan was not a top heavy plan for any
                           Plan Year ending during such year of Vesting Service,
                           or

                                    2) such year of Vesting Service was
                           completed in a Plan Year beginning before January l,
                           1984.

                           (c) A Participant's "testing period" shall be the
                  period of five (5) consecutive years during which the
                  Participant had the greatest compensation from the Employer;
                  provided, however, that:

                                    1) the years taken into account shall be
                           properly adjusted for years not included in a year of
                           service, and

                                    2) a year shall not be taken into account if
                           such year ends in a Plan Year beginning before
                           January l, 1984, or such year begins after the close
                           of the last year in which the Plan was a top heavy
                           plan.

                           (d) An individual shall be considered a Participant
                  for the purpose of accruing the minimum benefit only if such
                  individual has at least one thousand (1,000) Hours of Service
                  during a benefit accrual computation period (or equivalent
                  service determined under Department of Labor regulations).
                  Furthermore, such individual shall accrue a minimum benefit
                  only for a benefit accrual computation period in which such
                  individual has one thousand (1,000) Hours of Service (or
                  equivalent service). An individual shall not fail to accrue
                  the minimum benefit merely because the individual: (i) was not
                  employed on a specified date, or (ii) was excluded from
                  participation (or otherwise failed to accrue a benefit)
                  because the individual's compensation was less than a stated
                  amount, or (iii) because the individual failed to make any
                  mandatory contributions.

                  3.4.3. ACCRUALS PRESERVED. In years subsequent to the last
         Plan Year in which this Plan is a top heavy plan, the other benefit
         accrual rules of the Plan Statement shall be applied to determine the
         accrued benefit of each Participant, except that the application of
         such other rules shall not serve to reduce a Participant's accrued
         benefit as determined under this Section 3.4.



                                       81
<PAGE>

         3.5. PRIORITIES AMONG PLANS. In applying the minimum benefit provisions
of this Appendix in any Plan Year that this Plan is determined to be a top heavy
plan, the following rules shall apply:

                           (a) If an employee participates only in this Plan,
                  the employee shall receive the minimum benefit applicable to
                  this Plan.

                           (b) If an employee participates in both a defined
                  benefit plan and a defined contribution plan and only one (1)
                  of such plans is a top heavy plan for the Plan Year, the
                  employee shall receive the minimum benefit applicable to the
                  plan which is a top heavy plan.

                           (c) If an employee participates in both a defined
                  contribution plan and a defined benefit plan and both are top
                  heavy plans, then the employee, for that Plan Year, shall
                  receive the defined benefit plan minimum benefit unless for
                  that Plan Year the employee has received employer
                  contributions and forfeitures allocated to his account in the
                  defined contribution plan in an amount which is at least equal
                  to five percent (5%) of his compensation.

                           (d) If an employee participates in two (2) or more
                  defined contribution plans which are top heavy plans, then the
                  employee, for that Plan Year, shall receive the defined
                  contribution plan minimum benefit in that defined contribution
                  plan which has the earliest original effective date.

         3.6. ANNUAL CONTRIBUTION LIMITS.

                  3.6.1. GENERAL RULE. Notwithstanding anything apparently to
         the contrary in the Appendix A to the Plan Statement, for any Plan Year
         prior to 2000 that this Plan is a top heavy plan, the defined benefit
         fraction and defined contribution fraction of the Appendix to the Plan
         Statement pertaining to limits under Section 415 of the Code shall be
         one hundred percent (100%) and not one hundred twenty-five percent
         (125%).

                  3.6.2. SPECIAL RULE. Section 3.6.1 of this Appendix shall not
         apply to any top heavy plan if such top heavy plan satisfies the
         following requirements:

                           (a) MINIMUM BENEFIT REQUIREMENT. The top heavy plan
                  (and any plan required to be included in an aggregation group
                  with such plan) satisfies the requirements of Section 3.4 of
                  this Appendix when Section 3.4.2(a)(1) of this Appendix is
                  applied by substituting three percent (3%) for two percent
                  (2%) and by increasing (but by no more than ten percentage
                  points) twenty percent (20%) by one percentage point for each
                  year for which the plan was taken into account under this
                  Section 3.7. Section 3.3.1 of this Appendix shall be applied
                  by substituting "four percent (4%)" for "three percent (3%)."
                  Section 3.5(c) of this Appendix shall be applied by
                  substituting "seven and one-half percent (7 1/2%)" for "five
                  percent (5%)."

                           (b) NINETY PERCENT RULE. A top heavy plan would not
                  be a top heavy plan if "ninety percent (90%)" were substituted
                  for "sixty percent (60%)" each place that it appears in the
                  definitions of top heavy plan and top heavy aggregation group.

                  3.6.3. TRANSITION RULE. If, but for this Section 3.6.3,
         Section 3.6.l of this Appendix would begin to apply with respect to
         this Plan because it is a top heavy plan, the application of Section
         3.6.l of this Appendix shall be suspended with respect to any
         individual so long as there are no:



                                       82
<PAGE>

                           (a) employer contributions, forfeitures or voluntary
                  nondeductible contributions allocated to such individual (if
                  this Plan is a defined contribution plan), or

                           (b) accruals for such individual (if this Plan is a
                  defined benefit plan).

                  3.6.4. COORDINATING CHANGE. If this Plan is a top heavy plan
         for any Plan Year prior to 2000, then for purposes of the Appendix A to
         the Plan Statement, Section 415(e)(6)(i) of the Code shall be applied
         by substituting "Forty-one Thousand Five Hundred Dollars ($41,500)" for
         "Fifty-one Thousand Eight Hundred Seventy-five Dollars ($51,875)."

         3.7. BARGAINING UNITS. The requirements of Section 3.2 through Section
3.6 of this Appendix shall not apply with respect to any employee included in a
unit of employees covered by an agreement which the Secretary of Labor finds to
be a collective bargaining agreement between employee representatives and one
(1) or more employers if there is evidence that retirement benefits are the
subject of good faith bargaining between such employee representatives and such
employer or employers.




                                       83
<PAGE>
                                   APPENDIX C

                       QUALIFIED DOMESTIC RELATIONS ORDERS

                                    SECTION 1

                                 GENERAL MATTERS

         Terms defined in the Plan Statement shall have the same meanings when
used in this Appendix.

         1.1. GENERAL RULE. The Plan shall not honor the creation, assignment or
recognition of any right to any benefit payable with respect to a Participant
pursuant to a domestic relations order unless that domestic relations order is a
qualified domestic relations order.

         1.2. ALTERNATE PAYEE DEFINED. The only persons eligible to be
considered alternate payees with respect to a Participant shall be that
Participant's spouse, former spouse, child or other dependent.

         1.3. DRO DEFINED. A domestic relations order is any judgment, decree or
order (including an approval of a property settlement agreement) which relates
to the provision of child support, alimony payments, or marital property rights
to a spouse, former spouse, child or other dependent of a Participant and which
is made pursuant to a state domestic relations law (including a community
property law).

         1.4. QDRO DEFINED. A qualified domestic relations order is a domestic
relations order which creates or recognizes the existence of an alternate
payee's right to (or assigns to an alternate payee the right to) receive all or
a portion of the Account of a Participant under the Plan and which satisfies all
of the following requirements.

                  1.4.1. NAMES AND ADDRESSES. The order must clearly specify the
         name and the last known mailing address, if any, of the Participant and
         the name and mailing address of each alternate payee covered by the
         order.

                  1.4.2. AMOUNT. The order must clearly specify the amount or
         percentage of the Participant's Account to be paid by the Plan to each
         such alternate payee or the manner in which such amount or percentage
         is to be determined.

                  1.4.3. PAYMENT METHOD. The order must clearly specify the
         number of payments or period to which the order applies.

                  1.4.4. PLAN IDENTITY. The order must clearly specify that it
         applies to this Plan.

                  1.4.5. SETTLEMENT OPTIONS. Except as provided in Section 1.4.8
         of this Appendix, the order may not require the Plan to provide any
         type or form of benefits or any option not otherwise provided under the
         Plan.

                  1.4.6. INCREASED BENEFITS. The order may not require the Plan
         to provide increased benefits.

                  1.4.7. PRIOR AWARDS. The order may not require the payment of
         benefits to an alternate payee which are required to be paid to another
         alternate payee under another order previously determined to be a
         qualified domestic relations order.

                  1.4.8. EXCEPTIONS. The order will not fail to meet the
         requirements of Section 1.4.5 of this Appendix if:



                                       84
<PAGE>

                           (a) The order requires payment of benefits be made to
                  an alternate payee before the Participant has separated from
                  service, even if this is prior to the "earliest retirement
                  age" with respect to the Participant, as that term is defined
                  in Section 414(p) of the Code; and

                           (b) The order requires that payment of benefits be
                  made to an alternate payee as if the Participant had retired
                  on the date on which payment is to begin under such order (but
                  taking into account only the present value of benefits
                  actually accrued); and

                           (c) The order requires payment of benefits to be made
                  to an alternate payee in any form in which benefits may be
                  paid under the Plan to the Participant (other than in the form
                  of a joint and survivor annuity with respect to the alternate
                  payee and his or her subsequent spouse).

                  In lieu of the foregoing, the order will not fail to meet the
         requirements of Section 1.4.5 of this Appendix if the order: (1)
         requires that payment of benefits be made to an alternate payee in a
         single lump sum as soon as is administratively feasible after the order
         is determined to be a qualified domestic relations order, and (2) does
         not contain any of the provisions described in Section 1.4.9 of this
         Appendix, and (3) provides that the payment of such single lump sum
         fully and permanently discharges all obligations of the Plan to the
         alternate payee.

                  1.4.9. DEEMED SPOUSE. Notwithstanding the foregoing:

                           (a) The order may provide that the former spouse of a
                  Participant shall be treated as a surviving spouse of such
                  Participant for the purposes of Section 7 of the Plan
                  Statement (and that any subsequent or prior spouse of the
                  Participant shall not be treated as a spouse of the
                  Participant for such purposes), and

                           (b) The order may provide that, if the former spouse
                  has been married to the Participant for at least one (1) year
                  at any time, the surviving former spouse shall be deemed to
                  have been married to the Participant for the one (1) year
                  period ending on the date of the Participant's death.

                                    SECTION 2

                                   PROCEDURES

         2.1. ACTIONS PENDING REVIEW. During any period when the issue of
whether a domestic relations order is a qualified domestic relations order is
being determined by the Committee, the Committee shall cause the Plan to
separately account for the amounts which would be payable to the alternate payee
during such period if the order were determined to be a qualified domestic
relations order.

         2.2. REVIEWING DROS. Upon the receipt of a domestic relations order,
the Committee shall determine whether such order is a qualified domestic
relations order.

                  2.2.1. RECEIPT. A domestic relations order shall be considered
         to have been received only when the Committee shall have received a
         copy of a domestic relations order which is complete in all respects
         and is originally signed, certified or otherwise officially
         authenticated.

                  2.2.2. NOTICE TO PARTIES. Upon receipt of a domestic relations
         order, the Committee shall notify the Participant and all persons
         claiming to be alternate payees and all prior alternate payees with
         respect to the Participant that such domestic relations order has been
         received. The Committee shall include with such notice a copy of this
         Appendix.



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                  2.2.3. COMMENT PERIOD. The Participant and all persons
         claiming to be alternate payees and all prior alternate payees with
         respect to the Participant shall be afforded a comment period of thirty
         (30) days from the date such notice is mailed by the Committee in which
         to make comments or objections to the Committee concerning whether the
         domestic relations order is a qualified domestic relations order. By
         the unanimous written consent of the Participant and all persons
         claiming to be alternate payees and all prior alternate payees with
         respect to the Participant, the thirty (30) day comment period may be
         shortened.

                  2.2.4. INITIAL DETERMINATION. Within a reasonable period of
         time after the termination of the comment period, the Committee shall
         give written notice to the Participant and all persons claiming to be
         alternate payees and all prior alternate payees with respect to the
         Participant of its decision that the domestic relations order is or is
         not a qualified domestic relations order. If the Committee determines
         that the order is not a qualified domestic relations order or if the
         Committee determines that the written objections of any party to the
         order being found a qualified domestic relations order are not valid,
         the Committee shall include in its written notice:

                           (i) the specific reasons for its decision;

                           (ii) the specific reference to the pertinent
                  provisions of this Plan Statement upon which its decision is
                  based;

                           (iii) a description of additional material or
                  information, if any, which would cause the Committee to reach
                  a different conclusion; and

                           (iv) an explanation of the procedures for reviewing
                  the initial determination of the Committee.

                  2.2.5. APPEAL PERIOD. The Participant and all persons claiming
         to be alternate payees and all prior alternate payees with respect to
         the Participant shall be afforded an appeal period of sixty (60) days
         from the date such an initial determination and explanation is mailed
         in which to make comments or objections concerning whether the original
         determination of the Committee is correct. By the unanimous written
         consent of the Participant and all persons claiming to be alternate
         payees and all prior alternate payees with respect to the Participant,
         the sixty (60) day appeal period may be shortened.

                  2.2.6. FINAL DETERMINATION. In all events, the final
         determination of the Committee shall be made not later than eighteen
         (18) months after the date on which first payment would be required to
         be made under the domestic relations order if it were a qualified
         domestic relations order. The final determination shall be communicated
         in writing to the Participant and all persons claiming to be alternate
         payees and all prior alternate payees with respect to the Participant.

         2.3. FINAL DISPOSITION. If the domestic relations order is finally
determined to be a qualified domestic relations order and all comment and appeal
periods have expired, the Plan shall pay all amounts required to be paid
pursuant to the domestic relations order to the alternate payee entitled
thereto. If the domestic relations order is finally determined not to be a
qualified domestic relations order and all comment and appeal periods have
expired, benefits under the Plan shall be paid to the person or persons who
would have been entitled to such amounts if there had been no domestic relations
order.

         2.4. ORDERS BEING SOUGHT. If the Committee has notice that a domestic
relations order is being or may be sought but has not received the order, the
Committee shall not (in the absence of a written request from the Participant)
delay payment of benefits to a Participant or Beneficiary which otherwise would
be due. If the Committee has determined that a domestic relations order is not a
qualified domestic relations order and all comment and appeal periods have
expired, the Committee shall not (in the absence of a written request from the
Participant) delay payment of benefits to a Participant or



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Beneficiary which otherwise would be due even if the Committee has notice that
the party claiming to be an alternate payee or the Participant or both are
attempting to rectify any deficiencies in the domestic relations order.

                                    SECTION 3

                               PROCESSING OF AWARD

         3.1. GENERAL RULES. If a benefit is awarded to an alternate payee
pursuant to an order which has been finally determined to be a qualified
domestic relations order, the following rules shall apply.

                  3.1.1. SOURCE OF AWARD. If a Participant shall have a Vested
         interest in more than one Account under the Plan, the benefit awarded
         to an alternate payee shall be withdrawn from the Participant's
         Accounts in proportion to his Vested interest in each of them, unless
         the qualified domestic relations order clearly provides otherwise.

                  3.1.2. EFFECT ON ACCOUNT. For all purposes of the Plan, the
         Participant's Account (and all benefits payable under the Plan which
         are derived in whole or in part by reference to the Participant's
         Account) shall be permanently diminished by the portion of the
         Participant's Account which is awarded to the alternate payee. The
         benefit awarded to an alternate payee shall be considered to have been
         a distribution from the Participant's Account for the limited purpose
         of applying any rules of the Plan Statement relating to distributions
         from an Account that is only partially Vested.

                  3.1.3. AFTER DEATH. After the death of an alternate payee, all
         amounts awarded to the alternate payee which have not been distributed
         to the alternate payee and which continue to be payable shall be paid
         in a single lump sum distribution to the personal representative of the
         alternate payee's estate as soon as administratively feasible, unless
         the qualified domestic relations order clearly provides otherwise. The
         Participant's Beneficiary designation shall not be effective to dispose
         of any portion of the benefit awarded to an alternate payee, unless the
         qualified domestic relations order clearly provides otherwise.

                  3.1.4. IN-SERVICE BENEFITS. Any in-service distribution
         provisions of the Plan Statement shall not be applicable to the benefit
         awarded to an alternate payee.

         3.2. SEGREGATED ACCOUNT. If the Committee determines that it would
facilitate the administration or the distribution of the benefit awarded to the
alternate payee or if the qualified domestic relations order so requires, the
benefit awarded to the alternate payee shall be established on the books and
records of the Plan as a separate account belonging to the alternate payee.

         3.3. FORMER ALTERNATE PAYEES. If an alternate payee has received all
benefits to which the alternate payee is entitled under a qualified domestic
relations order, the alternate payee will not at any time thereafter be deemed
to be an alternate payee or prior alternate payee for any substantive or
procedural purpose of this Plan.




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                                   APPENDIX D

                           HIGHLY COMPENSATED EMPLOYEE

                                    SECTION 1

                               GENERAL DEFINITIONS

         1.1. HIGHLY COMPENSATED EMPLOYEE. Effective for Plan Years beginning
after December 31, 1996, a "highly compensated employee" means any employee who:

                           (i) during the current or preceding Plan Year was at
                  any time a five percent (5%) owner; or,

                           (ii) for the preceding Plan Year had compensation
                  from the Employer in excess of $80,000, as adjusted from time
                  to time in accordance with applicable rules, and, if the
                  Employer so elects (and such election will be indicated by the
                  Employer's use of the top-paid group limitation in the
                  satisfaction of any applicable non-discrimination test under
                  the Code), was in the top-paid group for the preceding year;
                  or

                           (iii) is a former employee and was a highly
                  compensated employee under the applicable legal rules in
                  effect when such employee separated from service or was a
                  highly compensated employee at any time after attaining age 55
                  under the applicable legal rules then in effect.

         1.2. CODE AND REGULATIONS CONTROLLING. The determination of who is a
highly compensated employee shall be made in accordance with Section 414(q) of
the Code and regulations thereunder, which shall be controlling in the event of
any conflict with the rules in this Appendix D.

                                    SECTION 2

                           SPECIAL RULES & DEFINITIONS

         2.1. INCORPORATED DEFINITIONS. Terms defined in the Plan Statement
shall have the same meanings when used in this Appendix.

         2.2. FIVE PERCENT OWNER. An employee shall be treated as a five percent
(5%) owner for any determination year or look-back year if at any time during
such year such employee was a five percent (5%) owner (as defined in Appendix B
to this Plan Statement) of the Employer.

         2.3. TOP-PAID GROUP. An employee is in the top-paid group of employees
for any Plan Year if such employee is in the group consisting of the top twenty
percent (20%) of the employees when ranked on the basis of compensation paid
during such year, excluding those employees described in Section 2.6. For
purposes of the preceding sentence, the top twenty percent (20%) shall be
determined by disregarding fractional numbers (i.e., the top 20% of 118
employees shall be the top 22 employees). Employees who perform no services for
the Employer during the year are not included in determining the top-paid group
of employees for that year.

         2.4. EMPLOYEES DESCRIBED IN SEVERAL GROUPS. An employee who is a highly
compensated employee for a particular Plan Year by reason of being described in
one group under Section 1.1, shall not be disregarded in determining whether
another employee is a highly compensated employee by reason of being described
in another group under Section 1.1.



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         2.5. COMPENSATION. FOR PURPOSES OF THIS APPENDIX:

                  2.5.1. IN GENERAL. The term "compensation" means wages within
         the meaning of Section 3401(a) of the Code (for purposes of income tax
         withholding at the source) but determined without regard to any rules
         that limit the remuneration included in wages based on the nature or
         location of the employment or the services performed (such as the
         exception for agricultural labor in Section 3401(a)(2) of the Code),
         plus, for Plan Years commencing from and after March 1, 1998, any
         elective deferral (as defined in Section 402(g)(3) of the Code) and any
         amount which is contributed or deferred by the Employer at the election
         of the employee by reason of Sections 125 or 457 of the Code.

         2.6. EXCLUDED EMPLOYEES.

                  2.6.1. GENERAL EXCLUSIONS. For purposes of determining the
         number of employees in the top-paid group for a Plan Year under Section
         2.3 of this Appendix, the following employees shall be excluded:

                           (i) employees who have not completed six (6) months
                  of service by the end of the year;

                           (ii) employees who normally work less than seventeen
                  and one-half (17 1/2) hours per week;

                           (iii) employees who normally work during not more
                  than six (6) months during the year; and

                           (iv) employees who have not attained age twenty-one
                  (21) by the end of the year.

         For purposes of computing months of service under (i) above, an
         employee's service in the immediately preceding year is added to
         service in the current year to determine whether an employee is
         excluded in the current year.

                  2.6.2. EMPLOYEES COVERED BY COLLECTIVE BARGAINING AGREEMENTS.
         In general, employees who are included in a unit of employees covered
         by a collective bargaining agreement are included in determining the
         number of employees in the top-paid group. However, if ninety percent
         (90%) or more of all employees are covered under collective bargaining
         agreements and this Plan covers only employees who are not covered
         under such agreements, then the employees who are covered under such
         collective bargaining agreements shall not be counted in determining
         the number of employees who will be included in the top-paid group. In
         addition, the employees covered by such agreements will not be included
         in the top-paid group.

                  2.6.3. MINIMUM HOUR RULE. An employee who works at least 17
         1/2 hours a week for 50% or more of the total weeks worked by such
         employee during a determination year or look-back year is deemed to
         normally work more than 17 1/2 hours a week. An employee who works less
         than 17 1/2 hours a week for 50% or more of the total weeks worked by
         such employee during a determination year or look-back year is deemed
         to normally work less than 17 1/2 hours a week. The foregoing
         determinations may be made separately with respect to each employee or
         on the basis of groups of employees who fall within particular job
         categories as established by the Employer on a reasonable basis. In
         general, 80% of the positions within a particular job category must be
         filled by employees who normally work less than 17 1/2 hours a week
         before any employees may be excluded under this rule on the basis of
         their membership in that job category. Alternatively, an Employer may
         exclude employees who are members of a particular job category



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         if the median number of hours credited to employees in that category
         during a determination year or look-back year is 500 or less.

                  2.6.4. MINIMUM PERIOD OF TIME RULE. The determination of
         whether an employee normally works during less than six months in any
         determination year or look-back year is made on the basis of the facts
         and circumstances of the Employer as evidenced by the Employer's
         customary experience in the years preceding such year. An employee who
         works on one day during a month is deemed to have worked during that
         month.

                  2.6.5. NONRESIDENT ALIENS. Employees who are nonresident
         aliens and who receive no earned income (within the meaning of Section
         911(d)(2) of the Code) from the employer which constitutes income from
         sources within the United States (within the meaning of Section
         861(a)(3) of the Code) are excluded for all purposes of this Appendix.

         2.7. ELECTION TO INCLUDE LEASED EMPLOYEES. The term "employee" shall
include all leased employees of the Employer, whether or not such leased
employees are covered by a "safe-harbor plan" as described in Section 414(n)(5)
of the Code.

         2.8. AGGREGATION. Subsections (b), (c), (m), (n), and (o) of Section
414 of the Code shall be applied before the application of the rules in this
Appendix.










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